EXHIBIT 10.1
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YEON BUSINESS CENTER
(3200 NW YEON AVENUE)
LEASE AGREEMENT
SCHNITZER INVESTMENT CORP.
(LANDLORD)
AND
SCHNITZER STEEL INDUSTRIES, INC.
(TENANT)
DATED: AUGUST 7, 2003
LEASE AGREEMENT
THIS LEASE ("Lease") dated as of the 7th day of August, 2003, is made by
and between SCHNITZER INVESTMENT CORP., an Oregon corporation ("Landlord"), and
SCHNITZER STEEL INDUSTRIES, INC., an Oregon corporation ("Tenant").
ARTICLE I DEFINITIONS
1.1 DEFINED TERMS. The following terms shall have the meanings specified
in this Section, unless otherwise specifically provided. Other terms may be
defined in other parts of the Lease.
(a) Landlord: SCHNITZER INVESTMENT CORP.
(b) Landlord's Address: c/o Schnitzer Northwest, LLC
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a Copy to: Ball Xxxxx LLP
000 XX Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(c) Landlord's Address Schnitzer Investment Corp.
for payment of Rent XX Xxx 0000
X/X 00
Xxxxxxxx, XX 00000
(d) Tenant: SCHNITZER STEEL INDUSTRIES, INC.
(e) Tenant's Address: 0000 XX Xxxx Xxxxxx
XX Xxx 00000
Xxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxx
(f) Tenant's Use: General office use, information
services, and related, incidental
uses
(g) Project: Yeon Business Center, including all
buildings and Common Areas thereon
and related thereto, as depicted on
the Project Site Plan attached as
Exhibit "B."
(h) Building: That certain building designated as
the 3200 Building on the Project
Site Plan attached hereto as
Exhibit B with a rentable area of
approximately 30,774 square feet,
and with a street address of 0000
XX Xxxx Xxxxxx, Xxxxxxxx, Xxxxxx.
(i) Premises: Approximately 7,905 rentable square
feet on the lower level and
approximately 11,266 rentable
square feet on the first floor of
the Building as depicted on the
attached Exhibit "C."
(j) Term: Commencing upon the Substantial
Completion (as defined in Section
3.2) of the Tenant Improvements (as
defined in Section 3.1) and
expiring on the last day of the
month during the month that is ten
(10) years after the date of the
Substantial Completion of the
Tenant Improvements.
(k) Base Rent:
MONTHS RENT PRSF (ANNUAL) MONTHLY INSTALLMENTS
LOWER LEVEL FIRST FLOOR
1-12 $13.00 $17.00 $24,523.92
13-24 $13.33 $17.43 $25,145.01
25-36 $13.66 $17.87 $25,775.49
37-48 $14.00 $18.32 $26,421.93
49-60 $14.35 $18.78 $27,084.36
61-72 $14.71 $19.25 $27,762.77
73-84 $15.08 $19.73 $28,457.14
85-96 $15.45 $20.22 $29,167.49
97-108 $15.84 $20.73 $29,903.21
109-120 $16.24 $21.25 $30,654.90
(l) Base Year: 2004
(m) Prepaid Rent: $0.00
(n) Security Deposit: $0.00
(o) Tenant's Share of Building: 62.3%
(p) Tenant's Share of Project: 7.14%
(q) Surface Parking Spaces: 51 uncovered reserved surface
parking spaces in the Project shall
be provided in the parking area
adjacent to the Building for the
exclusive use of Tenant, its
employees and visitors, subject to
reduction due to governmental
regulation.
(r) Exhibits: Exhibit A: Intentionally omitted
Exhibit B: Project Site Plan
Exhibit C: Floor Plan
Exhibit D: Work Schedule
Exhibit E: Schedule of Tenant
Improvement Plans
Exhibit F: Lease Confirmation
Exhibit G: Estoppel Certificate
Exhibit H: Rules and Regulations
ARTICLE II PREMISES AND COMMON AREAS LEASED
2.1 PREMISES.
(a) Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, subject to the provisions of this Lease, certain premises as more
fully described on the attached Exhibit C ("Premises") located within that
certain building ("Building") owned by Landlord and which is a portion of the
"Project" identified in Section 1.1(g). The Site Plan for the Project attached
hereto as Exhibit B is attached for location reference purposes only and shall
not constitute a representation or warranty by Landlord to be the final plan of
the Project, or to require Landlord to build any improvements, or to otherwise
comply with the site plan or require Landlord to lease space to a particular
tenant or type of tenant.
(b) The rentable areas of the Premises and of the Building specified
in Section 1.1 are approximate but based on measurements using the American
National Standard Method of Measuring Floor Area in Office Buildings, ANSI-BOMA
Z65.1-1996, published by the Building Owners and Managers Association
International ("BOMA Standards"), and the measurements take into account the
shared uses described in Section 2.3. Tenant is satisfied with such
approximations and with Landlord's measurement of the rentable areas of the
Premises and of the Building. Tenant acknowledges that, except as otherwise
expressly set forth in this Lease, neither Landlord nor any agent, property
manager or broker of Landlord has made any representation or warranty with
respect to the Premises, the Building, the Common Areas or the Project or their
suitability for the conduct of Tenant' s business, and that except only for any
improvements that Landlord has expressly agreed herein to construct and install,
the Premises is leased in its "As-Is" condition existing at the time of
execution of this Lease.
2.2 COMMON AREAS. In addition to the Premises, Tenant shall have the
non-exclusive right to use in common with other tenants and/or occupants of the
Project, the following areas appurtenant to the Building: parking areas and
facilities, roadways, sidewalks, walkways, parkways, plazas, levees, driveways
and landscaped areas and similar areas and facilities situated within the
exterior areas of the Project and not otherwise designated for the exclusive or
restricted use by Landlord and/or individual tenants of other buildings located
within the Project (collectively, "Common Areas"). Common Areas also include
shared lobbies, entryways, hallways, elevators, and restrooms, as modified from
time to time. Tenant's right to utilize the Common Areas shall at all times be
subject to Landlord's reserved rights therein as described in Section 17.5
hereof, the Rules and Regulations referred to in Section 17.15 hereof, all
encumbrances, easements, ground leases, and covenants, conditions and
restrictions ("CC&Rs") now affecting or encumbering the Project and all
encumbrances, easements, ground leases, and CC&R's affecting or encumbering the
Project in the future, to the extent they do not materially and adversely affect
Tenant's rights to use the Common Areas under this Lease.
2.3 SHARED USE OF BUILDING AREAS.
(a) IN THE PREMISES. Landlord reserves for itself and its
contractors, employees, and agents, and Tenant grants to Landlord and its
contractors, employees, and agents, the right to use of, and access to, the
areas in the Premises designated as "building common areas" on the attached
Exhibit C such as the furnace room and the lunch room (the "Shared Areas"). The
measurement of the net rentable area of the Premises, using BOMA Standards, has
taken into account such rights of joint use of Shared Areas in the Premises. If
Landlord elects to terminate its right to use any Shared Area, which Landlord
may do from time to time throughout the Term, (i) Landlord shall remeasure the
Premises to reflect such change, using BOMA Standards, and (ii) Base Rent,
Tenant's Share of the Building, Tenant's Share of the Project, and Tenant's
Share of the Operating Expense Increase shall change accordingly (collectively,
the "Adjustments"). Beginning on the first day of the first calendar month
following Landlord's written notice to Tenant of the Adjustments, and continuing
thereafter throughout the Term (or until such earlier date on which another
Adjustment takes place), Tenant shall pay Base Rent and Additional Rent in
accordance with Landlord's notice of the Adjustment.
(b) IN LANDLORD'S PREMISES. Unless terminated as provided below,
Tenant shall have the nonexclusive right to use the conference room located on
the second floor of the Building (the "Conference Room"), on a first come-first
served basis. All use of the Conference Room must be scheduled in advance with
Landlord. Landlord may terminate Tenant's rights to use of the Conference Room
after giving 30 days' prior written notice to Tenant if (i) Schnitzer Investment
Corp. ("SIC") vacates the offices on the second floor of the Building, or (ii)
SIC conveys its interest in the Building to a third party, or (iii) Landlord
elects to change the use of the Conference Room to something other than a shared
conference room. As of the commencement of the Lease, the Conference Room is
considered common area for purposes of determining Operating Expenses. However,
if Tenant's right to use the Conference Room terminates as provided in this
Section 2.3(b), then, from and after that termination, the Conference Room shall
not be considered common area for purposes of calculating net rentable area.
Landlord shall calculate the Adjustments resulting from such change as described
in Section 2.3(a). Then, beginning on the first day of the first calendar month
following Landlord's written notice to Tenant of the Adjustments, and continuing
thereafter throughout the Term (or until such earlier date on which another
Adjustment takes place), Tenant shall pay Base Rent and Additional Rent in
accordance with Landlord's notice of the Adjustment.
(c) MULTI-TENANT BUILDING. If SIC vacates the offices on the second
floor of the Building, then (a) Landlord shall have the right to reconfigure the
Premises, at Landlord's sole cost and expense, so as to make the Building more
suitable for occupancy by unaffiliated tenants (such as by adding common area
corridors), (b) Tenant shall cooperate with such changes, and (c) Landlord shall
make any appropriate Adjustments resulting from such reconfiguration. Then,
beginning on the first day of the first calendar month following Landlord's
written notice to Tenant of the Adjustments, and continuing thereafter
throughout the Term (or until such earlier date on which another Adjustment
takes place), Tenant shall pay Base Rent and Additional Rent in accordance with
Landlord's notice of the Adjustment. Any reconfiguration of the Premises
pursuant to this Section 2.3(c) shall not materially and adversely affect
Tenant's use of the Premises. The construction of new public corridors in the
Premises shall not be considered material or adverse.
ARTICLE III IMPROVEMENTS
3.1 CONSTRUCTION OF PREMISES.
(a) COMPLETION SCHEDULE. Attached hereto as Exhibit D is a schedule
(the "Work Schedule") setting forth the estimated timetable for the planning,
permitting, construction and completion of the tenant improvements to be
constructed by Landlord at the Premises ("Tenant Improvements").
(b) PREMISES PLANS. The plans and specifications for the Tenant
Improvements (the "Tenant Improvement Plans") are described on the attached
Exhibit E. No changes to the Tenant Improvement Plans shall be made except with
the approval of both Landlord and Tenant.
(c) CONSTRUCTION OF TENANT IMPROVEMENTS. Landlord shall work with a
general contractor chosen by Landlord (the "Contractor") for construction of the
Tenant Improvements. After building permits have been issued, Landlord shall
cause the Tenant Improvements to be constructed by the Contractor in accordance
with the Tenant Improvement Plans. Landlord shall supervise the completion of
such work and shall use its good faith efforts to secure substantial completion
of the Tenant Improvements in accordance with the Work Schedule. The cost of
Tenant Improvements shall be paid as provided in Paragraph 3.1(f) below.
(d) CHANGE ORDERS. In the event Tenant requests any changes to the
Tenant Improvement Plans, Landlord shall not unreasonably withhold, delay, or
condition its consent to any such changes. Tenant shall pay the costs, fees, and
expenses incurred by Landlord in connection with such changes within 15 days
after billing therefor.
(e) COMPLIANCE WITH LAWS. Landlord shall cause the Tenant
Improvements to be completed in a good and workmanlike manner and in compliance
with the building permit issued therefor by the City of Portland.
(f) PAYMENT OF TENANT IMPROVEMENTS COSTS.
(i) Landlord will pay for the Tenant Improvements included in
the Tenant Improvement Plans.
(ii) Tenant will, at its sole cost and expense, pay for any
improvements to the Premises not expressly included in the Tenant Improvement
Plans and all costs, fees, and expenses incurred by Landlord due to any changes
in the Tenant Improvement Plans requested by Tenant and approved by Landlord
(which approval shall not be unreasonably withheld). Tenant shall arrange for
the installation of all Tenant's furniture, fixtures and equipment associated
with its business. Costs associated with Tenant's equipment, layout, design and
construction coordination are also the sole responsibility of Tenant.
(g) TENANT DELAY IN COMPLETION. If there shall be a delay in
substantial completion of the Tenant Improvements to the Premises or the
issuance of a Certificate of Occupancy for the same as a result of:
(i) Tenant's failure to approve any item or perform any other
obligation within three (3) business days after receipt of notice from Landlord;
(ii) Tenant's request for changes in materials, finishes or
installations other than those readily available;
(iii) Tenant's request to deviate from the Plans; or
(iv) Tenant's interference with Landlord's construction of the
Tenant Improvements to Premises during Tenant's work within the Premises
(whether such work is performed by Tenant or its contractor or by Landlord or
its contractor on Tenant's behalf);
(each of which shall be deemed a "Tenant Delay") then the Commencement Date of
the Term of the Lease shall be accelerated by the number of days of such delay.
3.2 COMPLETION AND DELIVERY. The terms "substantial completion,"
"Substantial Completion," "Substantially Complete," "Substantially complete" and
words of similar import (whether or not spelled with initial capitals) as used
in the Lease shall mean the date of substantial completion of the Tenant
Improvements pursuant to the Tenant Improvement Plans such that Tenant may
commence the installation of any of Tenant's equipment and occupy the Premises
for the conduct of its business (subject to the completion of any additional
construction to be performed by Tenant). The Tenant Improvements shall be deemed
substantially complete notwithstanding the fact that minor details of
construction, mechanical adjustments or decorations which do not materially
interfere with Tenant's use and enjoyment of the Premises remain to be performed
(items normally referred to as "punch list" items). Certification by Landlord's
architect as to the substantial completion of the Tenant Improvements shall be
conclusive and binding upon Landlord and Tenant. By taking occupancy of the
Premises, Tenant shall be deemed to have accepted the Premises as substantially
complete, except that Tenant shall, within five (5) days after entering into
possession of the Premises, provide Landlord with a list of incomplete and/or
corrective items present in the Tenant Improvements. Landlord shall diligently
complete, as soon as reasonably possible, any items of work and adjustment on
such list as are not completed upon substantial completion of the Tenant
Improvements. The Commencement Date shall not be delayed because of the
existence of uncorrected punch list items.
3.3 RELOCATION; CONTINUANCE OF CURRENT LEASE DURING CONSTRUCTION. Tenant
currently leases the Premises pursuant to Lease Agreement dated September 1,
1988, as amended by an Amendment of Lease dated May 31, 1991, an Extension of
Lease dated August 27, 1993, a Second Amendment of Lease dated October 18, 1995,
a Second Extension of Lease dated May 28, 1996, a Third Amendment of Lease dated
August 3, 1998, and a Fourth Amendment of Lease dated June 26, 2001
(collectively, the "Current Lease"). The Current Lease shall continue in full
force and effect until the Commencement Date of this Lease. Effective
immediately prior to the Commencement Date of this Lease (the "Termination
Date"), the Current Lease shall terminate and all rights and obligations of
Landlord and Tenant under the Current Lease shall terminate except for rights
and obligations accrued as of the Termination Date pertaining to events
occurring on or prior to the Termination Date. Promptly upon notice from
Landlord, Tenant shall vacate the Building and relocate into its premises in the
building located at 0000 XX Xxxx Xxxxxx. Tenant shall continue to pay rent,
additional rent, and all other charges under the Current Lease and comply with
its obligations under the Current Lease through the Termination Date while
Landlord constructs the Tenant Improvements in the Premises. Landlord agrees to
contract with, and pay the reasonable expenses charged by, a third party moving
company to move Tenant's personal property and equipment from the Building into
the 0000 XX Xxxx Xxxxxx building.
3.4 REPAINT AND RECARPETING. Between the 60th and 72nd month of the
Initial Term of this Lease, Landlord shall repaint and recarpet the Premises
using materials of similar quality as those in the Tenant Improvements.
ARTICLE IV TERM
4.1 INITIAL TERM. Subject to Section 3.1(g), the Term shall commence on
the Commencement Date, as set forth in Section 1.1(j). The Term shall expire
upon the date set forth in Section 1.1(j), unless sooner terminated as
hereinafter provided.
4.2 NOTICE OF COMMENCEMENT DATE. Landlord shall use good faith efforts to
inform Tenant of the estimated date of substantial completion at least five (5)
days prior to such date. Upon ascertaining the date of substantial completion
and the Commencement Date, Landlord shall deliver to Tenant a written
confirmation in the form attached hereto as Exhibit F ("Lease Confirmation") of
said dates of substantial completion and the Commencement Date. The Lease
Confirmation shall be binding upon Tenant unless Tenant objects to the notice in
writing delivered to Landlord within five (5) days of Tenant's receipt of said
Lease Confirmation.
4.3 OPTION TO EXTEND.
(a) Subject to and upon the terms and conditions set forth below,
Tenant will have one option to extend the term of this Lease for one additional
successive period of five years (the "Renewal Term").
(b) Tenant's option to extend the Term must be exercised by written
notice given to Landlord (the "Renewal Notice") no less than 365 days prior to
the end of the Initial Term.
(c) Tenant shall not be permitted to extend the Term of this Lease
if there exists any uncured Event of Default by Tenant as of the date of the
Renewal Notice.
(d) The Renewal Term will be on the same terms and conditions as
this Lease except for the amount of monthly Base Rent. During the Renewal Term,
Tenant shall pay as monthly Base Rent an amount equal to the greater of (a) the
Base Rent and Additional Rent payable by Tenant immediately prior to the
commencement of the Renewal Term or (b) Market Rent for the Premises for the
Renewal Term. Market Rent during the Renewal Term shall be equal to rents
typically payable for the five year Renewal Term for comparable space by tenants
of buildings of comparable quality in the vicinity of the Premises, taking into
account the base year for the Renewal Term as described in Section 4.3(f) below.
