Standard Form of INDUSTRIAL/BUSINESS PARK LEASE Developed by
PORTLAND METROPOLITAN ASSOCIATION OF BUILDING OWNERS AND MANAGERS
INDUSTRIAL/BUSINESS PARK LEASE
(NNN)
1.1 BASIC LEASE TERMS.
a. REFERENCE DATE: January 15, 1997
b. TENANT: MedicaLogic, Inc., an Oregon corporation
20500 NW Evergreen Parkway
Address (Leased Premises): Hillsboro, OR 97124
Address (For Notices): MedicaLogic, Inc.
15400 NW Greenbrier Parkway, Suite 400
Beaverton, OR 97006
c. LANDLORD: Evergreen Corporate Center LLC, an Oregon
limited liability company
Address (For Notices): 111 SW Columbia Street, Suite 1380
Portland, OR 97201
d. TENANT'S USE OF PREMISES: General Office Purposes
e. PREMISES AREA: Approximately 75,010 Square Feet in
Evergreen Corporate Center RIDER NO. 1
f. RIDER NO. 2
g.
h. TERM OF LEASE: Anticipated Commencement Date: December 15, 1997
Expiration: December 14, 2007 RIDER
NO. 3
Number of Months: 120
i. BASE MONTHLY RENT:
j.
Time Period Base Monthly Rent
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Commencement Date through 12th month $60,000
13th month through 24th month $67,500
25th month through 60th month $78,750
61st month through 120th month $87,000
k. ANNUAL EXPENSES:
Note: See Section 4.3 below for the method of computing Expenses. The
number set forth above for Annual Expenses is only an estimate. The
actual Annual Expenses shall be determined pursuant to Section 4.3c
below.
l. PREPAID RENT: $60,000
m. TOTAL SECURITY DEPOSIT: $87,000
n. BROKER(S): Melvin Mark Brokerage Company, representing Landlord, and
Norris, Beggs & Simpson, representing Tenant
2.1 PREMISES. Landlord leases to Tenant the premises described in Section 1.1
and in Exhibit A (the "Premises"), located in the project described on
Exhibit B (the "Project"). Landlord shall modify Tenant's percentage of the
Project as set forth in Section 1.1 if the Project size is increased or
decreased, as the case may be, through the development of additional
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property or the deletion of a portion of the Project. RIDER NO. 2 Landlord
shall give Tenant notice when the Premises are ready for occupancy. RIDER
NO. 4 Within five (5) days after Tenant receives Landlord's notice that the
Premises are ready for occupancy, Landlord and Tenant shall inspect the
Premises and prepare a "punchlist" of items to be completed. The existence
of "punchlist" items shall not postpone the commencement date of this Lease
Agreement. By taking occupancy of the Premises, Tenant acknowledges that it
has examined the Premises and accepts the Premise in their then present
condition, subject only to any work which Landlord has agreed to perform as
set forth on the "punchlist." RIDER NO. 5
(1) Landlord shall deliver the Premises to Tenant clean and free of debris
on the commencement date and Landlord warrants to Tenant that the
Premises shall be in good operating condition on the commencement
date. In the event that it is determined that this warranty has been
violated, then it shall be the obligation of Landlord, after receipt
of written notice from Tenant setting forth with specificity the
nature of the violation, to promptly, at Landlord's sole cost, rectify
such violation. Tenant's failure to give such written notice to
Landlord with sixty (60) days after the commencement date shall be
deemed that Landlord has complied with all of Landlord's obligations
hereunder.
(2) Landlord warrants to Tenant that the Premises, in the state existing
on the date that the term commences, but without regard to the use for
which Tenant will occupy the Premises, does not violate any covenants
or restrictions of record, or any applicable Laws (as hereinafter
defined) in effect on RIDER NO. 6. In the event it is determined that
this warranty has been violated, then it shall be the obligation of
the Landlord, after written notice from Tenant, to promptly, at
Landlord's sole cost and expense, rectify any such violation. In the
event Tenant does not give to Landlord written notice of the violation
of this warranty within 180 days from the date the term commences, the
correction of same shall be the obligation of the Tenant at Tenant's
sole cost. RIDER NO. 7
3.1 TERM The term of this Lease is for the period set forth in Section 1.1,
commencing on the date in Section 1.1. If Landlord, for any reason, cannot
deliver possession of the Premises to Tenant upon the scheduled
commencement date set forth in Section 1.1, this Lease shall not be void or
voidable, nor shall Landlord be liable to Tenant for any loss or damage
resulting from such delay. In that event, however, Landlord shall deliver
possession of the Premises as soon as practicable and the commencement date
shall be the date of such delivery with the term of the Lease remaining
unchanged, and all other terms and conditions of this Lease remaining in
full force and effect. However, if Landlord is delayed in delivering
possession to Tenant for any reason attributable to Tenant, this Lease
(including the obligation to pay all rents) shall commence RIDER NO. 8
4.1 RENT Base Monthly Rent. Tenant shall pay to Landlord base monthly rent in
the initial amount in Section 1.1 which shall be payable monthly in advance
on the first day of each and every calendar month ("Base Monthly Rent");
provided, however, the Base Monthly Rent for the first month of the term
shall be paid upon the Commencement Date. All charges and sums due from
Tenant to Landlord hereunder shall be deemed rent.
4.2 RENT ADJUSTMENT If Section 1.1j is applicable, Base Monthly Rent shall be
increased periodically to the amounts and at the times set forth in Section
1.1j.
4.3 EXPENSES The purpose of this Section is to ensure that Tenant bears a share
of all Expenses reasonably related to the use, maintenance, ownership,
repair or replacement, and insurance of the Project. Accordingly, beginning
on the commencement date, Tenant shall commence the payment of Expenses.
(1) Expenses Defined The term "Expenses" shall mean all costs and expenses
reasonably incurred by Landlord with respect to the ownership,
operation, maintenance, repair or replacement, and insurance of the
Project, including without limitation, the following costs:
a. All supplies, materials, labor, equipment, and utilities used in
or related to the operation and maintenance of the Project;
b. All management, janitorial, legal, accounting, insurance, and
service agreement costs related to the Project; RIDER NO. 9
c. All maintenance, replacement and repair costs relating to the
areas within or around the Project, including, without
limitation, air conditioning systems, sidewalks, landscaping,
service areas, driveways, parking areas (including resurfacing
and restriping parking areas) walkways, building exteriors
(including painting), signs and directories, repairs and
replacing roofs, walls and other structural elements of the
Premises, the Building and the Project. RIDER NO. 10
d. Amortization (along with reasonable financing charges) of capital
improvements over the useful life of such capital improvements
made to the Project which may be required by any government
authority or which will improve the operating efficiency of the
Project
e. All Real Property Taxes, which shall mean and include all taxes,
assessments (general and special) and other impositions or
charges which may be taxed, charged, levied, assessed or imposed
upon all or any portion of or in relation to the Project or any
portion thereof, any leasehold estate in the Premises or measured
by rent from the Premises, including any increase caused by the
transfer, sale or encumbrance of the Project or any portion
thereof. "Real Property Taxes" shall also include any form of
assessment, levy, penalty, charge or tax (other than estate,
inheritance, net income or franchise taxes) imposed by any
authority having a direct or indirect power to tax or charge,
including, without limitation, any city, county, state, federal
or any improvement or other district, whether such tax is (1)
determined by the area of the Project or the rent or other sums
payable under this lease; (2) upon or with respect to any legal
or equitable interest of Landlord in the Project or any part
thereof; (3) upon this transaction or any document to which
Tenant is a party creating a transfer in any interest in the
Project; (4) in lieu of or as a direct substitute in whole or in
part of or in addition to any real property taxes on the Project;
(5) based on any parking spaces or parking facilities provided in
the Project; (6) in consideration for services, such as police
protection, fire protection, street, sidewalk and roadway
maintenance, refuse removal or other services that may be
provided by any governmental or quasi-governmental agency from
time to time which were formerly provided without charge or with
less charge to property owners or occupants. "Real Property
Taxes" shall also include all assessments under recorded
covenants or master plans and/or by owner's associations. RIDER
NO. 11
RIDER NO. 12
(2) Annual Estimate of Expenses On the commencement date or as soon
thereafter as practical, Landlord shall estimate Tenant's portion of
Expenses for the remainder of the calendar year based on the Tenant's
portion of the Project Area set forth in Section 1.1. At the
commencement of each calendar year thereafter or as soon thereafter as
practical, Landlord shall estimate Tenant's portion of Expenses for
the coming year based on the Tenant's portion of the Project Area set
forth in Section 1.1.
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(3) Monthly Payment of Expenses RIDER NO. 13 As soon as practical
following each calendar year, Landlord shall prepare an accounting of
actual Expenses incurred during the prior calendar year and such
accounting (the "Notice") shall reflect Tenant's share of Expenses. If
the additional rent paid by Tenant under this Section during the
preceding calendar year was less than the actual amount of Tenant's
share of Expenses, Landlord shall so notify Tenant and Tenant shall
pay such amount to Landlord within 30 days of receipt of such Notice.
Such amount shall be deemed to have accrued during the prior calendar
year and shall be due and payable from Tenant even though the term of
this Lease has expired or this Lease has been terminated prior to
Tenant's receipt of this Notice. Tenant shall have RIDER NO. 13a
contest the amount due; failure to so notify Landlord shall represent
final determination of Tenant's share of expenses. If Tenant's
payments were greater than the actual amount, then such overpayment
shall be credited by Landlord to all present rent due under this
Section or if this Lease has terminated, said amount shall be paid
directly to Tenant. RIDER NO. 14
(4) Rent Without Offset and Late Charge All rent shall be paid by Tenant
to Landlord monthly in advance on the first day of every calendar
month, at the address shown in Section 1.1, or such other place as
Landlord may designate in writing from time to time. All rent shall be
paid without prior demand or notice and without any deduction or
offset whatsoever. All rent shall be paid in lawful currency of the
United States of America. All rent due for any partial month shall be
prorated at the rate of 1/30th of the total monthly rent per day.
Tenant acknowledges that late payment by Tenant to Landlord of any
rent or other sums due under this Lease will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of such costs
being extremely difficult and impracticable to ascertain. Such costs
include, without limitation, processing and accounting charges and
late charges that may be imposed on Landlord by the terms of any
encumbrance or note secured by the Premises. Therefore, if any rent or
other sum due from Tenant is not received RIDER NO. 15 due, Tenant
shall pay to Landlord an additional sum equal to 5% of such overdue
payment. Landlord and Tenant hereby agree that such late charge
represents a fair and reasonable estimate of the costs that Landlord
will incur by reason of any such late payment and that the late charge
is in addition to any and all remedies available to the Landlord and
that the assessment and/or collection of the late charge shall not be
deemed a waiver of any default. Additionally, all such delinquent rent
or other sums, plus this late charge, shall bear interest at the prime
rate of Key Bank of Oregon or its successor, plus 2%, on a fully
floating basis (herein the "Default Rate"), from the date first due
until the date paid in full. Any payments of any kind returned for
insufficient funds will be subject to an additional handling charge of
$25.00, and thereafter, Landlord may require Tenant to pay all future
payments of rent or other sums due by money order or cashier's check.
5.1 PREPAID RENT On the Commencement Date, Tenant shall pay to Landlord the
prepaid rent set forth in Section 1.1, and if Tenant is not in default of
any provisions of this Lease, such prepaid rent shall be applied toward the
Base Monthly Rent due for the first month of the term (or the first month
following any Base Monthly Rent abatement period, if applicable). Upon a
default by Tenant prior to such application, Landlord shall have the right,
without waiver of the default or prejudice to other remedies, to use the
prepaid rent or any of it to cure the default or to compensate Landlord for
all or any damages resulting from the default. Landlord's obligations with
respect to the prepaid rent are those of a debtor and not of a trustee, and
landlord can commingle the prepaid rent with Landlord's general funds.
Landlord shall not be required to pay Tenant interest on the prepaid rent.
Landlord shall be entitled to immediately endorse and cash Tenant's prepaid
rent; however, such endorsement and cashing shall not constitute Landlord's
acceptance of this Lease. In the event Landlord does not accept this Lease,
Landlord shall return said prepaid rent.
6.1 DEPOSIT Upon execution of this Lease, Tenant shall deposit the security
deposit set forth in Section 1.1 with Landlord as security for the
performance by Tenant of the provisions of this Lease. Upon a default by
Tenant, Landlord shall have the right, without waiver of the default or
prejudice to other remedies, to use the security deposit or any portion of
it to cure the default or to compensate Landlord for any damages resulting
from Tenant's default. Upon demand, Tenant shall immediately pay to
Landlord a sum equal to the portion of the security deposit expended or
applied by Landlord to maintain the security deposit in the amount
initially deposited with Landlord. In no event will Tenant have the right
to apply any part of the security deposit to any rent or other sums due
under this Lease. If Tenant is not in default at the expiration or
termination of this Lease, Landlord shall return the entire security
deposit to Tenant, except for the portion designated in Section 1.1, if
any, which Landlord shall retain as a non-refundable cleaning fee.
Landlord's obligations with respect to the deposit are those of a debtor
and not of a trustee, and Landlord can commingle the security deposit with
Landlord's general funds. Landlord shall not be required to pay Tenant
interest on the deposit. Landlord shall be entitled to immediately endorse
and cash Tenant's security deposit; however, such endorsement and cashing
shall not constitute Landlord's acceptance of this Lease. In the event
Landlord does not accept this Lease, Landlord shall return said security
deposit. If Landlord sells its interest in the Premises during the term
hereof and deposits with or credits to the purchaser the unapplied portion
of the security deposit, thereupon Landlord shall be discharged from any
further liability or responsibility with respect to the security deposit.
7.1 USE OF PREMISES AND PROJECT FACILITIES Tenant shall use the Premises solely
for the purposes set forth in Section 1.1 and for no other purpose without
obtaining the prior written consent of Landlord. Tenant acknowledges that
neither Landlord nor any agent of Landlord has made any representation or
warranty with respect to the Premises or with respect to the suitability of
the Premises or the Project for the conduct of Tenant's business, nor has
Landlord agreed to undertake any modification, alteration or improvement to
the Premises or the Project, except as provided in writing in this Lease.
