METRO ONE
17,247 s.f.
COMMERCIAL LEASE
THIS LEASE, dated as of the 15th day of May, 2000 between Murray Scholls,
LLC, an Oregon limited liability company, as "Landlord" and Metro One
Telecommunications, Inc., an Oregon corporation, as "Tenant".
Section 1. - PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord approximately 17,247 rentable square feet of space shown
crosshatched on the floor plans attached hereto as Exhibit A-1 (the "Premises")
in the Building shown crosshatched on the site plan attached as Exhibit A-2 (the
"Building") in the Project constructed or to be constructed by Landlord on the
real property described in attached Exhibit A-3 (the "Project"). The rentable
square feet in the Building shall be measured in accordance with the Standard
Method for Measuring Floor Area in Office Buildings published by Building Owners
and Managers Association International and approved June 7, 1996 by American
National Standards Institute, Inc. as ANSI/BOMA Z65.1-1996. Tenant, its
officers, employees, agents, contractors and invitees shall not be permitted to
park in the parking spaces within the areas identified on Exhibit A-2 as
"Exclusive Office Parking" during the hours of 8:00 a.m. to 5:00 p.m. (except if
Tenant obtains written permission of the holder of the right to exclusive
parking in such area) or in the areas designated by Landlord as exclusive
restaurant parking during lunch and dinner hours as reasonably determined by
Landlord. Tenant shall have the non-exclusive right to parking in the Project
for up to four (4) automobiles for every 1,000 square feet of net rentable area
in the Premises in the Building 3 office parking area as shown on attached
Exhibit A-2. Landlord shall provide parking in the Project to satisfy the
following ratios: (i) 4 automobiles per 1,000 square feet of net rentable area
of retail space, (ii) 7 automobiles per 1,000 square feet of net rentable area
of stand alone restaurant space, and (iii) 3.5 automobiles per 1,000 square feet
of net rentable area of office space. Tenant's lease of the Premises shall
include the appurtenant right to use in common with others all common areas
within the Project as Landlord may from time to time designate. Landlord
reserves the right to alter or relocate any common area (except in the "No
Change Area" shown on Exhibit A-2). Tenant acknowledges that Landlord may from
time to time, at its sole discretion, make such modifications, alterations,
deletions or improvements to the Project other than the Premises and No Change
Area, as Landlord may deem necessary or desirable, without compensation to
Tenant, provided, Landlord shall give Tenant prior notice of any such
modifications that affect the parking areas immediately surrounding the
Building, and such modifications shall not unreasonably interfere with access
between Schools Ferry Road and the Premises. The Lease is subject to all
easements, restrictions, agreements of record, mortgages and deeds of trust in
effect on the date of this Lease, and zoning and building laws.
Section 2. -TERM. The lease term shall commence on the Commencement Date
described below and continue for eighty-four (84) full calendar months unless
sooner terminated. The Commencement Date will be the date sixty (60) days after
the date Landlord delivers possession of the Premises to Tenant with the work to
be performed by Landlord pursuant to Section 15 and Exhibit B substantially
complete to the extent necessary to permit Tenant to commence its work
(collectively, "Substantially Complete"). Landlord anticipates delivering
possession not later than October 1, 2000. If Landlord, for any reason, cannot
deliver possession of the Premises to Tenant on or before the anticipated
delivery date set forth above with the work to be performed by Landlord pursuant
to Section 15 and Exhibit B Substantially Complete, 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, the commencement date, the
expiration date, and the date for payment of rent shall be determined in
accordance with paragraph 9 of Exhibit B, and all other terms and conditions of
this Lease remaining in full force and effect. Landlord shall give Tenant thirty
(30) days prior written notice of the delivery date.
Page 1 - MURRAY SCHOLLS
Landlord has commenced work on the foundation of the building and
shall hereafter continuously pursue the work on construction of the building to
completion. If Landlord, for any reason except Force Majeure as defined in
Section 16.16, or tenant-caused delay, cannot deliver possession of the Premises
vanilla shell (as described in Exhibit D) to Tenant by November 1, 2000 with
Landlord's Work as provided for in Section 15 and Exhibit B Substantially
Complete, then Landlord shall pay to Tenant $100 per day from November 1, 2000
as liquidated damages until the earlier of (i) the day that Landlord does
deliver possession of the Premises to Tenant with Landlord's Work Substantially
Complete or (ii) November 30, 2000 or (iii) the day Tenant terminates this Lease
pursuant to the following sentence (but in no event after January 15, 2001).