Landlord and Tenant agree that once Tenant has timely delivered its Renewal
Notice, both parties will be responsible for their respective rights and
obligations under this Lease for the Renewal Term, regardless of the outcome of
the Base Rent determination. The word "Term" shall be used throughout this Lease
to include both the Initial Term and the Renewal Term, if applicable.
(e) The Market Rent for the Renewal Term will be determined as
follows:
(i) If Tenant properly exercises its option to extend the Term
for the Renewal Term, Landlord and Tenant shall attempt to agree as to the
Market Rent at least 270 days prior to the expiration of the Initial Term. If
Landlord and Tenant do not agree as to the Market Rent by such date, then no
later than 210 days prior to the expiration of the Initial Term, each shall
designate a real estate broker having at least ten (10) years' experience in
leasing space comparable to the Premises in the Portland metropolitan area or an
MAI-certified appraiser having at least five (5) years' experience in the
appraisal of lease rates of office space in the Portland metropolitan area. The
two representatives so appointed shall determine the Market Rent for the
Premises for the Renewal Term and each shall submit a copy of his or her
determination of such Market Rent, along with supporting documentation, to
Landlord and Tenant in writing, not less than 150 days prior to the expiration
of the Initial Term. In the event a party fails to designate a representative at
least 210 days prior to the expiration of the Initial Term, the determination of
Market Rent by the representative designated by the other party shall be binding
upon the parties for purposes of this Section 4.3(e). In the event a
representative fails to submit the required written determination of Market Rent
at least 150 days prior to the expiration of the Initial Term, the determination
of the Market Rent by the other representative shall be binding upon the parties
for the purposes of this Section 4.3(e).
(ii) If the determination of the Market Rent given by the two
representatives so appointed shall differ by less than ten percent (10%) of the
greater of such two representatives' determinations, then the Market Rent shall
be deemed to be the average of such two Market Rent determinations. In the event
such determinations differ by ten percent (10%) or more of the greater of such
two representatives' determinations, then Landlord and Tenant shall attempt to
agree on the Market Rent. If the parties are unable to reach agreement at least
90 days before the expiration of the Initial Term, the two representatives
originally designated shall designate a third representative, who shall meet the
qualifications set forth in Section 4.3(e)(i) and who shall be the arbitrator.
If the two representatives are unable to agree on an arbitrator, then either of
the parties to this Lease, after giving not less than five days' prior notice to
the other party, may apply to the presiding judge of the Multnomah County
Circuit Court for the selection, as soon as is reasonably practicable, of an
arbitrator who meets the foregoing qualifications.
(iii) The arbitrator shall, by not later than 30 days prior to
the expiration of the Initial Term, select the more reasonable of the two Market
Rent determinations submitted by the first two representatives. The
determination of Market Rent set forth in the written submission selected by the
arbitrator shall be binding upon the parties for purposes of this Section
4.3(e).
(iv) Landlord and Tenant shall each pay all costs of the
representative selected by it pursuant to Section 4.3(e)(i). Landlord and Tenant
shall share equally the cost of any arbitrator designated pursuant to Section
4.3(e)(ii).
(v) In the event the Market Rent for the Renewal Term has not
been determined by the arbitrator pursuant to the above procedure as of the
commencement of the Renewal Term, Tenant shall continue to pay monthly
installments of Base Rent based upon the Base Rent in effect as of the
expiration of the Initial Term and, within ten (10) days after the Market Rent
has been determined by the arbitrator, Tenant shall pay to Landlord the
difference between (A) the total amount that should have been paid by Tenant as
Base Rent with respect to the period from the commencement of the Renewal Term
to the date of Tenant's payment (based on the arbitrator's determination), and
(B) the total amount actually paid by Tenant with respect to such period.
(f) If Tenant extends the Term of this Lease as set forth above, the
"Base Year" for determining Tenant's obligation for the Operating Expense
Increase will be adjusted to the last full calendar year of the Initial Term.
ARTICLE V RENT
5.1 BASE RENT. The Base Rent ("Base Rent") shall be as set forth in
Section 1.1(k). The Base Rent shall be paid in advance on the first day of each
and every month during the Term to Landlord at the address set forth in Section
1.1(c) hereof or at such other place as Landlord may direct in writing, without
any prior notice or demand therefor and without any abatement, deduction, offset
or setoff whatsoever. If the Term commences on any day other than the first day
of a calendar month and/or ends on any day other than the last day of a calendar
month, Base Rent for the fraction(s) of a month at the commencement and/or upon
the expiration of the Term shall be prorated based upon the actual number of
days in such fractional month(s).
5.2 ADDITIONAL RENT. In addition to Base Rent, Tenant shall pay to
Landlord all sums of money or other charges required to be paid by the Tenant
under this Lease (other than Base Rent), including but not limited to Tenant's
Share of Operating Expense Increase (as defined in Article VI hereof) (all such
sums being herein deemed "Additional Rent"), and whether or not the same are
designated "Additional Rent" the same shall be payable in lawful money of the
United States of America without deduction, set-off or abatement whatsoever. Any
Additional Rent provided for in this Lease shall become due with the next
monthly installment of Base Rent unless otherwise provided. The term "Rent", as
used in this Lease, shall refer collectively to "Base Rent" and "Additional
Rent."
5.3 LATE PAYMENT. If any payment of Rent is not received by Landlord
within five (5) days after the same is due, Tenant shall pay to Landlord a late
payment charge equal to three percent (3%) of the amount of such delinquent
payment of Rent in addition to the installment of Rent then owing, regardless of
whether or not a notice of default has been given by Landlord. In addition,
Tenant shall pay interest on such late payment and late charge from the due date
of the late payment at an interest rate equal to the higher of: (a) twelve
percent (12%) or (b) the prevailing prime (reference) rate as published by Bank
of America (or any successor bank) at its Seattle main branch office, or any
successor rate of interest, plus three (3) percentage points, but in no event
higher than the maximum rate permitted by applicable law (hereafter the "Default
Rate"), until such amounts are paid. Landlord and Tenant recognize that the
damages which Landlord will suffer as a result of Tenant's failure to timely pay
Rent are difficult or impracticable to ascertain, and agree that said interest
and late charge are a reasonable approximation of the damages which Landlord
will suffer in the event of Tenant' s late payment. This provision shall not
relieve Tenant from payment of Rent at the time and in the manner herein
specified. Acceptance by Landlord of any such interest and late charge shall not
constitute a waiver of Tenant's default with respect to said overdue amount, nor
shall it prevent Landlord from exercising any other rights or remedies available
to Landlord.
5.4 SECURITY DEPOSIT. Intentionally deleted.
ARTICLE VI ADDITIONAL RENT AND CHARGES
6.1 OPERATING EXPENSES. In addition to Base Rent and other sums payable
by Tenant under this Lease, Tenant shall pay to Landlord, as Additional Rent,
Tenant's Share of the Operating Expense Increase (as such term is defined
below). The "Operating Expense Increase" is defined as the amount by which the
Operating Expenses of the Project in each calendar year, beginning with calendar
year 2005, exceed the Operating Expenses of the Project for the Base Year. For
the Initial Term of this Lease, the Base Year is calendar year 2004.
(a) ESTIMATED EXPENSES.
(i) Upon the Commencement Date, and thereafter prior to the
commencement of each calendar year occurring wholly or partially within the Term
or as soon as practical thereafter, Landlord shall estimate the annual Operating
Expense Increase payable by Tenant pursuant to this provision, and Tenant shall
pay to Landlord on the first day of each month in advance, one-twelfth (1/12th)
of Tenant's Share of the estimated Operating Expense Increase. Landlord's
estimate will be reasonable and based on standard real estate accounting
practices consistently and fairly applied. If Tenant requests, Landlord will
provide Tenant with reasonably detailed documentation to support Landlord's
estimate. In the event that during any calendar year of the Term, Landlord
reasonably determines that the actual Operating Expense Increase for such year
will exceed the estimated Operating Expense Increase, Landlord may revise such
estimate by written notice to Tenant, and Tenant shall pay to Landlord,
concurrently with the regular monthly rent payment next due following the
receipt of the revised estimate, an amount equal to the difference between the
initial monthly estimate and the revised monthly estimate multiplied by the
number of months expired during such calendar year and shall also pay an amount
equal to the revised monthly estimate for the month of such payment. Subsequent
installments shall be payable concurrently with the regular monthly Base Rent
due for the balance of the calendar year and shall continue until the next
calendar year's estimate is rendered or Landlord next revises its estimate of
the Operating Expense Increase, whichever occurs sooner .
(ii) Within one hundred twenty (120) days following the end of
each year or a reasonable time thereafter, Landlord shall provide Tenant with a
written statement (the "Statement") of the actual total Operating Expenses for
such year, showing in reasonable detail (A) the actual Operating Expenses for
the calendar year, broken down by component expenses, such as repairs,
administration, utilities, janitorial, and Real Property Taxes; (B) the Base
Year Operating Expenses; (C) the Operating Expense Increase for the calendar
year; (D) the amount of Tenant's Share of the Operating Expense Increase; (E)
the amount actually paid by Tenant during the calendar year toward the Operating
Expense Increase; (F) the amount Tenant owes toward the Operating Expense
Increase or the amount Landlord owes as a refund, and (G) the "gross-up"
information required by Section 6.1(a)(iii) of this Lease. If Tenant has
overpaid the amount of the Operating Expense Increase owing pursuant to this
provision, Landlord shall, provided Tenant is not then in default hereunder
beyond any applicable cure period, return to Tenant the amount of such
overpayment within thirty (30) days after Landlord's itemized Statement is
delivered to Tenant. If Tenant has underpaid the amount of the Operating Expense
Increase owing pursuant to this provision, Tenant shall pay the total amount of
such deficiency to Landlord as Additional Rent with the next payment of Base
Rent due under this Lease following delivery of written notice of said
deficiency from Landlord to Tenant.
(iii)In the event the average occupancy level of the Building or
Project, as the case may be, for any calendar year was or is not one hundred
percent (100%) of full occupancy, then the estimated Operating Expenses and
actual Operating Expenses for such year shall be proportionately adjusted by
Landlord to reflect those costs which would have occurred had the Building
and/or Project, as the case may be, been one hundred percent (100%) occupied
during such year. Such adjustment shall be based on Landlord's reasonable
estimate consistently and fairly applied using standard real estate practices in
the Portland, Oregon metropolitan area.
(iv) Landlord shall keep its books of account and records
concerning Operating Expenses in compliance with generally accepted standard
real estate practices and retain the same for two (2) years after the calendar
year for which they were prepared. Unless Tenant objects in writing regarding
specific discrepancies in the Operating Expense calculations for any calendar
year within 270 days after receipt of Landlord's final calculations for such
calendar year, Tenant shall be deemed to have approved the same and to have
waived the right to object to such calculations. Tenant, upon at least ten (10)
days' advance written notice to Landlord and during business hours, may examine
any invoices, receipts, canceled checks, vouchers or other records used to
support the figures shown on the Statement, provided, however, that Tenant shall
be entitled to such an examination only once in each calendar year and such
examination shall only be of the Operating Expenses for the calendar year shown
on the Statement. Tenant may only audit a specific calendar year once. Landlord
may condition such review upon Tenant's (and its auditor's) execution of a
reasonable form of confidentiality agreement. Except as provided in Section
6.1(a)(v) below, all costs of the review shall be borne by Tenant. If Tenant
examines or audits Landlord's books and records under Section 6.1(a)(iv) or
Section 6.1(a)(v)more than twice during the Term, Tenant shall reimburse all
costs, fees, and expenses incurred by Landlord and its property manager in
connection with the examination or audit, including, without limitation,
photocopy charges, and administration fees for the time spent in connection with
the audit or examination. All audits and examinations conducted by Tenant shall
be conducted by an independent auditor with at least five years experience with
standard real estate accounting practices in the Portland, Oregon area and such
auditor shall not be compensated on a contingency fee basis.
(v) Each Statement given by Landlord pursuant to this Section
shall be conclusive and binding upon Tenant unless within 270 days after the
receipt of such Statement Tenant shall notify Landlord that it disputes the
correctness of the Statement, specifying the particular respects in which the
Statement is claimed to be incorrect. If such disputes shall not have been
settled by agreement, Tenant, at Tenant's expense, and after giving Landlord
reasonable advance notice, may cause an examination or audit to be made of
Landlord's books and records relating to such Statement by a certified public
accountant, subject to the limitations set forth in Section 6.1(a)(iv). If the
examination or audit discloses an error in the xxxxxxxx to Tenant, Tenant shall
promptly pay the underpayment. If Landlord does not dispute the results of the
audit, Landlord shall promptly pay to Tenant the overpayment, and if there has
been an overpayment of greater than five percent (5%) of the amount of estimated
Operating Expenses for the year in question, Landlord shall reimburse Tenant for
the reasonable cost of the examination or audit. If Landlord disputes the
results of the audit, Landlord and Tenant shall engage an independent certified
public accountant (the "CPA") who shall resolve the dispute by choosing the
results of Tenant's audit or Landlord's position. If the CPA agrees with Tenant,
Landlord shall pay the fees of the CPA. If the CPA agrees with Landlord, Tenant
shall pay the fees of the CPA.
(b) DEFINED TERMS.
(i) OPERATING EXPENSES INCLUSIONS. For purposes of this Lease,
"Operating Expenses" means an amount equivalent to the total of all expenses and
costs incurred in connection with the ownership, operation, management,
maintenance, repair and replacement of the Project, the Building and the Common
Areas, including, but in no way limited to, the following:
A. The costs of operating, maintaining, repairing and
replacing the Project, the Building and the Common Areas, including but not
limited to: gardening and landscaping; painting; lighting; sanitary control;
personal property taxes; public liability insurance and property damage
insurance; utilities for Common Areas; licenses and fees for Common Area
facilities; sweeping; removal of snow and ice, trash, rubbish, garbage and other
refuse; repairing, restriping and resurfacing of parking area; and maintenance
of and property taxes on personal property, machinery and equipment used in
Common Area maintenance.
B. All Real Property Taxes (as defined below) assessed
against the Project, the Building and/or the Common Areas, as applicable,
including land, building(s) (including the Building) and improvements thereon or
thereto.
C. All premiums for liability, terrorism, fire, extended
coverage and other insurance the Landlord reasonably deems necessary and keeps
in force on or with respect to the Project, the Building of which the Premises
are a part and/or the Common Areas, as the case may be, and commercially
reasonable deductibles payable in connection therewith.
D. The cost of operating, maintaining, repairing and
replacing any electrical, mechanical, automatic fire sprinkler and other
utilities systems serving the Premises which serve the Premises in common with
the entire Building.
E. The cost of maintenance, repair and replacement of the
structural and non-structural portions of the roof, roof membrane, exterior
walls, foundation, and other exterior portions of the Project and Building, and
reasonable reserves for the same.
F. Reasonable property management charges together with the
costs incurred in the operation of a management office relating to the Project,
including, but not limited to the cost of rent and utilities with respect
thereto, not to exceed the amount charged by an owner or an independent
management company of comparable quality and experience.
G. Annual amortization of capital improvements (x) made
subsequent to the Commencement Date which are designed with a reasonable
probability of improving the operating efficiency of the Project, or some part
thereof, or (y) which are reasonably required under any amendment to any
applicable law, any new law, or any new interpretation (as hereinafter defined)
which amendment, law, or new interpretation is adopted or arose after the
Commencement Date of this Lease, or (z) made subsequent to the Commencement Date
and which are repairs or replacements of initial improvements. For the purposes
of this Lease, a "new interpretation" shall mean any interpretation, enforcement
or application occurring after the Commencement Date of a law enacted prior to
the Commencement Date, which interpretation, enforcement or application imposes
requirements with respect to the Project or Building that were not at the time
of Landlord's execution of this Lease, applicable to the Project or Building.
Annual amortization shall be determined by dividing the applicable capital
expenditure over the useful life of such capital expenditure (as determined by
GAAP) at an interest rate equal to the Prime Rate of Xxxxx Fargo Bank plus two
percent (2%).
H. Any other costs levied, assessed or imposed by or at the
direction of, or resulting from statutes or regulations or interpretations
thereof promulgated by any federal or governmental authority in connection with
the use or occupancy of the Project.
I. Assessments made on or with respect to the Project made
pursuant to any CC&Rs, Local Improvement District conditions and/or owner's
associations affecting the Project, or any portion thereof.
J. Compensation (including wages and employer paid benefits
and taxes ) of employees and contractors engaged in the operation and
maintenance of the Project, and/or Building.
(ii) OPERATING EXPENSE EXCLUSIONS. Notwithstanding the
foregoing, Operating Expenses to be reimbursed by Tenant shall not include:
A. Expenses which are separately metered or calculated for
the Premises or other leased area of the Project or the Building, as the case
may be, which expenses shall be billed separately to Tenant or such other
tenant(s), as applicable.
B. Costs incurred in connection with the initial
construction or design of the Building or to correct defects in the original
construction or design of the Building.
C. Depreciation.
D. Costs, fines or penalties incurred due to violation by
Landlord of any applicable law.
