OFFICE LEASE
between
600 XXXXXXXX LIMITED PARTNERSHIP
and
KINDERCARE LEARNING CENTERS, INC.
Date: June 2, 1997
Floors 12 - 15 and a
portion of Floor 11
Table of Contents
-----------------
Article 1 Basic Lease Information
Article 2 Agreement
Article 3 Use
Article 4 The Premises
Article 5 Monthly Rent
Article 6 Additional Rent for Operating Expenses
Article 7 Additional Rent for Taxes
Article 8 Insurance
Article 9 Requirements of Law and Hazardous Materials
Article 10 Assignment and Subletting
Article 11 Rules and Regulations
Article 12 Common Areas
Article 13 Landlord's Services
Article 14 Tenant's Care of the Premises
Article 15 Alterations
Article 16 Construction Liens
Article 17 End of Term
Article 18 Eminent Domain
Article 19 Damage and Destruction
Article 20 Subordination
Article 21 Entry by Landlord
Article 22 Indemnification, Waiver, and Release
Article 23 Quiet Enjoyment
Article 24 Effect of Sale
Article 25 Default
Article 26 Parking
Article 27 Option to Expand
Article 28 Option to Renew
Article 29 Arbitration
Article 30 Miscellaneous
Exhibit A: The Premises
Exhibit B: Legal Description of the Land
Exhibit C: Rules and Regulations
Exhibit D: Workletter
Exhibit E: HVAC Specifications
Exhibit F: Janitorial Specifications
Exhibit G: Subordination, Non-Disturbance and Attornment Agreement
OFFICE LEASE
THIS OFFICE LEASE is entered into by Landlord and Tenant as described in
the following Basic Lease Information on the date that is set forth for
reference only in the following Basic Lease Information. Landlord and Tenant
agree:
ARTICLE 1 - BASIC LEASE INFORMATION
1.1 Basic Lease Information. The following terms are referred to in other
provisions of the Lease. Each such reference shall incorporate the applicable
Basic Lease Information. In the event of any conflict between the Basic Lease
Information and the provisions of the Lease, the latter shall control.
(a) LEASE DATE:
(b) LANDLORD: 600 Xxxxxxxx Limited Partnership
(c) LANDLORD'S ADDRESS:
c/o Ashforth Pacific, Inc.
000 XX Xxxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
with a copy, in the event that Tenant alleges that
Landlord is in default of its obligations hereunder
or if Tenant claims a right to terminate this Lease,
at the same time to:
The Ashforth Company, Inc.
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
(d) TENANT: KinderCare Learning Centers, Inc.
(e) TENANT'S ADDRESS:
Until Tenant takes occupancy of its temporary space in
Portland, OR:
0000 Xxxxxxxxx'x Xxxxx
Xxxxxxxxxx, XX 00000
From the time that Tenant takes occupancy of its
temporary space in Portland, OR until the
Commencement Date of this Lease:
000 XX Xxxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
From and after the Commencement Date of this Lease:
000 XX Xxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx (in all cases)
with a copy at the same time to:
1
Xxxxxx X. Page
Stoel Rives LLP
000 XX Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000-0000
(f) BUILDING ADDRESS: 000 XX Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000.
(g) PREMISES: All of floors 12 through 15 and approximately 8,500
square feet on the 11th floor.
(h) USABLE AREA OF THE PREMISES: See Section 4.1.
(i) RENTABLE AREA OF THE PREMISES: See Section 4.1.
(j) RENTABLE AREA OF THE BUILDING: 270,728 square feet.
(k) TERM: Beginning on the Commencement Date and expiring on the
Expiration Date.
(l) COMMENCEMENT DATE: Upon substantial completion of the
Tenant's improvements, as described in the Workletter, which is
anticipated to be November 1, 1997.
(m) RENT COMMENCEMENT DATE: Upon the Commencement Date of the
Lease.
(n) EXPIRATION DATE: October 31, 2007, unless the Commencement
Date is delayed as provided in Section 4.2, in which case the
Expiration Date shall be the last day of the month preceding the
month occurring ten (10) years after the Commencement Date.
(o) SECURITY DEPOSIT: None.
(p) PREPAID RENT: First month's rent.
(q) MONTHLY RENT: $22.50 per rentable square foot per annum for
Lease Years 1 through 5, and $26.50 per rentable square foot per
annum for Lease Years 6 through 10.
(r) FIRST MONTHLY RENT ADJUSTMENT DATE: January 1, 1999.
(s) TENANT'S SHARE: To be determined by dividing the Rentable Area
of the Premises by the Rentable Area of the Building.
(t) PARKING: Up to two (2) spaces per 1,000 rentable square feet
of space, subject to the provisions of Article 27.
2
(u) BROKER: Xxxxxxx & Wakefield of Oregon, Inc.
(v) CONCEPTUAL PLAN SUBMISSION DATE: June 20, 1997.
1.2 Definitions:
(a) ADDITIONAL RENT: Any amounts that this Lease requires Tenant
to pay in addition to Monthly Rent.
(b) BASE YEAR: 1998.
(c) BUILDING: The office building known as Liberty Centre
(d) LAND: The Land on which the Project is located and which is
described on Exhibit B.
(e) LEASE YEAR: The twelve month period beginning on the first
day of the month in which the Commencement Date occurs and each
succeeding twelve (12) month period thereafter.
(f) NOTICE: Any notice, request, demand, consent, approval, or
other communication required or permitted under this Lease must
be in writing and will be deemed to have been given when
personally delivered, sent by facsimile with receipt
acknowledged, deposited with any nationally recognized overnight
carrier that routinely issues receipts, or deposited in any
depository regularly maintained by the United States Postal
Service, postage prepaid, certified mail, return receipt
requested, addressed to the party for whom it is intended at its
address set forth in Section 1.1. Either Landlord or Tenant may
add additional addresses or change its address for purposes of
receipt of any such communication by giving ten (10) days prior
Notice of such change to the other party.
(g) PARKING GARAGE: The structure located on the Land, and more
particularly shown on Exhibit B, designed for the parking of
passenger vehicles.
(h) PRIME RATE: The rate of interest from time to time announced
by U.S. National Bank of Oregon ("USB"), or any successor to it,
as its prime rate. If USB, or any successor to it, ceases to
announce a prime rate, the Prime Rate will be a comparable
interest rate designated by Landlord.
(i) PROJECT: The Land and all improvements built on the Land,
including without limitation the Building, Parking Garage,
walkways, driveways, fences, and landscaping.
(j) RENT: The Monthly Rent and Additional Rent.
3
(k) TAXES: All real and personal property taxes, school taxes,
sewer rates and charges, transit taxes assessed, levied or
imposed upon the Project or other Governmental assessments or
charges, general, specific, ordinary or extraordinary, foreseen
or unforeseen. If at any time during the Term the methods or
standards of taxation prevailing at the date hereof shall be
altered so that in lieu of, or as an addition to, or as a
substitute for the whole or any part of the Taxes now levied,
assessed or imposed, there shall be imposed (a) a tax,
assessment, levy, imposition or charge based on the rents
received (whether or not wholly or partially as a capital levy or
otherwise), or (b) a license fee measured by the Rent, other tax,
levy, imposition, charge or license fee; then all such taxes,
assessments, levies, impositions, charges or license fees or the
part thereof so measured or based, shall be deemed to be Taxes.
(l) UNAVOIDABLE DELAYS: Delays beyond Landlord's reasonable
control resulting from acts of God, governmental restrictions or
guidelines enacted after the date hereof, strikes, labor
disturbances, shortages of materials and supplies of which
Landlord did not know or should not have known on the date hereof
and from any other causes or events whatsoever beyond Landlord's
reasonable control.
(m) WORKLETTER: The workletter attached to this lease as
Exhibit D.
1.3 Exhibits. The following addendum and exhibits are attached to this
Lease and are made part of this Lease:
EXHIBIT A The Premises
EXHIBIT B Legal Description of the Land
EXHIBIT C Rules and Regulations
EXHIBIT D Workletter
EXHIBIT E HVAC Specifications
EXHIBIT F Janitorial Specifications
EXHIBIT G Subordination, Non-Disturbance and Attornment
Agreement
ARTICLE 2 - AGREEMENT
2.1 Leasing. Landlord leases the Premises to Tenant, and Tenant leases the
Premises from Landlord, together with the right to utilize in common with
others, for ingress and egress, the common areas of the Project as described in
Article 12. Nothing herein contained shall be construed to permit Tenant the use
of the roof (except as provided in Section 4.4) or exterior walls of the
Building, of the space above or below the Premises or of any parking or other
areas adjacent to the Building, except as provided in Article 26.
4
2.2 Restrictive Covenant. Landlord agrees that so long as Tenant is not in
default of any material provision of this Lease nor assigned this, Lease except
as provided in Section 10.5, nor subleased more than 75% of the Premises and
Tenant's corporate headquarters are located in the Premises, Landlord shall not
lease space in the Building to any other tenant for the purpose of operating a
child care facility nor consent to the use of any space in the Building for such
purpose; provided, however, that the foregoing restriction shall not be
applicable to a tenant of the Building that proposes to use a portion of its
premises as a child care facility solely for its own employees.
ARTICLE 3 - USE
3.1 General. The Premises shall be used for general office purposes and for
no other purpose. The Premises are leased together with the appurtenances
thereto, including the non-exclusive right to use the lobbies, elevators,
stairways and other public portions of the Building, the non-exclusive use of
any restrooms on any multi-tenant floors and the exclusive right to use any
restrooms on single-tenant floors included within the Premises. Tenant shall not
do, nor permit anything to be done, in or about the Premises which will in any
way obstruct or interfere with the rights of other tenants of the Building, or
injure or annoy them, or use or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or
permit any nuisance in, on or about the Premises or the Building, or commit or
suffer to be committed any waste in, on or about the Premises or the Building.
3.2 Commercial Facility. The Premises will be used only as a commercial
facility and not as a place of public accommodation as defined by the Americans
with Disabilities Act of 1990, as amended ("ADA"). Tenant shall not offer its
goods and services to the general public at the Premises.
3.3 Building Name. Tenant shall not be allowed to use the name of the
Building for any purpose other than as the address of the business to be
conducted by Tenant in the Premises. Landlord reserves the right in its sole
discretion to change the name of the Building at any time.
3.4 Signs and Advertising.
(a) Tenant shall not inscribe, paint, post, place, or in any manner
display any sign, notice, picture, placard, poster, name or advertising matter
anywhere in or about the Building or Premises at places visible (either directly
or indirectly as an outline or shadow on or through a glass pane) from outside
the Premises. In the event that Landlord permits any such signs or notices, upon
expiration or termination of this Lease, Tenant shall, at its expense, promptly
remove all such signs or advertising and shall repair any damage caused by such
removal.
(b) Tenant shall have the right , at its sole cost and expense, to
install Building standard directory signage in the main lobby and, subject to
Landlord's prior approval which shall not be unreasonably withheld or delayed,
Tenant's standard signage in the elevator lobby on each floor on which the
Premises are located, at each exterior entry door to the Premises, and on each
side of the pylon sign to be erected by Landlord at 0xx Xxxxxx xxx Xxxxxxx
Xxxxx.
5
3.5 Smoking Prohibited. Tenant acknowledges that smoking is not permitted
within the Project (except in areas specifically designated as smoking areas)
and agrees that it will not allow smoking within the Premises by employees,
invitees or visitors.
ARTICLE 4 - THE PREMISES
4.1 Determination of Premises.The Premises shall contain approximately
70,000 rentable square feet consisting of all of floors 12 through 15 and
approximately 8,500 rentable square feet the 11th floor. Promptly after Tenant
submits the Programming Information, Landlord shall calculate the usable and
rentable area on the 11th floor of the Premises and all other items contained in
this Lease that are dependent on either factor. The parties shall then enter
into a written supplement to this Lease specifying all such items and adding a
floor plan delineating the Premises as Exhibit A to this Lease . The usable area
of the space on the 11th floor shall be computed by measuring from the inside
finished surfaces of the dominant portion of the permanent outer Building walls
to the centerline of the permanent walls separating the Premises from other
tenant spaces and to the inside finished surface of the common corridor
permanent walls. No deductions shall be made for columns or projections
necessary to the Building. The rentable area for each single tenant floor shall
be 15,722 square feet and the rentable area of space on any multi-tenant floor
shall be calculated by multiplying the usable area by 1.14. Any dispute
regarding the calculation of usable or rentable area shall be resolved by
arbitration as provided in Article 29 and shall not render this Lease void or
voidable.
4.2 Delivery of Possession. Landlord will construct or install in the
Premises the improvements to be constructed or installed by Landlord according
to the Workletter. Tenant acknowledges that neither Landlord nor its agents or
employees have made any representations or warranties as to the suitability or
fitness of the Premises for the conduct of Tenant's business or for any other
purpose, nor has Landlord or its agents or employees agreed to undertake any
alterations or construct any tenant improvements to the Premises, except as
expressly provided in this Lease and the Workletter. If for any reason Landlord
cannot deliver possession of the Premises to Tenant on the anticipated
Commencement Date as stated in Section 1.1(l), this Lease will not be void or
voidable, and Landlord will not be liable to Tenant for any resultant loss or
damage; provided, however, in the event delivery of possession is delayed beyond
the anticipated Commencement Date as stated in Section 1.1(l), then the
Commencement Date and Rent Commencement Date shall be delayed on a day-by-day
basis as provided in Paragraph 9 of the Workletter. Once the Commencement Date
and Rent Commencement Date have been established, the parties shall execute and
exchange an agreement specifying the Commencement Date and Rent Commencement
Date, the Expiration Date and any other dates related thereto. If for any reason
other the "Tenant Delays" as defined in Section 8 of the Workletter, Landlord
has not achieved Substantial Completion as defined in Section 1(p) of the
Workletter within 180 days after the anticipated Commencement Date, Tenant shall
have the right to terminate this Lease by giving Landlord Notice of such
election within ten (10) days after the expiration of said 180 days.