RIDER NO. 16 Tenant acknowledges that Landlord may from time to time, at
its sole discretion, make such modifications, alterations, deletions or
improvements to the Project as Landlord may deem necessary or desirable,
without compensation or notice to Tenant. RIDER NO. 17 Tenant shall
promptly and at all times comply with all federal, state and local
statutes, laws, ordinances, orders and regulations affecting the Premises
and the Project (herein "Laws"), as well as all master plans, restrictive
covenants, and also any rules and regulations that Landlord may adopt from
time to time. RIDER NO. 18 Tenant shall not do or permit anything to be
done in or about the Premises or bring or keep anything in the Premises
that will in any way increase the premiums paid by Landlord on its
insurance related to the Project or which will in any way increase the
premiums for fire or casualty insurance carried by other tenants in the
Project. Tenant will not perform any act or carry on any practices that may
injure the Premises or the Project; that may be a nuisance or menace to
other tenants in the Project; or that shall in any way interfere with the
quiet enjoyment of such other tenants. Tenant shall not use the Premises
for sleeping, washing
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clothes, cooking or the preparation, manufacture or mixing of anything that
might emit any objectionable odor, noises, vibrations or lights onto such
other tenants. If sound insulation is required to muffle noise produced by
Tenant on the Premises, Tenant at its own cost shall provide all necessary
insulation. Tenant shall not do anything on the Premises which will
overload any existing parking or service to the Premises. Pets and/or
animals of any type shall not be kept on the Premises.
8.1 SIGNAGE All signage shall comply with rules and regulations set forth by
Landlord as may be modified from time to time. Current rules and
regulations relating to signs are described on Exhibit F. Tenant shall
place no window covering (e.g., shades, blinds, curtains, drapes, screens
or tinting materials), stickers, signs, lettering, banners or advertising
or display material on or near exterior windows or doors if such materials
are visible from the exterior of the Premises, without Landlord's prior
written consent. Similarly, Tenant may not install any alarm boxes, foil
protection tape or other security equipment on the Premises without
Landlord's prior written consent. Any material violating this provision may
be destroyed by Landlord without compensation to Tenant.
9.1 PERSONAL PROPERTY TAXES Tenant shall pay before delinquency all taxes,
assessments, license fees and public charges levied, assessed or imposed
upon its business operations as well as upon all trade fixtures, leasehold
improvements, merchandise and other personal property in or about the
Premises.
10.1 PARKING Landlord grants to Tenant and Tenant's customers, suppliers,
employees and invitees, a nonexclusive license to use the designated
parking areas in the Project for the use of motor vehicles during the term
of this Lease. RIDER NO. 19 Landlord reserves the right at any time to
grant similar nonexclusive use to other tenants, to make rules and
regulations relating to the use of such parking areas, including reasonable
restrictions on parking by tenants and employees, to designate specific
spaces for the use of any tenant and to make changes in the parking layout
from time to time. RIDER NO. 20
11.1 UTILITIES Tenant shall pay for all water, gas, heat, light, power, sewer,
electricity, telephone, garbage or other service metered, chargeable or
provided to the Premises. RIDER NO. 21
12.1 MAINTENANCE RIDER NO. 22 electrical, plumbing and sewerage systems lying
outside the Premises ; provided, however, the cost of all such maintenance
shall be considered "Expenses" for purposes of Section 4.3. Except as
provided above, Tenant shall maintain the Premises in good condition,
including, without limitation, maintaining and repairing all walls, floors,
ceilings, interior doors, exterior and interior windows and fixtures as
well as damage caused by Tenant, its agents, employees or invitees. RIDER
NO. 23 Upon expiration or termination of this Lease, Tenant shall surrender
the Premises to Landlord in the same condition as existed at the
commencement of the term, except for reasonable wear and tear or damage
caused by fire or other casualty . Nothing herein shall excuse Tenant from
financial responsibility for property damage caused by Tenant or Tenant's
agents. RIDER NO. 24
13.1 ALTERATIONS
(1) Tenant shall not make any alterations to the Premises without
Landlord's prior written consent in each instance. If Landlord gives
its consent to such alterations, Landlord may post notices in
accordance with the laws of the state in which the Premises are
located. Any alterations made shall remain on and be surrendered with
the Premises upon expiration or termination of this Lease, except that
Landlord may, within 30 days before or 30 days after the expiration or
termination of this Lease or the termination of Tenant's right of
possession, elect to require Tenant to remove any alterations which
Tenant may have made to the Premises. RIDER NO. 25 If Landlord so
elects, at its own cost Tenant shall restore the Premises to the
condition designated by Landlord in its election, before the last day
of the term or within 30 days after notice of its election is given,
whichever is later.
(2) Any request for Landlord's consent to alterations shall be made at
least thirty (30) days before any work may be commenced and shall be
accompanied by (i) detailed and costed plans and specifications for
all alterations, and (ii) Tenant's written agreement to provide, upon
completion of work, a complete set of as-built plans and
specifications. Landlord may withhold consent, in its reasonable
discretion and may issue such consent subject to conditions. All
alterations shall be constructed only after obtaining Landlord's prior
written consent and only in conformity with all Laws. The issuance of
Landlord's consent shall not be a waiver of Tenant's obligation to
comply with all Laws, nor Landlord's opinion that such alterations are
in compliance with all Laws.
(3) Should Landlord consent in writing to Tenant's alteration of the
Premises, Tenant shall contract with a contractor approved by Landlord
for the construction of such alterations, shall secure all appropriate
governmental approvals and permits, and shall complete such
alterations with due diligence in compliance with the plans and
specifications approved by Landlord. All such construction shall be
performed in a manner which will not interfere with the quiet
enjoyment of other tenants of the Project.
(4) Tenant shall pay all costs for construction of alterations and shall
keep the Premises and the Project free and clear of all liens which
may result from work by third parties authorized by Tenant. If any
such lien is filed, the same shall be an event of default hereunder if
Tenant fails to remove such lien within ten (10) days of the filing
thereof.
14.1 RELEASE AND INDEMNITY As material consideration to Landlord, Tenant agrees
that Landlord and Landlord's partners, shareholders, officers, directors,
employees and agents (collectively, the "Protected Parties") shall not be
liable to Tenant for any damage to Tenant or Tenant's property from any
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cause, RIDER NO. 26 and Tenant waives all claims against Landlord for
damage to persons or property arising for any reason, except for damage
resulting directly from Landlord's breach of its express obligations under
this Lease which Landlord has not cured within a reasonable time after
receipt of written notice of such breach from Tenant. Tenant shall defend,
indemnify and hold Landlord and all other Protected Parties harmless from
all claims, losses, causes of action, costs and expenses, and damages
arising out of (a) any damage to any person or property occurring in, on or
about the Premises, (b) use by Tenant or its agents of the Premises and/or
the Project or other properties of Landlord, and/or (c) Tenant's breach or
violation of any term of this Lease. RIDER NO. 27
15.1 INSURANCE Tenant, at its cost, shall maintain public liability and property
damage insurance and products liability insurance with a single combined
liability limit of $1,000,000, insuring against all liability of Tenant and
its authorized representatives arising out of or in connection with
Tenant's use or occupancy of the Premises. Public liability insurance,
products liability insurance and property damage insurance shall insure
performance by Tenant of the indemnity provisions of Section 14.1. Landlord
shall be named as an additional insured and the policy shall contain
cross-liability endorsements. On all its personal property, at its cost,
Tenant shall maintain a policy of standard fire and extended coverage
insurance with vandalism and malicious mischief endorsements and "all risk"
coverage on all Tenant's improvements and alterations in or about the
Premises, to the extent of at least 100% of their full replacement value.
The proceeds from any such policy shall be used by Tenant for the
replacement of personal property and the restoration of Tenant's
improvements or alterations. All insurance required to be provided by
Tenant under this Lease shall release Landlord and the other Protected
Parties from any claims for damage to any person or the Premises and the
Project, and to Tenant's fixtures, personal property, improvements and
alterations in or on the Premises or the Project, caused by or resulting
from risks insured against under any insurance policy carried by Tenant and
in force at the time of such damage. All insurance required to be provided
by Tenant under this Lease: (a) shall be issued by insurance companies
authorized to do business in the state in which the Premises are located;
(b) be reasonably acceptable to Landlord; (c) shall be issued as a primary
policy; and (d) shall contain an endorsement requiring at least 30 days
prior written notice of cancellation to Landlord and Landlord's lender,
before cancellation or change in coverage, scope or amount of any policy.
Tenant shall deliver a certificate or copy of such policy together with
evidence of payment of all current premiums to Landlord within 10 days of
execution of this Lease. Tenant's failure to provide evidence of such
coverage to Landlord may, in Landlord's sole discretion, constitute a
default under this Lease. RIDER NO. 28
16.1 DESTRUCTION If during the term, the Premises or Project is more than 25%
destroyed (based upon replacement cost) from any cause, or rendered
inaccessible or unusable from any cause, Landlord may, in its sole
discretion, terminate this Lease by delivery of notice to Tenant within 30
days of such event without compensation to Tenant. If Landlord does not
elect to terminate this Lease, and if, in Landlord's estimation, the
Premises cannot be restored within 270 days following such destruction,
RIDER NO. 29 then Landlord shall commence to restore the Premises in
compliance with then existing laws and shall complete such restoration with
due diligence. In such event, this Lease shall remain in full force and
effect, but there shall be an abatement of Base Monthly Rent between the
date of destruction and the date of completion of restoration, based on the
extent to which destruction interferes with Tenant's use of the Premises;
provided, there shall be no abatement if such damage is the result of
Tenant's negligence or wrongdoing. Tenant shall not be entitled to any
damages or compensation for loss of use or any inconvenience occasioned by
damage or any repair or restoration.
17.1 CONDEMNATION
(1) Definitions. The following definitions shall apply: (1) "Condemnation"
means (a) the exercise of any governmental power of eminent domain,
whether by legal proceedings or otherwise by condemnor and (b) the
voluntary sale or transfer by landlord to any condemnor either under
threat of condemnation or while legal proceedings for condemnation are
proceeding; (2) "Date of Taking" means the date the condemnor has the
right to possession of the property being condemned; (3) "Award" means
all compensation, sums or anything of value awarded, paid or received
on a total or partial condemnation; and (4) "Condemnor" means any
public or quasi-public authority, or private corporation or
individual, having a power of condemnation.
(2) Obligations to Be Governed by Lease. If during the term of the Lease
there is any taking of all or any part of the Premises or the Project,
the rights and obligations of the parties shall be determined pursuant
to this Lease.
(3) Total or Partial Taking. If the Premises are totally taken by
condemnation, this Lease shall terminate on the Date of Taking. If any
portion of the Premises is taken by Condemnation, this Lease shall
terminate as to the part so taken as of the Date of Taking, but shall
in all other respects remain in effect, except that Tenant can elect
to terminate this Lease if the remaining portion of the Premises is
rendered unsuitable for Tenant's continued use of the Premises. If
Tenant elects to terminate this Lease, Tenant must exercise its right
to terminate by giving notice to Landlord within 30 days after the
nature and extent of the Condemnation have been finally determined. If
Tenant elects to terminate this Lease, Tenant shall also notify
Landlord of the date of termination, which date shall not be earlier
than 30 days nor later than 90 days after Tenant has notified Landlord
of its election to terminate; except that this Lease shall terminate
on the Date of Taking if the Date of Taking falls on a date before the
date of termination as designated by Tenant. If any portion of the
Premises is taken by condemnation and this Lease remains in full force
and effect, on the Date of Taking the Base Monthly Rent shall be
reduced by an amount in the same ratio as the total number of square
feet in the Premises taken bears to the total number of square feet in
the Premises immediately before the Date of Taking.
(4) Landlord's Election. Notwithstanding anything herein to the contrary,
if the Project or any portion thereof is taken by Condemnation and the
portion taken does not, in Landlord's sole judgment, feasiblely permit
the continuation of the operation of the Project by Landlord, then
landlord shall have the right to terminate this Lease by written
notice given within thirty (30) days following the Date of Taking.
RIDER NO. 30
(5) Award. Tenant shall have no right or claim to all or any portion of
the Award; provided this shall not limit Tenant's right to seek and to
receive compensation for relocation expenses or the value of its
personal property taken, so long as receipt of such compensation does
not decrease the Award otherwise payable to Landlord.
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18.1 ASSIGNMENT OR SUBLEASE Tenant shall not assign or encumber its interest in
this Lease or the Premises or sublease all or any part of the Premises or
allow any other person or entity (except Tenant's authorized
representatives, employees, invitees, or guests) to occupy or use all or
any part of the Premises without first obtaining Landlord's consent. RIDER
NO. 31 Any assignment, encumbrance or sublease without Landlord's written
consent shall be voidable and at Landlord's election, shall constitute a
default. If Tenant is a partnership, a withdrawal or change, voluntary,
involuntary or by operation of law of any partner, or the dissolution of
the partnership, shall be deemed a voluntary assignment. If Tenant consists
of more than one person, a purported assignment, voluntary or involuntary
or by operation of law from one person to the other or to a third party
shall be deemed a voluntary assignment. If Tenant is a corporation, any
dissolution, merger, consolidation or other reorganization of Tenant, or
sale or other transfer of a controlling percentage of the capital stock of
Tenant, or the sale of at least 25% of the value of the assets of Tenant
shall be deemed a voluntary assignment. The phrase "controlling percentage"
means ownership of and right to vote stock possessing at least 50% of the
total combined voting power of all classes of Tenant's capital stock
issued, outstanding and entitled to vote for election of directors. RIDER
NO. 32 The preceding two sentences shall not apply to corporations the
stock of which is traded through an exchange or over the counter. RIDER NO.