E. Expenses incurred by Landlord in respect of individual
tenants and/or the improvement or renovation of tenants' leasehold improvements,
including leasing commissions, attorneys' fees arising from lease disputes
arising out of a tenant's failure to pay rent under its lease and other specific
costs incurred for the account of, separately billed to and paid by specific
tenants.
F. Repairs or replacements to the extent that the cost of
the same is recoverable by the Landlord pursuant to original construction
warranties.
G. Interest on debt or capital retirement of debt, and
costs of capital improvements except as expressly provided above.
H. Legal fees and disbursements relating to the entity that
owns the Project.
I. Costs incurred due to the gross negligence of Landlord
or breach by Landlord of its obligations under any lease.
J. Fines or penalties incurred due to violation by Landlord
of any applicable law.
K. Costs incurred because Landlord breached the terms of
any lease.
L. Overhead and profit paid to subsidiaries or affiliates
of Landlord for management or other services on or to the Project or for
supplies or other materials, to the extent that the costs of the services,
supplies or materials exceed the amount customarily charged by an independent
entity for similar services, supplies or materials of same or better quality.
M. Compensation paid to clerks, attendants and other
persons in commercial concessions operated by Landlord.
N. Advertising and promotional expenditures (except for
Project identification and directional signage).
O. Repairs or other work needed because of fire, windstorm
or other casualty or cause insured against by Landlord to the extent Landlord
receives insurance proceeds therefor.
P. Costs of sculpture, paintings or other art.
Q. Legal fees, costs, and disbursements relating to (i)
disputes with tenants, (ii) enforcing any leases, or (iii) the defense of
Landlord's title to, or interest in, the Buildings or Project.
R. Costs incurred due to the intentional misconduct or
intentional breach by Landlord of its obligations under any lease.
S. Landlord's general corporate overhead and administrative
expenses.
T. Costs of capital improvements and replacements except as
permitted under Section 6.1(b)(i)(G).
Additional Rent payable by Tenant which would not otherwise be due until
after the date of the expiration or earlier termination of the Lease shall, if
the exact amount is uncertain at the time this Lease expires or terminates, be
paid by Tenant to Landlord upon such expiration or termination in an amount to
be reasonably determined by Landlord, with an adjustment to be made once the
exact amount is known.
(iii)TENANT'S SHARE. For purposes of this Lease, "Tenant 's
Share" means the percentage, as set forth in Section 1.1(o) or Section 1.1(p),
as appropriate, and obtained by dividing the rentable area of the Premises by
the aggregate rentable area of all premises available for lease, whether leased
or not, in the Building or the Project, as applicable with respect to any
specific Operating Expense, subject to adjustment in the event of changes in
rentable area of the Project, Building and/or Premises. Notwithstanding the
above, Landlord shall have the right, but not the obligation, to equitably
adjust Tenant's Share of any specific Operating Expense so as to render such
expense payable proportionately by those tenants benefited by the same or
otherwise in order to appropriately allocate such Operating Expense to cover the
area covered by such Operating Expense.
(iv) REAL PROPERTY TAXES. For purposes of this Lease, "Real
Property Taxes" shall consist of all real estate taxes and all other taxes
relating to the Building, the Project, the Common Areas and/or the Project, as
applicable, all other taxes which may be levied in lieu of real estate taxes,
all assessments, local improvement districts, assessment bonds, levies, fees and
other governmental charges, including, but not limited to, charges for traffic
facilities and improvements, water service studies, and improvements or amounts
necessary to be expended because of governmental orders, whether general or
special, ordinary or extraordinary, unforeseen as well as foreseen, of any kind
and nature for public improvements, services, benefits, or any other purpose,
which are assessed, levied, confirmed, imposed or become a lien upon the
Building or any portion of the Project, and/or the Common Areas, or become
payable during the Term (or which become payable after the expiration or earlier
termination hereof and are attributable in whole or in part to any period during
the Term hereof), together with all costs and expenses incurred by Landlord in
successfully contesting, resisting or appealing any such taxes, rates, duties,
levies or assessments. Any special assessments which may be paid in installments
shall be deemed paid over the longest period allowable by law and only the
installment due in any calendar year shall be included in Real Property Taxes.
"Real Property Taxes" shall exclude any franchise, estate, inheritance or
succession transfer tax of Landlord, or any federal or state income, profits or
revenue tax or charge upon the net income of Landlord from all sources;
provided, however, that if at any time during the Term there is levied or
assessed against Landlord a federal, state or local tax or excise tax on rent,
or any other tax however described on account of rent or gross receipts or any
portion thereof, Tenant shall pay one hundred percent (100%) of the Tenant's
Share of any said tax or excise applicable to Tenant's Rent as Additional Rent.
(c) POLICY STATEMENT. The purpose of this Section 6.1 is to fairly
reimburse Landlord for the increased costs of those Operating Expenses for
operating, maintaining, repairing, and managing the Buildings which benefit all
of the Buildings' tenants. The reimbursement is not intended to provide an
additional source of profit to Landlord. Accordingly, the purpose described
above and the following principles are a statement of the parties' intent
regarding Section 6.1:
(i) Landlord will operate, maintain, repair, and manage the
Building in a manner of at least the quality as other comparable buildings in
Portland, Oregon.
(ii) Landlord shall perform its obligation set forth in Section
6.1 in a cost-effective manner.
(iii)The Operating Expenses shall be fairly and accurately
calculated by Landlord.
(iv) Examples of fair calculations include the exclusions in
Section 6.1(b)(ii), and not charging for the same service in two different
categories (such as an in-house manager and a management fee).
6.2 ADJUSTMENTS.
(a) CREDITS/REIMBURSEMENTS. Operating Expenses shall be reduced by
reimbursements, credits, discounts, reductions, or other allowances received by
Landlord for items of cost included in Operating Expenses.
(b) TAX REFUND. If Landlord receives a refund of any portion of Real
Property Taxes that were included in the Operating Expenses actually paid by
Tenant as an increase over the Real Property taxes for the Base Year, then
Landlord shall reimburse Tenant Tenant's Share of the refunded taxes to the
extent actually paid by Tenant, less any expenses that Landlord reasonably
incurred to obtain the refund.
(c) PRORATIONS. If this Lease (or an extended term hereof) begins or
ends on a day other than the last day of a calendar year, Tenant's obligation to
pay Tenant's Share of the Operating Expense Increase for that calendar year
shall be prorated by multiplying Tenant's Share of that Operating Expense
Increase by a fraction expressed as a percentage, the numerator of which is the
number of days of the calendar year included within the Term of this Lease and
the denominator of which is 365.
6.3 TENANT'S PERSONAL PROPERTY TAXES. Tenant shall pay or cause to be
paid, prior to delinquency, any and all taxes and assessments levied upon all
trade fixtures, inventories and other real or personal property placed or
installed in and upon the Premises by Tenant. If any such taxes on Tenant's
personal property or trade fixtures are levied against Landlord or Landlord's
property or if the assessed value of the Building is increased by the inclusion
therein of a value placed upon such real or personal property or trade fixtures
of Tenant, and if Landlord pays the taxes based upon such increased assessment,
Tenant shall, upon demand, repay to Landlord the taxes so levied or the portion
of such taxes resulting from such increase in the assessment.
ARTICLE VII INSURANCE
7.1 LANDLORD'S INSURANCE. During the Term, Landlord shall procure and
maintain in full force and effect with respect to the Building (i) a policy or
policies of standard "all-risk" fire insurance with extended coverage against
damage and destruction by fire, vandalism, and all other "all risk" perils. The
amount of such insurance shall be equal to the full replacement value of the
Building, as the value may exist from time to time (including, to the extent
required, sprinkler leakage, vandalism and malicious mischief coverage, and any
other endorsements required by the holder of any fee or leasehold mortgage and
earthquake, flood and terrorism insurance to the extent Landlord reasonably
deems prudent and/or to the extent required by any mortgagee); and (ii) a policy
of commercial general liability insurance, in the form and content acceptable to
Landlord, insuring Landlord's activities with respect to the Premises, the
Common Areas and the Project for loss, damage or liability for personal injury
or death of any person or loss or damage to property occurring in, upon or about
the Premises, Common Areas or Project. If the annual premiums charged Landlord
for such casualty and/or liability insurance exceed the standard premium rates
because the nature of Tenant's operations results in increased exposure, then
Tenant shall, upon receipt of appropriate premium invoices, reimburse Landlord
for such increased amount. Landlord shall have the right, at its option, to keep
and maintain in full force and effect during the Term such other insurance in
such amounts and on such terms as Landlord and/or any mortgagees or the
beneficiary of any first trust deed against the Building, or the portion of the
Project, may reasonably require from time to time in form, in amounts and for
insurance risks against which a prudent Landlord would protect itself, including
but not limited to rental abatement, rental interruption, earthquake, flood and
terrorism insurance.
7.2 TENANT'S PUBLIC LIABILITY. Tenant shall, at its own cost and expense,
keep and maintain in full force during the Term and any other period of
occupancy of the Premises by Tenant, a policy or policies of commercial general
liability insurance, written by a reputable insurance company authorized to do
business in the State of Oregon in form and content reasonably acceptable to
Landlord insuring Tenant's activities with respect to the Premises, the Common
Areas and the Project for loss, damage or liability for personal injury or death
of any person or loss or damage to property occurring in, upon or about the
Premises in an amount of not less than Three Million Dollars ($3,000,000)
combined single limit or such larger amounts as may hereafter be reasonably
requested by Landlord. The policy shall insure the hazards of the Premises and
Tenant's operations therein, shall include independent contractor and
contractual liability coverage (covering the indemnity contained in Section 7.8
hereof) and shall (a) name Landlord, Landlord's managing agent and the
Landlord's mortgagee under a mortgage or beneficiary under a deed of trust
either having a lien against the Building or Project (the "Lender") as an
additional insured; (b) contain a cross-liability provision and; (c) contain a
provision that the insurance provided hereunder shall be primary and
non-contributing with any other insurance available to Landlord.
7.3 TENANT'S PROPERTY AND OTHER INSURANCE. Tenant shall, at its own cost
and expense, keep and maintain in full force during the Term and any other
period of occupancy of the Premises, a policy or policies of standard form
property insurance insuring against the perils of fire, extended coverage,
vandalism, malicious mischief, special extended coverage and sprinkler leakage.
This insurance policy shall be upon all property owned by Tenant, for which
Tenant is legally liable or that was installed at Tenant's expense, and which is
located in the Premises, including without limitation, furniture, fittings,
installations, cabling, fixtures (other than the improvements installed by
Landlord), and any other personal property, in the amount of not less than one
hundred percent (100%) of the full replacement costs thereof.
7.4 FORM OF INSURANCE/CERTIFICATES. All policies shall be written in a
form satisfactory to Landlord and shall be taken out with insurance companies
licensed in the state in which the Building is located and holding a General
Policy Holder' s Rating of "A" and a financial rating of "X" or better, as set
forth in the most current issues of Best's Insurance Guide. Each party shall
furnish to the other, prior to the Commencement Date and thereafter within ten
(10) days prior to the expiration of each such policy, a certificate of
insurance (or renewal thereof) issued by the insurance carrier of each policy of
insurance carried by the party pursuant hereto and, upon request by the other
party, a copy of each such policy of insurance. Said certificates shall
expressly provide that such policies shall not be cancelable or subject to
reduction of coverage below the minimum amounts required by this Lease or
required by any lender having an interest in the Building or otherwise be
subject to modification except after thirty (30) days prior written notice to
the parties named as insured in Section 7.2.
7.5 TENANT'S FAILURE. If Tenant fails to maintain any insurance required
in the Lease, Tenant shall be liable for any loss or cost resulting from said
failure, and Landlord shall have the right to obtain such insurance on Tenant's
behalf and at Tenant's sole expense. This Section 7.5 shall not be deemed to be
a waiver of any of Landlord's rights and remedies under any other section of
this Lease. If Landlord obtains any insurance which is the responsibility of
Tenant to obtain under this Article VII, Landlord shall deliver to Tenant a
written statement setting forth the cost of any such insurance and showing in
reasonable detail the manner in which it has been computed and Tenant shall
promptly remit said amount as Additional Rent to Landlord.
7.6 WAIVER OF SUBROGATION. Any all risk policy or policies of fire,
extended coverage or similar casualty insurance which either party obtains in
connection with the Building, the Premises or Tenant's personal property therein
shall include a clause or endorsement denying the insurer any rights of
subrogation against the other party to the extent rights have been waived by the
insured prior to the occurrence of injury or loss. Landlord and Tenant waive any
rights of recovery against the other for liability, injury or loss due to
hazards covered by insurance containing such a waiver of subrogation clause or
endorsement to the extent of the liability, injury or loss covered thereby.
7.7 TENANT'S PROPERTIES AND FIXTURES. Tenant assumes the risk of damage
to any furniture, equipment, machinery, goods, supplies or fixtures which are or
remain the property of Tenant or as to which Tenant retains the right of removal
from the Premises, except to the extent due to the gross negligence or willful
misconduct of Landlord. Tenant shall not do or keep anything in or about the
Premises (except those things Tenant presently does and keeps in connection with
the uses set forth in Section 10.1) which will in any way tend to increase
insurance rates paid by Landlord and maintained with respect to the Premises
and/or the Project unless Tenant pays directly to Landlord the increase cost of
the premiums. In no event shall Tenant carry on any activities which would
invalidate any insurance coverage maintained by Landlord. If at any time
Tenant's occupancy or business in, or on, the Premises, whether or not Landlord
has consented to the same, results in any increase in premiums for the insurance
carried by Landlord with respect to the Building and/or the Project, Tenant
shall pay any such increase in premiums as Additional Rent within ten (10) days
after being billed therefore by Landlord. In determining whether increased
premiums are a result of Tenant's use of the Building, a schedule issued by the
organization computing the insurance rate on the Building and/or the Project
showing the various components of such rate shall be conclusive evidence of the
several items and charges which make up such rate. Tenant shall promptly comply
with all reasonable requirements of the insurance underwriters and/or any
governmental authority having jurisdiction thereover, necessary for the
maintenance of reasonable fire and extended insurance for the Building and/or
the Project.
7.8 INDEMNIFICATION.
(a) Tenant, as a material part of the consideration to be rendered to
Landlord, hereby indemnifies and agrees to defend and hold Landlord, Landlord's
managing agent and Lender, the Premises, and the Project harmless for, from and
against (i) any and all liability, penalties, losses, damages, costs and
expenses, demands, causes of action, claims, judgments or appeals arising from
any injury to any person or persons or any damage to any property to the extent
as a result of Tenant's or Tenants' officers, employees, agents, assignees,
subtenants, concessionaires, licensees, contractors or invitees' use,
maintenance, occupation, operation or control of the Premises during the Term,
or resulting from any breach or default in the performance of any obligation to
be performed by Tenant hereunder or for which Tenant is responsible under the
terms of this Lease or pursuant to any governmental or insurance requirement, or
to the extent arising from any act, neglect, fault or omission of Tenant or any
of Tenant's officers, employees, agents, servants, subtenants, concessionaires,
licensees, contractors or invitees, and (ii) from and against all reasonable
legal costs and charges, including reasonable attorneys' and other reasonable
professional fees, incurred in and about any of such matters and the defense of
any action arising out of the same or in discharging the Project and/or Premises
or any part thereof from any and all liens, charges or judgments which may
accrue or be placed thereon by reason of any act or omission of the Tenant,
except and to the extent as may arise out of the negligence or willful
misconduct of Landlord and/or its agents, officers, employees, contractors or
invitees.
(b) Landlord, as a material part of the consideration to be rendered
to Tenant, hereby indemnifies and agrees to defend and hold Tenant and the
Premises harmless from and against (i) any and all liability, penalties, losses,
damages, costs and expenses, demands, causes of action, claims, judgments or
appeals arising from any injury to any person or persons or any damage to any
property to the extent as a result of Landlord's or Landlord's employees,
agents, or contractors, gross negligence or willful misconduct, or resulting
from any breach or default in the performance of any obligation to be performed
by Landlord hereunder or for which Landlord is responsible under the terms of
the Lease or pursuant to any governmental or insurance requirement, and (ii)
from and against all reasonable legal costs and charges, including reasonable
attorneys' and other reasonable professional fees, incurred in and about any of
such matters and the defense of any action arising out of the same or in
discharging Tenant and/or Premises or any part thereof from any and all liens,
charges or judgments which may accrue or be placed thereon by reason of any act
or omission of the Landlord, except and to the extent as may arise out of the
negligence or willful misconduct of Tenant and/or its officers, agents,
employees, assignees, subtenants, concessionaires, licensees, contractors, or
invitees.
(c) In no event shall Landlord, its agents, employees and/or
contractors be liable for any personal injury or death or property damage caused
by other lessees or persons in or about the Premises, the Project and/or the
Building, as the case may be, or caused by public or quasi-public work, or for
consequential damages arising out of any loss of the use of the Premises or any
equipment or facilities therein by Tenant or any person claiming through or
under Tenant.
7.9 DAMAGE TO TENANT'S PROPERTY. Notwithstanding the provisions of
Section 7.8 to the contrary, except to the extent due to the gross negligence or
willful misconduct of Landlord, Landlord, its agents, employees and/or
contractors shall not be liable for (i) any damage to property entrusted to
employees or security officers of the Project or the Building, (ii) loss or
damage to any property by theft or otherwise, or (iii) any injury or damage to
persons or property resulting from fire, explosion, falling substances or
materials, steam, gas, electricity, water or rain which may leak from any part
of the Building, the Common Areas, or the Project or from the pipes, appliances
or plumbing work therein or from the roof, street, or subsurface or from any
other place or resulting from dampness or any other cause, except to the extent
Landlord receives consideration for such damage or injury from a third party.