4.3 Early Entry. Tenant may be permitted early entry to the Premises by
Landlord prior to the Commencement Date for the purpose of installing fixtures
or any other purpose permitted by Landlord upon reasonable Notice to Landlord
and provided that such entry does not interfere with or delay Landlord's
completion of construction of the improvements. Any such early entry shall be at
Tenant's sole risk and subject to all the terms and provisions of this Lease.
6
If at any time in Landlord's reasonable judgment such entry shall cause
interference with the timely completion of the improvements to be constructed by
Landlord, then said license may be withdrawn by Landlord immediately upon Notice
to Tenant.
4.4 Antenna. Tenant shall have the right, at its sole cost and expense, to
install a receiving dish antenna (approximately 24" in diameter) on the frame
that Landlord will provide on the roof or at the mechanical penthouse of the
Building and to utilize, in common with others, the conduits that Landlord shall
provide for such purpose to connect its antenna to communications equipment to
be installed in the Premises. Once installed, such antenna shall be maintained
by Tenant in a first class condition at Tenant's sole cost and expense. If
Tenant elects to install such antenna, Landlord's charge for such antenna usage
shall be $200.00 per month, which charge shall be deemed additional rent
pursuant to this Lease. Upon reasonable Notice to Landlord, Tenant shall be
permitted access to the roof of the Building in order to maintain the antenna.
4.5 Storage Space Tenant shall have the right to lease a separate storage
area of approximately 750 square feet to be constructed by Landlord in the
basement of the Building. Such storage space shall be constructed of wire
fencing or similar materials and not necessarily Building Standard partitioning
and shall be used only for the storage of normal office documents, furniture and
equipment. Such storage area may be leased by Tenant on a month to month basis
during the Term of this Lease, may not be assigned or sublet by Tenant except in
connection with the assignment of this Lease or a sublease of substantially all
of the Premises and shall be a Landlord's standard rates in effect from time to
time, which currently is $10.00 per square foot provided however that such rate
shall not be increased by more than five per cent (5%) per year.
ARTICLE 5 - MONTHLY RENT
5.1 Monthly Rent. Monthly Rent shall be paid beginning on the Rent
Commencement Date and throughout the Term in advance on or before the first day
of each calendar month of the Term except that the Prepaid Rent shall be paid
upon the execution of this Lease. If the Term commences on a day other than the
first day of a calendar month or ends on a day other than the last day of a
calendar month, then Monthly Rent will be appropriately prorated by Landlord
based on a thirty (30) day month. Monthly Rent and all Additional Rent will be
paid to Landlord, without Notice or demand, and without deduction or offset, in
lawful money of the United States of America at Landlord's address, or to such
other address as Landlord may from time to time designate in writing.
5.2 Late Payments. Tenant recognizes that late payment of Rent or any other
sum due hereunder from Tenant to Landlord will result in administrative expenses
to Landlord, the extent of which are difficult and economically impractical to
ascertain. Tenant therefore agrees that if Rent or any other payment due
hereunder from Tenant to Landlord is not paid on the date said amount is due,
then in addition to any other remedy available to Landlord, Tenant shall pay a
late charge in an amount equal to the greater of (i) one percent (1%) of such
delinquent Rent amount or (ii) a daily administrative charge of Twenty Five
Dollars ($25.00) provided that in no event shall such late charge be greater
than that permitted under the laws of the State of Oregon. The payment of such
late charge shall not excuse or cure any default by Tenant under this Lease.
7
ARTICLE 6 - ADDITIONAL RENT FOR OPERATING EXPENSES
6.1 General.
(a) Whenever for any calendar year the Operating Expenses (defined
below) exceed the Operating Expenses for the Base Year, then, effective January
1 of such year, Tenant shall pay as Additional Rent the product of Tenant's
Share multiplied by such excess, subject to the provisions of Section 6.2. The
first payment of Additional Rent for increases in Operating Expenses, if any,
shall be effective on the First Monthly Rent Adjustment Date set forth in
Section 1.1(r).
(b) As used in this Lease, the term "Operating Expenses" means:
(1) All reasonable costs paid, payable, or incurred by Landlord
for the management, operation, and maintenance of the Land and Building,
computed in accordance with generally accepted accounting principles, including
wages, salaries, benefits and compensation of employees but not above the level
of property manager; consulting, accounting, legal, janitorial, maintenance,
security, window washing and other services; management fees and costs;
reasonable reserves for operating expenses; that reasonable part of office rent
or rental value of space in the Project used or furnished by Landlord to
enhance, manage, operate, and maintain the Project; reasonable allocation of
costs to provide and operate free or discounted visitor parking for the
Building; power, water, waste disposal, and other utilities; consumable
materials and supplies, tools, and equipment; maintenance and repairs; insurance
obtained with respect to the Land and Building; depreciation or rental on
personal property and equipment used in the management, operation, or
maintenance of the Land and Building, except as set forth in (c) below or which
is or should be capitalized on the books of Landlord; and any other costs,
charges, and expenses that under generally accepted accounting principles would
be regarded as management, maintenance, and operating expenses. The preceding
list is for definitional purposes only and does not impose any obligation to
incur such expenses or provide such services. Any services provided by Landlord
or any affiliate of Landlord shall be at rates competitive with prevailing rates
for comparable services and projects.
(2) The cost (amortized over its useful life for federal income
tax purposes) together with interest (not to exceed Landlord's cost of funds) on
the unamortized balance of any capital improvements that are made to the Project
by Landlord (i) for the purpose of reducing operating expenses (provided that
the annual anticipated savings in the component of operating expenses that such
capital improvement is intended to reduce are reasonably expected to exceed the
annual amortized cost of such improvement,) or (ii) after the Lease Date and by
requirement of any governmental law, code or regulation (including without
limitation the ADA and any provisions of ADA applicable to the Project or any
part thereof as a result of the use, occupancy, or alteration thereof by
Landlord) that was not applicable to the Project at the time it was constructed
and is not as a result of special requirements for any tenant's use of the
Project.
(c) The Operating Expenses will not include:
1. depreciation on the Project (other than depreciation on
personal property, equipment used in the management, operation or maintenance of
the Land and Building;
8
2. costs of alterations of space or other improvements made for
tenants of the Project;
3. finders' fees and real estate brokers' commissions;
4. ground lease payments, mortgage principal or interest;
5. capital items other than those referred to in clause (b) (2)
above;
6. costs of replacements to personal property and equipment for
which depreciation costs are included as an operating expense;
7. costs of excess or additional services provided to any tenant
in the Building that are directly billed to such tenants;
8. the cost of repairs due to condemnation or casualties that are
reimbursed by third parties ;
9. any cost due to Landlord's breach of this Lease;
10 all costs, including legal fees, relating to activities for
the solicitation and execution of leases of space in the Building;
11. any legal fees incurred by Landlord in enforcing its rights
under other leases for space in the Building;
12. any costs incurred to correct defects in base Building
construction;
13. any cost associated with in the management, operation or
maintenance of the Parking Garage; and
14. Landlord's income taxes.
(d) If during any calendar year at least ninety-five percent (95%) of
the Building is not provided with full Building standard services or is not at
least ninety-five percent (95%) occupied, in determining Operating Expenses
Landlord shall compute all variable Operating Expenses for such calendar year as
though ninety-five percent (95%) of the Building were provided with full
Building standard services and were ninety-five percent (95%) occupied. For
purposes of this Section, the term variable Operating Expenses shall mean any
Operating Expense (or portion thereof) that increases or decreases with the
level of occupancy of the Building. In the event that Operating Expenses do not
include any specific costs billed to or otherwise incurred for the particular
benefit of specific tenants of the Building, Landlord shall have the right to
increase Operating Expenses by an amount equal to the cost of providing standard
services similar to the services for which such excluded specific costs were
billed or incurred. In no event shall Landlord receive from all tenants of the
Building more than one hundred percent (100%) of the Operating Expenses for any
calendar year.
9
(e) Tenant acknowledges that Landlord has not made any representation
or given Tenant any assurances that any estimate of Operating Expenses will
equal or approximate the actual Operating Expenses for any calendar year or
partial calendar year during the Term.
6.2 Estimated Payments.
(a) Commencing with the calendar year in which the First Monthly Rent
Adjustment Date occurs, Landlord will give Tenant Notice of the estimated
Operating Expense increase, if any, for such calendar year. On or before the
first day of each month during each calendar year, Tenant shall pay to Landlord
Additional Rent monthly, in advance, an amount equal to 1/12 of the product of
Tenant's Share multiplied by Landlord's estimate of the excess of the Operating
Expenses for such year over the Operating Expenses for the Base Year. In the
month in each calendar year in which Tenant first makes a payment based upon
such estimate, if not January 1st of such year, Tenant shall pay to Landlord for
each month which has elapsed since January 1st the difference, if any, between
the Additional Rent based upon such estimate of Operating Expenses and the
Additional Rent for Operating Expenses actually paid.
(b) If at any time or times it reasonably appears to Landlord that the
actual Operating Expenses for any calendar year will vary substantially from the
estimated Operating Expenses for such calendar year, Landlord may, by Notice to
Tenant, revise the estimated Operating Expense increase for such calendar year,
and subsequent Additional Rent payments by Tenant in such calendar year will be
based upon such revised estimated Operating Expense increase.
6.3 Annual Settlement. Within one hundred twenty (120) days after the end
of each calendar year or as soon thereafter as practicable, Landlord will
deliver to Tenant a statement with reasonable detail of the actual amounts
payable under Section 6.2 for the prior calendar year. Such statement will be
final and binding upon Landlord and Tenant unless Tenant objects to it in
writing to Landlord within two hundred ten (210) days after delivery to Tenant
or October 31st of each year, whichever is later. Acceptance or resolution of
the first such statement shall constitute acceptance of the Operating Expense
amount for the Base Year. If such statement shows an amount owing by Tenant that
is less than the estimated payments previously made by Tenant for such calendar
year, the excess will be held by Landlord and credited against the next payment
of Rent; however, if the Term has ended and Tenant was not in default at its
end, Landlord will refund the excess to Tenant. If such statement shows an
amount owing by Tenant that is more than the estimated payments previously made
by Tenant for such calendar year, Tenant will pay the deficiency to Landlord
within thirty (30) days after the delivery of such statement. Tenant may review
Landlord's records of the operating expenses, at Tenant's sole cost and expense,
at the place Landlord normally maintains such records during Landlord's normal
business hours upon reasonable advance Notice.
6.4 Final Proration. If this Lease ends on a day other than the last day of
a calendar year, the amount of increase (if any) in the Additional Rent payable
by Tenant applicable to the calendar year in which this Lease ends will be
calculated on the basis of the number of days of the Term falling within such
calendar year. Tenant's obligation to pay any increase or Landlord's obligation
to refund any overage shall survive the expiration or other termination of this
Lease.
10
6.5 Decrease in Operating Expenses. Notwithstanding anything contained in
this Article, the Monthly Rent payable by Tenant shall in no event be less than
the Monthly Rent specified in Section 1.1.
6.6 Dispute Resolution. Any dispute regarding the provisions of this
Article shall be resolved by arbitration as provided in Article 29.
ARTICLE 7 - ADDITIONAL RENT FOR TAXES
7.1 Calculation. Tenant shall pay, as Additional Rent, an amount equal to
Tenant's Share of the excess of Taxes due for each calendar year of the Term
which is subsequent to the first calendar year, over the amount of such Taxes
due with respect to the Base Year. The first payment of Additional Rent, if any,
shall be effective on the first Monthly Rent Adjustment Date set forth in
Section 1.1(r).
7.2 Adjustment of Taxes. If in the Base Year and/or any subsequent calendar
year, the Project is less than fully assessed, then the Taxes for such year(s)
shall be appropriately adjusted to reflect what the Taxes for such year(s) would
have been had the Project been fully assessed as completed and fully occupied.
In the event that there are tenants in the Building from time to time that are
entitled to exemptions from Taxes, Taxes for such year(s) shall be appropriately
adjusted to reflect Landlord's estimate of full assessment.
7.3 Tax Appeal. If, by virtue of any application or proceeding brought by
or on behalf of Landlord, there shall be a reduction of the assessed valuation
of the Project for any year, including the Base Year, which affects the Taxes,
or part thereof, for which Additional Rent has been paid by Tenant pursuant to
this Article, such Additional Rent payment shall be recomputed on the basis of
any such reduction and Landlord will credit against the next accruing
installment of Monthly Rent due under this Lease, after receipt by Landlord of a
tax refund or credit, any sums paid by Tenant in excess of the recomputed
amounts, less a sum equal to Tenant's Share of all costs, expenses, and fees,
including reasonable attorney's fees incurred by Landlord in connection with
such application or proceeding.