33 All rent received by Tenant from its subtenants in excess of the rent
payable by Tenant to Landlord under this Lease (allocated on a square
footage basis in cases of partial subleasing) shall be paid to Landlord,
and any sums to be paid by an assignee to Tenant in consideration of the
assignment of this Lease shall be paid to Landlord. If Tenant requests
Landlord to consent to a proposed assignment or subletting, Tenant shall
pay to Landlord, whether or not consent is ultimately given, $100 or
Landlord's reasonable attorneys' fees incurred in connection with such
request, whichever is greater. No interest of Tenant in this Lease shall be
assignable by involuntary assignment through operation of law (including
without limitation the transfer of this Lease by testacy or intestacy).
Each of the following acts shall be considered an involuntary assignment:
(a) if Tenant is or becomes bankrupt or insolvent, makes an assignment for
the benefit of creditors, or institutes proceedings under the Bankruptcy
Act in which Tenant is the bankrupt; or if Tenant is a partnership or
consists of more than one person or entity, if any partner of the
partnership or other person or entity is or becomes bankrupt or insolvent,
or makes an assignment for the benefit of creditors; or (b) if a writ of
attachment or execution is levied on this Lease; or (c) if in any
proceeding or action to which Tenant is a party, a receiver is appointed
with authority to take possession of the Premises. An involuntary
assignment shall constitute a default by Tenant and landlord shall have the
right to elect to terminate this Lease, in which case this Lease shall not
be treated as an asset of Tenant.
19.1 DEFAULT The occurrence of any of the following shall constitute a default
by Tenant: (a) A failure to pay rent or other charge RIDER NO. 34
20.1 LANDLORD'S REMEDIES
(1) Landlord shall have the following remedies if Tenant is in default.
These remedies are not exclusive; they are cumulative and in addition
to any remedies now or later allowed by law. Landlord may terminate
this Lease and/or Tenant's right to possession of the Premises at any
time. No act by Landlord other than giving notice to Tenant shall
terminate this Lease. Acts of maintenance, efforts to relet the
Premises, or the appointment of a receiver on Landlord's initiative to
protect Landlord's interest under this lease shall not constitute a
termination of this Lease. Upon termination of this Lease or of
Tenant's right to possession, Landlord has the right to recover from
Tenant: (1) The worth of the unpaid rent that had been earned at the
time of such termination; (2) The worth of the amount of the unpaid
rent that would have been earned after the date of such termination;
and (3) Any other amount, including court, attorney and collection
costs, necessary to compensate Landlord for all detriment proximately
caused by Tenant's default. "The Worth," as used for Item 20.1(1) in
this Paragraph is to be computed by allowing interest at the Default
Rate. "The Worth" as used for Item 20.1(2) in this Paragraph is to be
computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of termination of Tenant's
right of possession. RIDER NO. 35
(2) All covenants and assignments to be performed by Tenant under any of
the terms of this Lease shall be performed by Tenant at Tenant's sole
cost and expense and without any abatement of rent. If Tenant shall
fail to pay any sum of money owed to any party other than Landlord,
for which it is liable hereunder, or if Tenant shall fail to perform
any other act on its part to be performed hereunder, and such failure
shall continue for RIDER NO. 36 Landlord may, without waiving such
default or any other right or remedy, but shall not be obligated to,
make any such payment or perform any such other act to be made or
performed by Tenant. All sums so paid by Landlord and all necessary
incidental costs, together with interest thereon at the Default Rate
from the date of expenditure by Landlord, shall be payable to Landlord
on demand.
21.1 ENTRY ON PREMISES Landlord and its authorized representatives shall have
the right to enter the Premises at all reasonable times RIDER NO. 37 for
any of the following purposes: (a) To determine whether the Premises are in
good condition and whether Tenant is complying with its obligations under
this Lease; (b) To do any necessary maintenance and to make any restoration
to the Premises or the Project that Landlord has the right or obligation to
perform; (c) To post "for sale" signs at any time during the term, to post
"for rent" or "for lease" signs during the last 90 days of the term, or
during any period while Tenant is in default; (d) To show the Premises to
prospective brokers, agents, buyers, tenants or persons interested in
leasing or purchasing the Premises, at any time during the term; or (e) To
repair, maintain or improve the Project and to erect scaffolding and
protective barricades around and about the Premises but not so as to
prevent entry to the Premises and to do any other act or thing necessary
for the safety or preservation of the Premises or the Project. Landlord
shall not be liable in any manner for any inconvenience, disturbance, loss
of business, nuisance or other damage arising out of Landlord's entry onto
the Premises as provided in this Section. Landlord shall conduct its
activities on the Premises as provided herein in a manner that will cause
the least inconvenience, annoyance or disturbance to Tenant. For each of
these purposes, Landlord shall at all times have and retain a key with
which to unlock all the doors in, upon and about the Premises, excluding
Tenant's vaults and safes. Tenant shall not alter any lock or install a new
or additional lock or bolt on any door of the Premises without prior
written consent of Landlord. If Landlord gives its consent, Tenant shall
furnish Landlord with a key for any such lock.
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22.1 SUBORDINATION Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any mortgagee or any beneficiary of a Deed of Trust
with a lien on the Project or any ground lessor with respect to the
Project, this Lease shall be subject and subordinate at all time to (a) all
ground leases or underlying leases which may now exist or hereafter be
executed affecting the Project, and (b) the lien of any mortgage or deed of
trust which may now exist or hereafter be executed in any amount for which
the Project, ground leases or underlying leases, or Landlord's interest or
estate in any of said items is specified as security. In the event that any
ground lease or underlying lease terminates for any reason or any mortgage
or Deed of Trust is foreclosed or a conveyance in lieu of foreclosure is
made for any reason, Tenant shall, notwithstanding any subordination,
attorn to and become the Tenant of the successor in interest to Landlord,
at the option of such successor in interest. Tenant covenants and agrees to
execute and deliver, upon demand by Landlord and in the form requested by
Landlord any additional documents evidencing the priority or subordination
of this Lease with respect to any such ground lease or underlying leases or
the lien of any such mortgage or Deed of Trust. Tenant hereby irrevocably
appoints Landlord as attorney-in-fact of Tenant to execute, deliver and
record any such document in the name and on behalf of Tenant. RIDER NO. 38
Tenant, within ten days from notice from Landlord, shall execute and
deliver to Landlord, in recordable form, certificates stating that this
Lease is not in default, is unmodified and in full force and effect, or in
full force and effect as modified, and stating the modifications. This
certificate should also state the amount of current monthly rent, the dates
to which rent has been paid in advance, the amount of any security deposit
and prepaid rent, and such other matters as Landlord may request. In
addition, in connection with any sale or financing involving the Premises,
Tenant shall deliver to Landlord, within twenty (20) days of request by
Landlord, a current audited financial statement of Tenant and of each
guarantor. RIDER NO. 39
23.1 NOTICE Any notice, demand, request, consent, approval or communication
desired by either party or required to be given, shall be in writing and
either served personally or sent by prepaid certified first class mail,
addressed as set forth in Section 1.1. RIDER NO. 40 Either party may change
its address by notification to the other party. Notice shall be deemed to
be communicated 48 hours from the time of such mailing, or upon the time of
service as provided in this Section.
24.1 WAIVER No delay or omission in the exercise of any right or remedy by
Landlord shall impair such right or remedy or be construed as a waiver. No
act or conduct of Landlord, including without limitation, acceptance of the
keys to the Premises, shall constitute an acceptance of the surrender of
the Premises by Tenant before the expiration of the term. Only written
notice from Landlord to Tenant shall constitute acceptance of the surrender
of the Premises and accomplish termination of the Lease. Landlord's consent
to or approval of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to waive or render unnecessary Landlord's
consent to or approval of any subsequent act by Tenant. Any waiver by
Landlord of any default must be in writing and shall not be a waiver of any
other default concerning the same or any other provision of the Lease.
25.1 SURRENDER OF PREMISES; HOLDING OVER Upon expiration of the term or the
termination of this Lease or of Tenant's right of possession, Tenant shall
surrender to Landlord the Premises and all tenant improvements and
alterations (except alterations which Tenant has the right or obligation to
remove) in good condition, except for ordinary wear and tear. RIDER NO. 41
Tenant shall remove all personal property including, without imitation, all
wallpaper, paneling and other decorative improvements or fixtures and shall
perform all restoration made necessary by the removal of any alterations or
Tenant's personal property before the expiration of the term, including for
example, restoring all wall surfaces to their condition prior to the
commencement of this Lease. RIDER NO. 42 Landlord can elect to retain or
dispose of in any manner Tenant's personal property not removed from the
Premises by Tenant prior to the expiration of the term. Tenant waives all
claims against Landlord for any damage to Tenant resulting from Landlord's
retention or disposition of Tenant's personal property. Tenant shall be
liable to Landlord for Landlord's costs for storage, removal or disposal of
Tenant's personal property. If Tenant fails to surrender the Premises upon
the expiration of the term, or upon the termination of this Lease or of
Tenant's right of possession, Tenant shall defend, indemnify and hold
Landlord harmless from all resulting loss or liability, including without
limitation, any claim made by any succeeding tenant founded on or resulting
from such failure.
If Tenant, with Landlord's consent, remains in possession of the Premises
after expiration of this Lease, such possession by Tenant shall be deemed
to be a month-to-month tenancy terminable on written 30-day notice at any
time, by either party. All provisions of this Lease, except those
pertaining to term and rent, shall apply to the month-to-month tenancy.
Tenant shall pay Base Monthly Rent in an amount equal to 150% of the Base
Monthly Rent for the last full calendar month during the regular term plus
100% of said last month's estimate of Tenant's share of Expenses pursuant
to Section 4.3(3).
26.1 LIMITATION OF LIABILITY In consideration of the benefits accruing
hereunder, Tenant agrees that, regarding any claim against Landlord and/or
any other Protected Party, including in the event of any actual or alleged
failure, breach or default by Landlord:
a. The sole and exclusive remedy of Tenant shall be against the interest
of Landlord in the Project, and neither Landlord nor any other
Protected Party shall have any other liability whatsoever.
b. If Landlord is a partnership, the following provisions of this item b.
shall also apply: (i) No partner of Landlord shall be sued or named as
a party in any suit or action; (ii) No service of process shall be
made against any partner of Landlord (except as may be necessary to
secure jurisdiction of the partnership); (iii) No partner of Landlord
shall be required to answer or otherwise plead to any service or
process; (iv) No judgement may be taken against any partner of
Landlord; (v) Any judgment taken against any partner of Landlord may
be vacated and set aside at any time without hearing; and (vi) No writ
of execution will ever be levied against the assets of any partner of
Landlord.
c. These covenants and agreements contained in this Section are
enforceable both by Landlord and also by any other Protected Party.
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d. Tenant agrees that each of the foregoing provisions shall be
applicable to any and all liabilities, claims and causes of action
whatsoever, including those based on any provision of this Lease, any
implied covenant, and/or any statute or common law principle.
27.1 MISCELLANEOUS PROVISIONS
(1) Time of Essence. Time is of the essence of each provision of this
Lease.
(2) Successor. This Lease shall be binding on and inure to the benefit of
the parties and their successors, except as provided in Section 18.1
herein.
(3) Landlord's Consent. Any consent required by Landlord under this Lease
must be granted in writing. No such consent shall be unreasonably
withheld, but any consent may be issued subject to reasonable
conditions. As a condition to any consent, Landlord may require that
any other party or parties with a right of consent issue such consent
on terms acceptable to Landlord.
(4) Commissions. Each party represents that it has not had dealings with
any real estate broker, finder or other person with respect to this
Lease in any manner, except for the broker identified in Section 1.1,
who shall be compensated by Landlord.
(5) Other Charges. If Landlord becomes a party to any litigation
concerning this lease, the premises or the project, by reason of any
act or omission of Tenant or any agent, guest or invitee of Tenant,
Tenant shall be liable to Landlord for all attorneys fees and costs
incurred by Landlord in connection with such litigation, including any
appeal or review.
In the event of litigation RIDER NO. 43 between Tenant and Landlord
and/or any other Protected Party, the prevailing party shall be
entitled to recover from the losing party all costs and attorneys fees
incurred both at and in preparation for trial and any appeal or
review. If Landlord employs a collection agency to recover delinquent
charges, Tenant agrees to pay all collection agency and attorneys'
fees charged to Landlord in addition to rent, late charges, interest
and other sums payable under this Lease. Tenant shall pay a charge of
$75 to Landlord for preparation of a demand for delinquent rent.
(6) Landlord's Successors. In the event of a sale or conveyance by
Landlord of the Project or a portion thereof including the Premises,
or of Landlord's interest in the foregoing, the same shall operate to
release Landlord from any liability under this Lease, and in such
event Landlord's success in interest shall be solely responsible for
all obligations of Landlord under this Lease.
(7) Interpretation. This Lease shall be construed and interpreted in
accordance with the laws of the state in which the Premises are
located. This Lease constitutes the entire agreement between the
parties with respect to the Premises and the Project, except for such
guarantees or modifications as may be executed in writing by the
parties from time to time. When required by the content of this Lease,
the singular shall include the plural, and the masculine shall include
the feminine and/or neuter. "Party" shall mean Landlord or Tenant. If
more than one person or entity constitutes Tenant, the obligations
imposed on Tenant shall be joint and several. The enforceability,
invalidity or illegality of any provision shall not render the other
provisions unenforceable, invalid or illegal.
(8) Third Parties. The Protected Parties shall have the right to enforce
the provisions of this Lease which reference them. Except for the
foregoing, there are no third parties benefitted hereby, this Lease
being intended solely for the benefit of Landlord and Tenant.
Notwithstanding the foregoing, the beneficiary under a trust deed, or
a mortgagee, holding a security interest in the Project shall be a
third party beneficiary of the Tenant's obligations set forth in
Sections 30.1 and 31.1 hereof and shall have the right to enforce such
provisions.
(9) Survival. The release and indemnity covenants of Tenant, the right of
Landlord to enforce its remedies hereunder, the attorneys fees
provisions hereof, the provisions of Section 26.1 hereof, as well as
all provisions of this Lease which contemplate performance after the
expiration or termination hereof or the termination of Tenant's right
to possession hereunder, shall survive any such expiration or
termination.