Neither Landlord nor its agents, employees or contractors shall be liable for
interference with light. Tenant shall give prompt notice to Landlord and
appropriate emergency response officials if Tenant is or becomes aware of fire
or accidents in the Building, the Common Areas or any other portion of the
Project or of defects therein in the fixtures or equipment.
ARTICLE VIII REPAIRS AND MAINTENANCE
8.1 LANDLORD REPAIRS AND MAINTENANCE. Subject to Landlord's right to
reimbursement from Tenant pursuant to Sections 6.1 and 8.3, Landlord shall at
its expense maintain in good condition and repair the Building including without
limitation the foundation, roof and membrane and shall maintain in good
condition the exterior of the Building, utilities, the Building systems
(including HVAC, plumbing, electrical, and mechanical), common area doors,
windows, and walls, and light fixtures, and the Common Areas of the Project.
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. There shall be no abatement of Rent and, except for the gross
negligence or willful misconduct of Landlord or its employees, 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 improvement in or to any
portion of the Premises or in or to fixtures, appurtenances and equipment
therein; provided, that Landlord, its employees, agents and contractors use
reasonable efforts not to unreasonably interfere with Tenant's business in
exercise of Landlord's rights or obligations hereunder. Except as may otherwise
be expressly set forth herein, Tenant affirms that (a) neither Landlord nor any
agent, employee or officer of Landlord has made any representation regarding the
condition of the Premises, the Building, the Common Areas or the Project, and
(b) Landlord shall not be obligated to undertake any repair, alteration,
remodel, improvement, painting or decorating.
8.2 UTILITIES AND SERVICES. Subject to reimbursement pursuant to Sections
6.1 and 8.3, Landlord shall furnish or cause to be furnished to the Premises
water, natural gas for hot water, electricity, sewage, heating, ventilating, air
conditioning services, and janitorial services of the quality provided to office
buildings of similar quality, style, and age in the Portland metropolitan area.
Tenant shall pay before delinquency, at its sole cost and expense, all charges
for water, heat, electricity, power, telephone service, sewer service charges
and other utilities or services charged or attributable directly to the
Premises; provided, however, that if any such services or utilities shall be
billed to Landlord and are not separately billed to the Premises, Tenant shall
pay to Landlord as Additional Rent, an amount equal to that proportion of the
total charges therefor which the rentable area of the Premises bears to the
rentable area of leased area covered by such charges. Notwithstanding the above,
in the event Tenant uses any heating, ventilating and air conditioning services
during non-standard building hours, or if Tenant uses any utility services
beyond standard office usage as reasonably determined by Landlord, Tenant shall
pay the actual cost of such after-hours services or above-standard services, as
the case may be, used by Tenant based on Landlord's reasonable estimate
therefor. At Landlord's option, Landlord may install separate meters to measure
above-standard consumption of services. Tenant shall reimburse the costs of the
purchase and installation of such meters within 15 days after Landlord's billing
therefor.
8.3 TENANT REPAIRS AND MAINTENANCE. Tenant shall, at its expense, (a)
keep the Premises and fixtures in good order, and keep Tenant's personal
property in good order and repair; and (b) make repairs and replacements to the
Premises and pay Landlord for the repairs or replacements to the Buildings if
any such repairs or replacements are needed because of Tenant's misuse or
primary negligence, except to the extent that a claim for such repairs or
replacements is waived under Section 7.6. Upon expiration or earlier termination
of the Term, Tenant shall surrender the Premises to Landlord in the same
condition as when leased except for (i) ordinary wear and tear, (ii) damage by
the elements, fire, or other casualty not required to be repaired, replaced or
paid for by Tenant pursuant to this Lease, (iii) condemnation, and (iv)
alterations as permitted under this Lease unless consent was conditioned on
their removal.
8.4 NON-LIABILITY OF LANDLORD. Notwithstanding anything to the contrary
contained in Sections 8.1 or 8.2 above or elsewhere in this Lease, but except as
expressly provided below, Landlord shall not be in default hereunder or be
liable for any damages directly or indirectly resulting from, nor shall the Rent
herein reserved be abated or rebated by reason of (a) the interruption or
curtailment of the use of the Premises as a result of the installation of any
equipment in connection with the Building or Project; or (b) any failure to
furnish or delay in furnishing any services required to be provided by Landlord,
unless and to the extent such failure or delay is caused by any condition
created by Landlord's active gross negligence; or (c) the limitation,
curtailment, rationing or restriction of the use of water or electricity, gas or
any other form of energy or any other service or utility whatsoever serving the
Premises or Project. However, if, as a result of Landlord's act or omission,
Landlord causes one of the events described in clause (a), (b), or (c) of this
paragraph, and as a result of such event, the Premises are rendered unsuitable
for Tenant's use and Tenant, in fact does not occupy the Premises for its
business operations for seven consecutive days, Base Rent shall xxxxx beginning
on the eighth consecutive day and continuing until such time as the Premises are
again rendered suitable for Tenant's use.
8.5 INSPECTION OF PREMISES. Landlord may enter the Premises to complete
construction undertaken by Landlord on the Premises, to inspect, clean, improve
or repair the same, to inspect the performance by Tenant of the terms and
conditions hereof, show the Premises to prospective purchasers, tenants and
lenders and for all other purposes as Landlord shall reasonably deem necessary
or appropriate; provided, that Landlord shall use reasonable efforts not to
interfere with Tenant's business in exercise of Landlord's rights hereunder.
Tenant hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment of
the Premises and any other loss in, upon or about the Premises, arising from
exercise by Landlord of its rights hereunder except as otherwise provided in
Article XI hereof.
8.6 ACCESS BY TENANT. Tenant and its employees, agents, and invitees
shall have access to the Premises 24 hours a day, seven days a week, subject to
restrictions due to governmental regulation, casualty, and weather.
ARTICLE IX FIXTURES, PERSONAL PROPERTY AND ALTERATIONS
9.1 FIXTURES AND PERSONAL PROPERTY. Tenant, at Tenant's expense, may
install any necessary trade fixtures, equipment and furniture in the Premises,
provided that such items are installed and are removable without damage to the
structure of the Premises , including, but not limited to, damage to drywall,
doors, door frames and floors. Landlord reserves the right to approve or
disapprove of any interior improvements which are visible from outside the
Premises or which violate the CC&R's on wholly aesthetic grounds, but such
approval shall not be unreasonably withheld, conditioned or delayed. Such
improvements must be submitted for Landlord's written approval prior to
installation, or Landlord may remove or replace such items at Tenant's sole
expense. Said trade fixtures, equipment, furniture and personal property shall
remain Tenant's property and shall be removed by Tenant upon the expiration or
earlier termination of the Lease. As a covenant which shall survive the
expiration or earlier termination of the Lease, Tenant shall repair, at Tenant's
sole expense, or at Landlord's election, reimburse Landlord for the cost to
repair all damage caused by the installation or removal of said trade fixtures,
equipment, furniture, personal property or temporary improvements. If Tenant
fails to remove the foregoing items prior to or upon the expiration or earlier
termination of this Lease, Landlord, at its option and without liability to
Tenant for loss thereof, may keep and use them or remove any or all of them and
cause them to be stored or sold in accordance with applicable law, and Tenant
shall, upon demand of Landlord, pay to Landlord as Additional Rent hereunder all
costs and expenses incurred by Landlord in so storing and/or selling said items.
In the event any such fixtures, equipment, and/or furniture of Tenant are sold
by Landlord, the proceeds of such sale shall be applied, first, to all expenses
of Landlord incurred in connection with storage and sale; second, to any amounts
owed by Tenant to Landlord under this Lease or otherwise, and, third, the
remainder, if any, shall be paid to Tenant.
9.2 ALTERATIONS. Tenant shall not make or allow to be made any material
alterations, additions or improvements to the Premises (defined as alterations,
additions or improvements costing in excess of $1,000.00 individually or in the
aggregate with respect to separate items relating to the same improvement or
alteration or any alterations, additions or improvements that affect the
structure or exterior of the Building or any building, mechanical, electrical or
life safety system), either at the inception of the Lease or subsequently during
the Term, without obtaining the prior written consent of Landlord which consent
may be withheld in Landlord's sole discretion with respect to any alteration,
addition or improvement that affects the structure or exterior of the Building
or any building, mechanical, electrical or life safety systems. Tenant shall
deliver to Landlord the contractor's name, references and state license number,
a certificate of liability insurance naming Landlord and Landlord' s manager and
lender(s) as an additional insured, as well as full and complete plans and
specifications of all such alterations, additions or improvements, and any
subsequent modifications or additions to such plans and specifications, and no
proposed work shall be commenced or continued by Tenant until Landlord has
received and given its written approval of each of the foregoing. Landlord shall
either approve or disapprove any proposed alteration, addition or improvement on
or before fifteen (15) days following receipt of all of the foregoing items.
Landlord does not expressly or implicitly covenant or warrant that any plans or
specifications submitted by Tenant are accurate, safe or sufficient or that the
same comply with any applicable laws, ordinances, building codes, or the like.
Further, Tenant shall indemnify, protect, defend and hold Landlord and
Landlord's agents, employees and contractors harmless for, from and against any
loss, damage, liability, claims, cost or expense, including attorneys' fees and
costs, incurred as a result of any defects in design, materials or workmanship
resulting from Tenant's alterations, additions or improvements to the Premises.
All alterations, telephone or telecommunications lines, cables, conduits and
equipment and all other additions or improvements to the Premises made by Tenant
shall remain the property of Tenant until termination of this Lease, at which
time they shall, unless otherwise elected by Landlord by written notice to
Tenant, be and become the property of Landlord. Landlord may, as a condition to
approval of any such alterations, additions or improvements, require Tenant to
remove any partitions, counters, railings, telephone and telecommunications
lines, cables, conduits and equipment and/or other improvements installed by
Tenant during the Term, and Tenant shall repair all damage resulting from such
removal or, at Landlord's option, shall pay to Landlord all costs arising from
such removal. All repairs, alterations, additions and restorations by Tenant
hereinafter required or permitted shall be done in a good and workmanlike manner
and in compliance with the plans and specifications approved by Landlord and in
compliance with all applicable laws and ordinances, building codes, bylaws,
regulations and orders of any federal, state, county, municipal or other public
authority and of the insurers of the Premises and as-built plans and
specifications shall be provided to Landlord by Tenant upon completion of the
work. If required by Landlord, and only if Tenant is not Schnitzer Steel
Industries, Inc., Tenant shall secure at Tenant's own cost and expense a
completion and lien indemnity bond or other adequate security, including without
limitation an indemnity agreement from Tenant's parent in form and substance
reasonably satisfactory to Landlord. Tenant shall reimburse Landlord for
Landlord's reasonable out-of-pocket costs (including any professional fees
incurred by Landlord and a reasonable administrative fee payable to Landlord's
manager) for reviewing and approving or disapproving plans and specifications
for any proposed alterations and observing the alterations.
9.3 LIENS. Tenant shall promptly file and/or record, as applicable, all
notices of completion provided for by law, and shall pay and discharge all
claims for work or labor done, supplies furnished or services rendered at the
request of Tenant or at the request of Landlord on behalf of Tenant, and shall
keep the Premises and the Project free and clear of all mechanics' and
materialmen's liens in connection therewith. Landlord shall have the right, and
shall be given ten (10) business days written notice by Tenant prior to
commencement of the work, to post or keep posted on the Premises, or in the
immediate vicinity thereof, any notices of non-responsibility for any
construction, alteration, or repair of the Premises by Tenant. If any such lien
is filed, Tenant shall cause same to be discharged of record within ten (10)
days following written notice thereof, or if Tenant disputes the correctness or
validity of any claim of lien, Landlord may, in its reasonable discretion,
permit Tenant to post or provide security in a form and amount acceptable to
Landlord to insure that title to the Project remains free from the lien claimed.
If said lien is not timely discharged Landlord may, but shall not be required
to, take such action or pay such amount as may be necessary to remove such lien
and Tenant shall pay to Landlord as Additional Rent any such amounts expended by
Landlord, together with interest thereon at the Default Rate (as defined in
Section 5.3 hereof), within five (5) days after notice is received from Landlord
of the amount expended by Landlord.
ARTICLE X USE AND COMPLIANCE WITH LAWS
10.1 GENERAL USE AND COMPLIANCE WITH LAWS. Tenant shall use the Premises
only for Tenant's business described in Section 1.1(f) above, and uses
customarily incidental thereto and for no other use without the prior written
consent of Landlord which consent shall not be unreasonably withheld,
conditioned or delayed. Tenant shall, at Tenant's sole cost and expense, comply
with applicable requirements of municipal, county, state, federal and other
applicable governmental authorities now or hereafter in force pertaining to
Tenant's business operations, alterations and/or specific use of the Premises
and/or the Project, and shall secure any necessary permits therefore and shall
faithfully observe in the use of the Premises and the Project, applicable
municipal, county, state, federal and other applicable governmental entities'
requirements which are now or which may hereafter be in force. Tenant, in
Tenant's use and occupancy of the Premises, shall not subject or permit the
Premises and/or the Project to be used in any manner which would tend to damage
any portion thereof, or which would increase the cost of any insurance paid by
Landlord with respect thereto. Tenant shall not do or permit anything to be done
in or about the Premises, the Common Areas and/or the Project which will in any
way obstruct or interfere with the rights of other tenants or occupants of the
Common Areas and/or the Project or use or allow the Premises or any portion of
the Project to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit a nuisance in, on or about
the Premises, the Common Areas and/or the Project. Tenant shall comply with all
covenants and obligations in the CC&R's which affect the use and operation of
the Premises, the Common Areas and/or the Project.
10.2 HAZARDOUS MATERIALS.
(a) DEFINED TERMS.
(i) "HAZARDOUS MATERIALS" means, among other things, any of the
following, in any amount: (a) any petroleum or petroleum derived or derivative
product, asbestos in any form, urea formaldehyde and polychlorinated biphenyls
and medical wastes; (b) any radioactive substance; (c) any toxic, infectious,
reactive, corrosive, ignitable or flammable chemical or chemical compound; and
(d) any chemicals, materials or substances, whether solid, liquid or gas,
defined as or included in the definitions of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," "solid waste," or
words of similar import in any federal, state or local statute, law, ordinance
or regulation or court decisions now existing or hereafter existing as the same
may be interpreted by government offices and agencies.
(ii) "HAZARDOUS MATERIALS LAWS" means any federal, state or
local statutes, laws, ordinances or regulations or court decisions now existing
or hereafter existing that control, classify, regulate, list or define Hazardous
Materials or require remediation of Hazardous Materials contamination.
(b) COMPLIANCE WITH HAZARDOUS MATERIALS LAWS. Tenant will not cause
any Hazardous Material to be brought upon, kept, generated or used on the
Project in a manner or for a purpose prohibited by or that could result in
liability under any Hazardous Materials Law; provided, however, in no event
shall Tenant allow any Hazardous Material to be brought upon, kept, generated or
used on the Project other than those Hazardous Materials for which Tenant has
received Landlord's prior written consent (other than small quantities of
cleaning or other/industrial supplies as are customarily used by a tenant in the
ordinary course in a general office facility). Tenant, at its sole cost and
expense, will comply with (and obtain all permits required under) all Hazardous
Materials Laws, groundwater wellhead protection laws, storm water management
laws, fire protection provisions, and prudent industry practice relating to the
presence, storage, transportation, disposal, release or management of Hazardous
Materials in, on, under or about the Project that Tenant brings upon, keeps,
generates or uses on the Project (including, without limitation, but subject to
this Section 10.2, immediate remediation of any Hazardous Materials in, on,
under or about the Project that Tenant brings upon, keeps, generates or uses on
the Project in compliance with Hazardous Materials Laws) and in no event shall
Tenant allow any liens or encumbrances pertaining to Tenant's use of Hazardous
Materials to attach to any portion of the Project. On or before the expiration
or earlier termination of this Lease, Tenant, at its sole cost and expense, will
completely remove from the Project (regardless whether any Hazardous Materials
Law requires removal), in compliance with all Hazardous Materials Laws, all
Hazardous Materials Tenant causes to be present in, on, under or about the
Project. Tenant will not take any remedial action in response to the presence of
any Hazardous Materials in on, under or about the Project, nor enter into (or
commence negotiations with respect to) any settlement agreement, consent decree
or other compromise with respect to any claims relating to or in any way
connected with Hazardous Materials in, on, under or about the Project, without
first notifying Landlord of Tenant's intention to do so and affording Landlord
reasonable opportunity to investigate, appear, intervene and otherwise assert
and protect Landlord's interest in the Project. Landlord shall have the right
from time to time to inspect the Premises to determine if Tenant is in
compliance with this Section 10.2.