7.4 Estimated Payments and Annual Settlement. Commencing with the calendar
year in which the First Monthly Rent Adjustment Date occurs, Landlord will give
Tenant Notice of the estimated Additional Rent for Taxes, if any, for such
calendar year. On or before the first day of each month during each such
calendar year, Tenant shall pay to Landlord Additional Rent of one-twelfth
(1/12) of such estimated increase. In the month in each calendar year in which
Tenant first makes a payment based upon such estimate, if not January 1st of
such year, Tenant shall pay to Landlord for each month which has elapsed since
January 1st the difference, if any, between the Additional Rent based upon such
estimate and the Additional Rent for Taxes actually paid. After the end of each
calendar year, there shall be a reconciliation of the Additional Rent for Taxes
actually due and the total of estimated payments for such Additional Rent, as
provided in Section 6.3.
7.5 Final Proration. Any Additional Rent payable pursuant to this Article
for any partial year shall be adjusted in proportion to the number of days in
such partial year during which this Lease is in effect. The obligation of Tenant
with respect to any Additional Rent pursuant to
11
this Article applicable to the last fiscal or calendar year of the Term shall
survive the expiration or termination of this Lease.
7.6 Decrease in Taxes. Notwithstanding anything contained in this Article,
the Monthly Rent payable by Tenant shall in no event be less than the Monthly
Rent specified in Section 1.1.
7.7 Dispute Resolution. Any dispute regarding the provisions of this
Article shall be resolved by arbitration as provided in Article 29.
ARTICLE 8 - INSURANCE
8.1 Landlord's Insurance. At all times during the Term, Landlord will carry
insurance coverages and amounts reasonably determined by Landlord, based on
coverages carried by prudent owners of comparable buildings in the vicinity of
the Project.
8.2 Certain Insurance Risks. Tenant will not do or permit to be done any
act or thing upon the Premises or the Project which would jeopardize or be in
conflict with casualty insurance policies covering the Project or increase the
rate of fire or any other insurance applicable to the Project of which Tenant
has knowledge or reasonably should have known.
8.3 Tenant's Insurance.
(a) During the entire Term, and for so long thereafter as Tenant shall
occupy any portion of the Premises, Tenant shall keep in full force and effect,
at its own expense, a policy or policies of:
(i) Commercial General Liability insurance, in occurrence form,
covering bodily injury or death to persons and damage to or destruction of
property, and including contractual liability coverage for Tenant's indemnity
obligations required by this Lease to afford protection of not less than
$2,000,000 per occurrence and $2,000,000 combined single limit in the aggregate
for any one accident and coverage for child abuse claims. Provided, however,
that Tenant shall be permitted to maintain a self-insured retention. Tenant
represents that its current self-insurane retention is $500,000. Tenant shall be
permitted to increase the amount of its self-insured retention to $1,000,000.
Any increase in such self-insured retention in excesss of $1,000,000 shall be
subject to Landlord's consent, which shall not be unreasonably withheld or
delayed.
(ii) Worker's Compensation insurance as required by all state
and/or federal laws.
(b) Such policies will be maintained with companies having a "General
Policyholders Rating" of at least A:IX as set forth in the most current issue of
"Best's Insurance Guide," and will be written as primary policy coverage and not
contributing with, or in excess of, any insurance coverage which Landlord may
carry. Tenant shall have the right to provide the coverages required herein
under blanket policies provided that the coverage afforded Landlord shall not be
diminished by reason thereof.
12
8.4 Certificates of Insurance.Tenant shall, prior to the Commencement Date,
cause to be delivered to Landlord an original certificate of insurance providing
a minimum of thirty (30) days prior notice of cancellation or reduction in
coverage. Renewal certificates shall be furnished to Landlord at least ten (10)
days prior to the expiration date of each policy. All such certificates shall
indicate that Landlord is an additional insured with respect to the Commercial
General Liability coverage.
8.5 Waiver of Subrogation. All insurance policies required by this Article
shall contain a waiver by the insurer of any rights of subrogation to any cause
of action (including negligent acts) against the Tenant or Landlord (as the case
may be) and their officers, directors, and employees. Further, each party waives
any claim or cause of action against the other party hereto arising from any
loss or damage which is by such insurance or which could be covered by such
insurance if Tenant self-insures but only insofar as such party is compensated
by such insurance for such loss or damage.
8.6 Tenant's Property. All furnishings, fixtures, equipment and property of
every kind and description of Tenant and of persons claiming by or through
Tenant which may be on the Premises shall be at the sole risk and hazard of
Tenant and no part of loss or damage thereto for whatever cause is to be charged
to or borne by Landlord.
ARTICLE 9 - REQUIREMENTS OF LAW AND HAZARDOUS MATERIALS
9.1 General. At its sole cost and expense, Tenant shall in its use of the
Premises promptly comply with: (i) all laws, statutes, ordinances, and
governmental rules, regulations, or requirements now in force or in force after
the Lease Date, (ii) the requirements of any fire or casualty insurance policy
applicable to the Project now or after the Lease Date known to Tenant, and (iii)
any direction or certificate of occupancy issued pursuant to any law by any
public officer or officers, as well as with the provisions of all recorded
documents affecting the Premises in each case, insofar as they relate to the
condition, use, or occupancy of the Premises, excluding requirements of
structural changes to the Premises or the Building, unless required by the
unique nature of Tenant's use or occupancy of the Premises. Tenant shall
participate in all Building practice fire drills and Building evacuations and
shall prepare and maintain a Fire and Life Safety Plan for its employees and
guests. Landlord shall comply with all laws, statutes, ordinances and
governmental rules, regulations or requirements now in force or in force after
the Lease Date affecting the Project, excluding Tenant's obligations hereunder.
9.2 Americans with Disabilities Act. Tenant shall be responsible for all
modifications to the Premises required for compliance with ADA. Landlord shall
be responsible for insuring that the common areas of the Building and the Base
Building elements are in compliance with ADA on the Commencement Date.
9.3 Hazardous Materials.
(a) For purposes of this Lease, "Hazardous Materials" means any
explosives, radioactive materials, hazardous wastes, or hazardous substances,
including without limitation substances defined as "hazardous substances" in the
Comprehensive Environmental Response,
13
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections
9601-9657; the Hazardous Materials Transportation Act of 1975, 49 U.S.C.
Sections 1801-1812; the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Sections 6901-6987; or any other federal, state, or local statute, law,
ordinance, code, rule, regulation, order, or decree regulating, relating to, or
imposing liability or standards of conduct concerning Hazardous Materials,
waste, or substances now or at any time hereafter in effect (collectively,
"Hazardous Materials Laws").
(b) Tenant will not directly or indirectly cause or permit the
storage, use, generation, or disposition of any Hazardous Materials in, on, or
about the Premises or the Project by Tenant, its agents, employees, or
contractors other than customary office supplies in such quantities and used in
such manner as is consistent with normal office uses. Tenant will not directly
or indirectly use or permit the Premises to be used or operated in a manner that
may cause the Premises or the Project to be contaminated by any Hazardous
Materials in violation of any Hazardous Materials Laws. In the event of the
violation of the foregoing by Tenant, in addition to all other rights and
remedies of Landlord under this Lease, regardless of when the existence of the
Hazardous Materials or violation of any Hazardous Materials Laws is determined,
and whether during the Term or after the Expiration Date, Tenant shall,
immediately upon notice from Landlord, at Tenant's sole cost and expense, at
Landlord's option, either (i) take all action necessary to test, identify and
monitor the Hazardous Materials and to remove the Hazardous Materials from the
Project or Premises and dispose of the same and restore the Project or Premises
to the condition existing prior to such removal, and/or to remedy any violation
of any Hazardous Materials Laws, all in accordance with applicable federal,
state and local statutes, laws, codes, rules, regulations or orders; or (ii)
reimburse Landlord for all costs and expenses incurred by Landlord for
engineering or environmental consultant or laboratory services) in testing,
investigating, identifying and monitoring the Hazardous Materials and in
removing and disposing of the Hazardous Materials and in restoring the Project
or Premises, and/or in remedying any violation of any Hazardous Materials Laws
to the extent that Tenant is responsible for such violation. Tenant shall defend
with legal counsel acceptable to Landlord, indemnify and save harmless Landlord
and Landlord's managing agent against and from all liabilities, obligations,
damages, penalties, claims, costs, charges and expenses, including architects'
and attorneys' fees and disbursements which may be imposed upon or incurred by
or asserted against Landlord or Landlord's managing agent, whether by any
governmental authority, Tenant or other third party, by reason of any violation
or alleged violation of any of the foregoing provisions of this Section by
Tenant. Without Landlord's prior written consent, Tenant will not take any
remedial action or enter into any agreements or settlements in response to the
presence of any Hazardous Materials in, on, or about the Project or the
Premises.
(c) Landlord represents, to the best of its knowledge, and warrants as
of the date of this Lease and the Commencement Date that there are no Hazardous
Materials in or on the Premises or the Project except for equipment and supplies
in such quantities and used in such manner as is consistent with the operation
and maintenance of a first-class office building.
14
ARTICLE 10 - ASSIGNMENT AND SUBLETTING
10.1 General. Tenant shall not assign or transfer this Lease, or any
interest therein, by operation of law or otherwise, and shall not sublet the
Premises or any part thereof, or any right or privilege appurtenant thereto, or
suffer any other person to occupy or use the Premises, or any portion thereof,
or agree to any of the foregoing, without in each case first obtaining the
written consent of Landlord in accordance with the provisions of this Article,
except as provided in Section 10.5. Any such assignment, transfer, pledge,
hypothecation, encumbrance, sublease or occupation or use of the Premises by any
other person without such consent, shall be void and shall constitute a default
under this Lease. Any consent to any assignment, transfer, pledge,
hypothecation, encumbrance, sublease or occupation or use of the Premises by any
other person which may be given by Landlord shall not constitute a waiver of the
provisions of this Article or a release of Tenant from the full performance of
the covenants herein contained.
10.2 Consent.
(a) If Tenant desires at any time to assign this Lease or sublet all
or any portion of the Premises, Tenant shall give Landlord Notice of its desire
to do so, which Notice shall contain:
(i) the name of the proposed subtenant or assignee;
(ii) the nature of the proposed subtenant's or assignee's
business to be carried on in the Premises;
(iii) a copy of the final form of the proposed sublease or
assignment;
(iv) financial statements, either audited independently or signed
by an authorized officer or principal, for the two most recent completed fiscal
years of the proposed subtenant or assignee (financial statements furnished to
Landlord which are not independently audited must be in accordance with
generally accepted accounting principles ("GAAP"), and must include all four (4)
GAAP financial statements);
(v) bank references for the proposed subtenant or assignee; and
(vi) such supplemental information as Landlord may reasonably
request concerning the proposed subtenant or assignee.
(b) Within twenty (20) days after Landlord's receipt of all of the
above information, Landlord shall, by Notice to Tenant, elect to:
(I) terminate this Lease as to the portion of the Premises so
proposed to be assigned or subleased, effective as of the date of such proposed
assignment or sublease with a proportionate abatement in Rent payable hereunder
in the event that (i) Tenant proposes to assign the Lease except as provided in
Section 10.5, or (ii) Tenant proposes to sublease space for more than five (5)
years, or (iii) Tenant has subleased or would with the inclusion of the proposed
sublease have subleased 15,722 or more rentable square feet.
(II) consent to the sublease or assignment pursuant to Landlord's
standard form; or
(III) reject the sublease or assignment for any of the following
reasons:
(i) in Landlord's reasonable estimate, the proposed
subtenant
15
or assignee has a financial standing, is of a character, is engaged in business,
is of a reputation, or proposes to use any part of the Premises in a manner, not
in keeping with the standards of a first-class office building;
(ii) the sublease or assignment is not expressly subject to
all of the obligations of Tenant pursuant to this Lease and does not
specifically provide that there shall be no further subletting or assignment of
the Premises without the prior written consent of Landlord and that the
subtenant or assignee shall provide Landlord with an insurance certificate
verifying the same coverages as required by Article 8;
(iii) such subletting or assignment shall result in there
being more than five occupants per floor (who are not employed, associated with
or subject to Tenant's control) other than Tenant in the Premises;
(iv) the proposed subtenant or assignee is a person then
negotiating with Landlord for the rental of any space in the Building.
Immediately prior to the time that Tenant lists any space as available for
sublease, it may request from Landlord a list of parties with which Landlord is
engaged in active negotiations for space in the Building. Tenant shall be free
to negotiate with any party not on such list for the subleasing of such space.
(c) If Landlord has available for rent comparable or similar space in
the Building, Tenant shall not solicit any other occupant of the Building.
10.3 Obligation and Liability. Each permitted assignee, shall, in writing,
assume and be deemed to have assumed this Lease and shall be and remain liable
jointly and severally with Tenant for the payment of Rent and for the due
performance or satisfaction of all the provisions, covenants, conditions and
agreements herein contained on Tenant's part to be performed or satisfied. No
permitted assignment shall be binding on Landlord unless such assignee or Tenant
shall deliver to Landlord a counterpart of such assignment which contains a
covenant of assumption by the assignee, but the failure or refusal of the
assignee to execute such instrument of assumption shall not release or discharge
the assignee from its liability as set forth above. No such assumption by an
assignee or subtenant shall relieve Tenant of Tenant's obligation and
liabilities under this Lease.
10.4 ADA Compliance. As a condition to its consent required by this
Article, Landlord may require Tenant, its assignee, or its subtenant, to make
such alterations to the Premises as required in order to comply with ADA as it
applies to the use, occupancy, or alteration of the Premises.