28.1 EMISSIONS Tenant shall not:
a. Discharge, emit or permit to be discharged or emitted, any liquid,
solid or gaseous matter, or any combination thereof, into the
atmosphere, the ground or any body of water, which matter, as
reasonably determined by Lessor or any governmental entity does, or
may, pollute or contaminate the same, or is, or may become,
radioactive or does, or may, adversely affect the (1) health or safety
of persons, wherever located, whether on the Premises or anywhere
else, (2) condition, use or enjoyment of the Premises or any other
real or personal property, whether on the Premises or anywhere else,
or (3) Premises or any of the improvements thereto, or thereon
including buildings, foundations, pipes, utility lines, landscaping or
parking areas;
b. Produce, or permit to be produced, any intense glare, light or heat
except within an enclosed or screened area and then only in such
manner that the glare, light or heat shall not be discernible from
outside the Premises;
c. Create, or permit to be created, any sound pressure level which will
interfere with the quiet enjoyment of any real property outside the
Premises; or which will create a nuisance or violate any Law, rule,
regulation or requirement;
d. Create, or permit to be created, any ground vibration that is
discernible outside the Premises;
e. Transmit, receive or permit to be transmitted or received, any
electromagnetic, microwave or other radiation which is harmful or
hazardous to any person or property in, on or about the Premises, or
anywhere else.
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28.2 STORAGE AND USE
(1) Storage. Subject to the uses permitted and prohibited to Tenant under
this lease, Tenant shall store in appropriate leak proof containers
all solid, liquid, or gaseous matter, or any combination thereof,
which matter, if discharged or emitted into the atmosphere, the ground
or any body of water, does or may (1) pollute or contaminate the same,
or (2) adversely affect the (i) health or safety of persons, whether
on the Premises or anywhere else, (ii) condition, use or enjoyment of
the Premises or any real or personal property, whether on the Premises
or anywhere else, or (iii) Premises or any of the improvements thereto
or thereon.
(2) Use. In addition, without Landlord's prior written consent, Tenant
shall not use, store or permit to remain on the Premises any solid,
liquid or gaseous matter which is, or may become, radioactive. If
Landlord does give its consent, Tenant shall store the materials in
such a manner that no radioactivity will be detectable outside a
designated storage area and Tenant shall use the materials in such a
manner that (1) no real or personal property outside the designated
storage area shall become contaminated thereby or (2) there are and
shall be no adverse effects on the (i) health or safety of persons,
whether on the Premises or anywhere else, (ii) condition, use or
enjoyment of the Premises or any real or personal property thereon or
therein, or (iii) Premises or any of the improvements thereto or
thereon.
28.3 DISPOSAL OF WASTE
(1) Refuse Disposal. Tenant shall not keep an trash, garbage, waste or
other refuse on the Premises except in sanitary containers and shall
regularly and frequently remove same from the Premises. Tenant shall
keep all incinerators, containers or other equipment used for the
storage or disposal of such materials in a clean and sanitary
condition.
(2) Sewage Disposal. Tenant shall properly dispose of all sanitary sewage
and shall not use the sewage system (1) for the disposal of anything
except sanitary sewage or (2) in excess of the lesser of the amount
(a) reasonably contemplated by the uses permitted under this Lease or
(b) permitted by any governmental entity. Tenant shall keep the sewage
disposal system free of all obstructions and in good operating
condition.
(3) Disposal of Other Waste. Tenant shall properly dispose of all other
waste or other matter delivered to, stored upon, located upon or
within, used on, or removed from, the premises in such a manner that
it does not, and will not, adversely affect the (1) health or safety
of persons, wherever located, whether on the Premises or elsewhere,
(2) condition, use or enjoyment of the Premises or any other real or
personal property, wherever located, whether on the Premises or
anywhere else, or (3) Premises or any of the improvements thereto or
thereon including buildings, foundations, pipes, utility lines,
landscaping or parking areas.
29.1 COMPLIANCE WITH LAW Notwithstanding any other provision in the Lease to the
contrary, Tenant shall comply with all Laws in complying with its
obligations under this Lease, and in particular, Laws relating to the
storage, use and disposal of hazardous or toxic matter.
30.1 INDEMNIFICATION Tenant shall defend, indemnify and hold Landlord, the other
Protected Parties, the Project and the beneficiary under a trust deed, or
mortgagee, holding a security interest in the Project harmless from any
loss, claim, liability or expense, including, without limitation, attorneys
fees and costs, at trial and/or on appeal and review, arising out of or in
connection with its failure to observe or comply with the provisions of
this Section. This indemnity shall survive the expiration or earlier
termination of the term of the Lease or the termination of Tenant's right
to possession and be fully enforceable thereafter.
31.1 ADDITIONAL PROVISIONS The following covenants and agreements shall in no
way diminish or limit the foregoing provisions of this Section. No use may
be made of, on or from the Premises relating to the handling, storage,
disposal, transportation or discharge of Hazardous Substances (as defined
below). All of such use which does occur shall be in strict conformance
with all Laws. Tenant shall give prior written notice to Landlord of any
use, whether incidental or otherwise, of Hazardous Substances on the
Premises, or of any notice of any violation of any Law with respect to such
use. Landlord and any ground lessor or master lessor of the Premises and/or
the Project shall have the right to request and to receive information with
respect to use of Hazardous Substances on the Premises in writing.
In addition to the indemnity obligations contained elsewhere herein, Tenant
shall indemnify, defend and hold harmless Landlord, the other Protected
Parties, the Premises, the Project, and the beneficiary under a trust deed,
or a mortgagee, holding a security interest in the Project, from and
against all claims, losses, damages, costs, response costs and expenses,
liabilities, and other expenses caused by, arising out of, or in connection
with, the generation, release, handling, storage, discharge,
transportation, deposit or disposal in, on, under or about he Premises by
Tenant or any of Tenant's Agents of the following (collectively referred to
as "Hazardous Substances"): hazardous materials, hazardous substances,
toxic wastes, toxic substances, pollutants, petroleum products, underground
tanks, oils, pollution, asbestos, PCB's, materials, or contaminants, as
those terms are commonly used or as defined by federal, state and/or local
law or regulation related to protection of health or the environment,
including but not limited to, the Resource Conservation and Recovery Act
(RCRA) (42 U.S.C. ss. 6901 et seq.); the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA) (42 U.S.C.ss. 9601, et
seq.); the Toxic Substances Control Act (15 U.S.C. ss. 2601, et seq.); the
Clean Water Act (33 U.S.C. ss. 1251, et seq.); the Clean Air Act (42 U.S.C.
ss. 7401, et seq.); and ORS Chapters 453, 465 and 466 as any of the same
may be amended from time to time, and/or by any rules and regulations
promulgated thereunder. Such damages, costs, liabilities, and expenses
shall include such as are claimed by any regulating and/or administering
ground lessor or master lessor of the Project, the holder of any Mortgage
or Deed of Trust on the Project, and/or any successor of the Landlord named
herein. This indemnity shall include (a) claims of third parties, including
governmental agencies, for damages, fines, penalties, response costs,
monitoring costs, injunctive or other relief; (b) the costs, expenses or
losses resulting from any injunctive relief, including preliminary or
temporary injunctive relief; (c) the expenses, including fees of attorneys
and experts, of reporting the existence of Hazardous Substances to an
agency of the State of Oregon or of the United States as required by
applicable laws and regulations; (d) any and all expenses or obligations,
including attorney's and paralegal fees, incurred
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at, before and after any trial or appeal therefrom or review thereof, or an
administrative proceeding or appeal therefrom or review thereof, whether or
not taxable as costs, including, without limitation, attorney's fees,
paralegal fees, witness fees (expert and otherwise), deposition costs,
photocopying and telephone charges and other expenses related to the
foregoing, all of which shall be paid by Tenant to Landlord when such
expenses are accrued. This indemnity shall survive the expiration or
earlier termination of the term of the Lease or the termination of Tenant's
right to possession and be fully enforceable thereafter. RIDER NO. 44
32.1 INFORMATION Tenant shall provide Landlord with any and all information
regarding Hazardous Substances in the Premises, including contemporaneous
copies of all filings and reports to governmental entities, and any other
information requested by Landlord. In the event of any accident, spill or
other incident involving Hazardous Substances, Tenant shall immediately
report the same to Landlord and supply Landlord with all information and
reports with respect to the same. All information described herein shall be
provided to Landlord regardless of any claim by Tenant that it is
confidential or privileged.
33.1
RIDER NO. 45
Tenant: MEDICALOGIC, INC., an Oregon corporation
MARK LEAVITT GUY E. FIELD
--------------------------------------------------
By: Mark K. Leavitt Guy E. Field
By: President Controller
Landlord: EVERGREEN CORPORATE CENTER LLC, an Oregon limited
liability company
By: Marzer Venture, an Oregon general partnership
By: MELVIN MARK
---------------------------------------------------
Its: Partner
--------------------------------------------------
By: Schnitzer Investment Corp., an Oregon corporation
By: KEN NOVACK
---------------------------------------------------
Its:
--------------------------------------------------
Exhibits
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A - Premises A-1 Measurement Standards for each floor
B - Project
C - Landlord's Work Plans
D - Work Agreement
E - Rules and Regulations
F - Sign Regulations
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ADDENDUM TO LEASE
DATED: January 15, 1997
BETWEEN: EVERGREEN CORPORATE CENTER LLC,
an Oregon limited liability company ("Landlord")
AND: MEDICALOGIC, INC., an Oregon corporation ("Tenant")
The following modifications and insertions, numbered Rider No. 1 to
and including Rider No. 45, are hereby incorporated into the Lease and shall be
deemed made at the respective places indicated throughout the Lease. Any
reference to the Lease in the following provisions of this Addendum shall be
deemed to include this Addendum, unless otherwise specified in such reference.
The capitalized terms used in this Addendum which are defined in the Lease shall
have the meanings given to them in the Lease.
Rider No. 1. Insert Section 1.1(e), Page 1:
- ------------------------------------------
The Premises will be in a two story building to be constructed by
Landlord and are outlined on the attached Exhibit A. Both floors in the Premises
shall be measured in accordance with Portland NAIOP measurement standards, a
copy of which is attached as Exhibit A-1.
Rider No. 2. Insert Section 1.1(f), Page 1:
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At the time this Lease is executed, the Project is under construction.
The current conceptual plan for the Project is attached as Exhibit B. The
location and size of the buildings shown on Exhibit B may change from time to
time. Also, the total amount of square footage in the Project shall vary over
the Term of the Lease. Tenant's percent of the Project for purposes of
determining Tenant's share of Expenses pursuant to Section 4.3 of the Lease
shall be determined by multiplying the Expenses by a fraction, the numerator of
which shall be the number of square feet in the Premises from time to time
(initially 75,010) and the denominator which shall be the total number of square
feet of completed and leasable space in the Project from time to time. The
remaining development of the Project shall be compatible with that portion of
the Project which is constructed as of the date of this Lease and the portion to
be constructed as provided in this Lease. That is, the structures, landscaping
and parking shall be similar and no special or materially different amenities in
the common areas (such as water fountains, for example) are contemplated and, if
Landlord constructs such a special or materially different amenity in the common
area, the costs thereof shall not be included in Expenses payable by Tenant
unless Tenant first consents to the construction of such amenity.
1
Rider No. 3. Insert Section 1.1(h), Page 1:
- ------------------------------------------
The term of the Lease (the "Term") shall commence on the earlier of
(a) the date on which Tenant first takes occupancy of the Premises; or (b) the
date on which Landlord's Work (as defined below) is substantially completed as
certified by Landlord's architect, a temporary certificate of occupancy is
received, access to the Premises is completed as required by Laws, and parking
areas are completed consistent with the provisions of Section 10.1 (the
"Commencement Date"). The Term shall expire, unless sooner terminated or
extended pursuant to the provisions of the Lease, 120 months after the
Commencement Date. If the Lease is fully executed and delivered by January 17,
1997 and all information and approvals as requested by Landlord regarding
details, colors, finishes or other issues relating to Landlord's Work (as
defined below) are received by Landlord in writing from Tenant on or before
March 15, 1997, then the anticipated substantial completion date of Landlord's
Work shall be December 15, 1997, subject to delays caused by Tenant, delays
caused by Tenant's requested changes to any plans related to Landlord's Work, or
to delays caused by forces and events outside of Landlord's control, such as
delays caused by abnormally adverse weather, labor dispute, strike, civil
commotion, rebellion, hostilities, military or other usurped power, sabotage,
governmental regulations or controls, delay in issuance of any permit beyond 30
days after an application therefor (which is, to the best of Landlord's
knowledge, a completed application) is submitted, inability, due to reasons
beyond Landlord's control, to obtain labor, services or materials, or acts of
God (collectively, "Force Majeure"). If substantial completion of Landlord's
Work is delayed past March 31, 1998, as extended, day for day, for days of delay
caused by Tenant, by Tenant's requested changes to any plans related to
Landlord's Work, or by Force Majeure, then for each day of delay in substantial
completion of Landlord's Work beyond March 31, 1998 except for days of delay
caused by Tenant, by Tenant's requested changes to any plans related to
Landlord's Work, or by delays caused by Force Majeure, Tenant shall receive a
credit against Base Rent payable under this Lease in an amount equal to $653.47
per day. Tenant hereby accepts the Landlord's Work Plans (defined below) as
complete and as comprising the totality of Landlord's Work. Tenant shall be
permitted to enter the Premises approximately 45 days prior to the Commencement
Date for the purpose of rough-wiring Tenant's telephone, alarm, and data systems
to perimeter walls. Such work shall be in compliance with the provisions of
Section 2.7, 2.8 and 2.9 of the Work Agreement attached as Exhibit D. Tenant
shall provide promptly upon Landlord's request information regarding details,
colors, finishes and other issues relating to Landlord's Work so that Landlord
may apply for applicable permits by March 15, 1997.
Rider No. 4. Insert Section 2.1, Page 1:
- ---------------------------------------
Landlord shall give Tenant notice when the Premises are ready
for occupancy.