(c) NOTICE OF ACTIONS. Tenant will notify Landlord of any of the
following actions affecting Landlord, Tenant or the Project that result from or
in any way relate to Tenant's use of the Project immediately after receiving
notice of the same: (a) any enforcement, clean-up, removal or other governmental
or regulatory action instituted, completed or threatened under any Hazardous
Materials Law; (b) any claim made or threatened by any person relating to
damage, contribution, liability, cost recovery, compensation, loss or injury
resulting from or claimed to result from any Hazardous Material; and (c) any
reports made by any person, including Tenant, to any environmental agency
relating to any Hazardous Material, including any complaints, notices, warnings
or asserted violations. Tenant will also deliver to Landlord, as promptly as
possible and in any event within five (5) business days after Tenant first
receives or sends the same, copies of all claims, reports, complaints, notices,
warnings or asserted violations relating in any way to the Project or Tenant's
use of the Project. Upon Landlord's written request, Tenant will promptly
deliver to Landlord documentation acceptable to Landlord reflecting the legal
and proper disposal of all Hazardous Materials removed or to be removed from the
Premises. All such documentation will list Tenant or its agent as a responsible
party and the generator of such Hazardous Materials and will not attribute
responsibility for any such Hazardous Materials to Landlord or Landlord's
property manager.
(d) DISCLOSURE AND WARNING OBLIGATIONS. Tenant acknowledges and
agrees that all reporting and warning obligations required under Hazardous
Materials Laws resulting from or in any way relating to Tenant's use of the
Premises or Project are Tenant's sole responsibility, regardless whether the
Hazardous Materials Laws permit or require Landlord to report or warn.
(e) INDEMNIFICATION. Tenant releases and will indemnify, defend
(with counsel reasonably acceptable to Landlord), protect and hold harmless the
Landlord and Landlord's agents, employees and contractors for, from and against
any and all claims, liabilities, damages, losses, costs and expenses whatsoever
arising or resulting, in whole or in part, directly or indirectly, from the
presence, treatment, storage, transportation, disposal, release or management of
Hazardous Materials in, on, under, upon or from the Project (including water
tables and atmosphere) that Tenant brings upon, keeps, generates or uses on the
Premises or the Project. Tenant's obligations under this Section include,
without limitation and whether foreseeable or unforeseeable, (a) the costs of
any required or necessary repair, clean-up, detoxification or decontamination of
the Project; (b) the costs of implementing any closure, remediation or other
required action in connection therewith as stated above; (c) the value of any
loss of use and any diminution in value of the Project, and (d) consultants '
fees, experts' fees and response costs. The Tenant's obligations under this
section survive the expiration or earlier termination of this Lease. Landlord
releases and will indemnify, defend (with counsel reasonably acceptable to
Tenant), protect and hold harmless the Tenant and Tenant's agents, employees and
contractors for, from and against any and all claims, liabilities, damages,
losses, costs and expenses whatsoever arising or resulting, in whole or in part,
directly or indirectly, from the presence, treatment, storage, transportation,
disposal, release or management of Hazardous Materials in, on, under, upon or
from the Project (including water tables and atmosphere) that Landlord brings
upon, keeps, generates or uses on the Premises or the Project. Landlord's
obligations under this Section include, without limitation and whether
foreseeable or unforeseeable, (a) the costs of any required or necessary repair,
clean-up, detoxification or decontamination of the Project; (b) the costs of
implementing any closure, remediation or other required action in connection
therewith as stated above; (c) the value of any loss of use and any diminution
in value of the Project, and (d) consultants ' fees, experts' fees and response
costs. The Landlord's obligations under this section survive the expiration or
earlier termination of this Lease.
(f) HAZARDOUS MATERIALS REPRESENTATION BY LANDLORD. Landlord
represents to Tenant that, to its actual knowledge and except as Landlord has
previously disclosed to Tenant, Landlord has not caused the generation, storage
or release of Hazardous Materials upon the Premises, except in accordance with
Hazardous Materials Laws and prudent industry practices regarding construction
of the Premises.
10.3 SIGNS. The Tenant shall not paint, display, inscribe, place or affix
any sign, picture, advertisement, notice, lettering, or direction on any part of
the outside of the Building or the Project or visible from the outside of the
Premises, the Building or the Project, except as first approved by Landlord or
as may be set forth in the Tenant Improvement Plans. Landlord's approval of any
proposed sign, picture, advertisement, notice, lettering, or direction shall not
be unreasonably withheld, conditioned, or delayed.
ARTICLE XI DAMAGE AND DESTRUCTION
11.1 RECONSTRUCTION. If the "Relevant Space" (which means the Premises,
reasonable access to the Premises, or any part of either Building or the Project
that provides essential services to the Premises) is damaged or destroyed during
the Term, Landlord shall, except as hereinafter provided, diligently repair or
rebuild it to substantially the condition in which it existed immediately prior
to such damage or destruction. If Landlord is obligated or elects to repair or
restore as herein provided, Landlord shall be obligated to make repair or
restoration of only those portions of the Premises which were initially provided
at Landlord's expense or as part of the original installation by Landlord for
Tenant and the repair and/or restoration of other items within the Premises
shall be the obligation of the Tenant.
11.2 RENT ABATEMENT. Rent due and payable hereunder shall be abated
proportionately during any period in which, by reason of any such damage or
destruction, there is substantial interference with the operation of Tenant's
business in the Premises. Such abatement shall continue for the period
commencing with such damage or destruction and ending with a substantial
completion by Landlord of the work of repair or reconstruction which Landlord is
obligated or undertakes to do. If it be determined that continuation of business
is not practical pending reconstruction, and if Landlord does not elect to or is
unable to provide alternative temporary space for continuation of such business,
then Rent due and payable hereunder shall xxxxx, until reconstruction is
substantially completed or until business is totally or partially resumed,
whichever is the earlier. Tenant shall not be entitled to any claim,
compensation or damages for loss in the use in the whole or any part of the
Premises (including loss of business) and/or any inconvenience or annoyance
occasioned by such damage, repair, reconstruction or restoration.
11.3 EXCESSIVE DAMAGE OR DESTRUCTION. If the Relevant Space is damaged or
destroyed to the extent that it cannot within Landlord's reasonable discretion,
with reasonable diligence, be fully repaired or restored by Landlord (using
standard working methods and procedures) within the earlier of (i) one hundred
twenty (120) days after the date of the damage or destruction, or (ii) the
expiration of the Term hereof, Landlord may terminate this Lease by written
notice to Tenant within thirty (30) days of the date of the damage or
destruction. If Landlord does not terminate the Lease, this Lease shall remain
in full force and effect and Landlord shall diligently repair and restore the
damage as soon as reasonably possible.
11.4 UNINSURED CASUALTY. Notwithstanding anything contained herein to the
contrary, in the event of damage to or destruction of all or any portion of the
Building, which damage or destruction is not fully covered by the insurance
proceeds received by Landlord under the insurance policies required under
Section 7.1 hereinabove, Landlord may terminate this Lease by written notice to
Tenant given within sixty (60) days after the date of notice to Landlord that
said damage or destruction is not so covered. If Landlord does not elect to
terminate this Lease, the Lease shall remain in full force and effect and the
Building shall be repaired and rebuilt in accordance with the provisions for
repair set forth in Section 11.1 hereinabove.
11.5 WAIVER. With respect to any damage or destruction which Landlord is
obligated to repair or may elect to repair under the terms of this Article XI,
and to the extent permitted by law, Tenant hereby waives any rights to terminate
this Lease pursuant to rights otherwise accorded by law to tenants, except as
expressly otherwise provided herein.
11.6 MORTGAGEE'S RIGHT. Notwithstanding anything herein to the contrary,
if the holder of any indebtedness secured by a mortgage or deed of trust
covering the Building and/or the Project requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to Tenant within fifteen
(15) days after such requirement is made. Upon any termination of this Lease
under the provisions hereof, the parties shall be released without further
obligation to the other from date possession of the Premises is surrendered to
Landlord, except for items which are theretofore accrued and are then unpaid.
11.7 DAMAGE NEAR END OF TERM. Notwithstanding anything to the contrary
contained in this Article XI, in the event the Premises or the Building are
subject to excessive damage (as defined in Section 11.3) during the last
twenty-four (24) months of the Term or any applicable extension periods,
Landlord may elect to terminate this Lease by written notice to Tenant within
thirty (30) days after the date of such damage.
ARTICLE XII EMINENT DOMAIN
In the event the whole of the Premises, Building, Project and/or Common
Areas, as the case may be, and/or such part thereof as shall materially
interfere with Tenant's use and occupation thereof, shall be taken for any
public or quasi-public purpose by any lawful power or authority by exercise of
the right of appropriation, condemnation or eminent domain, or is sold in lieu
of or to prevent such taking, then Tenant shall have the right to terminate this
Lease effective as of the date possession is required to be surrendered to said
authority. In the event the whole of the Premises, Building, Project, and/or
Common Areas, as the case may be, or such part thereof as shall substantially
interfere with Landlord's use and occupation thereof, or if any access points to
adjoining streets, shall be taken for any public or quasi-public purpose by any
lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or is sold in lieu of or to prevent such taking,
then Landlord shall have the right to terminate this Lease effective as of the
date possession is required to be surrendered to said authority. Except as
provided below, Tenant shall not assert any claim against Landlord or the taking
authority for any compensation because of such taking, and Landlord shall be
entitled to receive the entire amount of any award without deduction for any
estate or interest of Tenant in the Premises. Nothing contained in this Article
XII shall be deemed to give Landlord any interest in any separate award made to
Tenant for the taking of personal property and fixtures belonging to Tenant or
for Tenant's moving expenses. In the event the amount of property or the type of
estate taken shall not materially interfere with the conduct of Tenant's
business, Landlord shall be entitled to the entire amount of the award without
deduction for any estate or interest of Tenant, Landlord shall promptly proceed
to restore the Building to substantially their same condition prior to such
partial taking less the portion thereof lost in such condemnation, and the Base
Rent shall be proportionately reduced by the time during which, and the portion
of the Premises which, Tenant shall have been deprived of possession on account
of said taking and restoration.
ARTICLE XIII DEFAULT
13.1 EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an "Event of Default" on the part of the Tenant:
(a) Tenant shall fail to pay on or before the due date any
installment of Rent or other payment required pursuant to this Lease within five
(5) days after Tenant's receipt of written notice from Landlord of Tenant's
failure to make such payment;
(b) Tenant shall fail to comply with any term, provision, or covenant
of this Lease, other than the payment of Rent or other sums of money due
hereunder, and such failure is not cured within fifteen (15) days after written
notice thereof to Tenant (said notice being in lieu of, and not in addition to,
any notice required as a prerequisite to a forcible entry and detainer or
similar action for possession of the Premises); provided that if the nature of
such cure is such that a longer cure period is necessary, Tenant shall only be
in default if Tenant shall have failed to commence such cure within said fifteen
(15) day period and thereafter to have diligently prosecuted such cure to
completion;
(c) Tenant shall file a petition or be adjudged a debtor or bankrupt
or insolvent under the United States Bankruptcy Code, as amended, or any similar
law or statute of the United States or any State; or a receiver or trustee shall
be appointed for all or substantially all of the assets of Tenant and such
appointment or petition, if involuntary, is not dismissed within sixty (60) days
of filing; or
(d) Tenant shall make an assignment for the benefit of creditors.
13.2 REMEDIES.
(a) Upon the occurrence of any Event of Default set forth in this
Lease, in addition to any other remedies available to Landlord at law or in
equity, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder. In the event that Landlord shall elect to so
terminate this Lease, then Landlord may recover from Tenant: (i) any unpaid rent
which has been earned at the time of such termination plus interest at the rates
contemplated by this Lease; plus (ii) the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably avoided
plus interest at the rates contemplated by this Lease; plus (iii) the worth at
the time of award of the amount by which the unpaid rent for the balance of the
Term after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; plus (iv) the unamortized balance of the
value of any free Rent, tenant improvement costs, commissions and any other
monetary concessions provided to Tenant pursuant to this Lease, as amortized
over the initial Term of this Lease; plus (v) any other amount necessary to
compensate Landlord for all the damage proximately caused by Tenant's failure to
perform Tenant's obligation under this Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited to, costs
to restore the Premises to good condition, costs to remodel, renovate or
otherwise prepare the Premises, or portions thereof, for a new tenant, leasing
commissions, marketing expenses, attorneys' fees, and free rent, moving
allowances and other types of leasing concessions. As used in Subsections
13.2(a) (iii) above, the "worth at the time of award" is computed by discounting
such amount at the discount rate of the Federal Reserve Bank of San Francisco at
the time of award plus one percent (1%). Landlord agrees to use its commercially
reasonable efforts to mitigate its damages.
(b) In the event of any such default by Tenant, Landlord shall also
have the right with or without terminating this Lease, to re-enter the Premises
and remove all persons and property from the Premises; such property may be
removed and stored in a public warehouse or elsewhere at the cost of and for the
account of the Tenant. No re-entry or taking possession of the Premises by
Landlord pursuant to this Section 13.2(b) shall be construed as an acceptance of
a surrender of the Premises or an election to terminate this Lease unless a
written notice of such intention is given to Tenant or unless the termination
thereof is decreed by a court of competent jurisdiction.
(c) In the event that Landlord shall elect to re-enter as provided
above or shall take possession of the Premises pursuant to legal proceedings or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided above, Landlord may from time to time, without
terminating this Lease, either recover all Rent as it becomes due or relet the
Premises or any part thereof for the Term of this Lease on terms and conditions
as Landlord at its sole discretion may deem advisable with the right to make
alterations and repairs to the Premises.
(d) In the event that Landlord shall elect to so relet, the rents
received by Landlord from such reletting shall be applied: first to the payment
of any indebtedness other than Rent due hereunder from Tenant to Landlord;
second to the payment of any costs of such reletting; third, to the payment of
the cost of any alterations and repairs to the Premises; fourth, to the payment
of Rent due and unpaid hereunder; and the residual, if any, shall be held by
Landlord and applied to payment of future Rent as the same shall become due and
payable hereunder. Should that portion of such rents received from such
reletting during the month which is applied to the payment of Rent be less than
the Rent payable during that month by Tenant hereunder, then Tenant shall pay
any such deficiency to Landlord immediately upon demand therefor by Landlord.
Such deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as is certain, any of the costs and expenses incurred by
Landlord in such reletting or in making such alterations and repairs not covered
by the rents received from such reletting.
(e) All rights, options and remedies of Landlord contained in this
Lease shall be construed and held to be cumulative, and no one of them shall be
exclusive of the other, and Landlord shall have the right to pursue any one or
all of such remedies or any other remedy or relief which may be provided by law,
whether or not stated in this Lease. No waiver of any default of Tenant
hereunder shall be implied from any acceptance by Landlord of any Rent or other
payments due hereunder or any omission by Landlord to take any action on account
of such default if such default persists or is repeated, and no express waiver
shall affect defaults other than as specified in said waiver. The consent or
approval of Landlord to or of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to waive or render unnecessary Landlord's consent
or approval to or of any subsequent similar acts by Tenant.
(f) In the event that during the term of this Lease, Tenant commits
more than two (2) acts or omissions of default for which default notices are
given by Landlord pursuant to this Article XIII (whether or not such defaults
are cured by Tenant), and if the defaults are material in Landlord's reasonable
judgment, Landlord may, at its option, elect to terminate this Lease. Landlord's
election to exercise its early termination rights shall be effective only upon
written notice delivered to Tenant specifying Landlord's election to cause an
early termination of this Lease. Such early termination shall be in effect when
such written notice is provided to Tenant. Landlord's right of early termination
shall be in addition to all other rights and remedies available to Landlord at
law or in equity.
13.3 LANDLORD'S DEFAULT. Landlord shall not be in default unless Landlord
fails to perform its obligations under this Lease within thirty (30) days after
written notice by Tenant, or if such failure is not reasonably capable of being
cured within such thirty (30) day period, Landlord shall not be in default
unless Landlord has failed to commence the cure and diligently pursue the cure
to completion. In no event shall Tenant have the remedy to terminate this Lease
except upon final adjudication of competent jurisdiction authorizing such
default. In no event shall Landlord be liable to Tenant or any person claiming
through or under Tenant for consequential, exemplary or punitive damages.
ARTICLE XIV FILING OF PETITION
Landlord and Tenant (as either debtor or debtor-in-possession) agree that
if a petition ("Petition") is filed by or against Tenant under any chapter of
Title 11 of the United States Code (the "Bankruptcy Code"), the following
provisions shall apply:
(a) Adequate protection for Tenant's obligations accruing after
filing of the Petition and before this Lease is rejected or assumed shall be
provided within 15 days after filing in the form of a security deposit equal to
three months ' Base Rent and Additional Rent and other Lease charges, to be held
by the court or an escrow agent approved by Landlord and the court.
(b) The sum of all amounts payable by Tenant to Landlord under this
Lease constitutes reasonable compensation for the occupancy of the Premises by
Tenant.
(c) Tenant or Trustee shall give Landlord at least 30 days written
notice of any abandonment of the Premises or any proceeding relating to
administrative claims. If Tenant abandons without notice, Tenant or Trustee
shall stipulate to entry of an order for relief from stay to permit Landlord to
reenter and relet the Premises.
(d) If Tenant failed to timely and fully perform any of its obligations under
this Lease before the filing of the Petition, whether or not Landlord has given
Tenant written notice of that failure and whether or not any time period for
cure expired before the filing of the Petition, Tenant shall be deemed to have
been in default on the date the Petition was filed for all purposes under the
Bankruptcy Code.
(e) For the purposes of Section 365(b)(1) of the Bankruptcy Code,
prompt cure of defaults shall mean cure within 30 days after assumption.