10.5 Corporate Transfers. Anything to the contrary notwithstanding,
Landlord's consent shall not be required for an assignment to any entity which
becomes a successor in interest to Tenant or to a transfer to an affiliate or to
a transfer in connection with a merger, consolidation or sale of all or
substantially all of the stock or assets of Tenant; provided, however, that
Tenant shall give Landlord prompt Notice of such event.
10.6 Processing Fees. Any notice by Tenant to Landlord pursuant to this
Article 10, of a proposed assignment, subletting or other transfer of any kind,
shall be accompanied by a payment of Seven Hundred Fifty ($750.00) Dollars as a
non-refundable fee for Landlord's time
16
and the processing of Tenant's request for Landlord's consent
10.7 Lease Termination. The voluntary or other surrender of this Lease by
Tenant or a mutual cancellation thereof shall not work a merger, and shall, at
the option of Landlord, terminate all or any existing subleases or subtenancies,
or may, at the option of Landlord, operate as an assignment to it of any or all
such subleases or subtenancies.
ARTICLE 11 - RULES AND REGULATIONS
Tenant and its employees, agents, licensees, and visitors will at all times
observe faithfully, and comply strictly with, the rules and regulations set
forth in Exhibit C. Landlord may from time to time reasonably amend, delete, or
modify existing rules and regulations, or adopt reasonable new rules and
regulations. In the event of any breach of any rules or regulations, Landlord
will have all remedies that this Lease provides for default by Tenant, and in
addition to any remedies available at law or in equity, including the right to
enjoin any breach of such rules and regulations. Landlord will not be liable to
Tenant for violation of such rules and regulations by any other tenant, its
employees, agents, visitors, or licensees or any other person. In the event of
any conflict between the provisions of this Lease and the rules and regulations,
the provisions of this Lease will govern.
ARTICLE 12 - COMMON AREAS
As used in this Lease, the term "common areas" means the hallways,
entryways, stairs, lobbies, elevators, driveways, walkways, terraces, docks,
loading areas, restrooms, trash facilities, and all other areas and facilities
in the Project that are provided and designated from time to time by Landlord
for the general nonexclusive use and convenience of Landlord, tenants of the
Project, their employees, invitees, licensees, and other visitors. Without
advance Notice to Tenant, except with respect to matters covered by subsection
(a) below, and without any liability to Tenant in any respect, provided Landlord
will take no action permitted under this Article 12 in such a manner as to
impair or adversely affect in any significant way Tenant's substantial benefit
and enjoyment of the Premises, Landlord shall have the right to:
(a) Close off any of the common areas to whatever extent required in
the opinion of Landlord to prevent a dedication of any of the common areas or
the accrual of any rights by any person or the public to the common areas;
(b) Temporarily close any of the common areas for maintenance,
alteration, or improvement purposes provided, however that Tenant shall at all
times, except in the case of an emergency, have reasonable access to the
Premises;
(c) Change the size, use, shape, or nature of any such common areas,
including erecting additional buildings on the common areas, expanding the
existing Building or other buildings to cover a portion of the common areas,
converting common areas to a portion of the Building or other buildings, or
converting any portion of the Building (excluding the Premises) or other
buildings to common areas. Upon erection of any additional buildings or change
in common areas, the portion of the Project upon which buildings or structures
have been erected will no longer be deemed to be a part of the common areas. In
the event of any such changes in the size or use of the Building or common areas
of the Building or Project, Landlord will make an appropriate adjustment in the
rentable area of the Building or the Building's pro rata share of
17
exterior common areas of the Project, as appropriate, and a corresponding
adjustment to Tenant's Share; and
(d) Retain control over any common areas for the purposes of enforcing
state trespass laws and shall be the "person in charge" for that purpose as that
phrase is defined in ORS 164.205 (5).
ARTICLE 13 - LANDLORD'S SERVICES
13.1 Landlord's Repair and Maintenance. Landlord will as a cost of
operation maintain, repair and restore the common areas of the Project and
public restrooms (including the restrooms on any single tenant floors included
within the Premises), the exterior windows in the Building, the mechanical,
plumbing and electrical equipment serving the Building, and the structure of the
Building in reasonably good order and condition. Any damage occasioned by Tenant
(or Tenant's employees, agents, contractors, licensees, invitees, customers or
clients) shall be repaired by Landlord at Tenant's expense. Tenant agrees to
notify Landlord of necessity for any repairs of which Tenant may have knowledge
and for which Landlord may be responsible under the provisions of this Section.
13.2 Landlord's Other Services.Landlord shall furnish the Premises with the
following services:
(a) Electricity at the rate of 3.5 xxxxx per usable square foot for
Building Standard lighting and low wattage office equipment including personal
computers, laser printers and copiers, and microwave ovens but excluding
electrical power required for computer rooms, special lighting in excess of
State of Oregon energy standards in effect on the date hereof or any other item
of electrical equipment which (individually) consumes more than 1.8 kilowatts at
rated capacity or which requires a voltage other than 120 volts single phase. If
Tenant installs equipment requiring power in excess of that required for normal
office use as determined by Landlord, Tenant shall pay to Landlord upon billing
for the cost of such excess power as Additional Rent, together with the cost of
installing any additional risers, submeters or other facilities that may be
necessary to furnish such excess power to the Premises. Tenant shall notify
Landlord in writing of any need for any excess power usage. If Tenant fails to
deliver such notice to Landlord, such excess power usage shall be deemed to have
commenced on the first day of occupancy of the Premises by Tenant.
(b) Heat, ventilation, and air conditioning (HVAC) to the extent
reasonably required to provide a standard of comfort customary in other
comparable buildings in the area ("Building Standard HVAC"), during reasonable
and usual business hours of 7:00 a.m. to 6:00 p.m., exclusive of Saturdays,
Sundays, and state and national holidays ("Building Standard Hours"), or such
shorter period specified or prescribed by any applicable policies or regulations
adopted by any utility or government agency. The Building Standard HVAC shall
conform to the HVAC specifications contained in Exhibit E. If Tenant desires
Building Standard HVAC before or after Building Standard Hours, Tenant shall
request such service in advance, and Landlord shall provide such service, at the
then current hourly rate charged to other tenants in the Building, Tenant shall
pay such charges as Additional Rent within ten (10) days of receipt of invoice.
Landlord's initial charge for after hours HVAC shall not exceed $30 per hour per
floor. If Tenant's equipment or office machines require additional air
conditioning capacity above that
18
provided by Landlord as Building standard or during other than Building Standard
Hours, such additional air conditioning installation and operating costs shall
be paid by Tenant. Tenant shall not, without Landlord's prior written consent,
use heat generating machines or equipment or lighting other than Building
Standard lights and customary office equipment in the Premises which affect the
temperature otherwise maintained by the Building air conditioning system. If
such consent is given, Landlord shall have the right to install supplementary
air conditioning units servicing the Premises, and the cost thereof, including
the cost of installation and the cost of operation and maintenance thereof,
shall be paid by Tenant to Landlord as Additional Rent.
(c) Full passenger elevator service to all tenant floors during
Building Standard Hours, and freight elevator service for deliveries of large
items to and from tenant floors. At other times, elevator service may be limited
as required for reasons of maintenance, repair or security provided, however,
that passenger service from at least one elevator shall be available at all
times, except in the case of emergencies.
(d) Lighting replacement for Building standard fixtures.
(e) Janitorial service in accordance with Exhibit F five (5) days per
week, excluding holidays; provided, however that if Tenant improvements are not
consistent in quality and/or quantity with Building standard improvements and
therefore require special cleaning or janitorial services, Tenant shall pay any
cleaning and janitorial costs attributable to such special services.
13.3 Manufacturer's Warranty. In the event any special equipment or
appliance is installed by Landlord in the Premises, whether during initial
build-out for Tenant, or at any time subsequent to the Commencement Date, such
equipment or appliance shall be covered only by the manufacturer's warranty.
After the original warranty period on said equipment or appliance has expired,
the servicing, maintenance, repair, or replacement of said equipment or
appliance shall be the sole responsibility and expense of Tenant throughout the
remainder of the Term and any extensions thereof.
13.4 Limitation on Liability. 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 by reason of (a) the installation, use or
interruption (beyond the reasonable control of Landlord) of use of any equipment
in connection with the furnishing of any of the foregoing services, (b) failure
to furnish or delay in furnishing any such services when such failure or delay
is caused by accident or any condition beyond the reasonable control of Landlord
or by the making of necessary repairs or improvements to the Premises or to the
Building, or (c) the limitation, curtailment, rationing or restrictions on use
of water, electricity, gas or any other form of energy serving the Premises or
the Building. Landlord shall use reasonable efforts to remedy any interruption
in the furnishing of such services.
19
ARTICLE 14 - TENANT'S CARE OF THE PREMISES
Tenant will maintain the Premises (including Tenant's equipment, personal
property, and trade fixtures located in the Premises) in the same condition
existing at the time they were delivered to Tenant, reasonable wear and tear
excluded. Tenant shall also be responsible for the maintenance of any special
equipment, such as supplemental air conditioning units, installed at Tenant's
request. Tenant will immediately advise Landlord of any damage to the Premises
or the Project. All damage or injury to the Premises, the Project, or the
fixtures, appurtenances, and equipment in the Premises or the Project that is
caused by Tenant, its agents, employees, or invitees may be repaired, restored,
or replaced by Landlord, at the expense of Tenant. The actual out of pocket cost
of any such repairs plus 12.5% of such expense for Landlord's profit, general
conditions and overhead shall be Additional Rent and will be paid by Tenant
within ten (10) days after delivery of a statement for such expense. Landlord
has no obligation and has made no promise to alter, remodel, improve, repair,
decorate or paint the Premises or any part thereof, except as may be specified
in Article 4. No representations respecting the condition of the Premises or the
Project have been made by or on behalf of Landlord to Tenant, except as
specifically set forth in this Lease.
ARTICLE 15 - ALTERATIONS
15.1 General.
(a) Tenant will not after the Commencement Date make or allow to be
made any alterations, additions, or improvements to or of the Premises, or
attach any fixtures or equipment to the Premises (an "Alteration"), without
first obtaining Landlord's written consent. Prior to commencing any Alterations,
Tenant shall furnish to Landlord:
(i) Copies of all governmental permits and authorizations which
may be required in connection with such Alteration;
(ii) A certificate evidencing that Tenant or its contractors
have procured employers' general liability and worker's
compensation insurance including without limitation
contractors' protective, blanket contractual and completed
operations coverages;
(iii) Such additional bodily injury and property damage insurance
(over and above the insurance required to be carried by
Tenant pursuant to the provisions of Article 8) as Landlord
may reasonably require because of the nature of the work to
be done by Tenant; and
(iv) Plans and specifications for such Alterations.
(b) Landlord's consent to such Alterations shall create no
responsibility or liability on the part of Landlord for the completeness, design
sufficiency, or compliance with laws, rules, and regulations of governmental
agencies or authorities. If Landlord determines that the services of architects
or engineers or other professionals are reasonably required in order to review
Tenant's plans for any Alterations, the fees charged by such professionals shall
be deemed Additional Rent and shall be paid within ten (10) days of the receipt
of an invoice for such
20
services. All such Alterations:
(i) Will be performed by contractors approved by Landlord and
subject to conditions specified by Landlord (which may
include requiring the posting of a mechanic's or insurance
construction xxxx xxxx);
(ii) At Landlord's option and sole discretion, will be made by
Landlord for Tenant's account in which case Tenant will
reimburse Landlord for the cost of such Alteration plus
percent 12.5% for Landlord's profit, general conditions and
overhead within ten (10) days after receipt of a statement;
(iii) Shall, when completed, be of such a character as not to
lessen the value of the Premises;
(iv) Shall conform to applicable Building codes and shall be
approved by any and all governmental, quasi-governmental or
utility authority having jurisdiction;
(v) Shall be performed promptly in accordance with the plans
and specifications, in a good workmanlike manner and in
full compliance with all applicable permits,
authorizations, building and zoning laws and the Building
Rules in effect at such time; and
(vi) Shall be performed in such a manner so as not to interfere
with any other tenant in the Project or impose any
additional expense upon Landlord in the maintenance or
operation of the Project.
(c) Subject to Tenant's rights and obligations in Article 17.1, all
Alterations, whether temporary or permanent in character, made in or upon the
Premises either by Tenant or Landlord, will immediately become Landlord's
property and at the end of the Term will remain on the Premises without
compensation to Tenant; provided, however, Landlord at its option may require
Tenant to remove any or all Alterations upon expiration or earlier termination
of the Lease. Notwithstanding the foregoing, Landlord shall not require the
removal of the initial improvements to the Premises, except for such
improvements as are in Landlord's opinion not standard office installations,
such as private bathrooms, exercise facilities and internal staircases. In its
approval of the plans for any Alterations, including the initial fit up of the
Premises, Landlord shall indicate in writing which Alterations or improvements
are to be removed.
(d) Landlord shall not be liable for any failure of any Building
facilities or services caused by any Alterations. Tenant shall pay the cost of
correcting any such faulty installation as Additional Rent unless caused by
improper or defective work performed by Landlord or its contractor.
15.2 Free-Standing Partitions. Tenant will have the right to install or
relocate free-standing work station partitions, without Landlord's prior written
consent, so long as no building or other governmental permit is required for
their installation or relocation. However, if a permit is required, Tenant shall
not install or relocate such partitions without Landlord's prior
21
written consent which shall not be unreasonably withheld. The free-standing work
station partitions which are paid for by Tenant will be part of Tenant's trade
fixtures for all purposes under this Lease. All other partitions installed in
the Premises are and will be Landlord's property for all purposes under this
Lease.