Rider No. 5. Insert Section 2.1, Page 1:
- ---------------------------------------
, and subject to latent defects but only to the extent the costs of
correction of such latent defects are paid for under any applicable guaranty,
warranty or contractual commitment provided by Baugh Construction Oregon, Inc.
(the "Contractor"). Landlord agrees to use commercially reasonable efforts to
enforce applicable guaranties, warranties and the construction
2
contract with the contractor (the "Construction Contract") related to correction
of latent defects at Tenant's cost and expense. The limitation on Landlord's
liability in this Lease related to the Building and Landlord's Work shall not
limit the Contractor's liability. The Construction Contract shall contain
substantially the same warranty as that which is set forth in AIA Form A201-1976
or terms more favorable to landlord. "Punchlist items" shall mean minor items
which do not interfere with Tenant's use of the Premises for its intended
purpose. Landlord shall complete all punchlist items within 60 days of the date
of Tenant's and Landlord's agreement as to the items on the punchlist, subject
to additional time needed to complete warranty items and delays due to Force
Majeure including additional time needed to obtain materials.
Rider No. 6. Insert Section 2.1(2), Page 2:
- ------------------------------------------
the date on which the building permits for Landlord's Work are issued.
Rider No. 7. Insert Section 2.1(2), Page 2:
- ------------------------------------------
However, Landlord agrees to use commercially reasonable efforts to
enforce any applicable guaranties, warranties or Construction Contract claims
related to the correction of the violation at Tenant's cost and expense.
Landlord represents to Tenant that the Premises are zoned MP by the City of
Hillsboro, which zoning designation permits office use.
Rider No. 8. Insert Section 3.1, Page 2:
- ---------------------------------------
one day earlier than the date of substantial completion of Landlord's
Work for each day of delay caused by any reason attributable to Tenant (each a
"Tenant Delay Day"). Tenant acknowledges that Landlord shall not be obligated to
engage overtime labor in order to reduce delay due to Force Majeure unless
Tenant requests such overtime labor and pays for such overtime labor.
Rider No. 9. Insert Section 4.3(1)(b), Page 2:
- ---------------------------------------------
excluding janitorial costs related to the interior of buildings in the
Project;
Rider No. 10. Insert Section 4.3(1)(c), Page 2:
- ----------------------------------------------
; provided, however, that Expenses shall not include maintenance,
replacement or repair costs relating to individual tenant premises which
maintenance, replacement or repair is in excess of the type of maintenance,
replacement or repair required to be provided by Landlord to Tenant under this
Lease.
Rider No. 11. Insert Section 4.3(1)(e), Page 2:
- ----------------------------------------------
Real Property Taxes shall not include assessments (such as local
improvement districts) for construction of improvements in the initial
development of the Project but Real Property Taxes will include ad valorem taxes
assessed on such improvements.
3
Rider No. 12. Insert Section 4.3(1), Page 2:
- -------------------------------------------
The term "Expenses" shall not include the following:
(i) Ground lease rental.
(ii) Amortization and interest pay1ments on Landlord's mortgage
financing.
(iii) Depreciation.
(iv) Costs incurred in the initial development and construction of the
Project.
(v) The costs of correcting defects in construction which are paid by
enforcement of applicable guaranties or warranties.
(vi) The cost of tenant improvements provided inside buildings.
(vii) Leasing commissions or brokerage commissions.
(viii) Legal expenses for disputes with other tenants.
(ix) Legal, auditing, and consulting fees other than those incurred in
connection with operation, maintenance, repair or replacement of the Project.
(x) Costs incurred in performing maintenance and repairs or furnishing
services for individual tenants which work or services is in excess of the type
of maintenance and repair or services required to be provided by Landlord to
Tenant under this Lease.
(xi) Expenses incurred in leasing transactions or procuring new
tenants.
(xii) Expenses for repair or replacement paid by proceeds of
condemnation awards and costs due to casualty (other than commercially
reasonable deductible amounts under insurance policies which shall be included
in Expenses).
(xiii) Wages, costs and salaries associated with offsite employees of
Landlord other than services provided by such employees which would otherwise be
provided by outside persons, and wages, costs and salaries attributable to
persons above the level of property manager; provided, however, that Tenant
acknowledges the right of Landlord to charge (a) a management fee not to exceed
four percent of gross rents and revenues of the Project, (b) construction
management fees not to exceed ten percent of the costs, fees and expenses in
connection with construction, and (c) an additional charge on costs of labor and
personnel not to exceed fifteen percent thereof.
(xiv) Any costs representing an amount paid to any entity related to
Landlord which is in excess of the amount which would have been paid in the
absence of such relationship subject to the proviso regarding the fees and
charges set forth in paragraph (xiii) above.
4
(xv) Damages payable by Landlord due to a default by Landlord under
any lease or fines, penalties or interest charged by a governmental entity
arising from Landlord's violation of any governmental laws, rules, regulations,
or ordinances applicable to the Project.
Rider No. 13. Insert Section 4.3(3), Page 3:
- -------------------------------------------
Tenant shall pay its annual share of estimated Expenses in monthly
installments of one-twelfth (1/12) each beginning on the Commencement Date and
continuing thereafter on the first day of each calendar month, in advance,
throughout the Term. Landlord may revise its estimate of Tenant's share of
Expenses from time to time. When Landlord revises its estimate of Tenant's share
of Expenses, and Landlord gives written notice to Tenant of such revised
estimate, Tenant shall make revised payments of Expenses pursuant to such notice
commencing on the first day of the calendar month following Landlord's notice of
the revised estimate and continuing on the first day of each calendar month
until the estimated payments are again revised.
Rider No. 13a. Insert Section 4.3(3), Page 3:
- --------------------------------------------
until the earlier of (a) 365 days following the date of receipt of the
Notice, or (b) the date Landlord issues its accounting for Expenses for the next
succeeding calendar year (the "Objection Deadline") to
Rider No. 14. Insert Section 4.3(3), Page 3:
- -------------------------------------------
No later than on the Objection Deadline, Tenant's employee or Tenant's
authorized representative (which must be a certified public accountant paid on
an hourly basis and not on a contingent fee basis) may, at Tenant's expense,
after reasonable prior notice to Landlord, and at a reasonable time, audit
Landlord's books and records for the calendar year pertaining to the Notice for
the purpose of verifying Landlord's calculation of the Expenses for the year in
question. If such audit reveals any errors, and if Landlord does not dispute the
audit, appropriate adjustments shall be made. If Landlord disputes the results
of the audit and Landlord and Tenant are unable to agree on the appropriate
adjustment to be made, if any, then the dispute shall be resolved by a
nationally recognized accounting firm not then employed by Landlord or Tenant
selected by Tenant from a list of three names given by Landlord to Tenant (the
"Arbitrator"). The decision by the Arbitrator shall be binding on the parties
and any adjustment required by the Arbitrator's decision shall promptly be made
after receipt of the Arbitrator's decision. The parties shall share equally the
cost of the Arbitrator. Tenant shall give Landlord a copy of the audit results.
The fact of the audit itself, the results of the audit, and any adjustments made
to Expenses shall be kept confidential by Tenant.
Rider No. 15. Insert Section 4.3(4), Page 3:
- -------------------------------------------
within five days after it is
5
Rider No. 16. Insert Section 7.1, Page 3:
- ----------------------------------------
Landlord shall build the base building in which the Premises are
located (the "Building") and Landlord shall provide certain tenant improvements
in the Premises, all as specifically described in the scope narrative, the
plans, and the specifications prepared by Zimmer Gunsul Frasca, the partition
plan, and the electrical plan, all attached as Exhibit C (collectively, the
"Landlord's Work Plans"). Landlord shall obtain all permits and approvals
required for Landlord's Work. Landlord shall perform all of Landlord's Work in a
good and workmanlike manner using new materials. The work specified in the
Landlord's Work plans is collectively referred to in this lease as "Landlord's
Work". All other improvements, alterations, and modifications to the Premises,
additional finish items, all changes to Landlord's Work, and all changes to
Landlord's Work plans, if any (collectively and individually, the "Additional
Work") shall be first approved in writing by Landlord and the costs, fees, and
expenses thereof, including without limitation, the costs, fees, and expenses of
obtaining all necessary permits and approvals of design, construction, and
installation thereof, together with supervision fees by the manager of the
Project and any costs, fees, or expenses incurred due to corresponding changes
to other items of Landlord's Work required as a result thereof (collectively,
the "Additional TI Costs") shall be paid in full by Tenant prior to the
Commencement Date of the Lease (except to the extent payable by Tenant as a
First TI Loan or a Second TI Loan pursuant to Section 36.1 of the Lease). The
Work Agreement attached as Exhibit D is incorporated in this Lease by this
reference.
Rider No. 17. Insert Section 7.1, Page 3:
- ----------------------------------------
; provided, however, that (unless required by any Laws) no such
modifications, alterations, deletions, or improvements shall reduce the parking
ratio for the Project below the ratio set forth in Section 10.1 or materially
adversely restrict access to the Premises from N.W. Evergreen Parkway.
Rider No. 18. Insert Section 7.1, Page 3:
- ----------------------------------------
The current rules and regulations pertaining to the Project with which
Tenant shall comply are attached to this Lease as Exhibit E.
Rider No. 19. Insert Section 10.1, Page 4:
- -----------------------------------------
Tenant shall not park nor allow its employees, invitees, and customers
collectively to park in excess of four automobiles for every 1,000 square feet
leased by tenant in the center at any point in time.
Rider No. 20. Insert Section 10.1, Page 4:
- -----------------------------------------
; provided, however, that (unless required by any laws), landlord
shall not have the right to reduce the parking available to tenant below the
ratio set forth in this Section.
6
Rider No. 21. Insert Section 11.1, Page 4:
- -----------------------------------------
Tenant shall pay its share of utilities used in or related to the
operation and maintenance of the Project as part of Expenses as described in
Section 4.3(1).
Rider No. 22. Insert Section 12.1, Page 4:
- -----------------------------------------
Landlord shall maintain, in good condition, the structural parts of
the building which shall include only the foundation, the structural parts of
the bearing and exterior walls (excluding glass), the structural parts of the
subflooring and the structural portions of the roof (excluding skylights), and
the unexposed portions of the
Rider No. 23. Insert Section 12.1, Page 4:
- -----------------------------------------
Except as expressly set forth in the first sentence of Section 12.1
and below in this paragraph, from and after the Commencement Date, Tenant shall
be fully responsible for the maintenance, repair, replacement, and operation, in
good operating order and condition, of the interior and exterior of the
Building, and its systems and equipment including without limitation the
heating, ventilating and air conditioning systems and equipment ("HVAC"), the
roof, and the elevator. Landlord's sole obligations are set forth in the first
sentence of Section 12.1. However, so long as (a) Landlord's designated Project
property manager ("Landlord's Property Manager") manages the maintenance and
repair of the Building and its systems pursuant to a written property management
contract between Tenant and Landlord's Property Manager containing a scope of
work reasonably satisfactory to Landlord, and (b) such contract is in full force
and effect, then Landlord agrees to be responsible to maintain, repair, and
replace the roof and any leaking windows. As of the date of this Lease, Melvin
Mark Brokerage Company is Landlord's Property Manager. Tenant shall provide its
own janitorial services and, in all respects, maintain the Building in good and
clean operating condition throughout the Term of the Lease. Tenant shall provide
regular service and maintenance of the HVAC, the elevator, the electrical
system, and all other Building systems and equipment, and regular pest control
services throughout the Term using contractors first approved by Landlord, which
approval shall not be unreasonably withheld. Landlord shall also have the right
to approve the scope of work to be provided under each such contract so that
Landlord is reasonably satisfied that the Building and its systems and equipment
will be properly maintained and inspected throughout the Term.
Rider No. 24. Insert Section 12.1, Page 4:
- -----------------------------------------
Landlord shall use its commercially reasonable efforts to enforce on
Tenant's behalf and at Tenant's expense all applicable construction and
equipment warranties.
Rider No. 25. Insert Section 13.1, Page 4:
- -----------------------------------------
either without Landlord's permission or alterations as to which
Landlord required removal in connection with Landlord's approval of the
alteration. Whenever Tenant requests Landlord's consent to any alteration,
Tenant shall also request Landlord's decision at that time whether Landlord will
require the alteration in question to be removed at the end of the Term. If
7
Tenant does not request such decision at that time, or if Landlord responds to
such request with a requirement that Tenant remove the alteration in question,
then Landlord shall be free to require Tenant to remove such alteration at the
end of the Term as provided in this Section 13.1.
Rider No. 26. Insert Section 14.1, Page 5:
- -----------------------------------------
(except as expressly provided below)
Rider No. 27. Insert Section 14.1, Page 5:
- -----------------------------------------
Landlord shall indemnify, defend, and hold Tenant harmless from all
claims, losses, causes of action, costs and expenses, and damages arising out of
(a) Landlord's or its agents' negligence or willful misconduct and/or (b)
Landlord's default or violation of any term of this Lease which is not corrected
within a reasonable time after Tenant's notice to Landlord thereof. However,
Landlord shall never be liable for consequential damages such as lost profits.
Rider No. 28. Insert Section 15.1, Page 5:
- -----------------------------------------
Neither party shall be liable to the other party for any loss or
damage caused by any of the risks covered by "all risk" insurance coverage, and
there shall be no subrogated claim by one party's insurance carrier against the
other party arising out of any such loss.
Rider No. 29. Insert Section 16.1, Page 5:
- -----------------------------------------
Then Landlord shall give Tenant a notice as to Landlord's estimate of
the time period reasonably required to complete the restoration (the "Damage
Assessment"). If the Damage Assessment shall state that the reconstruction shall
require more than 270 days to complete following receipt of governmental
approvals required therefor, then this Lease may be terminated by Landlord or
Tenant by its giving to the other party written notice of such termination
within 30 days after Tenant's receipt of the Damage Assessment. In the event of
the giving of such notice of termination, this Lease shall expire as of the date
of such notice given in accordance with the terms of this paragraph, with the
same effect as if such date were the Expiration Date. In the event that Landlord
fails to substantially complete the repairs by the date specified in the Damage
Assessment, Tenant shall have the right to terminate this Lease with written
notice given no later than 15 days after the date specified in the Damage
Assessment if Landlord's failure to complete such repairs on the date specified
in the Damage Assessment is not caused in whole or in part by delays due to
Force Majeure or delays caused by Tenant. If the Lease is not terminated
pursuant to this Section 16.1,
Rider No. 30. Insert Section 17.1(4), Page 5:
- --------------------------------------------
; provided, however, Landlord shall not use this termination provision
in bad faith.