(f) For the purposes of Section 365(b)(1) and 365(f)(2) of the
Bankruptcy Code, adequate assurance of future performance of this Lease by
Tenant, Trustee or any proposed assignee will require that Tenant, Trustee or
the proposed assignee deposit three months of Base Rent and Additional Rent into
an escrow fund (to be held by the court or an escrow agent approved by Landlord
and the court) as security for such future performance. In addition, if this
Lease is to be assigned, adequate assurance of future performance by the
proposed assignee shall require that: (i) the assignee have a tangible net worth
not less than the net worth of Tenant as of the Commencement Date or that such
assignee's performance be unconditionally guaranteed by a person or entity that
has a tangible net worth not less than the net worth of Tenant as of the
Commencement Date; (ii) the assignee demonstrate that it possesses a history of
success in operating a business of similar size and complexity in a similar
market as Tenant's business; and (iii) assignee assume in writing all of
Tenant's obligations relating to the Premises or this Lease.
(g) If Tenant or Trustee intends to assume and/or assign this Lease,
Tenant or Trustee shall provide Landlord with 30 days written notice of the
proposed action, separate from and in addition to any notice provided to all
creditors. Notice of a proposed assumption shall state the assurance of prompt
cure, compensation for loss and assurance of future performance to be provided
to Landlord. Notice of a proposed assignment shall state: (i) the name, address,
and federal tax identification and registration numbers of the proposed
assignee; (ii) all of the terms and conditions of the proposed assignment, and
(iii) the assignee's proposed adequate assurance of future performance to be
provided to Landlord. (h) If Tenant is in default under this Lease when the
Petition is filed, Landlord shall not be required to provide Tenant or Trustee
with services or supplies under this Lease or otherwise before Tenant assumes
this Lease, unless Tenant compensates Landlord for such services and supplies in
advance.
ARTICLE XV ASSIGNMENT AND SUBLETTING
15.1 PROHIBITION. Tenant shall not assign, mortgage, pledge or otherwise
transfer or encumber this Lease, in whole or in part, nor sublet, assign, or
permit occupancy by any party other than Tenant of all or any part of the
Premises, without the prior written consent of Landlord in each instance which
consent shall not be unreasonably withheld, conditioned, or delayed. Tenant
shall at the time the Tenant requests the consent of Landlord, deliver to
Landlord such information in writing as Landlord may reasonably require
respecting the proposed assignee or subtenant including, without limitation, the
name, address, nature of business, ownership, financial responsibility and
standing of such proposed assignee or subtenant and Landlord shall have not less
than twenty (20) business days after receipt of all required information to
elect one of the following: (a) consent to such proposed assignment, encumbrance
or sublease, or (b) refuse such consent, or (c) elect to terminate this Lease,
in the case of a proposed assignment, or elect to terminate the Lease with
respect to the portion of the Premises proposed to be subleased, as applicable.
Without making a formal request for consent to an assignment or sublease, Tenant
may request that Landlord give Tenant its decision whether it intends to enforce
the recapture provision in clause (c). Landlord agrees to respond to such
request within 20 days after Tenant's request for the decision. In addition, as
a condition to Landlord's consent to any assignment, sublease or encumbrance of
this Lease shall be the delivery to Landlord of a true copy of the fully
executed instrument of assignment, transfer or encumbrance and an agreement
executed by the assignee, sublessee or other transferee in form and substance
reasonably satisfactory to Landlord and expressly enforceable by Landlord,
whereby the assignee assumes and agrees to be bound by the terms and provisions
of this Lease and perform all the obligations of Tenant hereunder with respect
to the assigned or subleased portion of the Premises. No assignment or
subletting by Tenant shall relieve Tenant of any obligation under this Lease,
including Tenant's obligation to pay Base Rent and Additional Rent hereunder.
Any purported assignment or subletting contrary to the provisions hereof without
consent shall be void. The consent by Landlord to any assignment or subletting
shall not constitute a waiver of the necessity for such consent to any
subsequent assignment of subletting. Tenant 's sole remedy for Landlord's
refusal to consent to a proposed assignee or sublessee of Tenant will be an
action or proceeding for specific performance, injunction or declaratory relief.
Tenant shall pay Landlord's reasonable processing costs and attorneys' fees
incurred in reviewing any proposed Assignment or sublease.
15.2 EXCESS RENTAL. If Tenant assigns this Lease or subleases the
Premises, Tenant shall pay to Landlord as Additional Rent under this Lease fifty
percent (50%) of the Profit on such transaction as herein provided. For purposes
of this Section 15.2, the term "Profit" means the consideration received by
Tenant from an assignee or subtenant in excess of the amount Tenant must pay
Landlord under this Lease, which amount is to be prorated where a part of the
Premises is subleased or assigned. In determining the Profit, the consideration
received by Tenant shall be deemed to be reduced by the leasing commissions paid
by Tenant, payments attributable to the costs of improvements made to the
Premises at Tenant's cost for the assignee or sublessee, and other reasonable,
out-of-pocket costs paid by Tenant, such as attorney fees related to Tenant's
obtaining an assignee or sublessee, costs of advertising or marketing the space,
moving expenses paid by Tenant for the assignee or subtenant, and other economic
concessions given by Tenant to the assignee or sublessee. Tenant shall pay fifty
percent (50%) of the Profit to Landlord within thirty (30) days after the end of
each calendar year during which Tenant collects any Profit.
15.3 SCOPE. The prohibition against assigning or subletting contained in
this Article XV shall be construed to include a prohibition against any
assignment or subletting by operation of law. If this Lease be assigned, or if
the underlying beneficial interest of Tenant is transferred, or if the Premises
or any part thereof be sublet or occupied by anybody other than Tenant, Landlord
may collect rent from the assignee, subtenant or occupant and apply the net
amount collected to the Rent herein reserved and apportion any excess rent so
collected in accordance with the terms of the immediately preceding paragraph,
but no such assignment, subletting, occupancy or collection shall be deemed a
waiver of this covenant, or the acceptance of the assignee, subtenant or
occupant as tenant, or a release of Tenant from the further performance by
Tenant of covenants on the part of Tenant herein contained. No assignment or
subletting shall affect the continuing primary liability of Tenant (which,
following assignment, shall be joint and several with the assignee), and Tenant
shall not be released from performing any of the terms, covenants and conditions
of this Lease.
15.4 WAIVER. Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee or failure of Landlord to take action against any assignee or
sublease, Tenant hereby agrees that Landlord may, at its option, and upon not
less than ten (10) days' notice to Tenant, proceed against Tenant without having
taken action against or joined such assignee or sublessee, except that Tenant
shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee.
15.5 CHANGE IN CONTROL. So long as Tenant is not in default of the Lease,
Tenant shall have the right to assign this Lease to any corporation or other
entity which is controlled by, under the control of, or under common control
with Tenant, or any corporation into which Tenant may be merged or consolidated,
or which purchases all or substantially all of the assets or stock of Tenant
(each an "Affiliate of Tenant"); provided, however, (a) Tenant shall not be
released from its obligations under this Lease, (b) Landlord shall be given at
least 15 days prior written notice of the assignment, (c) Landlord shall be
given a copy of the document effecting the assignment at least 15 days prior to
the date on which the assignment shall occur, and (d) from and after the date of
the assignment, Tenant shall be jointly and severally liable with the Affiliate
of Tenant with respect to all obligations of Tenant under this Lease.
ARTICLE XVI ESTOPPEL CERTIFICATE, ATTORNMENT AND SUBORDINATION
16.1 ESTOPPEL CERTIFICATES. Within ten (10) business days after request
therefor by Landlord, or if on any sale, assignment or hypothecation by Landlord
of Landlord's interest in the Project and/or the Premises, or any part thereof,
an estoppel certificate shall be required from Tenant, Tenant shall deliver a
certificate in the form attached hereto as Exhibit G, or in such other form as
requested by Landlord, to any proposed mortgagee or purchaser, and to Landlord,
certifying (if such be the case) that this Lease is in full force and effect,
the date of Tenant's most recent payment of Rent, and that Tenant has no
defenses or offsets outstanding, or stating those claimed by Tenant, and any
other information contained in such Exhibit G or reasonably requested by
Landlord or such proposed mortgagee or purchaser. Tenant's failure to deliver
said statement within said period shall, at Landlord's option be an Event of
Default hereunder and shall in any event be conclusive upon Tenant that: (i)
this Lease is in full force and effect, without modification except as may be
represented by Landlord; (ii) there are no uncured defaults in Landlord's
performance and Tenant has no right to offset, counterclaim or deduction against
Rent hereunder; and (iii) no more than one period's Base Rent has been paid in
advance. Landlord agrees that it shall, at any time upon not less than ten days'
prior written request from Tenant, execute, acknowledge, and deliver a statement
in writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect); (ii) certifying
the date to which Rent and other charges are paid in advance, if any, and the
amount of any security deposit which has been paid; (iii) acknowledging that
there are not, to Landlord's knowledge, any uncured defaults on the part of
Tenant, or specifying such defaults, if any are claimed; and (iv) certifying to
Tenant correct and reasonably ascertainable facts that are covered by the terms
of this Lease. Any such statement may be conclusively relied upon by any
prospective purchaser of the Premises, any assignee of this Lease, or any lender
or prospective lender.
16.2 ATTORNMENT. Tenant shall, in the event any proceedings are brought
for the foreclosure of, or in the event of exercise of the power of sale under,
any mortgage or deed of trust made by Landlord, its successors or assigns,
encumbering the Building, or any part thereof or in the event of termination of
a ground lease, if any, and if so requested, attorn to the purchaser upon such
foreclosure or sale or upon any grant of a deed in lieu of foreclosure and
recognize such purchaser as Landlord under this Lease; provided, that such
purchaser recognizes Tenant's rights under this Lease and agrees not to disturb
Tenant's quiet possession of the Premises for so long as Tenant is not in
default hereunder.
16.3 SUBORDINATION. The rights of Tenant hereunder are and shall be, at
the election of any mortgagee or the beneficiary of a deed of trust encumbering
the Project (or the portion thereof on which the Building is located) and/or
Building, subject and subordinate to the lien of such mortgage or deed of trust,
or the lien resulting from any other method of financing or refinancing, now or
hereafter in force against the Project (or the portion thereof on which the
Building is located) and/or the Building, and to all advances made or hereafter
to be made upon the security thereof. If requested, Tenant agrees to execute
such documentation as may be reasonably required by Landlord or its lender to
further effect the provisions of this Article so long as the holder of the
mortgage, deed of trust or other lien at issue agrees not to disturb Tenant's
rights under this Lease so long as Tenant is not in default of this Lease.
16.4 RECORDING. Tenant covenants and agrees with Landlord that Tenant
shall not record this Lease. At Tenant's request, Landlord agrees to execute and
acknowledge a memorandum of this Lease and deliver such memorandum to Tenant so
that Tenant may record the same. Notwithstanding the provisions of Section 16.3,
in the event that Landlord or its lender requires this Lease or a memorandum
thereof to be recorded in priority to any mortgage, deed of trust or other
encumbrance which may now or at any time hereafter affect in whole or in part
the Building, the Project (or the portion thereof on which the Building is
located), and whether or not any such mortgage, deed of trust or other
encumbrance shall affect only the Building, the Project (or the portion thereof
on which the Building is located), or shall be a blanket mortgage, deed of trust
or encumbrance affecting other premises as well, the Tenant covenants and agrees
with Landlord that the Tenant shall execute promptly upon request from Landlord
any reasonable certificate, reasonable priority agreement or other reasonable
instrument which may from time to time be requested to give effect thereto.
16.5 SUBORDINATION OF LANDLORD'S LIEN. Landlord agrees to subordinate its
landlord's lien on Tenant's personal property to the lien of Tenant's lender if
the terms of such subordination are reasonably acceptable to Landlord.
ARTICLE XVII MISCELLANEOUS
17.1 NOTICES. All notices required to be given hereunder shall be in
writing and mailed postage prepaid by certified or registered mail, return
receipt requested, or by personal delivery or nationally recognized courier
service, to the appropriate address indicated in Section 1.1(b) or Section
1.1(e), as appropriate, at such street address or street addresses (but not more
than three such addresses) as either Landlord or Tenant may, from time to time,
respectively, designate in a written notice given to the other. Notices shall be
deemed sufficiently served upon the earlier of actual receipt or the expiration
of three (3) days after the date of mailing thereof. Tenant agrees to accept
service of process for all matters related to this Lease at the Premises.
17.2 SUCCESSORS BOUND. This Lease and each of its covenants and conditions
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective assignees, subject to the provisions hereof. Whenever in this
Lease a reference is made to Landlord, such reference shall be deemed to refer
to the person in whom the interest of Landlord shall be vested, and Landlord
shall have no obligation hereunder as to any claim arising after the transfer of
its interest in the Building. Any successor or assignee of the Tenant who
accepts an assignment of the benefit of this Lease and enters into possession or
enjoyment hereunder shall thereby assume and agree to perform and be bound by
the covenants and conditions thereof. Nothing herein contained shall be deemed
in any manner to give a right of assignment without the prior written consent of
Landlord pursuant to, or otherwise as provided in, Article XV hereof.
17.3 WAIVER. No waiver of any default or breach of any covenant by either
party hereunder shall be implied from any omission by either party to take
action on account of such default if such default persists or is repeated, and
no express waiver shall affect any default other than the default specified in
the waiver and said waiver shall be operative only for the time and to the
extent therein stated. Waivers of any covenant, term or condition contained
herein by either party shall not be construed as a waiver of any subsequent
breach of the same covenant, term or condition. The consent or approval by
either party to or of any act by either party requiring further consent or
approval shall not be deemed to waive or render unnecessary their consent or
approval to or of any subsequent similar acts.
17.4 SUBDIVISION AND EASEMENTS. Landlord reserves the right to: (a)
subdivide the Project; (b) alter the boundaries of the Project; and (c) grant
easements on the Project and dedicate for public use portions thereof; provided,
however, that no such subdivision, alteration of boundaries, grant or dedication
shall materially interfere with Tenant's use of the Premises. Tenant hereby
consents to such subdivision, boundary revision, and/or grant or dedication of
easements and agrees from time to time, at Landlord's request, to execute,
acknowledge and deliver to Landlord, in accordance with Landlord's instructions,
any and all documents, instruments, maps or plats necessary to effectuate
Tenant's consent thereto.
17.5 LANDLORD'S RESERVED RIGHTS IN COMMON AREAS. Landlord reserves the
right from time to time, provided that Tenant's use and enjoyment of, and access
to and from, the Premises is not materially and adversely affected thereby, to:
(a) install, use, maintain, repair and replace pipes, ducts, conduits, wires and
appurtenant meters and equipment for service to other parts of the Building
above the ceiling surfaces, below the floor surfaces, within the walls and in
the central core areas, and to relocate any pipes, ducts, conduit, wires and
appurtenant meters in the Building which are so located or located elsewhere
outside the Building; (b) make changes to the Common Areas and/or the parking
facilities located thereon, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas and walkways; (c) close temporarily all or any portion
of the Common Areas and/or the Building in order to perform any of the foregoing
or any of Landlord's obligations under this Lease, so long as reasonable access
to the Building remains available during normal business hours; and (d) alter,
relocate or expand, and/or to add additional structures and improvements to, or
remove same from, all or any portion of the Common Areas or other portions of
the Project.
17.6 ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord
of a lesser amount than the Rent herein stipulated shall be deemed to be other
than on account of the Rent, nor shall any endorsement or statement on any check
or any letter accompanying any check or payment as Rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such Rent or pursue any other remedy
provided in this Lease.
17.7 LIMITATION OF LANDLORD'S LIABILITY. The obligations of Landlord under
this Lease do not constitute personal obligations of the individual partners,
directors, officers, members, employees or shareholders of Landlord or its
partners, and Tenant shall look solely to the Project, and the rents and profits
therefrom, for satisfaction of any liability in respect of this Lease and will
not seek recourse against the individual partners, directors, officers, members,
employees or shareholders of Landlord or its partners or any of their personal
assets for such satisfaction.
17.8 SURVIVAL. The obligations and liabilities of each party which are
incurred or accrue prior to the expiration of this Lease or the termination of
this Lease or of Tenant's right of possession shall survive such expiration or
termination, as shall all provisions by which a party is to provide defense and
indemnity to the other party, all provisions waiving or limiting the liability
of Landlord, and all attorneys' fees provisions.
17.9 ATTORNEYS' FEES. In the event either party requires the services of
an attorney in connection with enforcing the terms of this Lease or in the event
suit is brought for the recovery of any Rent due under this Lease or the breach
of any covenant or condition of this Lease, or for the restitution of the
Premises to Landlord and/or eviction of Tenant during the Term of this Lease, or
after the expiration thereof, the substantially prevailing party will be
entitled to a reasonable sum for attorneys' fees, witness fees and other court
costs, both at trial and on appeal.
17.10 CAPTIONS AND ARTICLE NUMBERS. The captions, article, paragraph and
section numbers and table of contents appearing in this Lease are inserted only
as a matter of convenience and in no way define, limit, construe or describe the
scope or intent of such sections or articles of this Lease nor in any way affect
this Lease.
17.11 SEVERABILITY. If any term, covenant, condition or provision of this
Lease, or the application thereof to any person or circumstance, shall to any
extent be held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, covenants, conditions or provisions
of this Lease, or the application thereof to any person or circumstance, shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
17.12 APPLICABLE LAW. This Lease, and the rights and obligations of the
parties hereto, shall be construed and enforced in accordance with the laws of
the state in which the Building is located.