ARTICLE 16 - CONSTRUCTION LIENS
Tenant will pay or cause to be paid all costs and charges for work all done
by Tenant or caused to be done by Tenant, in or to the Premises, and for all
materials furnished for, or in connection with, such work. Tenant will indemnify
Landlord against and hold Landlord harmless of and from all construction liens
and claims of liens, and all other liabilities on account of such work by or on
behalf of Tenant, other than work performed by Landlord. If any such lien, at
any time, is filed against any part of the Project, Tenant will cause such lien
to be discharged of record within ten (10) days. If Tenant fails to pay any
charge for which a construction lien has been filed, or has not complied with
such statutory procedures as may be available to release the lien, Landlord may,
at its option, pay such charge and related costs and interest without inquiring
into the validity thereof. The amount so paid, together with reasonable
attorneys' fees incurred, will be immediately due from Tenant to Landlord as
Additional Rent. Nothing contained in this Lease will be deemed the consent or
agreement of Landlord to subject Landlord's interest in the Project to liability
under any construction or other lien law. If Tenant receives Notice that a lien
has been or is about to be filed against the Premises or the Project, or that
any action affecting title to the Project has been commenced on account of work
done by, or for, or materials furnished to, or for, Tenant, it will immediately
give Landlord Notice of such lien notice. At least fifteen (15) days prior to
the commencement of any work in or to the Premises, Tenant will give Landlord
Notice of the proposed work and the names and addresses of the persons supplying
labor and materials for the proposed work. Landlord will have the right to post
notices of non-responsibility or similar notices on the Premises in order to
protect the Premises against any such liens.
22
ARTICLE 17 - END OF TERM
17.1 Surrender of Premises. Upon the expiration of the Term or earlier
termination of this Lease, Tenant will deliver all keys to Landlord and promptly
quit and surrender the Premises broom-clean, in good order and repair, ordinary
wear and tear, damage by fire and other casualty (if covered or reasonably
should have been covered by insurance the premiums for which were or could have
been included in Operating Expenses) excepted. Tenant, at its sole expense,
shall remove such Alterations as Landlord has requested in accordance with
Article 15, and all of its computer, data, telephone and security equipment
including all computer, data, telephone and security wiring and cables in the
plenum. Tenant will fully repair any damage occasioned by the removal of any
trade fixtures, equipment, furniture or Alterations. All trade fixtures,
equipment, furniture, effects and Alterations remaining on the Premises after
the expiration or termination of this Lease will be deemed conclusively to have
been abandoned and may be appropriated, sold, stored, destroyed, or otherwise
disposed of by Landlord in a commercially reasonable manner without Notice to
Tenant or any other person and without obligation to account for them.
Notwithstanding the foregoing provisions of this Article, in the event that
Tenant fails to comply with the preceding provisions of this Article, Landlord
at its option may perform all or a portion of removals and repairs required of
Tenant hereunder, for Tenant's account, and Tenant will reimburse Landlord for
the costs of doing so (including 12.5% for Landlord's profit, general conditions
and overhead) within ten (10) days after receipt of a statement of such cost.
17.2 Holding Over.
(a) If Tenant fails to vacate the Premises after the expiration of the
Term, such holding over shall be construed as a tenancy from month-to-month,
subject to all the conditions, provisions and obligations of this Lease as
existed during the last month of the Term hereof, so far as applicable to a
month-to-month tenancy except that the Rent shall be the greater of an amount
equal to one hundred twenty five percent (125%) of (i) the Rent in effect
immediately prior to the expiration (or sooner termination) of the Lease, or
(ii) of the current market rent. No such payment shall serve to extend or renew
the Term.
(b) Failure of Tenant to remove any Alterations which Tenant is
required to remove pursuant to Section 15.1 or any substantial amount of
furniture, furnishings, or trade fixtures which Tenant is required to remove
under this Lease shall constitute a failure to vacate.
(c) Notwithstanding the foregoing, Landlord may evict Tenant from the
Premises and recover damages including consequential damages caused by wrongful
holdover.
17.3 Survivorship. The provisions of this Article shall survive the
expiration or sooner termination of this Lease.
23
ARTICLE 18 - EMINENT DOMAIN
If all or any part of the Premises shall be taken or conveyed as a result
of the exercise of the power of eminent domain or under threat of the exercise
of such power, this Lease shall terminate as to the part so taken as of the date
of taking. In the case of a partial taking, either Landlord or Tenant shall have
the right to terminate this Lease as to the balance of the Premises by Notice to
the other within thirty (30) days after such date; provided, however, that a
condition to the exercise by Tenant of such right to terminate shall be that the
portion of the Premises taken or conveyed shall be of such extent and nature as
substantially to impede or impair Tenant's use of the balance of the Premises.
In the event of any taking, Landlord shall be entitled to any and all
compensation, damages, income, rent awards or any interest therein whatsoever
which may be paid or made in connection therewith. Tenant shall have no claim
against Landlord for the value of any unexpired Term of this Lease or any other
value whatsoever; provided however, Tenant shall be entitled to any and all
compensation, damages, income, rent or awards paid for, or on account of,
Tenant's moving expenses, trade fixtures and equipment; provided same does not
reduce Landlord's award. In the event of a taking of the Premises which does not
result in a termination of this Lease, Rent will be abated in the proportion of
the rentable area of the Premises so taken to the rentable area of the Premises
immediately before such taking, and Tenant's Share will be appropriately
recalculated.
ARTICLE 19 - DAMAGE AND DESTRUCTION
19.1 Repair. If the Premises or the Building are damaged by fire or other
casualty, Landlord shall forthwith repair the same subject to Unavoidable
Delays, subject to the provisions of this Article 19, provided such repairs can,
in Landlord's opinion, be made within one hundred eighty (180) days, and this
Lease shall remain in full force and effect. If Landlord fails to complete such
repairs within said 180 day period, Tenant shall have the right to terminate
this Lease by giving Landlord Notice of its election to do so within ten (10)
days after the expiration of said 180 day period, time shall be of the essence
with regard to said notice period.
19.2 Option to Repair or Terminate. If such repairs cannot, in Landlord's
opinion, be made within one hundred eighty (180) days, Landlord, at its option,
shall, by Notice to Tenant within thirty (30) days after the date of such fire
or other casualty, either (a) elect to repair or restore such damage subject to
Unavoidable Delays, with this Lease continuing in full force and effect, or (b)
terminate this Lease as of a date specified in the Notice. Landlord's Notice
shall state Landlord's opinion as to the time period necessary to effect such
repairs. If such time period exceeds 180 days, Tenant may terminate this Lease
by Notice to Landlord given within thirty (30) days after receipt of Landlord's
Notice, as to which date time shall be of the essence. If Tenant fails or elects
not to terminate this Lease as provided in the preceding sentence and Landlord
fails to substantially complete such repairs within said 180 day period, Tenant
shall have the right to terminate this Lease by giving Landlord Notice within
ten (10) days after the expiration of said 180 day period, time shall be of the
essence with regard to such notice period.
19.3 Rent Abatement. If such fire or other casualty shall have damaged the
Premises or common areas necessary to Tenant's occupancy and if such damage is
not the result of the negligence or willful misconduct of Tenant or Tenant's
employees or invitees, then during the period the Premises are rendered unusable
by such damage, Tenant shall be entitled to a reduction in Rent in the
proportion that the rentable area of the Premises rendered unusable by
24
such damage bears to the total rentable area of the Premises.
ARTICLE 20 - SUBORDINATION
20.1 General.Subject to the provisions of Section 20.3, this Lease and all
of Tenant's rights hereunder shall be subject and subordinate to any mortgage,
deed of trust or other security instrument now or hereafter affecting all or any
portion of the Project and to all renewals, modifications, consolidations,
replacements and extensions thereof (herein referred to as "Security Documents")
and to all of the rights of the holders of any Security Documents. The foregoing
subordination shall be self-operative and no further instrument of subordination
need be obtained by any holder of a Security Document; provided, however, that
upon such holder's request, Tenant shall promptly execute and deliver an
instrument prepared by such holder evidencing and confirming such subordination.
Notwithstanding the foregoing, if the holder of a Security Document shall elect
to have this Lease be superior to the lien of such Security Document, this Lease
shall be deemed to be superior to such Security Document upon the giving of
Notice to such effect by such holder to Tenant, irrespective of the relative
dates of execution of this Lease and such Security Document or the recordation
of either.
20.2. Attornment. In the event the holder of any Security Document (or any
other person or entity) shall come into possession of or acquire title to the
Project as a result of the enforcement or foreclosure (judicial or nonjudicial)
of such Security Document, or by means of the delivery to such holder (or to
such other person or entity) of a deed-in-lieu of foreclosure or as a result of
any other means, or in the event that Landlord's estate in such real property is
conveyed or passes to a person or entity by operation of law or any other means
(a "Successor Owner"), then in any of said events Tenant shall, at the election
and upon the request of such Successor Owner, attorn to such Successor Owner as
its landlord under this Lease. The foregoing attornment requirement shall be
self-operative upon any such request of a Successor Owner without the execution
of any further instruments immediately upon the Successor Owner coming into
possession of, or acquiring title to, the Project. Tenant agrees, however, upon
demand of such Successor Owner, to execute an instrument in confirmation of the
foregoing provisions prepared by such Successor Owner.
20.3 Subordination, Non-Disturbance and Attornment Agreement. Anything to
the contrary contained in Sections 20.1 and 20.2 notwithstanding, this Lease
shall be contingent for a period of five (5) business days upon Landlord
obtaining from its current lender a subordination, non-disturbance and
attornment agreement in substantially the same form as Exhibit G. In the event
that Landlord fails to deliver an executed original of such Subordination,
Non-Disturbance and Attornment Agreement within in said five (5) day period,
Tenant shall have the right to terminate this Lease by giving Landlord Notice.
The provisions contained in Section 20.1 shall be applicable for the benefit of
the holder of any subsequent Security Documents provided that such holder enters
into a subordination, non-disturbance and attornment agreement with Tenant upon
such holder's standard form except that such form must contain provisions that
(i) Tenant shall not be disturbed in its possession of the Premises so long as
it is not in default of the provisions of this Lease; (ii) are commercially
reasonable regarding any limitation of remedies against the holder of any such
Security Documents; and (iii) does not provide for a period of more than 180
days for such holder to cure any of Landlord's default before Tenant can
exercise any right to terminate this Lease. If Tenant fails or refuses to
execute such holder's standard form of subordination, non-disturbance and
attornment agreement, this Lease shall remain subordinate to
25
any such subsequent Security Documents.
20.4. Notice. Tenant shall send a copy of any notice given Landlord under
this Lease which alleges that Landlord is in default of its obligations under
this Lease or in which Tenant claims a right to terminate this Lease to the
holder of each Security Document of which it has notice at the same time and in
the same manner such notice is sent to Landlord.
20.5 Documentation. If any mortgagee, trustee or ground lessor shall, in
writing, elect to have this Lease deemed subordinate or prior to the lien of its
mortgage, deed of trust or ground lease, whether this Lease is dated prior or
subsequent to the date of said mortgage, deed of trust or ground lease, or the
date of recording thereof, Tenant agrees to execute any documents required to
effectuate such subordination or to make this Lease prior to the lien of any
mortgage, deed or trust or ground lease, as the case may be.
ARTICLE 21 - ENTRY BY LANDLORD
21.1 Entry. Landlord, its agents, employees, and contractors may enter the
Premises at any time and at reasonable hours after reasonable notice in
non-emergency situations (except as provided in Section 25.2) and without notice
in emergency situations and for purposes of subsection (d) hereof in order to:
(a) Inspect the Premises;
(b) Exhibit the Premises to prospective purchasers, lenders, or,
during the last Lease Year of the Term, tenants;
(c) Determine whether Tenant is complying with its Lease obligations;
(d) Supply cleaning service and any other service to be provided by
Landlord to Tenant according to this Lease;
(e) Post notices of non-responsibility or similar notices; or
(f) Make repairs required of Landlord under the terms of this Lease or
make repairs to any adjoining space or utility services or make repairs,
alterations, or improvements to any other portion of the Building; however, all
such work will be done as promptly as reasonably possible and so as to cause as
little interference to Tenant as reasonably possible.
21.2 Waiver. Tenant hereby waives any claim against Landlord, its agents,
employees, or contractors for damages for any injury or inconvenience to, or
interference with, Tenant's business, any loss of occupancy or quiet enjoyment
of the Premises, or any other loss occasioned by any entry in accordance with
this Article 21, except to the extent caused by the negligence or willful
misconduct of Landlord, its agents, employees or contractors. Landlord will at
all times be provided with a key with which to unlock all of the doors in, on,
or about the Premises (excluding Tenant's vaults, safes, and similar areas
designated in writing by Tenant in advance). Landlord will have the right to use
any and all means Landlord may deem proper to open doors in and to the Premises
in an emergency in order to obtain entry to the Premises,
26
provided that Landlord will promptly repair any damages caused by any forced
entry. Any entry to the Premises by Landlord in accordance with this Article 21
will not be construed or deemed to be a forcible or unlawful entry into or a
detainer of the Premises or an eviction, actual or constructive, of Tenant from
the Premises or any portion of the Premises, nor will any such entry entitle
Tenant to damages or an abatement of Rent or other charges Tenant is required to
pay pursuant to this Lease.