8
Rider No. 31. Insert Section 18.1(4), Page 6:
- --------------------------------------------
Which consent shall not be unreasonably withheld or delayed. Landlord
may condition its consent on reasonable conditions. Should Landlord withhold its
consent to a proposed assignment or subletting or any other transfer of Tenant's
rights under this Lease (each a "Transfer") for any of the following reasons,
the withholding of consent shall be deemed reasonable: (A) conflict or
incompatibility of the proposed use with uses appropriate in a professional
business park; (b) financial inadequacy of the proposed transferee as reasonably
determined by Landlord; (c) any proposed change in use which would diminish the
professional nature of the Project or of the other businesses located in the
Project; (d) the proposed use would adversely impact the use of the common
facilities by other tenants of the Project; (5) Tenant is then in default of the
Lease beyond any applicable cure period; and (6) any other reasonable criteria.
Landlord shall not be required to consent to a Transfer to any person or entity
with whom Landlord or its agents is then negotiating the terms of a lease of any
other portion of the Project; provided, however, that with respect to a sublease
of no more than 30 percent of the Premises entered into during the initial two
years of the Term, (x) Landlord shall not be allowed to withhold its consent to
the sublease to a person or entity based solely on the fact that Landlord or its
agents is then negotiating the terms of a lease of another portion of the
Project with that same person or entity, and (y) Landlord shall not use
financial ability of the proposed subtenant as a criterion for withholding its
consent to the sublease. Landlord shall not be required to consent to any
Transfer at any time to an existing tenant or occupant of the Project. No
Transfer shall result in Tenant being released from any obligation under this
Lease. As a condition to Landlord's prior written consent as provided in this
Section 18.1, the transferee shall agree in writing to comply with and be bound
by all of the terms, covenants, conditions, provisions, and agreements of this
Lease and Tenant shall deliver to Landlord promptly after execution an executed
copy of all agreements of such compliance by each transferee.
Rider No. 32. Insert Section 18.1, Page 6:
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; provided, however, if the net worth of Tenant after the transfer at
issue would be less than either (x) the net worth of Tenant as of the date of
this Lease, or (y) the net worth of Tenant prior to the transfer, then Landlord
may refuse its consent to the transfer at issue.
Rider No. 33. Insert Section 18.1, Page 6:
- -----------------------------------------
or to transfers to shareholders of record on the date of this Lease or
to transfers by shareholders of record on the date of this Lease to family
members or trusts for the benefit of family members of such shareholders. Tenant
shall have the right to assign this Lease or sublease all or part of the
Premises to any entity which is controlled by, under the control of, or under
common control with Tenant, or any corporation into which Tenant may be merged
or consolidated, or which purchases all or substantially all of the assets of
Tenant (each an "Affiliate of Tenant"); provided, however, (a) Tenant shall not
be released from its obligations under this Lease, (b) Landlord shall be given
at least 15 days prior written notice of the assignment or sublease, (c)
Landlord shall be given a copy of the document effecting the assignment or
sublease at least 15 days prior to the date on which the assignment or sublease
9
shall occur, and (d) from and after the date of the assignment or sublease,
Tenant shall be jointly and severally liable with the Affiliate of Tenant with
respect to all obligations of Tenant under this Lease.
Rider No. 34. Insert Section 19.1, Page 6:
- -----------------------------------------
within ten days after written notice that it is due; provided,
however, that Landlord shall not be obligated to give a ten day notice and
opportunity to cure more than once during any single twelve-month period. If
Tenant fails to pay rent or any other charge on the date it is due a second time
within any twelve-month period, such failure to pay rent or other charge shall
be an automatic event of default at Landlord's option without need for further
notice or opportunity to cure;
(b) failure to comply with Laws which failure materially affects the
operations or quality of the Project or may result in a claim, fine or penalty
against Landlord, failure to carry the insurance required of Tenant under this
Lease, or the failure of Tenant to deliver a subordination agreement or estoppel
certificate within the time required by Section 22.1 of this Lease within five
days after written notice by Landlord. No notice and no opportunity to cure
shall be required if Landlord has previously given Tenant notice of failure to
comply with the same provision of this Lease;
(c) failure to comply with the provisions of Section 10.1 of the Lease
within five days after written notice by Landlord; provided, however, that
Landlord shall not be obligated to give a five day notice and opportunity to
cure more than once during any single twelve-month period. If Tenant fails to
comply with the provisions of Section 10.1 of the Lease a second time within any
twelve-month period, such failure to comply shall be an automatic event of
default at Landlord's option without need for further notice or opportunity to
cure;
(d) failure of Tenant to comply with any other term or condition of
this Lease or to fulfill any other obligation of this Lease within 30 days after
written notice from Landlord specifying the nature of the failure or, if such
failure cannot be cured within such 30 day period, Tenant shall not be in
default if, promptly after Landlord's notice to Tenant, Tenant begins its cure
of the failure and diligently prosecutes such cure to completion. Landlord shall
not be obligated to give written notice for the same type of failure more than
once during any single twelve-month period; at Landlord's option, a failure to
perform an obligation again after the first notice during any twelve-month
period shall be an automatic event of default, without notice or any opportunity
to cure.
Rider No. 35. Insert Section 20.1, Page 6:
- -----------------------------------------
Notwithstanding any provisions in this Section to the
contrary, Landlord shall have the duty to exercise its reasonable efforts to
mitigate damages in accordance with Oregon law.
10
Rider No. 36. Insert Section 20.1, Page 6:
- -----------------------------------------
after notice thereof by Landlord beyond the cure period set forth in
Section 19.1,
Rider No. 37. Insert Section 21.1, Page 6:
- -----------------------------------------
after reasonable oral notice in non-emergency situations
Rider No. 38. Insert Section 22.1, Page 7:
- -----------------------------------------
Landlord shall deliver to Tenant within 30 days after execution of
this Lease or such additional time as may be reasonably required by Landlord to
obtain such agreement, a nondisturbance agreement in form and substance
reasonably acceptable to Tenant from any existing mortgagee or beneficiary of a
deed of trust with a lien on the Project or any existing ground lessor with
respect to the Project. The commencement of Tenant's obligation to pay rent
shall be contingent upon Landlord's compliance with the terms of this Section
22.1. Tenant's subordination to any future mortgage, trust deed or ground lease
shall be contingent upon the delivery of a non-disturbance agreement in form and
substance reasonably acceptable to Tenant from any future mortgagee, beneficiary
or ground lessor.
Rider No. 39. Insert Section 22.1, Page 7:
- -----------------------------------------
Tenant's obligation under the last sentence of this section 22.1 shall
be to deliver its most recent audited financial statement (which shall be
current at least to the most recently ended fiscal year) and its most recent
unaudited financial statement which shall be current at least to the most
recently ended calendar quarter of tenant's fiscal year. Landlord agrees to keep
confidential any such financial statements which are not already public
information except that landlord may disclose all financial statements to its
advisors, prospective and current lenders, and prospective and current
purchasers.
Rider No. 40. Insert Section 23.1, Page 7:
- -----------------------------------------
In order for any notices given to Landlord to be effective, such
notices must be addressed to Landlord and delivered to the following addresses
(or to such other addresses as Landlord may designate in writing from time to
time in accordance with the notice provisions of Section 23.1 of the Lease):
Melvin Mark Companies
Attn: Mr. Daniel J. Petrusich
Suite 1380
111 SW Columbia Street
Portland, OR 97201
11
With a copy to:
Schnitzer Investment Corp.
Attn: Mr. Kenneth M. Novack
3200 NW Yeon Street
Portland, OR 97210
Rider No. 41. Insert Section 25.1, Page 7:
- -----------------------------------------
and damage by fire or other casualty
Rider No. 42. Insert Section 25.1, Page 7:
- -----------------------------------------
to the extent required pursuant to the provisions of Section 13.1 of
this Lease. Restoration of wall surfaces shall not include repainting of wall
surfaces but shall include patching and preparing such wall surfaces for paint
Rider No. 43. Insert Section 25.1(5), Page 8:
- --------------------------------------------
concerning this Lease, the Premises or the Project
Rider No. 44. Insert Section 31.1, Page 10:
- ------------------------------------------
Landlord represents and warrants to Tenant that, to the best of
Landlord's actual and present knowledge, without inquiry except for the review
of a Phase I Environmental Property Assessment prepared by PBS Environmental
dated December 1995, no hazardous substances have been generated, released,
handled, stored, discharged, transported, deposited or disposed in, on, or under
or about the Premises or the Project.
Rider No. 45. Insert Page 10: The following provisions are hereby added to the
- ----------------------------
Lease:
33.1 Option to Extend.
----------------
33.1.1 If the Lease is not then in default and if Tenant has not
assigned the Lease or subleased more than 50% of the Premises, Tenant shall have
the right to extend the term of the Lease for two successive periods of five
years each (the "Options to Extend"). Tenant shall exercise each Option to
Extend by delivering written notice of such exercise not less than 365 days
prior to the last day of the then expiring Term. The giving of such notice shall
be sufficient to make the Lease binding on the parties for the extended term in
question without further action of the parties. The extended term shall commence
on the day following the date of expiration of the immediately preceding term.
The terms and conditions of the Lease for the extended term shall be identical
to the immediately preceding term except for Base Monthly Rent. During the
extended term, Base Monthly Rent shall be adjusted to equal the greater of
(a) the Base Monthly Rent in effect at the end of the immediately preceding
term, or (b) the fair market rental value of the premises for the extended term,
determined as hereinafter provided. Within 30 days after the exercise of an
Option to Extend, Landlord shall notify Tenant of its determination of the fair
market rental value. Within 30 days after the effective date of such notice,
Tenant shall either
12
(x) notify Landlord of Tenant's acceptance of Landlord's determination of the
fair market rental value, in which event Base Monthly Rent for the extended term
shall be as so determined by Landlord; or (y) notify Landlord of Tenant's
rejection of Landlord's determination of the fair market rental value, in which
event the fair market rental value shall be determined in accordance with
Section 33.1.2 below. The failure of Tenant to give any notice within the
required time period shall be deemed an acceptance by Tenant of Landlord's
determination of the fair market rental value.
33.1.2 Within ten days after Tenant's rejection of Landlord's
determination of fair market rental value as provided in Section 33.1.1 above,
each party shall designate a representative who is either an Oregon licensed MAI
appraiser skilled in determining rental rates for office buildings in western
suburban areas of Portland, Oregon, or a real estate broker experienced in
leasing office space in office buildings located in the western suburbs of
Portland, Oregon. If the two representatives cannot agree within 30 days after
their selection on the fair market rental value, then the two representatives so
chosen shall select an arbitrator having the above qualifications or, if they
cannot agree, the presiding judge of the Circuit Court of Multnomah County or
Washington County, Oregon, shall, upon application by either party, select an
arbitrator having the above qualifications. Within 90 days prior to the
commencement of the extended term, each party's representative shall submit to
the arbitrator a written report stating such representative's opinion of the
fair market rental value of the Premises for the extended term in question,
based on a consideration of all factors appropriate to determining fair market
rental value for the extended term in question including without limitation
rental rates then being charged (under the most recently executed leases) in
space comparable to the Premises in buildings comparable to the Building and
concessions available to comparable tenants for comparable space. Within 30 days
after receipt of such reports, the arbitrator shall accept one or the other of
the reports. The determination of the fair market rental value in the report so
accepted shall be binding on the parties; provided, however, that Base Monthly
Rent during any extended term shall not in any event be less than Base Monthly
Rent payable during the immediately preceding term. The cost of the
determination of the fair market rental value pursuant to this Section 33.1.2
shall be shared equally by Landlord and Tenant. If the arbitrator does not
decide the fair market rental value prior to the commencement date of the
renewal term in question, Base Monthly Rent shall continue to be payable in the
amount previously in effect, and retroactive adjustment shall be made when the
arbitrator reaches a decision.
34.1 Satellite Dish
--------------
34.1.1 Grant of License. Landlord hereby grants Tenant a
nonexclusive license to install on the roof of the building a satellite dish of
no more than three feet in diameter and the nonexclusive right to run connecting
lines to such satellite dish from the Premises (such satellite dish and such
connecting lines and equipment are herein referred to as the "Equipment").
Tenant shall not penetrate the roof in connection with any installation or
reinstallation of the Equipment if such penetration may void or adversely affect
any applicable guaranty or warranty. The plans and specifications for all the
Equipment shall be approved by Landlord in writing prior to any installation.
Tenant shall be responsible for any damage to the roof or conduit systems as a
result of Tenant's installation, maintenance and/or removal of the Equipment.
13
34.1.2 Location. The location of the satellite dish and the rest
of the Equipment shall be subject to Landlord's prior written approval. Tenant
shall not change the location of, or alter or install additional Equipment or
paint the satellite dish or the other Equipment without Landlord's prior written
consent.
34.1.3 Compliance with Law. Tenant, at Tenant's sole expense,
shall comply with all Laws regarding the installation, construction, operation,
maintenance and removal of the Equipment and shall be solely responsible for
obtaining and maintaining in force all permits, licenses and approvals necessary
for such operations.
34.1.4 Taxes. Tenant shall be responsible for and promptly shall
pay when due all taxes, assessments, charges, fees and other governmental
impositions levied or assessed on the Equipment or based on the operation
thereof.