17.13 SUBMISSION OF LEASE. The submission of this document for examination
and negotiation does not constitute an offer to lease, or a reservation of or
option for leasing the Premises. This document shall become effective and
binding only upon execution and delivery hereof by Landlord and Tenant. No act
or omission of any officer, employee or agent of Landlord or Tenant shall alter,
change or modify any of the provisions hereof.
17.14 HOLDING OVER. Should Tenant, or any of its successors in interest,
hold over the Premises or any part thereof after the expiration or earlier
termination of this Lease without Landlord's prior written consent, such holding
over shall constitute and be construed as tenancy at sufferance only, at a
monthly rent equal to one hundred fifty percent (150%) of the Base Rent owed
during the final month of the Term of this Lease and otherwise upon the terms
and conditions in the Lease, so far as applicable. Should Tenant, or any of its
successors in interest, hold over the Premises or any part thereof after the
expiration or earlier termination of this Lease with Landlord's prior written
consent, such holding over shall constitute and be construed as a tenancy from
month to month only, at a fair market monthly rent as agreed by Landlord and
Tenant and otherwise upon the terms and conditions of this Lease, so far as
applicable. The acceptance by Landlord of Rent after such expiration or early
termination shall not result in a renewal or extension of this Lease. The
foregoing provisions of this Section 17.14 are in addition to and do not affect
Landlord's right of re-entry or any other rights of Landlord hereunder or as
otherwise provided by law. If Tenant fails to surrender the Premises on the
expiration of this Lease and/or to remove all Tenant's fixtures and/or personal
property pursuant to Section 9.1 hereof, Tenant shall indemnify and hold
Landlord harmless for, from and against all claims, damages, loss or liability,
including without limitation, any claim made by any succeeding tenant resulting
from such failure to surrender by Tenant and any attorneys' fees and costs
incurred by Landlord with respect to any such claim.
17.15 RULES AND REGULATIONS. At all times during the Term, Tenant shall
comply with Rules and Regulations for the Building and the Project, as set forth
in Exhibit H attached hereto, together with such amendments thereto as Landlord
may from time to time reasonably adopt and enforce in a non-discriminatory
fashion; provided that:
(a) Tenant is given fifteen (15) days' advance notice of such
modifications or new rules and regulations; and
(b) Such modifications or new rules and regulations are (i) for the
safety, care, order and cleanliness of the Project, (ii) do not unreasonably and
materially interfere with Tenant's conduct of its business or Tenant's use and
enjoyment of or its access to the Premises, or (iii) are of the type customarily
imposed for similar buildings.
If a Rule or Regulation conflicts with or is inconsistent with any Lease
provision, the Lease provision controls. Landlord agrees not to enforce the
Rules and Regulations in a discriminatory fashion.
17.16 PARKING. Unless Tenant is in default hereunder and subject to any
reduction due to governmental requirements, Tenant shall be entitled to the
number of reserved vehicle parking spaces designated in Section 1.1(q) hereof
for the exclusive use of Tenant, its employees, visitors and customers. All
unreserved parking spaces shall be available for the common use of the tenants,
subtenants and invitees of the Project on a non-exclusive basis, subject to any
reasonable restrictions from time to time imposed by Landlord. Tenant shall not
use or permit its officers, employees or invitees to use more than the number of
spaces designated in Section 1.1(q) or any spaces which have been specifically
reserved by Landlord to other tenants or for such other uses as have been
designated by appropriate governmental entities as being restricted to certain
uses. Tenant shall at all times comply and cause its officers, employees and
invitees to comply with any parking Rules and Regulations as Landlord may from
time to time reasonably adopt.
17.17 NO NUISANCE. Tenant shall conduct its business and control its
agents, employees, invitees and visitors in such a manner as not to create any
nuisance, or interfere with, annoy or disrupt any other tenant or Landlord in
its operation of the Building or Project.
17.18 BROKER; AGENCY DISCLOSURE. Landlord has not engaged any real estate
broker or agent in connection with this Lease. Tenant has entered into an
agreement with Colliers International ("Colliers") pursuant to which Colliers
has advised Tenant. Tenant is responsible for the payment of all fees and
commissions to Colliers in connection with this Lease. Landlord has no
responsibility for any such fees or commissions. Tenant shall indemnify and hold
harmless Landlord from and against any and all claims, demands, losses,
liabilities, lawsuits, judgments, costs and expenses (including without
limitation, attorneys' fees and costs) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of Tenant's discussions,
negotiations and/or dealings with Colliers, whose fee shall be paid by Tenant.
17.19 LANDLORD'S RIGHT TO PERFORM. Upon Tenant's failure to perform any
obligation of Tenant hereunder after notice from Landlord pursuant to Section
13.1 above, including without limitation, payment of Tenant's insurance premiums
and charges of contractors who have supplied materials or labor to the Premises.
Landlord shall have the right to perform such obligation of Tenant on behalf of
Tenant and/or to make payment on behalf of Tenant to such parties. Tenant shall
reimburse Landlord the reasonable cost of Landlord's performing such obligation
on Tenant's behalf, including reimbursement of any amounts that may be expended
by Landlord, plus interest at the Default Rate, as Additional Rent.
17.20 ASSIGNMENT BY LANDLORD. In the event of a sale, conveyance, or other
transfer by Landlord of the Building, the Project, or portion thereof on which
the Building is located, or in the event of an assignment of this Lease by
Landlord, the same shall operate to release Landlord from any further liability
upon any of the covenants or conditions, express or implied, herein contained on
the part of Landlord, and from any and all further liability, obligations, costs
and expenses, demands, causes of action, claims or judgments arising out of this
Lease from and after the effective date of said release. In such event, Tenant
agrees to look solely to the successor in interest of Landlord with respect to
liabilities accruing after the date of such sale, conveyance, transfer, or
assignment. If any Security Deposit is given by Tenant to secure performance of
Tenant's covenants hereunder, Landlord shall transfer such Security Deposit to
any purchaser and thereupon Landlord shall be discharged from any further
liability in reference thereto. Notwithstanding anything in this Lease to the
contrary, however, (i) in no event shall Landlord's lender, who may have
succeeded to the interest of Landlord by foreclosure, deed in lieu of
foreclosure, or any other means, have any liability for any obligation of
Landlord to protect, defend, indemnify or hold harmless Tenant or any other
person or entity except for those matters arising from the lender's breach of
the terms of this Lease after the date of such foreclosure, deed in lieu of
foreclosure or any other means, and (ii) such succeeding lender shall have no
liability for any representations or warranties of the Landlord contained herein
except for those matters arising from the lender's breach of the terms of this
Lease after the date of such foreclosure, deed in lieu of foreclosure or any
other means.
17.21 ENTIRE AGREEMENT. This Lease sets forth all covenants, promises,
agreements, conditions and understandings between Landlord and Tenant concerning
the Building and the Project, and there are no covenants, promises, agreements,
conditions or understandings, either oral or written, between Landlord and
Tenant other than as are herein set forth. No subsequent alteration, amendment,
change or addition to the Lease shall be binding upon Landlord or Tenant unless
reduced to writing and signed by Landlord and Tenant.
17.22 FINANCIAL COVENANTS. If Tenant is not a publicly traded company with
its financial information readily available to the public on the Internet, at
Landlord's request, Tenant shall provide Landlord with current annual audited
financial statements and quarterly unaudited financial statements (all such
statements shall be prepared in compliance with GAAP standards) setting forth
Tenant's financial condition.
17.23 CONSENTS. Whenever the approval or consent of Landlord or Tenant is
required under the terms of this Lease, such consent shall not be unreasonably
withheld or delayed unless a different standard of approval is specifically set
forth in the particular Section containing that particular consent requirement.
17.24 EXHIBITS. Exhibits A through H are attached to this Lease after the
signatures and by this reference incorporated herein.
17.25 TIME. Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.
17.26 AUTHORITY TO BIND LANDLORD. The individuals signing this Lease on
behalf of Landlord hereby represent and warrant that they are empowered and duly
authorized to bind Landlord to this Lease.
17.27 AUTHORITY TO BIND TENANT. The individuals signing this Lease on
behalf of Tenant hereby represent and warrant that they are empowered and duly
authorized to bind Tenant to this Lease.
17.28 INTERPRETATION. The parties hereto specifically acknowledge and agree
that the terms of this Lease have been mutually negotiated and the parties
hereby specifically waive the rule or principle of contract construction which
provides that any ambiguity in any term or provision of a contract will be
interpreted or resolved against the party which drafted such term or provision.
17.29 EXCUSED DELAYS. Except as otherwise set forth in this Section 17.30,
neither party shall have liability to the other on account of the following acts
(each of which is an "Excused Delay" and jointly all of which are "Excused
Delays")" which shall include: (a) the inability to fulfill, or delay in
fulfilling, any obligations under this Lease by reason of strike, lockout, other
labor trouble, dispute or disturbance; (b) governmental regulation, moratorium,
action, preemption or priorities or other controls; (c) shortages of fuel,
supplies or labor; (d) any failure or defect in the supply, quantity or
character of electricity or water furnished to the Premises by reason of any
requirement, act or omission of the public utility or others furnishing the
Building with electricity or water; or (e) for any other reason, whether similar
or dissimilar to the above, or for act of God beyond a party's reasonable
control. If this Lease specifies a time period for performance of an obligation
of a party, that time period shall be extended by the period of any delay in the
party's performance caused by any of the events of Excused Delay described
herein; provided, that notwithstanding anything to the contrary above, no
payment of money (whether as Base Rent, Tenant's Share of Operating Expenses, or
any other payment due under this Lease) shall be postponed, delayed or forgiven
by reason of any of the foregoing events of Excused Delay.
17.30 QUIET ENJOYMENT. Until such time as this Lease has expired or been
terminated pursuant to this Lease, Tenant shall peaceably and quietly have,
hold, and enjoy the Premises for the Term of this Lease without hindrance or
disturbance by anyone. Landlord will defend Tenant's right to quiet enjoyment of
the Premises from the lawful claims of all persons claiming through Landlord
during the Term of the Lease.
17.31 LANDLORD'S REPRESENTATIONS AND WARRANTIES. Landlord represents and
warrants as follows:
(a) Landlord has received no written notice of any liens to be
assessed against the Premises, Buildings, or Project;
(b) Landlord has received no written notice or any current violation
of any laws relating to the Premises, Buildings, or Project;
(c) The execution, delivery, and performance of this Lease by
Landlord will not result in any breach of, or constitute any default under, or
result in the imposition of any lien or encumbrance on the Premises under any
agreement or other instrument to which Landlord is a party or by which Landlord
or the Premises might be bound;
(d) To the best of Landlord's actual knowledge, there are no legal
actions, suits, or other legal or administrative proceedings, including
condemnation cases, pending or threatened, against the Premises, and Landlord is
not aware of any fact that might result in any such action, suit, or other
proceeding.
ARTICLE XVIII RIGHT OF FIRST OFFER
If space becomes available for lease in the Building, and Landlord elects
to lease such space to a third party, Landlord agrees to give Tenant a one-time
right of first offer as follows: Landlord shall give Tenant written notice of
Landlord's intention to market such premises for lease (the "Offer Premises")
and the terms under at which Landlord intends to market the Offer Premises for
lease (the "Notice"). Landlord agrees not to market the Offer Premises for lease
for 30 days following the date of the Notice (the "Negotiation Period") and, if
Tenant is interested in leasing the Offer Premises at the price set forth in the
Notice, Landlord agrees to negotiate in good faith with Tenant during the
Negotiation Period the terms of Tenant's lease of the Offer Premises. If
Landlord and Tenant do not enter into a binding written lease pertaining to the
lease of the Offer Premises before the end of the Negotiation Period, Tenant's
rights under this Article XVIII shall terminate and be of no further force or
effect.
IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first above written.
"Landlord" "Tenant"
SCHNITZER INVESTMENT CORP. SCHNITZER STEEL INDUSTRIES, INC.
By: /s/ X. Xxxxxx By: /s/ R. Xxxxxx
----------------------------- ----------------------------
Its: CEO Its: CEO
---------------------------- ----------------------------
EXHIBIT A
INTENTIONALLY OMITTED
EXHIBIT B
PROJECT SITE PLAN
EXHIBIT C
FLOOR PLAN
EXHIBIT D
WORK SCHEDULE
WORK ACTIVITY MILESTONE
------------- ---------
REVIEW TENANT'S INITIAL SPACE PLAN
Tenant Improvements Pricing Complete
Pull Tenant Improvement Permit
Commence Tenant Improvements
Tenant Improvements
Certificate of Occupancy
Tenant's Occupancy & Lease Commencement
Punch List Completion
EXHIBIT E
SCHEDULE OF TENANT IMPROVEMENT PLANS
3200 Yeon Remodel - First Floor and Lower Level
Prepared by Xxxx Xxxxx Xxxx
DRAWING INDEX
6/27/03
ARCHITECTURAL
-------------
A0.01 Cover Sheet & Code Summary
A1.01 Lower & First floor Demolition Plans
A2.01 Lower & First Floor Floor Plans
A4.01 Enlarged Plans - Toilet Rooms
A6.01 Interior Elevations
A7.01 Lower & First Floor Reflected Ceiling Plans
A9.01 Partition Types & Typ Interior Details
A9.02 Typ Ceiling Details
A9.03 Interior Details
A10.01 Lower & First Floor Finish Plans
MECHANICAL
----------
M0.01 Mechanical Legend & Abbreviations
M1.02 Mechanical Details
M0.02 Mechanical Details
M0.03 Mechanical Schedules
M0.04 Mechanical Specifications
M1.01 Mechanical Demolition Floor Plans
M2.01 Mechanical Floor Plans
M2.02 Mechanical Roof Plans
ELECTRICAL
----------
E0.01 Electrical Legend & Abbreviations
E0.02 Electrical Schedules
E0.03 Specifications
E1.01 Electrical Demolition Floor Plans - Power & Signal
E1.02 Electrical Demolition Floor Plans - Lighting
E2.01 Electrical Floor Plans Floor Plans - Power & Signal
E2.02 Electrical Floor Plans - Lighting
E2.02E Electrical Floor Plans - Egress Lighting
E2.03 Electrical Roof Plans - Power
E6.01 Electrical Single Line Diagram
E7.01 Electrical Details
EXHIBIT F
LEASE CONFIRMATION
This Lease Confirmation is made __________, 20__, by ____________________,
a _______________________ ("Tenant"), who agree as follows:
1. Landlord and Tenant entered into a lease dated _______________, 20__,
in which Landlord leased to Tenant and Tenant leased from Landlord the premises
described in Section 2.1 of said Lease ("Premises"). All capitalized terms
herein are as defined in the Lease.
2. Pursuant to the Lease, Landlord and Tenant agreed to and do hereby
confirm the following matters as of the Commencement of the Term:
a. _______________, 20__ is the Commencement Date of the Term of the
Lease;
b. _______________, 20___ is the expiration date of the Term of the
Lease;
c. The initial Base Rent under the Lease, subject to adjustments as
provided in the Lease, is $__________.
3. Tenant confirms that:
a. It has accepted possession of the Premises as provided in the
Lease;
b. The improvements required to be furnished by Landlord under the
Lease have been furnished (subject to any corrective work or punch-list items of
which Tenant has notified Landlord in accordance with the Lease);
c. Landlord has fulfilled all its duties of an inducement nature;
d. The Lease is in full force and effect and has not been modified,
altered, or amended, except as follows:
______________________________________________
______________________________________________; and
e. There are no setoffs or credits against Rent, and no Security
Deposit or prepaid rent has been paid except as provided by the Lease.
4. The provisions of this Lease Confirmation shall inure to the benefit,
or bind, as the case may require, the parties and their respective successors
and assigns, subject to the restrictions on assignment and subleasing contained
in the Lease.
Initials
Landlord: _________________
Tenant: ___________________
EXHIBIT G
ESTOPPEL CERTIFICATE
__________________
__________________
__________________
Re: Lease dated __________, 2___ ("Lease") by and between ______________
("Landlord"), and _______________ ("Tenant")
Ladies and Gentlemen:
Reference is made to the above-described Lease in which the undersigned is
the Tenant. We understand that you are accepting an assignment of Landlord's
rights under the Lease as ____________________, and we hereby, as a material
inducement for you to consummate the transaction, represent that:
1. There are no modifications amendments, supplements, arrangements, side
letters or understandings, oral or written, of any sort, modifying, amending,
altering, supplementing or changing the terms of the Lease, except for those
attached to this Certificate.
2. The Lease is in full force and effect, and the Lease has been duly
executed and delivered by, and is a binding obligation of, the Tenant as set
forth therein.
3. The undersigned acknowledges (a) that rent on the Lease has been paid
up to and including _____________, 2___ (b) that monthly rent during the
______________ (___) years of the term of the Lease is $___________ per month,
and (c) that rent has not been paid for any period after ____________, 2___ and
shall not, except for any Prepaid Rent as specified in the Lease, be paid for a
period in excess of one (1) month in advance.
4. To the current knowledge of the undersigned, the improvements on the
Building are free from defects in design, materials and workmanship and the
improvements meet all governmental requirements, including, but not limited to,
zoning and environmental requirements.
5. To the current knowledge of the undersigned, the Lease is not in
default, and Landlord has performed the obligations required to be preformed by
Landlord under the terms thereof through the date hereof.
Dated: ________________, 2___.