ARTICLE 22 - INDEMNIFICATION, WAIVER, AND RELEASE
22.1 Tenant's Indemnification. Except if and to the extent that Tenant is
released from liability to Landlord pursuant to Section 8.5, Tenant shall
indemnify and hold Landlord harmless against and from any and all loss, cost and
expense arising from Tenant's use of the Premises or arising from any act,
neglect, fault, or omission of the Tenant, or of its agents, employees,
visitors, invitees, or licensees. In case any action or proceeding is brought
against Landlord by reason of such claim, Tenant, upon notice from Landlord,
shall defend same, at Tenant's expense, by counsel reasonably satisfactory to
Landlord. Tenant, as a material part of the consideration to Landlord, hereby
assumes all risk of damage to Tenant's property or injury to Tenant's employees,
agents, visitors, invitees, and licensees in or upon the Premises and Tenant
hereby waives all claims in respect thereof, from any cause whatsoever except to
the extent caused by the gross negligence or willful misconduct of Landlord, its
agents, employees or contractors.
22.2 Landlord's Indemnification. Except if and to the extent that Landlord
is released from liability to Tenant pursuant to Section 8.5, Landlord shall
indemnify and hold Tenant harmless against and from any and all loss, cost and
expense arising from any act, neglect, fault, or omission of the Landlord, or of
its agents, employees, visitors, invitees, or licensees. In case any action or
proceeding is brought against Tenant by reason of such claim, Landlord, upon
notice from Tenant, shall defend same, at Landlord's expense, by counsel
reasonably satisfactory to Tenant.
22.3 Release. Landlord shall not be liable to Tenant for any entry of third
parties into the Project, or for any damage to person or property, or loss of
property in and about the Project by or from any unauthorized or criminal acts
of third parties, regardless of any breakdown, malfunction, or insufficiency of
any security measures, practices, or equipment provided by Landlord, except as
provided by law. Tenant shall immediately notify Landlord in writing of any
breakdown or malfunction of any security measures, practices or equipment
provided by Landlord as to which Tenant has knowledge.
22.4 Limitations of Actions. In any situation in which Tenant disputes
Landlord's reasonableness in exercising its judgment or withholding or delaying
its consent or approval, the sole remedies available to Tenant shall be those of
an equitable nature, such as an action for an injunction or specific
performance. Tenant specifically waives the rights to money damages or other
remedies (including the right to claim money damages by way of setoff,
counterclaim or defense). The foregoing shall not be deemed to relieve Landlord
from liability in the event of a judicial determination that Landlord's refusal
to consent was arbitrary or capricious or that Landlord's consent was withheld
in bad faith. Failure by Tenant to seek relief within thirty (30) days of the
date of Landlord's decision or alleged failure to render a decision shall be
deemed a waiver of any right to dispute such action.
27
22.5 Survival. The provisions of this Article 22 shall survive the
expiration or earlier termination of this Lease.
ARTICLE 23 - QUIET ENJOYMENT
Landlord covenants and agrees with Tenant that so long as Tenant pays the
Rent and observes and performs all the terms, covenants and conditions of this
Lease on Tenant's part to be observed and performed, Tenant may peaceably and
quietly enjoy the Premises subject, nevertheless, to the terms and conditions of
this Lease, and Tenant's possession will not be disturbed by anyone claiming by,
through, or under Landlord.
ARTICLE 24 - EFFECT OF SALE
A sale or conveyance of the Project and/or assignment by Landlord of this
Lease shall operate to transfer all of Landlord's obligations under the Lease
from and after the effective date of such sale, conveyance, or assignment to
Landlord's successor in interest and shall release Landlord from liability for
all of the covenants, terms, and conditions of this Lease, express or implied.
After the effective date of such sale, conveyance, or assignment, Tenant will
look solely to Landlord's successor in interest in and to this Lease. This Lease
will not be affected by any such sale, conveyance, or assignment, and Tenant
will attorn to Landlord's successor in interest to this Lease.
ARTICLE 25 - DEFAULT
25.1 Events of Default. The occurrence of any one or more of the following
events ("Events of Default") shall constitute a breach of this Lease by Tenant:
(a) if Tenant shall fail to pay Monthly Rent and/or Additional Rent
for increases in Operating Expenses or Taxes and such failure shall continue for
more than five (5) days after receipt of Notice of non-payment; or
(b) if Tenant shall fail to pay any other sum when and as the same
becomes due and payable and such failure shall continue for more than ten (10)
days after receipt of Notice of non-payment; or
(c) if Tenant shall fail to comply with the restrictions and
provisions of Article 10; or
(d) if Tenant shall fail to perform or observe any other term hereof
to be performed or observed by Tenant, and such failure shall continue for more
than thirty (30) days after Notice thereof from Landlord provided, however that
if such default is of such a nature that it cannot be remedied fully within such
thirty (30) day period, the failure by Tenant to begin correction within such
thirty (30) day period and thereafter proceed with diligence and in good faith
to effect the remedy as soon as practicable ; or
(e) if Tenant shall make a general assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts as they
become due or shall file a petition in
28
bankruptcy, or shall be adjudicated as bankrupt or insolvent, or shall file a
petition seeking a reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, or shall file any answer admitting or shall fail timely to
contest the material allegations of a petition filed against it in any such
proceeding, or shall seek or consent to or acquiesce in the appointment of any
trustee, receiver or liquidator of Tenant or any material part of its
properties; or
(f) if any proceeding against Tenant seeking a reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, and such
proceeding shall not have been dismissed within thirty (30) days after it
commenced, or if, within thirty (30) days after the appointment, without the
consent or acquiescence of Tenant, of any trustee, receiver or liquidator of
Tenant or of any material part of its properties, such appointment shall not
have been vacated; or
(g) vacation or abandonment of the Premises for a continuous period in
excess of five (5) business days unless Tenant continues to pay all sums due
pursuant to this Lease; or
(h) if this Lease or any estate of Tenant hereunder shall be levied
upon under any attachment or execution and such attachment or execution is not
vacated within ten (10) days after levy thereof.
25.2 Landlord's Remedies. If an Event of Default shall occur under this
Lease, then Landlord may exercise any one or more of the remedies set forth in
this Section 25.2, or any other right or remedy available under applicable law
or contained in this Lease:
(a) Landlord may re-enter the Premises and remove all persons and
property to repossess and enjoy the Premises, without any further Notice, either
by summary proceedings, or by any other applicable action or proceeding,
(without being liable to indictment, prosecution, or damages therefore).
Landlord may use the Premises for Landlord's own purposes or relet it, without
prejudice to any other remedies that Landlord may have by reason of Tenant's
default. None of these actions will be deemed an acceptance of surrender by
Tenant. To the extent permitted by law, Tenant expressly waives the service of
any notice of intention to terminate this Lease or to retake the Premises, and
waives service of any demand for payment of Rent or for possession, and of any
and every other notice or demand required or permitted under applicable law.
(b) Landlord, at its option, may relet the whole or any part of the
Premises from time to time, either in the name of Landlord or otherwise, for
terms ending before, on, or after the Expiration Date, at such rent and upon
such other conditions (including concessions and free rent periods) as Landlord,
may determine to be appropriate. Landlord shall have no obligation to relet the
Premises or any part thereof and shall not be liable for failure to relet the
Premises or, in the event of any such reletting, for failure to collect any rent
due upon such reletting. No such failure shall operate to relieve Tenant of any
liability under this Lease. Landlord, at its option, may make such physical
changes to the Premises as it considers advisable or necessary in connection
with any such reletting or proposed reletting, without relieving Tenant of any
liability under this Lease. If there is other vacant space in the Building,
Landlord shall have no obligation to attempt to relet the Premises prior to
leasing other space in the Building.
29
(c) Whether or not Landlord retakes possession of or relets the
Premises, Landlord shall have the right to recover unpaid Rent and all damages
caused by the default, including attorneys' fees. Damages shall include, without
limitation: (1) all past due Rent together with interest at a rate equal to five
percent (5%) per annum over the Prime Rate but in no event at a rate greater
than the maximum rate permitted by law, and all future Rent payable to the end
of the Term; (2) all legal expenses and other related costs incurred by Landlord
following Tenant's default; (3) all reasonable costs incurred by Landlord in
restoring the Premises to good order and condition, or in remodeling,
renovating, or otherwise preparing the Premises for reletting; and (4) all costs
incurred by Landlord in reletting the Premises, including, without limitation,
any brokerage commissions and the value of Landlord's time. Landlord may xxx
periodically for damages as they accrue without barring a later action for
further damages. Landlord may in one action recover accrued damages plus damages
attributable to the remaining Term equal to the difference between the Rent
reserved in this Lease (including an estimated amount of Additional Rent as
determined by Landlord) for the balance of the Term after the time of award, and
the fair rental value of the Premises for the same period, discounted to the
time of award at the Prime Rate at the time of award. If Landlord has relet the
Premises for the period which otherwise would have constituted the unexpired
portion of the Term, or any part thereof, the amount of Rent reserved upon such
reletting shall be deemed, prima facie, to be the fair and reasonable rental
value for the part or the whole of the Premises so relet during the term of the
reletting.
25.3 Continuation after Default. Even though Tenant has breached this Lease
and abandoned the Premises, this Lease shall continue in effect as long as
Landlord does not terminate this Lease by Notice of termination to Tenant, and
Landlord shall have the right to enforce all of its rights and remedies under
this Lease, including the right to recover the Rent as it becomes due under this
Lease. Acts of maintenance or preservation, efforts to relet the Premises or the
appointment of a receiver upon initiative of Landlord to protect Landlord's
interest under this Lease shall not constitute a termination of this Lease.
25.4 Other Relief. The remedies provided for in this Lease are in addition
to any other remedies available to Landlord at law or in equity, by statute or
otherwise.
25.5 Landlord's Right to Cure Defaults. All agreements and provisions to be
performed by Tenant under any of the terms of this Lease shall be at its sole
cost and expense and without any abatement of Rent. If Tenant shall fail to pay
any sum of money, other than Rent, required to be paid by it hereunder or shall
fail to perform any other act on its part to be performed hereunder and such
failure shall continue for thirty (30) days after Notice thereof by Landlord,
Landlord may, but shall not be obligated to do so, and without waiving or
releasing Tenant from any obligations of Tenant, make any such payment or
perform any such other act on Tenant's part to be made or performed as provided
in this Lease. All sums so paid by Landlord and all necessary incidental costs
shall be deemed Additional Rent hereunder and shall be payable to Landlord on
demand, together with interest thereon from the date of expenditure by Landlord
to the date of repayment by Tenant at a rate of interest equal to five percent
(5%) per annum over the Prime Rate from time to time, but not in any event at a
rate greater than the maximum rate permitted by law. In addition to any other
rights or remedies of Landlord, Landlord shall have the same rights and remedies
in the event of the nonpayment of such sums and interest as in the case of
default by Tenant in the payment of Rent.
30
ARTICLE 26 - PARKING
26.1 Visitor Parking. Tenant's visitors, clients, and patrons to the
Premises, in common with visitors, clients, and patrons of other tenants, may
use the visitors' parking area provided by Landlord in the vicinity of the
Building; provided, however, that such parking may be subject to validation,
charge, or other control systems which may be instituted from time to time by
Landlord. As used herein, the Terms "visitors" "clients" and "patrons" shall be
deemed to exclude any employee, agent, salesman, trainee, student or independent
contractor of Tenant, whether employed by Tenant on a full time or part time
basis.
26.2 Monthly Parking.
(a) During the Term, Tenant shall have the non-exclusive right to rent
up to two (2) parking spaces per 1,000 rentable square feet of Premises of which
spaces twenty (20) shall be reserved. Tenant's rental and use of such parking
spaces shall be pursuant to the terms, rules, and regulations provided under
separate parking agreement(s). All such parking spaces will be located within
the Project in the Parking Garage. The parking spaces will be unassigned,
non-reserved, and non-designated, except for twenty (20) reserved spaces.
(b) The parking spaces shall at all times be subject to the exclusive
control and management of Landlord, and Landlord shall have the right from time
to time to establish, modify, and enforce reasonable rules and regulations with
respect to the parking spaces. Tenant agrees after notice thereof, to abide by
such rules and regulations and to cause its employees to conform thereto. The
parking spaces shall be used solely for the parking of normal sized passenger
cars, sport ulitity vechicles and non-commercial vans used by Tenant's employees
while they are working at the Building. No employee shall be permitted to park
more than one (1) vehicle in a parking space and no storage of vehicles shall be
permitted in the parking spaces.
(c) Landlord reserves the right from time to time:
(i) to change the area, location and arrangement of parking areas
and parking spaces;
(ii) to restrict parking by tenants, their officers, agents,
employees, customers and invitees to designated areas;
(iii) to discontinue, restrict or temporarily suspend use of all,
or any portion of, the parking spaces for such period of time as may be
necessary in Landlord's sole discretion to perform maintenance or repairs to the
parking spaces provided, however, that Landlord shall provide temporary
replacement parking or xxxxx the parking changes for the spaces it cannot
provide temporary replacements for;
(iv) to limit the parking of vans, limousines and other large
vehicles to specified areas provided, however that Landlord shall provide
temporary replacement spaces for all such parking spaces;
(v) to exclude any and all vehicles other than normal passenger
cars,
31
sport utility vehicles and vans; and
(vi) to designate parking areas and to modify parking lots and
parking garage structures.