34.1.5 Relocation. Landlord may require Tenant to relocate the
Equipment during the term of the Lease to a location approved by Tenant, which
approval shall not be unreasonably withheld or delayed. Landlord shall reimburse
Tenant for any direct third party expenses reasonably incurred by Tenant in so
relocating the Equipment upon receipt of invoices evidencing Tenant's incurring
of such expenses.
34.1.6 Interference. Operation of the Equipment shall not
interfere in any manner with equipment systems or utility systems of other
tenants, including without limitation, telephones, dictation equipment,
lighting, heat and air conditioning, computers, electrical systems, and
elevators. If operation of the Equipment causes such interference, Tenant
immediately shall suspend operation of the Equipment until such interference is
eliminated.
34.1.7 Maintenance and Repair. Tenant shall maintain the
Equipment in good condition and repair, at Tenant's cost and expense. Landlord
may from time to time require that Tenant repaint the satellite dish at Tenant's
expense to keep the same in an attractive condition.
34.1.8 Indemnity and Insurance. Tenant shall indemnify, defend,
protect and hold harmless Landlord pursuant to the Lease from and against any
and all claims related to the Equipment or operation of the same as if the
Equipment were located wholly within the Premises. Tenant shall provide evidence
satisfactory to Landlord that Tenant's property and liability insurance policies
required under the Lease include coverage for the Equipment and any claim, loss,
damage, or liability relating to the Equipment.
34.1.9 No Landlord Responsibility. Landlord shall have no
responsibility or liability whatsoever relating to (i) maintenance or repair of
the Equipment; (ii) damage to the Equipment; (iii) damage to persons or property
relating to the Equipment or the operation thereof; or (iv) interference with
use of the Equipment arising out of utility the interruption or any other cause.
Upon installation of the Equipment, Tenant shall accept the area where the
Equipment is located in its "as is" condition. Tenant acknowledges that the roof
location of the Equipment is suitable for Tenant's needs, and acknowledges that
Landlord shall have no
14
obligation whatsoever to improve, maintain or repair the area in which the
Equipment will be installed.
34.1.10 Use. Tenant shall use the Equipment solely for operations
within the Premises and shall not use or allow use of the Equipment, for
consideration or otherwise, for the benefit of other tenants in the project or
any other person or entity.
34.1.11 Removal. Tenant shall, at Tenant's sole expense, remove
the satellite dish and such other portions of the Equipment as Landlord may
designate, and restore the affected areas to their condition prior to
installation of the Equipment (i) immediately upon request of Landlord, if
Tenant fails to perform any of its obligations under this Section 34.1, (ii)
immediately if such removal is required by any governmental agency having
jurisdiction over the Equipment, and (iii) in any event, no later than 30 days
after expiration or earlier termination of the Lease. If Tenant fails to remove
the Equipment when and as required under this Section 34.1, Landlord reserves
the right to do so, and the expense of the same shall be immediately due and
payable from Tenant to Landlord as additional rent, together with interest and
late charges as provided in the Lease.
34.1.12 Survival. The covenants, obligations and indemnities of
Tenant under this Section 34.1 shall survive expiration or earlier termination
of the Lease for any reason.
35.1 Communication Regarding Available Expansion.
-------------------------------------------
In the event Tenant informs Landlord that Tenant desires to lease
additional space in the Project, Landlord shall inform Tenant of the available
space, if any, which is not subject to prior rights held by other tenants or
prospective tenants of the Project and of the terms under which Landlord would
be willing to lease such available space to Tenant.
36.1 Tenant Improvement Loans.
------------------------
36.1.1 First Tenant Improvement Loan. As provided in Section 7.1,
Rider 16, and the Work Agreement, Tenant is required to pay the Additional TI
Costs in full prior to the Commencement Date of this Lease. If Tenant desires to
borrow funds from Landlord for such excess amount, Landlord agrees to loan funds
to Tenant in an amount not to exceed $75,010.00 solely for costs, fees, and
expenses to design and construct improvements in the Premises (the "First TI
Loan"). The First TI Loan shall accrue interest at the rate of 11 percent per
annum. Tenant shall repay the First TI Loan with monthly payments sufficient to
amortize the First TI Loan over the ten year term of the Lease beginning on the
Commencement Date and ending on the expiration date of the initial term of the
Lease, taking into account interest at the rate of 11 percent per annum.
Payments on the First TI Loan will begin on the Commencement Date and shall
continue on the first day of each month throughout the remainder of the initial
term of the Lease and shall be paid in full on or before the expiration date of
the initial term of the Lease or any earlier termination date. Landlord shall
inform Tenant of the monthly amount to be paid under the First TI Loan as soon
as practicable after substantial completion of the Tenant improvements. If the
amount is not determined prior to the Commencement Date, then Tenant's first
payment under the First TI Loan shall be sufficient to pay the monthly payments
15
due from the Commencement Date to the date on which Tenant is informed of the
monthly payment amount. At Landlord's option, Landlord may prepare a promissory
note which Tenant shall execute and deliver to Landlord, setting forth the terms
of Tenant's obligation to repay the First TI Loan.
36.1.2 Second Tenant Improvement Loan. Landlord further agrees to
loan additional funds to be applied toward the Additional TI Costs in an amount
not to exceed $75,010.00 solely for costs, fees, and expenses to design and
construct improvements in the Premises (the "Second TI Loan"). The Second TI
Loan shall accrue interest at the rate of 11 percent per annum. Tenant shall
repay the Second TI Loan with monthly payments sufficient to amortize the Second
TI Loan over the initial two years of the Term beginning on the Commencement
Date and ending on the last day of the 24th month of the Term, taking into
account interest at the rate of 11 percent per annum. Payments on the Second TI
Loan will begin on the Commencement Date and shall continue on the first day of
each month thereafter and shall be paid in full on or before the end of the 24th
month of the Term or any earlier lease termination date. Landlord shall inform
Tenant of the monthly amount to be paid under the Second TI Loan as soon as
practicable after substantial completion of the Tenant improvements. If the
amount is not determined prior to the Commencement Date, then Tenant's first
payment under the Second TI Loan shall be sufficient to pay the monthly payments
due from the Commencement Date to the date on which Tenant is informed of the
monthly payment amount. At Landlord's option, Landlord may prepare a promissory
note which Tenant shall execute and deliver to Landlord, setting forth the terms
of Tenant's obligation to repay the Second TI Loan.
37.1 Force Majeure.
-------------
Whenever a period of time is prescribed in this Lease for action to be
taken by Landlord or for performance of any obligation of Landlord under this
Lease, Landlord shall not be responsible for, and there shall be excluded from
the computation of such period of time, any delays due to Force Majeure.
Whenever a period of time is prescribed in this Lease for action to be taken by
Tenant (except for the obligation to pay rent and other expenses or charges) or
for performance of any obligation of Tenant under this Lease (except for the
obligation to pay rent and other expenses or charges), Tenant shall not be
responsible for, and there shall be excluded from the computation of such period
of time, any delays due to Force Majeure.
38.1 Publicity.
---------
Neither Landlord nor Tenant will issue a press release regarding this
Lease without the prior written consent of the other party.
39.1 Authority.
---------
The person signing this Lease by Tenant represents that he has been
duly authorized by Tenant's board of directors to execute and deliver this Lease
which shall be binding on Tenant.
16
Effect of Addendum. The Lease is modified only in the specific
respects set forth in this Addendum. Except as expressly modified, the Lease
remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Addendum as part of
the Lease as of the date first set forth above.
LANDLORD: EVERGREEN CORPORATE CENTER LLC
By: Marzer Venture, an Oregon general
partnership
By: Mark Group Partnership No. 4
By: MELVIN MARK
---------------------------
Title: Partner
------------------------
By: Schnitzer Investment Corp., an
Oregon corporation
By: KEN NOVACK
---------------------------
Title: President
------------------------
TENANT: MEDICALOGIC, INC., an Oregon corporation
By: MARK K. LEAVITT GUY E. FIELD
-------------------------------------
Title: President Controller
----------------------------------
17
Maps and
exhibits omitted.
AMENDMENT TO LEASE
DATED: July 15, 1999
BETWEEN: EVERGREEN CORPORATE CENTER LLC,
an Oregon limited liability company ("Landlord")
AND: MEDICALOGIC, INC., an Oregon corporation ("Tenant")
A. Landlord and Tenant are parties to an Industrial Business Park
Lease dated January 15, 1997 (the "Lease Agreement"), as amended by an Addendum
to Lease dated January 15, 1997 (the "Addendum"). The Lease Agreement and the
Addendum are collectively referred to in this Amendment to Lease (the
"Amendment") as the "Lease." The capitalized terms used in this Amendment which
are defined in the Lease shall have the meanings given to them in the Lease.
B. After the Lease was executed, the Project was reconfigured.
Attached, as Exhibit A, is a current site plan of the Project. Landlord and
Tenant desire to expand the Premises by adding to them approximately 27,652
square feet in Building 3 (20540 N.W. Aloclek), as described in this Amendment.
NOW, THEREFORE, in consideration of the mutual promises of the parties
set forth in this Amendment, Landlord and Tenant agree as follows:
1. Expansion. Commencing on September 1, 1999, approximately 27,652 square
feet of space in Building 3 in the area which is crosshatched on the attached
Exhibit B (the "Expansion Space") shall be added to the Premises for the Term.
Commencing on September 1, 1999, and continuing throughout the Term, the
Expansion Space shall be a part of the Premises and subject to all terms and
conditions of the Lease except as otherwise provided in this Amendment. The
Expansion Space was measured in accordance with Portland NAIOP measurement
standards, a copy of which is attached as Exhibit A-I to the Lease Agreement.
2. Rent. Commencing on September 1, 1999, and continuing throughout the
Term, Base Monthly Rent shall increase by the following amounts in accordance
with the following schedule:
Time Period Monthly Base Rent Increase
----------- --------------------------
September 1, 1999 through February 28, 2000 $0
March 1, 2000 through April 30, 2000 $21,569.00
May 1, 2000 through April 30, 2003 $28,482.00
1
Time Period Monthly Base Rent Increase
----------- --------------------------
May 1, 2003 through April 30, 2006 $31,045.00
May 1, 2006 through December 14, 2007 $33,839.00
3. Additional Rent. Commencing on May 1, 2000, and continuing throughout
the Term, Tenant's percent of the Project for purposes of determining Tenant's
share of Expenses pursuant to Section 4.3 of the Lease Agreement shall be
increased. In addition to the Expenses Tenant pays for the Premises, Tenant
shall also pay Tenant's share of Expenses for the Expansion Space which shall be
a fraction of the Expenses, the numerator of which shall be 27,652, and the
denominator of which shall be the total number of square feet of completed and
leasable space in the Project from time to time.
4. Improvements to Expansion Space. The provisions of Rider No. I through
Rider No. 6 of the Addendum, Rider No. 8 of the Addendum, Rider No. 16 of the
Addendum, Rider No. 36.1 of the Addendum, Exhibit C to the Lease and Exhibit D
to the Lease shall not apply to the Expansion Space. The provisions of this
Section 4 shall control the condition of the Expansion Space and Landlord's work
in the Expansion Space. The Expansion Space shall be leased in its AS IS
condition except for the work to be performed pursuant to the Work Agreement
attached as Exhibit C to this Amendment (the "Expansion Space Work Agreement").
5. Security Deposit. Contemporaneously with the execution of this
Amendment, Tenant shall pay Landlord $33,839.00 as an increased security deposit
which shall be held and disbursed in accordance with the provisions of Section
6.1 of the Lease Agreement.
6. First Opportunity to Lease. Throughout the Term, so long as Tenant is
not in default of the Lease, Tenant shall have the right of first offer to lease
the remainder of space in Building 3 (the "First Offer Space'), in accordance
with the terms of this Section 6. In the event that Landlord desires to make a
written offer (the "Offer) to a third party to lease all or any portion of the
First Offer Space, Landlord shall first present the Offer to Tenant and give
Tenant three business days within which to determine whether Tenant will accept
the Offer. If Tenant gives Landlord written notice within such three business
day period that Tenant elects to accept the Offer, then Tenant shall be bound to
enter into a written lease agreement in accordance with the terms of the Offer.
If Tenant does not give Landlord such written notice within the three business
day period, then Landlord shall be free to lease the First Offer Space to any
party on the terms of the Offer or on substantially similar terms. If Landlord
does not so lease the First Offer Space, Tenant's right of first offer with
respect to the First Offer Space shall revive and continue throughout the Term.
7. Brokerage Commissions. Landlord agrees to pay Tenant's broker, Norris
Beggs & Simpson Northwest Limited Partnership ("NBS") a fee in the amount
described in a letter addressed to NBS from Melvin Mark Brokerage Company dated
June 18, 1999. One half of the commission shall be payable upon full execution
of this Amendment by Landlord and Tenant, and the remainder shall be paid when
Tenant begins paying rent for the Expansion Space at the rate of $1.03 per
square foot.
2
8. Effect of Amendment. The Lease is modified only in the specific respects
set forth in this Amendment. Except as expressly modified, the Lease remains in
full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as part
of the Lease as of the date first set forth above.
LANDLORD: EVERGREEN CORPORATE CENTER LLC
By: Marzer Venture, an Oregon general partnership
By: Mark Group Partnership No. 4
By: MELVIN MARK
----------------------------------------
Title: Partner
-------------------------------------
By: Schnitzer Investment Corp., an Oregon
corporation
By: KENNETH NOVACK
----------------------------------------
Title: President
-------------------------------------
TENANT: MEDICALOGIC, INC., an Oregon corporation
By: GUY E. FIELD
-------------------------------------------------------
Its: VP Finance
--------------------------------------------------
3
EXHIBIT A
(Current Site Plan)
[GRAPHIC OMITTED-Evergreen Corporate Center Site Plan]
EXHIBIT B
(Expansion Space)
[GRAPHIC OMITTED-Evergreen Corporate Center Building Three]
EXHIBIT C
EXPANSION SPACE WORK AGREEMENT
------------------------------
SECTION 1 GENERAL
1.1 Landlord agrees to provide certain improvements in the Expansion Space
in accordance with this Expansion Space Work Agreement. Landlord shall pay up to
$774,256.00 ($28.00 per square foot in the Expansion Space) (the "TI Allowance")
towards the cost of designing and constructing the improvements in the Expansion
Space subject to and in accordance with the terms and conditions of this
Expansion Space Work Agreement. At least $553,040.00 ($20.00 per square foot in
the Expansion Space) of the TI Allowance must be used for improvements made to
the Expansion Space on or before May 31, 2000 (the "Initial Improvements") or
else the TI Allowance shall be reduced as follows. If $553,040.00 is not spent
for improvements made to the Expansion Space on or before May 31, 2000, the TI
Allowance shall be reduced by the difference between $774,256.00, and the amount
spent for improvements made to the Expansion Space on or before May 31, 2000.