Very truly yours,
"Tenant"
___________________________
___________________________
___________________________
By: _______________________
Its: ______________________
EXHIBIT H
OFFICE RULES AND REGULATIONS
1. SIGN. No sign, placard, picture, advertisement, name or notice shall
be inscribed, displayed, printed or affixed on or to any part of the outside or
inside of the Building, the Premises or the surrounding area without the written
consent of the Landlord being first obtained. If such consent is given by
Landlord, Landlord may regulate the manner of display of the sign, placard,
picture, advertisement, name or notice. Landlord shall have the right to remove
any sign, placard, picture, advertisement, name or notice which has not been
approved by Landlord or is being displayed in a non-approved manner without
notice to and at the expense of the Tenant. Tenant shall not place anything or
allow anything to be placed near the glass of any window, door, partition or
wall which may appear unsightly from outside of the Premises.
2. DIRECTORY. The bulletin board or directory of the Building will be
provided exclusively for the display of the name and location of tenants and
Landlord reserves the right to exclude any other names therefrom.
3. ACCESS. The sidewalks, halls, passages, exits, entrances, elevators
and stairways shall not be obstructed by any of the tenants or used by them for
any purpose other than for ingress to and egress from their respective Premises.
The halls, passages, entrances, exits, elevators, stairways, balconies and roof
are not for the use of the general public and the Landlord shall in all cases
retain the right to control thereof and prevent access thereto by all persons
whose presence in the judgment of the Landlord shall be prejudicial to the
safety, character, reputation and interests of the Building or its tenants;
provided, however, that nothing herein contained shall be construed to prevent
access by persons with whom the Tenant normally deals in the ordinary course of
Tenant's business unless such persons are engaged in illegal activities. No
Tenant and no employees or invitees of any Tenant shall go upon the roof of the
Building.
4. LOCKS. Tenant shall not alter any lock or install any new additional
locks or any bolts on any door of the Premises without the written consent of
Landlord.
5. RESTROOMS. The toilet rooms, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein. The expense of any breakage, stoppage or damage resulting from a
violation of this rule shall be borne by the Tenant who, or whose employees,
sublessees, assignees, agents, licensees, or invitees shall have caused it.
6. NO DEFACING PREMISES. Tenant shall not overload the floor of the
Premises, shall not xxxx on or drive nails, screw or drill into the partitions,
woodwork or plaster (except as may be incidental to the hanging of wall
decorations), and shall not in any way deface the Premises or any part thereof.
7. SAFES AND HEAVY EQUIPMENT. No furniture, freight or equipment of any
kind shall be brought into the Building without the consent of Landlord and all
moving of the same into or out of the Building shall be done at such time and in
such manner as Landlord shall designate. Landlord shall have the right to
prescribe the times and manner of moving all heavy equipment in and out of the
Building. Landlord will not be responsible for loss of or damage to any such
safe or property from any cause and all damage done to the Building by moving or
maintaining any such safe or other property shall be repaired at the expense of
Tenant. There shall not be used in any Premises or in the public halls of the
Building, either by any tenant or others, any hand trucks except those equipped
with rubber tires and side guards. Elevators must be padded while moving freight
via the elevators. All such heavy equipment shall be subject to the requirements
of Rule 25 below.
8. NUISANCE. Tenant shall not use, keep or permit to be used or kept any
noxious gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to the Landlord or other
occupants of the Building by reason of excessive noise, odors and/or vibrations,
or unreasonably interfere in any way with other tenants or those having business
in the Building. No animals or birds shall be brought in or kept in or about the
Premises or the Building. No Tenant shall make or permit to be made any
unreasonably disturbing noises or unreasonably disturb or interfere with
occupants of this or neighboring Buildings or Premises, or with those having
business with such occupants by the use of any musical instrument, radio,
phonograph, unusual noise, or in any other way. No Tenant shall throw anything
out of doors or down the passageways.
9. PERMITTED USE. The Premises shall not be used for manufacturing or for
the storage of merchandise except as such storage may be incidental to the use
of the Premises for general office purposes. No Tenant shall occupy or permit
any portion of its Premises to be occupied for the manufacture or sale of
liquor, narcotics, or tobacco in any form, or as a medical office, or as a
xxxxxx shop or manicure shop except with prior written consent of Landlord. No
Tenant shall advertise for laborers giving an address at the Premises. The
Premises shall not be used for lodging or sleeping or for illegal purposes.
10. HAZARDOUS SUBSTANCES. Tenant shall not use or keep in the Premises or
the Building any kerosene, gasoline or inflammable or combustible fluid or
material or any Hazardous Materials as defined in Section 10.2 of the Lease or
use any method of heating or air conditioning other than that supplied by
Landlord.
11. TELEPHONES. Landlord will direct electricians as to where and how
telephone and telegraph wires are to be introduced. No boring or cutting for or
stringing of wires will be allowed without the consent of Landlord. The location
of telephones, call boxes and other office equipment affixed to the Premises
shall be subject to the approval of Landlord.
12. KEYS. All keys to the Building, Premises, rooms and toilet rooms shall
be obtained from Landlord's office and Tenant shall not from any other source
duplicate or obtain keys or have keys made. The Tenant, upon termination of the
tenancy, shall deliver to the Landlord the keys to the Building, Premises, rooms
and toilet rooms which shall have been furnished and shall pay the Landlord the
cost of replacing any lost key or of changing the lock or locks opened by such
lost key if Landlord deems it necessary to make such change.
13. FLOOR COVERING. No Tenant shall lay linoleum, tile, carpet or other
similar floor coverings so that the same shall be affixed to the floor or the
Premises in any manner except as approved by the Landlord. The expense of
repairing any damage resulting from a violation of this rule or removal of any
floor covering shall be borne by the Tenant by whom, or by whose contractors,
agents, sublessees, licensees, employees or invitees, the floor covering shall
have been laid.
14. BUILDING CLOSURE. During all hours on legal holidays and such other
times as reasonably determined by Landlord from time to time, access to the
Building or to the halls, corridors, or stairways in the Building, or to the
Premises may be refused unless the person seeking access is known to any person
or employee of the Building in charge and has a pass or is properly identified.
The Landlord shall in no case be liable for damages for any error with regard to
the admission to or exclusion from the Building of any person. In case of
invasion, mob, riot, public excitement, or other commotion, the Landlord
reserves the right to prevent access to the Building during the continuance of
the same, by closing the doors or otherwise, for the safety of the tenants and
protection of the Building and property located therein. Anything to the
foregoing notwithstanding, Landlord shall have no duty to provide security
protection for the Building at any time or to monitor access thereto.
15. PREMISES CLOSURE. Tenant shall see that the doors of the Premises are
closed and securely locked before leaving the Building and that all water
faucets, and water apparatus are entirely shut off before Tenant or Tenant's
employees leave the Building. Tenant shall be responsible for any damage to the
Building or other tenants caused by a failure to comply with this rule. Tenant
shall at all times keep the perimeter doors and windows to the Premises closed.
16. DISORDERLY CONDUCT. Landlord reserves the right to exclude or expel
from the Building any person who, in the judgment of Landlord, is intoxicated or
under the influence of liquor or drugs, or who shall in any manner do any act in
violation of any of the rules and regulations of the Building.
17. TENANT REQUESTS. Any requests of Tenant will be considered only upon
application at the office of the Landlord. Employees of Landlord shall not be
requested to perform any work or do anything outside of their regular duties
unless under special instructions from the Landlord.
18. VENDING MACHINES. No vending machine shall be installed, maintained or
operated upon the Premises without the written consent of the Landlord.
19. BUILDING NAME AND ADDRESS. Landlord shall have the right, exercisable
without notice and without liability to Tenant, to change the name and the
street address of the Building of which the Premises are a part.
20. EMERGENCY REGULATIONS. Tenant agrees that it shall comply with all
emergency regulations that may be issued from time to time by Landlord and
Tenant also shall provide Landlord with the names of a designated responsible
employee to represent Tenant in all matters pertaining to emergency regulations.
21. TENANT ADVERTISING. Without the written consent of Landlord, Tenant
shall not use the name of the Building in connection with or in promotion or
advertising the business of Tenant except as Tenant's address.
22. EMERGENCY INFORMATION. Tenant must provide Landlord with names and
telephone numbers to contact in case of emergency. Tenant must fill out a tenant
emergency information sheet and return it to Landlord's office within three (3)
days of occupancy.
23. INSTALLATION OF BURGLAR AND INFORMATIONAL SERVICES. If Tenant requires
telegraphic, telephonic, burglar alarm or similar services, it shall first
obtain, and comply with, Landlord's instructions in their installation.
24. FLOOR LOADS. Tenant shall not place a load upon any floor of the
Premises which exceeds the load per square foot, which such floor was designed
to carry and which is allowed by law. Landlord shall have the right to prescribe
the weight, size and position of all equipment, materials, furniture or other
property brought into the Building. Heavy objects shall, if considered necessary
by Landlord, stand on such platforms as determined by Landlord to be necessary
to properly distribute the weight, which platforms shall be provided at Tenant's
expense. Business machines and mechanical equipment belonging to Tenant, which
cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenants in the Building, shall be placed and maintained by
Tenant, at Tenant's expense, on vibration eliminators or other devices
sufficient to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord. Landlord
will not be responsible for loss of, or damage to, any such equipment or other
property from any cause, and all damage done to the Building by maintaining or
moving such equipment or other property shall be repaired at the expense of
Tenant.
25. ENERGY CONSERVATION. Tenant shall not waste electricity, water or air
conditioning and agrees to cooperate fully with Landlord to assure the most
effective operation of the Building's heating and air-conditioning and to comply
with any governmental energy-saving rules, laws or regulations of which Tenant
has actual notice, and shall refrain from attempting to adjust controls. Tenant
shall keep corridor doors closed.
26. NO ANTENNAS. Tenant shall not install any radio or television antenna,
loudspeaker or other devices on the roof or exterior walls of the Building.
Tenant shall not interfere with radio or television broadcasting or reception
from or in the Building or elsewhere.
27. NO SOLICITING. Canvassing, soliciting and distribution of handbills or
any other written material, and peddling in the Building are prohibited, and
Tenant shall cooperate to prevent such activities.
28. PROHIBITED USES. The Premises shall not be used for any improper,
immoral or objectionable purpose. No cooking shall be done or permitted on the
Premises without Landlord's consent, except that use by Tenant of Underwriters
Laboratory approved equipment for brewing coffee, tea, hot chocolate and similar
beverages or use of microwave ovens for employee use shall be permitted,
provided that such equipment and use is in accordance with all applicable
federal, state, county and city laws, codes, ordinances, rules and regulations.
29. ENFORCEMENT OF RULES. Landlord may waive any one or more of these
Rules and Regulations for the benefit of Tenant or any other Tenant but no such
waiver by Landlord shall be construed as a waiver of such Rules and Regulations
in favor of Tenant, nor prevent Landlord from thereafter enforcing any such
Rules and Regulations against any or all of the tenants of the Building.
30. LEASE. These Rules and Regulations are in addition to, and are made a
part of, the terms, covenants, agreements and conditions of Tenant's Lease of
its Premises in the Building.
31. ADDITIONAL RULES. Landlord reserves the right to make such other Rules
and Regulations or amendments hereto as, in its reasonable judgment, may from
time to time be needed for safety and security, for care and cleanliness of the
Building and for the preservation of good order therein. Tenant agrees to abide
by all such Rules and Regulations hereinabove stated and any additional rules
and regulations which are adopted.
32. OBSERVANCE OF RULES. Tenant shall be responsible for the observance of
all of the foregoing rules by Tenant's employees, agents, licensees, sublessees,
assigns, and invitees.
33. MAINTENANCE OF FIRE EXTINGUISHERS. Tenant shall maintain in the
Premises during the entire Lease Term, not less than the minimum number of fire
extinguishers required by law and Tenant shall inspect all such fire
extinguishers not less frequently than once each month to assure that the same
are fully charged and in good operational condition. Annually the Tenant shall
have all fire extinguishers inspected by an authorized and qualified inspector
who shall certify that each such fire extinguisher complies with all applicable
requirements of the NFPA. If any such fire extinguishers fail to obtain such
certification, then within three (3) business days after such failure such fire
extinguishers shall be replaced, or repaired, and re-inspected and a
certification shall be issued certifying that all such fire extinguishers comply
with all applicable requirements of the NFPA.
34. EMERGENCY. In the event of a fire or other emergency threatening
property or health and safety, Tenant shall immediately notify the appropriate
emergency response officials and Landlord of such emergency.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS....................................................1
1.1 Defined Terms..................................................1
ARTICLE II PREMISES AND COMMON AREAS LEASED...............................3
2.1 Premises.......................................................3
2.2 Common Areas...................................................3
2.3 Shared Use of Building Areas...................................3
ARTICLE III IMPROVEMENTS...................................................4
3.1 Construction of Premises.......................................4
3.2 Completion and Delivery........................................5
3.3 Relocation; Continuance of Current Lease During Construction...5
3.4 Repaint and Recarpeting........................................6
ARTICLE IV TERM...........................................................6
4.1 Initial Term...................................................6
4.2 Notice of Commencement Date....................................6
4.3 Option to Extend...............................................6
ARTICLE V RENT...........................................................7
5.1 Base Rent......................................................7
5.2 Additional Rent................................................8
5.3 Late Payment...................................................8
5.4 Security Deposit. Intentionally deleted.......................8
ARTICLE VI ADDITIONAL RENT AND CHARGES....................................8
6.1 Operating Expenses.............................................8
6.2 Adjustments...................................................13
6.3 Tenant's Personal Property Taxes..............................13
ARTICLE VII INSURANCE.....................................................13
7.1 Landlord's Insurance..........................................13
7.2 Tenant's Public Liability.....................................14
7.3 Tenant's Property and Other Insurance.........................14
7.4 Form of Insurance/Certificates................................14
7.5 Tenant's Failure..............................................14
7.6 Waiver of Subrogation.........................................14
7.7 Tenant's Properties and Fixtures..............................15
7.8 Indemnification...............................................15
7.9 Damage to Tenant's Property...................................16
ARTICLE VIII REPAIRS AND MAINTENANCE.......................................16
8.1 Landlord Repairs and Maintenance..............................16
8.2 Utilities and Services........................................16
8.3 Tenant Repairs and Maintenance................................16
8.4 Non-liability of Landlord.....................................17
8.5 Inspection of Premises........................................17
8.6 Access by Tenant..............................................17
ARTICLE IX FIXTURES, PERSONAL PROPERTY AND ALTERATIONS...................17
9.1 Fixtures and Personal Property................................17
9.2 Alterations...................................................17
9.3 Liens.........................................................18
ARTICLE X USE AND COMPLIANCE WITH LAWS..................................18
10.1 General Use and Compliance with Laws..........................18
10.2 Hazardous Materials...........................................19
10.3 Signs.........................................................20
ARTICLE XI DAMAGE AND DESTRUCTION........................................21
11.1 Reconstruction................................................21
11.2 Rent Abatement................................................21
11.3 Excessive Damage or Destruction...............................21
11.4 Uninsured Casualty............................................21
11.5 Waiver........................................................21
11.6 Mortgagee's Right.............................................21
11.7 Damage Near End of Term.......................................22
ARTICLE XII EMINENT DOMAIN................................................22
ARTICLE XIII DEFAULT.......................................................22
13.1 Events of Default.............................................22
13.2 Remedies......................................................23
13.3 Landlord's Default............................................24
ARTICLE XIV FILING OF PETITION............................................24
ARTICLE XV ASSIGNMENT AND SUBLETTING.....................................25
15.1 Prohibition...................................................25
15.2 Excess Rental.................................................25
15.3 Scope.........................................................26
15.4 Waiver........................................................26
15.5 Change in Control.............................................26
ARTICLE XVI ESTOPPEL CERTIFICATE, ATTORNMENT AND SUBORDINATION............26
16.1 Estoppel Certificates.........................................26
16.2 Attornment....................................................27
16.3 Subordination.................................................27
16.4 Recording.....................................................27
16.5 Subordination of Landlord's Lien..............................27
ARTICLE XVII MISCELLANEOUS.................................................27
17.1 Notices.......................................................27
17.2 Successors Bound..............................................27
17.3 Waiver........................................................27
17.4 Subdivision and Easements.....................................28
17.5 Landlord's Reserved Rights in Common Areas....................28
17.6 Accord and Satisfaction.......................................28
17.7 Limitation of Landlord's Liability............................28
17.8 Survival......................................................28
17.9 Attorneys' Fees...............................................28
17.10 Captions and Article Numbers..................................28
17.11 Severability..................................................29
17.12 Applicable Law................................................29
17.13 Submission of Lease...........................................29
17.14 Holding Over..................................................29
17.15 Rules and Regulations.........................................29
17.16 Parking.......................................................29
17.17 No Nuisance...................................................30
17.18 Broker; Agency Disclosure.....................................30
17.19 Landlord's Right to Perform...................................30
17.20 Assignment by Landlord........................................30
17.21 Entire Agreement..............................................30
17.22 Financial Covenants...........................................30
17.23 Consents......................................................30
17.24 Exhibits......................................................31
17.25 Time..........................................................31
17.26 Authority to Bind Landlord....................................31
17.27 Authority to Bind Tenant......................................31
17.28 Interpretation................................................31
17.29 Excused Delays................................................31
17.30 Quiet Enjoyment...............................................31
17.31 Landlord's Representations and Warranties.....................31
ARTICLE XVIII RIGHT OF FIRST OFFER..........................................32