(d) Use of the parking spaces by Tenant, its employees and visitors
will be at their own risk and Landlord shall not be liable for any injury to
person or property, or for loss or damage to any vehicle or its contents
resulting from theft, collision, vandalism or any other cause whatsoever.
(e) On or before the Commencement Date, Tenant shall give Landlord
Notice of the number of parking spaces Tenant intends to rent as of the
Commencement Date. If Tenant elects not to rent all or a portion of the parking
spaces available to it under Section 26.2(a) above on the Commencement Date, or
at any time during the Term, Landlord shall have the right to rent such spaces
to others. After the Commencement Date, and throughout the Term, if Tenant later
desires to rent up to its maximum number of parking spaces, including any spaces
not rented on the Commencement Date (or during the Term), Tenant shall give
Landlord at least thirty (30) days prior Notice of the number of parking spaces
it desires to rent; provided parking spaces are available, and not contractually
committed to others, or otherwise encumbered, or required for other uses,
Landlord shall, subject to the provisions of Section 26.2(a), rent the desired
parking spaces to Tenant.
(f) Tenant shall be required to pay for parking spaces rented at
prevailing market rates as determined and adjusted from time-to-time by
Landlord. All parking charges are due and payable in advance at the same time
and place as Monthly Rent. Landlord reserves the right to adjust the parking
charges in Landlord's sole discretion at any time after thirty (30) days prior
Notice. Tenant may, at its option, elect to distribute all or a portion of its
maximum number of parking spaces to individual employees of Tenant who shall be
responsible for paying parking charges directly to Landlord or its operator.
Each employee of Tenant who will be paying directly for parking will be required
to sign a separate parking agreement and abide by all of the terms, conditions,
and provisions therein.
26.3 Government Regulations. If any generally applicable governmental
regulation, restriction, rule or limitation (affecting parking or the
availability or use of spaces within Landlord's available parking inventory)
limits or reduces the number or availability of spaces within Landlord's parking
inventory, then in that event Tenant's parking shall be reduced on a
proportionate basis in order to spread the effects of such limitation or
reduction in spaces or availability or use of spaces among all tenants in
proportion to their then respective allocations.
ARTICLE 27 - OPTION TO EXPAND
27.1 Option. Landlord agrees that it will not lease that portion of the
11th floor of the Building (up to 8,000 rentable square feet) not initially
leased by Tenant (the "Expansion Space") for a term or terms exceeding five (5)
years for the initial leases covering the Expansion Space. Landlord shall have
the right to lease the Expansion Space to one or more tenants. At the time that
the term of each lease for the Expansion Space expires, Tenant shall have the
right to lease the Expansion Space as it becomes available. In the event that
the Expansion Space is leased to more than one tenant, Tenant shall have the
right to lease each
32
portion of the Expansion Space as such space becomes available. The foregoing
right shall only be effective upon strict compliance with the following terms
and conditions:
(a) Tenant shall have the right to lease all, but not less than all,
of the portion of the Expansion Space that becomes available.
(b) Landlord will give Tenant no more than twelve (12) and no less
than four (4) months (except in the case of any premature termination of a
lease) prior Notice of the date on which each lease for all or any portion of
the Expansion Space is to expire. In the event that a lease for all or a portion
of the Expansion Space is terminated, Landlord shall give Tenant prompt Notice
of such fact. Such notice shall specify the date on which such space is to
become available, the rentable and usable area of such space, and Landlord's
determination of the Fair Market Rent for such space.
(c) Tenant shall have thirty (30) days after the receipt of Landlord's
Notice within which to exercise its right to lease such space by giving Landlord
Notice. Such Notice shall indicate whether Tenant shall (i) lease that portion
of the Expansion Space described in Landlord's Notice at the rent specified in
such Notice; (ii) lease that portion of the Expansion Space but elect to
arbitrate the rental rate as provided in Sections 28.2 and 28.3; or (iii) elect
not to lease such space. Such Notice once given shall be irrevocable. In the
event that Tenant fails to give Notice within said thirty (30) day period or
elects not to lease the space being offered, Landlord shall be free to lease
such space upon any terms it deems acceptable in its sole and unfettered
discretion.
(d) In the event that Tenant properly exercises its right to lease
some or all of the Expansion Space, such leasing shall be upon the same terms
and conditions contained in this Lease except as follows:
(i) Monthly Rent shall be $26.50 per rentable square foot.
(ii) The Base Year for Operating Expenses and Taxes shall be
calendar year 1998. (iii) Landlord shall deliver the Expansion Space "as is" on
the date that the existing tenant vacates, broom clean and free of all of such
tenant's personal property.
(iv) Rent shall commence on the date such space is available to
Tenant.
(v) Landlord shall give Tenant a fit-up allowance of $10.00 per
usable square foot of space leased for a term of five (5) years, which allowance
shall be prorated on a straight line basis for terms of less than five (5)
years.
(e) In order for Tenant's Notice to be valid it must be in full
compliance with all of the terms and conditions of this Lease on the date that
it gives Notice of intent to lease the Expansion Space.
(f) So long as all or any portion of the Expansion Space is available
for
33
lease and/or has not been fitted out, Tenant may lease all or any portion
corresponding to that which Landlord is offering for lease upon the same terms
and conditions as the initial Premises except the Tenant Finish Allowance of
$28.50 per usable square foot shall be prorated on a straight line basis if the
term for which such space is being leased is less than ten (10) years.
27.2 Failure to Vacate. In the event that a tenant fails or refuses to
vacate its portion of the Expansion Space, Landlord shall have no liability or
obligation except to use commercially reasonable efforts to evict such tenant
from its space.
34
ARTICLE 28 - OPTION TO EXTEND
28.1 Option. Tenant shall have the option to extend the term of this Lease
for an additional term of five (5) years to commence on the day following the
Expiration Date and to terminate five (5) years thereafter, provided that Tenant
is not in default of any provision of this Lease and has not subleased more than
thirty-five percent (35%) of the area of the Premises during any portion of the
two (2) Lease Years prior to the Expiration Date. Such extension shall be upon
the same terms and conditions as contained in this Lease except that (i) the
Monthly Rent shall be the "Fair Market Rent" as of the Expiration Date,
determined pursuant to Section 28.2, but in no event less per square foot than
the Monthly Rent and Additional Rent for increases in Operating Costs and Taxes
Tenant is paying immediately prior to the Expiration Date; (ii) there shall be
no Landlord's Work or other related concessions granted for such extension,
except that Landlord shall provide Tenant with a refurbishment allowance of
$10.00 per usable square foot of space occupied by Tenant at such time; (iii)
the Base Year for the extension period shall be the calendar year in which such
term commences; and (iv) there shall be no further option to extend. In order to
exercise the option to extend, Tenant shall give notice to Landlord ("Tenant's
Notice") of such exercise not later than twelve (12) months prior to the
Expiration Date, time being of the essence. In order for Tenant's exercise to be
effective, at the time it gives such Tenant's Notice and at the time such
extension term is to commence, Tenant shall not be in default at either time of
any obligation hereunder, beyond any applicable grace period. If Tenant fails to
exercise its option to extend within the time period provided herein, said time
being of the essence, Landlord shall be free to lease such space upon the same
or different terms as set forth in the Landlord's Notice.
28.2 Determination of Rent. Following Tenant's Notice, but no later than
ten (10) months prior to the Expiration Date, Landlord shall give Tenant notice
("Landlord's Notice") of Landlord's determination of the "Fair Market Rent" (as
hereinafter defined) for the extension term. For the purposes of this Article,
the term "Fair Market Rent" shall mean the annual fair market rent per square
foot for comparable space in the Building and in other comparable first-class
office buildings in the Portland, Oregon area paid by tenants pursuant to leases
similar to this Lease and taking into account rent concessions then being
granted, if any, for such leases, as if Landlord and Tenant were entering into a
new lease for comparably improved space for a term of five (5) years. In the
event that Landlord and Tenant are not able to agree upon the Fair Market Rent,
after a period of thirty (30) days in which to negotiate in good faith to do so
as provided in Section 28.3, Tenant shall nevertheless have the right to
exercise its option to extend the term of this Lease under protest by noting its
objections to such Fair Market Rent in a notice to Landlord. In the event that
the determination of Fair Market Rent shall not be resolved by the date of the
initial Expiration Date, Tenant shall continue to pay the Rent in effect
immediate prior to such expiration date. In the event that it is determined that
the Fair Market Rent is greater than the Rent Tenant has been paying, Tenant
shall reimburse Landlord for the amount it has underpaid Monthly Rent plus
interest at the Interest Rate
28.3 Dispute Resolution. In the event that the parties are unable to agree
upon the Fair Market Rent within thirty (30) days of Tenant's receipt of
Landlord's Notice, such rent shall be determined in accordance with the
foregoing definition by two (2) qualified appraisers, one selected by each of
the parties. Each party shall send the other Notice of its choice of appraiser
within sixty (60) days of Tenant's receipt of Landlord's Notice. Failure by
either party to send such notice within such sixty (60) day period shall mean
that the other party's determination of
35
Fair Market Rent is accepted. If the two (2) appraisers agree upon such rent,
such decision shall be conclusive and binding upon the parties. Except as
hereinafter provided, if the two (2) appraisers cannot agree upon such rent
within sixty (60) days after the date upon which both have been appointed, the
two (2) appraisers shall then select a third appraiser within ten (10) days
thereafter. The third appraiser shall within thirty (30) days select the value
determined by either Landlord's or Tenant's appraiser as being in his/her
professional opinion closest to the Fair Market Rent of the Premises. If the
rent determined by Landlord's and Tenant's appraisers are not more than $2.00
per square foot apart, for the purposes of this Article, the Fair Market Rent
shall be deemed to be the average of the two (2) rents. The appraisers shall be
licensed real estate brokers or Members of the Appraisal Institute, who are
disinterested and are currently practicing in Portland, Oregon with at least ten
(10) years of experience in leasing or appraising properties similar to the
Building. Each party shall pay the fees charged by the appraiser it selects and
the fees of the third appraiser, if one is required, shall be borne equally. The
foregoing agreement to arbitrate shall be specifically enforceable and shall be
subject to the applicable provisions of Article 29.
ARTICLE 29 - ARBITRATION
29.1 The parties have not agreed to arbitrate all disputes arising pursuant
to this Lease; however, Landlord or Tenant may at any time request final and
binding arbitration of any matter in dispute where arbitration is expressly
provided for in this Lease (Sections 4.1, 6.6 and 7.7). Any party who fails to
submit to binding arbitration following a lawful demand by the other party shall
bear all costs and expenses, including reasonable attorneys' fees, (including
those incurred in any trial, bankruptcy proceeding, appeal or review) incurred
by the other party in obtaining a stay of any pending judicial proceeding
concerning a dispute which by the terms of this Lease has been properly
submitted to mandatory arbitration, and or compelling arbitration of any
dispute. The party requesting arbitration shall do so by giving Notice to that
effect to the other party, specifying in said Notice the nature of the dispute.
All such arbitration hearings shall be held in the City of Portland, Oregon, and
determined by a single arbitrator for matters up to $200,000.00 and by three
arbitrators for any dispute in excess of such amount, in accordance (to the
extent consistent with this Article) with the rules then pertaining to the
Multnomah County Circuit Court Arbitration Program except to the extent provided
otherwise under Oregon laws on arbitration and as otherwise provided herein. If
such program is terminated then the rules of the American Arbitration
Association shall be used.
29.2 A party demanding arbitration of a dispute shall give Notice to that
effect to the other party and shall in such Notice appoint a disinterested
arbitrator if a dispute is to be resolved by three (3) arbitrators. Within ten
(10) business days after delivery of such Notice, the other party will also
appoint a disinterested arbitrator by Notice to the original party. Within ten
(10) business days after the latter appointment, the two arbitrators so
appointed will appoint a third arbitrator (the "Neutral Arbitrator"). If only
one arbitrator is to be used, then such arbitrator shall be selected as provided
by the Rules of the Multnomah County Circuit Court Arbitration Program or
American Arbitration Association, as the case may be. The Neutral Arbitrator
shall conduct the arbitration. The qualification of the arbitrators will vary
depending upon the nature of the matter to be resolved as follows: a real estate
broker with at least ten (10) years experience in office leasing in Portland, a
partner in a national accounting firm's Portland office, or a lawyer
specializing in real estate matters with at least ten (10) years experience in
the Portland area. Selection of the Neutral Arbitrator will be subject to the
following:
36
(a) if the second arbitrator is not appointed within said ten (10)
business day period, the first arbitrator will select the Neutral Arbitrator;
and
(b) if the two arbitrators appointed by the parties cannot agree,
within ten (10) business days after the appointment of the second arbitrator,
upon the appointment of the Neutral Arbitrator, they will give Notice to the
parties of such failure to agree, and, if the parties fail to agree upon the
selection of the Neutral Arbitrator within five (5) business days after the
arbitrators appointed by the parties give such Notice, then either of the
parties may apply to the Circuit Court presiding judge of Multnomah County,
Oregon for a court appointment of the Neutral Arbitrator.