Tenant acknowledges that the availability of the TI Allowance is conditioned on
Tenant accepting Landlord's work in the Expansion Space on or before May 31,
2000, as described in the certificate attached as Exhibit D (the "Teachers
Certificate") to be executed and delivered by Tenant on or before May 31, 2000.
If such conditions are fulfilled then, on or before May 31, 2000, Tenant shall
execute the Teachers Certificate and send the original and a copy thereof to
Landlord. If at least $553,040.00 of the TI Allowance is spent for improvements
made to the Expansion Space on or before May 31, 2000, then any remaining amount
of the TI Allowance may be spent at any time during the Term.
1.2 All costs, fees, and expenses in connection with the design and
construction of the improvements in the Expansion Space in excess of the TI
Allowance paid in accordance with Section 1. 1 shall be paid for by Tenant
within twenty (20) days after billing therefor. If Tenant desires to borrow
funds from Landlord for such excess amount, Landlord agrees to loan funds to
Tenant in an amount not to exceed $138,260.00 ($5.00 per square foot in the
Expansion Space) solely for costs, fees, and expenses to design and construct
improvements in the Expansion Space (the "Expansion TI Loan"). The Expansion TI
Loan shall accrue interest at the rate of 11 percent per annum, commencing on
the date of the first advance on the Expansion TI Loan (the "First Advance
Date') and continuing until such time as the entire Expansion TI Loan and all
accrued interest are paid in full. Tenant shall repay the Expansion TI Loan with
monthly payments sufficient to amortize the Expansion TI Loan over the period of
time beginning on the first Advance Date and ending on December 14, 2007, taking
into account interest at the rate of 11 percent per annum. Payments on the
Expansion TI Loan will begin on the first day of the first calendar month
following the First Advance Date and shall continue on the first day of each
month through December 1, 2007 and shall be paid in full on or before December
1, 2007 or any earlier termination date of the Lease. Landlord shall inform
Tenant of the monthly amount to be paid under the Expansion TI Loan as soon as
practicable after substantial completion of the tenant improvements for which
the Expansion TI Loan is used. If the amount is not determined
1
prior to May 1, 2000, then Tenant's first payment under the Expansion TI Loan
shall be sufficient to pay the monthly payments due from May 1, 2000 to the date
on which Tenant is informed of the monthly payment amount. Upon Landlord's
request, Tenant shall execute and deliver to Landlord a promissory note, setting
forth the terms of Tenant's obligation to repay the Expansion TI Loan, in the
form attached as Exhibit E.
1.3 Throughout the process of design and construction of the Tenant
improvements, Patty Sullivan ("Tenant's Construction Representative") shall be
available for onsite and telephone consultations and decisions as necessary.
Tenant's Construction Representative's address is 20500 N.W. Evergreen Parkway,
Hillsboro, Oregon 97124 and her telephone number is 531-7000. Tenant's
Construction Representative shall have the authority to bind Tenant as to all
matters relating to the tenant improvements.
SECTION 2 DESIGN OF TENANT IMPROVEMENTS
2.1 Landlord shall retain the services of a space planner or architect (the
"Planner") to prepare the necessary drawings, including without limitation Basic
Plans and Working Plans as described below for construction of the tenant
improvements (the "Pl1ans"). Promptly after the Planner's requests, Tenant's
Construction Representative will meet with the Planner to provide information to
the Planner as needed to prepare the Plans and to modify the Plans, as provided
in this Expansion Space Work Agreement.
2.2 Within ten business days after Landlord delivers to Tenant a copy of
the Basic Plans, Tenant shall either approve the Basic Plans or shall set out
the revisions requested by Tenant to the Basic Plans. Also, Tenant shall, within
such ten business day period, clearly identify and locate on the Basic Plans (i)
any equipment requiring special plumbing or mechanical systems, areas subject to
above normal loads, special openings in the floor, ceiling, or walls, and other
major or special features; and (ii) locations of telephone and electrical
receptacles, outlets, and other items requiring electrical power (for special
conditions and equipment, power requirements, and manufacturer's model numbers
must be included)
2.3 Landlord shall review any revisions made to the Basic Plans and shall,
in writing within five business days after receipt, either approve the revised
Basic Plans or reject them, in which case Landlord shall specify in reasonable
detail the deficiencies in the Basic Plans as submitted. If the Basic Plans are
rejected, Tenant shall resubmit required changes to the Basic Plans as soon as
practicable until Landlord's approval has been obtained. Following Landlord's
approval of the Basic Plans, the Planner shall produce full working drawings for
construction sufficient to obtain all necessary permits and with sufficient
detail to construct the improvements, including specifications for every item
included thereon (the "Working Plans"). Landlord shall have the right to stop
the design process at any point and terminate the Lease if it appears to
Landlord that the cost, timing, or some other issue related to the tenant
improvements will not be resolved between the parties.
2.4 Tenant must approve the Working Plans for the Initial Improvements to
the Premises no later than on December 31, 1999. Tenant shall be responsible for
delays and additional costs in completion of the design and construction of
Tenant's improvements caused
2
by delays in approving the Working Plans, by changes made to the Working Plans
after Landlord delivers them to Tenant or by delays in delivery of special
materials requiring long lead times. For any construction of improvements other
than the Initial Improvements in the Premises, the Working Plans for such
improvements must be completed and approved by Landlord and Tenant at least five
months prior to the anticipated substantial completion date of such
improvements.
SECTION 3 CONSTRUCTION OF TENANT IMPROVEMENTS
3.1 Upon completion of the Working Plans and at the request of Tenant,
Landlord and its contractor shall provide to Tenant in writing an estimate of
the cost of improvements to be provided at Tenant's expense pursuant to Section
1 of this Expansion Space Work Agreement. Within five days after Tenant's
receipt of such estimated cost, Tenant shall delete any items which Tenant
elects not to have constructed. Landlord and Tenant shall work together to
establish a construction budget reasonably acceptable to both parties. Tenant
shall authorize in writing the agreed upon construction budget. In the absence
of such written authorization, Landlord shall not be obligated to commence work
on the Expansion Space and Tenant shall be responsible for any costs due to any
resulting delay in completion of the Expansion Space.
3.2 If Tenant desires any change to its improvements, Tenant shall submit a
written request for such change to Landlord, together with all plans and
specifications necessary to show and explain changes from the approved Working
Plans. Any such change shall be subject to Landlord's approval. Landlord or
Landlord's contractor shall notify Tenant in writing of the amount, if any,
which will be charged or credited to Tenant to reflect the cost of such change.
3.3 Tenant's entry into the Expansion Space for any purpose, prior to
September 1, 1999, shall be subject to all the terms and conditions of the
Lease, including without limitation the provisions of the Lease relating to the
maintenance of insurance, but excluding the provisions of the Lease relating to
the payment of rent. Tenant's entry shall mean entry by Tenant, its officers,
contractors, licensees, agents, servants, employees, guests, invitees, or
visitors (the "Tenant Parties"). Tenant shall indemnify and hold harmless
Landlord from and against any and all claims, losses, liabilities, and expenses
(including without limitation attorneys' fees) arising out of or in any way
related to the activities of Tenant or the Tenant Parties in the Expansion Space
or the Project.
3
EXHIBIT D
STATEMENT OF TENANT IN RE: LEASE
--------------------------------
Date: May 31, 2000
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 100 17
Attn: ______________________
RE: TIAA Appl. #OR- 108
TIAA Mtge. #000447000
Name of Project: Evergreen Corporate Center
Address: 20540 NW Aloclek
Hillsboro, Oregon 97124
Ladies and Gentlemen:
It is our understanding that you have a mortgage upon the subject premises
and as a condition precedent thereof have required this certification of the
undersigned.
The undersigned, as tenant, under that certain lease dated January 15,
1997, as amended by an Amendment to Lease dated July 15, 1999, made with
Evergreen Corporate Center LLC, as landlord, hereby ratifies said lease and
certifies that:
1. the "Commencement Date" of said lease is December 15, 1997; and
2. the undersigned is presently solvent and free from reorganization and/or
bankruptcy; and
3. the operation and use of the premises do not involve the generation,
treatment, storage, disposal or release of a hazardous substance or a
solid waste into the environment other than to the extent necessary to
conduct its ordinary course of business in the premises and in
accordance with all applicable environmental laws, and that the premises
are being operated in accordance with all applicable environmental laws,
zoning ordinances and building codes; and
4. the current base rental payable pursuant to the terms of said lease is
$107,232 per month; and further, additional rental pursuant to said
lease is payable as provided in the Lease; and
5. said lease is in full force and effect and has not been assigned,
modified, supplemented or amended in any way (except as set forth above)
and the undersigned is not in default thereunder; and
1
6. the lease described above represents the entire agreement between the
parties as to the leasing of the premises; and
7. the term of said lease expires on December 14, 2007; and
8. Landlord has spent at least $553,040 of the TI Allowance, as defined in
the Amendment to Lease, and the work performed by landlord to date in
the Expansion Space is acceptable to the undersigned.
9. no rental has been paid in advance and no security (except the security
deposit in the amount of $120,839) has been deposited with landlord; and
10. tenant's floor area is 102,662 rentable square feet; and
11. the most recent payment of current basic rental was for the payment due
on May 1, 2000, and all basic rental and additional rental payable
pursuant to the terms of the lease have been paid up to said date; and
12. the undersigned acknowledges notice that landlord's interest under the
lease and the rent and all other sums due thereunder will be assigned to
you as part of the security for a mortgage loan by you to landlord. In
the event that Teachers Insurance and Annuity Association of America, as
lender, notifies the undersigned of a default under the mortgage and
demands that the undersigned pay its rent and all other sums due under
the lease to lender, tenant agrees that it shall pay its rent and all
such other sums to lender.
Very truly yours,
MEDICALOGIC, INC.
By:
-------------------------------------
Its:
------------------------------------
2
EXHIBIT E
PROMISSORY NOTE
---------------
$__________ __________, 1999
Portland, Oregon
FOR VALUE RECEIVED, the undersigned, MEDICALOGIC, Inc., an Oregon
corporation ("Borrower"), promises to pay to the order of EVERGREEN CORPORATE
CENTER LLC, an Oregon limited liability company, at 111 SW Columbia Street,
Suite 1380, Portland, Oregon 97201, or such other place as may be designated
from time to time in writing by the holder of this Note ("Holder"), the
principal sum of ________________________________ Dollars ($____________) in
lawful money of the United States of America, plus interest and other charges as
provided herein.
1 . Interest Rate. Interest shall accrue on the unpaid principal balance of
this Note, from ________________ until paid in full, at a fixed rate of eleven
percent (11%) per annum.
2. Payment Schedule. Commencing on _____________________ and continuing on
the first day of each calendar month thereafter until and through December 1,
2007 (the "Maturity Date"), Borrower shall make constant equal monthly payments
of principal and interest sufficient to amortize fully the principal balance of
this Note over a period of time from the date of this Note to December 14, 2007,
taking into account interest at the rate of 11 percent per annum. Such payments
shall equal $_______ per month. The entire principal balance of and all unpaid
accrued interest on this Note shall be due and payable on the Maturity Date.
3. Prepayment. The indebtedness evidenced by this Note may be prepaid in
whole or in part at any time without penalty.
4. Time of Essence. Time is of the essence of the performance of Borrower's
obligations under this Note. If Borrower fails to make any payment required
hereunder within five days after written notice that such payment is due, or if
Borrower is in default of its lease between Holder and Borrower dated January
15, 1997, as amended (the "Lease"), such event shall constitute an event of
default (an "Event of Default"). Upon the occurrence of an Event of Default, the
entire unpaid principal balance of and all unpaid accrued interest on this Note
shall become immediately due and payable at Holder's option. Holder's failure to
exercise or delay in exercising such option, or any other remedy provided
herein, shall not constitute a waiver of the right to do so upon the occurrence
of any subsequent Event of Default.
5. Late Fee. If any payment required under this Note is not received by
Holder within ten (10) days after the date such payment was due, Borrower shall
pay to Holder on demand a late charge in an amount equal to five percent (5%)
of the overdue payment. Borrower and Holder agree that the late charge is
intended to be a reasonable approximation of actual damages incurred by such
overdue payment, which damages are difficult to estimate. The
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imposition or collection of a late charge is in addition to and not in lieu of
any other rights or remedies Holder may have as a result of late payment.
6. Application of Payments. All payments on this Note shall be applied
first to the payment of attorneys' fees, costs, and other charges to the extent,
if any, provided herein; then to interest accruing hereon; and then to
principal. The unpaid principal balance of this Note shall continue to bear
interest until and including the date of collection.
7. Attorneys' Fees. If either Holder or Borrower shall institute legal or
other proceedings to interpret or enforce this Note, the prevailing party shall
recover from the nonprevailing party all costs, attorneys' fees, and expenses
incurred by it in connection with such proceedings, whether at trial, on appeal,
or on review, in addition to all other amounts allowed by law.
8. Default Interest. All late payments shall bear interest at the Default
Rate (as defined in the Lease) from the due date of such payment until paid in
full.
9. Miscellaneous. In any provision of this Note is held invalid by a court
of competent jurisdiction, the remainder of this Note shall not be affected
thereby and shall remain in full force and effect. Borrower hereby waives
presentment, demand for payment, notice of dishonor, protest, and notice of
protest.
BORROWER: MEDICALOGIC, INC., an Oregon corporation
By:
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Its:
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