29.3 The arbitrator(s) shall resolve all disputes in accordance with the
substantive law of the state of Oregon. The arbitrator(s) shall have no
authority nor jurisdiction to award any damages or any other remedies beyond
those which could have been awarded in a court of law if the parties had
litigated the claims instead of arbitrating them nor to modify the provisions of
this Agreement. The parties shall not assert any claim for punitive damages
except to the extent such awards are specifically authorized by statute. The
Federal Arbitration Act, Title 9 of the United States Code, is applicable to
this Lease transaction and shall be controlling in any judicial proceedings and
in the arbitration itself as to issues of arbitrability and procedure. No
provision of, nor the exercise of any rights under this Article shall limit the
right of the Landlord to evict the tenant, exercise self help remedies or obtain
provisional or ancillary remedies such as an injunction, receivership,
attachment or garnishment. Any arbitration proceeding may proceed in the absence
of any party who, after Notice, fails to be present at such arbitration and, in
such event, an award may be made based solely upon the evidence submitted by the
party that is present. Discovery will be in accordance with the Federal Rules of
Civil Procedure. The arbitrators will render a decision and award in writing,
within thirty (30) days after appointment, and will deliver counterpart copies
of the decision and award to each of the parties. Unless otherwise agreed in
writing by the parties or unless this Agreement has been terminated, during the
pendency of the arbitration, the parties will continue to comply with all the
terms and provisions of this Agreement which are not the subject of the
arbitration proceeding. This agreement to arbitrate will be specifically
enforceable by either party. The decision or award rendered by the arbitrator(s)
shall be final, non-appealable, and binding upon the parties, and judgment may
be entered upon it in accordance with applicable Oregon law in a court of
competent jurisdiction.
29.4 The parties shall use their best efforts to complete any arbitration
within sixty (60) days of initial notice of arbitration. The arbitrator(s) shall
be empowered to impose sanctions for any party's failure to do so. The
provisions of this arbitration provision shall survive any termination,
amendment, or expiration hereof or of the Lease. Each party agrees to keep all
disputes and arbitration proceedings strictly confidential, except for the
disclosure of information required in the ordinary course of business of the
parties or as required by applicable law or regulation. Any time limitation
(such at the statute of limitations or laches) which would bar litigation of a
claim shall also bar arbitration of the claim. If any provision of this Article
is declared invalid by any court, the remaining provisions shall not be affected
thereby and shall remain fully enforceable. The parties understand that they
have decided that upon demand of either of them, their disputes as described
herein will be resolved by arbitration rather than in a court and once so
decided cannot later be brought, filed or pursued in court.
37
29.5 Nothing in this Article shall limit the right of either party to
obtain from any court having jurisdiction equitable, provisional or ancillary
remedies such as injunctive relief, attachment, garnishment, or the appointment
of a receiver. Such rights may be exercised at any time, except to the extent
such action is contrary to a final award of decision in any arbitration
proceeding. The institution and maintenance of such action will not constitute a
waiver of the right of either party to submit any dispute under this Agreement
to arbitration, nor render inapplicable the compulsory arbitration provisions
hereof.
29.6 Each party will pay one-half the fees and the costs incurred by the
Neutral Arbitrator, unless the Neutral Arbitrator exercises its discretion, or
is required by this Article, to award fees, costs and expenses to the prevailing
party.
ARTICLE 30 - MISCELLANEOUS
30.1 No Offer. This Lease is submitted to Tenant on the understanding that
it will not be considered an offer and will not bind Landlord in any way until
Tenant has duly executed and delivered triplicate originals to Landlord and
Landlord has executed and delivered one of such originals to Tenant.
30.2 No Construction Against Drafting Party. Landlord and Tenant
acknowledge that each of them and their counsel have had an opportunity to
review this Lease and that this Lease will not be construed against Landlord
merely because Landlord has prepared it. Tenant further acknowledges that it has
been represented (or has had the opportunity to be represented) in the
negotiation and execution of this Lease by independent legal counsel, selected
of Tenant's own free will. Tenant further acknowledges that it has read and
understands the provisions, terms and conditions of this Lease.
30.3 Time of the Essence. Time is of the essence of each and every
provision of this Lease.
30.4 No Recordation. Tenant's recordation of this Lease or any memorandum
or short form of it will be void and a default under this Lease.
30.5 No Waiver. The failure of either party to seek redress for violation
of, or to insist upon the strict performance of any covenant or condition of
this Lease or any of the rules and regulations shall not prevent a subsequent
act which would have originally constituted a violation, from having all the
force and effect of an original violation. No provision of this Lease shall be
deemed to have been waived by either party, unless such waiver be in written
agreement giving such waiver. The receipt by Landlord of Rent with knowledge of
the breach of any covenant of this Lease shall not be deemed a waiver of such
breach. No payment by Tenant or receipt by Landlord of a lesser amount than the
Monthly Rent herein stipulated shall be deemed to be other than on account of
the earliest stipulated 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. 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 in this Lease. No act by Landlord or its agent shall be deemed an
acceptance of a surrender of the Premises or an agreement to accept such
surrender unless in writing and signed by Landlord. No employee of Landlord or
its
38
agent shall have any power to accept the keys to the Premises and the delivery
of the keys shall not operate as a termination of this Lease or surrender of the
Premises. The parties acknowledge that the provisions of this Section are
essential and material terms of this Lease.
30.6 Estoppel Certificates. Tenant agrees that from time to time, upon not
less than seven (7) days prior written request by Landlord, Tenant will, and
Tenant will use reasonable effort to cause any permitted subtenant or assignee,
licensee, concessionaire or other occupant of the Premises to promptly complete,
execute and deliver to Landlord, or any party or parties designated by Landlord,
an estoppel in the form furnished by Landlord certifying: (1) that this Lease is
unmodified and in full force and effect (or if there have been modifications
that the same are in full force and effect as modified and identifying the
modifications); (2) the dates to which the Rent and other charges have been
paid; (3) that the Premises have been unconditionally accepted by the Tenant (or
if not, stating with particularity the reasons why the Premises have not been
unconditionally accepted); (4) the amount of any Security Deposit held
hereunder; (5) that, so far as the party making the certificate knows, Landlord
is not in default under any provisions of this Lease, if such is the case, and
if not, identifying all defaults with particularity; and (6) any other matter
reasonably requested by Landlord. Any purchaser or mortgagee of any interest in
the Building, Land or Project shall be entitled to rely on said statement.
30.7 Attorney's Fees. In the event Landlord places the collection of any
Rent or other sums due or to become due hereunder, or recovery of the possession
of the Premises in the hands of an attorney at law, or files suit upon the same,
then the prevailing party shall be entitled to recover from the other party such
sum as the court may adjudge reasonable as attorneys' fees at trial or on appeal
of such suit or action, in addition to all other sums provided by law.
30.8 Severability. If any provision of this Lease proves to be illegal,
invalid, or unenforceable, the remainder of this Lease will not be affected by
such finding, and in lieu of each provision of this Lease that is illegal,
invalid, or unenforceable a provision will be added as a part of this Lease as
similar in terms to such illegal, invalid, or unenforceable provision as may be
possible and be legal, valid, and enforceable.
30.9 Written Amendment Required. No amendment, alteration, modification of,
or addition to the Lease will be valid or binding unless expressed in writing
and signed by Landlord and Tenant.
30.10 Entire Agreement. This Lease, the exhibits and addenda, if any,
contain the entire agreement between Landlord and Tenant. No promises or
representations, except as expressly contained in this Lease, have been made to
Tenant respecting the condition or the manner of operating the Premises, the
Building, or the Project. The taking possession of the Premises by Tenant shall
be conclusive evidence that Tenant accepts the Premises and the Building and
that, except to the extent set forth in a written "punchlist" or other agreement
between Landlord and Tenant and except for latent defects, the same were good
and satisfactory condition at the time such possession was so taken.
30.11 Captions. The captions of the various articles and sections of this
Lease are for convenience only and do not necessarily define, limit, describe,
or construe the contents of such articles or sections.
39
30.12 Brokers. Landlord and Tenant respectively represent and warrant to
each other that neither of them has consulted or negotiated with any broker or
finder with regard to the Premises except the broker named in Section 1.1(u), if
any. Each of them will indemnify the other against and hold the other harmless
from any claims for fees or commissions from anyone with whom either of them has
consulted or negotiated with regard to the Premises except the broker. Landlord
will pay any fees or commissions due the broker.
30.13 Governing Law. This Lease will be governed by and construed pursuant
to the laws of the State of Oregon.
30.14 No Easements for Air or Light. Any diminution or shutting off of
light, air, or view by any structure that may be erected on lands adjacent to
the Building will in no way affect this Lease or impose any liability on
Landlord.
30.15 Tax Credits. Landlord is entitled to claim all tax credits and
depreciation attributable to leasehold improvements in the Premises for which
Landlord has paid. Promptly after Landlord's demand, Landlord and Tenant will
prepare a detailed list of the leasehold improvements and fixtures and their
respective costs for which Landlord or Tenant has paid. Landlord will be
entitled to all credits and depreciation for those items for which Landlord has
paid by means of any Tenant Finish Allowance or otherwise. Tenant will be
entitled to any tax credits and depreciation for all items for which Tenant has
paid with funds not provided by Landlord.
30.16 Binding Effect. The covenants, conditions, and agreements contained
in this Lease will bind and inure to the benefit of Landlord and Tenant and
their respective heirs, executors, administrators, successors, and, except as
otherwise provided in this Lease, their assigns.
30.17 Confidentiality. It is hereby agreed that the terms and provisions of
this Lease are confidential and, as such, may not be disclosed to any individual
or entity without the express written consent of Landlord; provided, however
that Tenant may disclose the terms of this Lease to its attorneys, accountants
and other advisors and as may be required by law or regulation.
30.18 Approval. Except as may be specifically otherwise provided in this
Lease, reference in this Lease to "approval," "consent" "judgment" and
"satisfactory" shall not be interpreted as justifying arbitrary rejection, but
rather shall connote a reasonable application of judgment taking into account
long-term leasing practices and commercial customs relating to major real estate
transactions.
30.19 Construction of Terms. Wherever used in this Lease, unless the
context clearly indicates a contrary intent or unless otherwise specifically
provided herein, the word "Lease" shall mean this Lease and any schedules or
supplements hereto. Whether or not specifically stated in any provision of this
Lease, reference therein to (i) any law, statute, ordinance, code, rule,
regulation or the like shall mean and included any and all modifications,
amendments and replacements thereof, (ii) the phrase "including" shall mean
"including without limitation" and (iii) any right of Landlord shall mean unless
expressly provided therein to the contrary, such right without any corresponding
obligation. The term "Tenant" shall mean Tenant
40
and any subsequent holder or holders of this Lease; and pronouns of any gender
shall include the other gender; and either the singular or plural shall include
the other. The term "Landlord" wherever used in this Lease shall be limited to
mean and include only the owner or owners at the time in question of the
Building or a mortgagee in possession, so that in the event of any sale,
assignment or transfer of the Building, such assigning owner, or mortgagee in
possession shall thereupon be released and discharged from all covenants,
conditions and agreements of Landlord hereunder, but such covenants, conditions
and agreements shall be binding for the time being upon each new owner, or
mortgagee in possession of the Building, until again sold, assigned or
transferred.
30.20 Consequential Damages. In no event shall Landlord be liable for any
consequential, special, punitive or indirect loss or damage which Tenant may
incur or suffer in connection with this Lease or any services to be performed or
provided pursuant hereto.
30.21 Limitation of Liability. Tenant shall look solely to the estate and
interest of Landlord, its successors and assigns, in the Project for the
collection of a judgment (or other judicial process) requiring the payment of
damages or money by Landlord, and no other property or assets of Landlord or any
partner of Landlord shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Tenant's remedies under or with respect to
either this Lease, the relationship of Landlord and Tenant hereunder or Tenant's
use and occupancy of the Premises.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
day and year first above written.
LANDLORD: TENANT:
600 XXXXXXXX LIMITED PARTNERSHIP KINDERCARE LEARNING
By Xxxxxxxx Xxxxx Properties, Inc. CENTERS, INC.
Its General Partner
XXXXX X. XXXXXXXX, III XXXX X. XXXXXXX
--------------------------------------- ------------------------------
By Xxxxx X. Xxxxxxxx, III By Xxxx X. Xxxxxxx
Its Executive Vice President Its Executive Vice President
41
EXHIBIT A
The Premises
TO BE AGREED UPON AS PROVIDED IN SECTION 4.1
A-1
EXHIBIT B
Legal Description of the Land
All of Block 82 and Block 83, XXXXXXXX'X ADDITION TO EAST PORTLAND, in the
City of Portland, County of Multnomah and State of Oregon.
FURTHER described as follows:
A tract of land being part of the Xxxxxxxx'x Addition to the City of
Portland, Blocks 82 and 83 and the vacated N.E. Pacific Street TOGETHER WITH
portions of vacated N.E. 7th Avenue and N.E. Oregon Street, in Section 35,
Township 1 North, Range 1 East, of the Willamette Meridian, in the City of
Portland, County of Multnomah and State of Oregon, being more particularly
described as follows:
Beginning at the Northwest corner of Block 82 of the recorded plat of
Xxxxxxxx'x Addition; thence East along the North line of Block 82 of said plat a
distance of 200.00 feet to the Northeast corner of Block 82 of said plat; thence
South along the East line of said Block 82 and Block 83 a distance of 450.00
feet to the Southeast corner of said Block 83, said point being in the South
line of that portion vacated along the North line of X.X. Xxxxxx Xxxxxx as per
vacation Ordinance No. 169326; thence West along said South line of Block 83 and
the said vacated portion of X.X. Xxxxxx Xxxxxx a distance of 200.00 feet to the
Southwest corner of said Block 83; thence North along the East line of N.E. 6th
Avenue, a distance of 450.00 feet to the point of beginning.
B-1