Beginning December 1, 2000, the liquidated damage amount shall be one day's free
rent for each day of delay. If Landlord for any reason except Force Majeure as
defined in Section 16.16, or tenant-caused delays, cannot deliver possession of
the Premises to Tenant by December 31, 2000 with Landlord's Work Substantially
Complete, then Tenant shall be permitted to terminate this Lease by written
notice to Landlord given on or before January 15, 2001 (but in no event after
Landlord has delivered possession). Payment of any penalty under this Section
shall be paid monthly and shall be due on the first day of the month. Interest
shall accrue on the past due payments at the rate provided for in this Lease for
unpaid rent.
Concurrently with delivery of possession of the Premises to Tenant
with Landlord's Work Substantially Complete, Landlord shall deliver to Tenant a
letter which shall specify the date of delivery of possession as the term
commencement date.
Section 3.- RENT.
3.1 Minimum Rent. Tenant shall pay to Landlord, during the term of this
Lease as minimum rent for the office space the following sums per month:
(1) During the first and second months there shall be no minimum
rent or additional rent;
(2) During the third through the sixtieth months the sum of
Twenty-five Thousand Eight Hundred Seventy-one and no/100 Dollars ($25,871) per
month; and
(3) During the sixty-first through eighty-fourth months the sum of
Thirty-one Thousand Forty-five and no/100 Dollars ($31,045) per month.
Rent will be paid in advance on the first day of each month at such
place as Landlord may designate. Minimum rent is uniformly apportionable day to
day. Minimum rent for the partial month (if any) in which the lease term
commences shall be prorated and paid at commencement of the lease term. Upon
execution hereof, Tenant shall pay Twenty-five Thousand Eight Hundred
Seventy-one and no/100 Dollars ($25,871) to be applied to the third month's
minimum rent and additional rent when due.
3.2 Additional Rent.
(1) Operating Expenses - Project. Except during the first two (2)
months of the lease term, in addition to the minimum rent, Tenant shall pay as
additional rent its share of all operating expenses for the Project. As used
herein "operating expenses of the Project" shall mean all costs of ownership,
operation, maintenance and repair of the Common Areas of the Project as
determined by standard real estate accounting practice, including, but not
limited to: wages, salaries and benefits of employees engaged in the operation,
maintenance and repair of the Common Areas of the Project; cost of consumable
supplies, materials, tools and equipment used in the operation, management and
maintenance of the Common Areas of the Project; the cost of all insurance
relating to the Project, including but not limited to the cost of casualty,
rental abatement and liability insurance (and all deductibles); all accounting,
legal and professional fees incurred in connection with the operation of the
Project; costs of repairs, replacements and general maintenance of the Common
Areas of the Project; cost or rental value of the Project office; and a
management fee of four percent (4%) of the minimum rent.
Page 2 - MURRAY SCHOLLS
Operating Expenses of the Project shall not include (i) the initial
cost of any construction of the Project or any part thereof; (ii) costs for any
capital expenditure in excess of $10,000; provided, however that operating
expenses shall include the annual amortization charge for such capital
expenditure assuming amortization over the useful life of the capital asset in
question together with interest thereon at the rate of 9% per annum; (iii)
salary, employee benefit and payroll taxes for offsite executive or managerial
personnel; (iv) brokerage fees and commissions incurred in connection with the
sale or leasing of space in the Project; (v) such portion of any expenses for
which Landlord is entitled to reimbursement by insurance proceeds, condemnation
awards, other tenants (excluding reimbursements of operating expenses pursuant
to lease provisions similar to this Section) or any other source; (vi) cost of
performing additions, alterations, improvements or individual services for other
tenants or vacant or vacated space; (vii) any payments required in connection
with any debt or ground lease encumbering the Project; (viii) any amounts not
actually expended, such as contingency funds, reserve funds or sinking funds;
(ix) costs and expenses of enforcing lease provisions against other tenants in
the Project, including legal fees; (x) expenses resulting from a violation of
Landlord of the terms of any lease of space in the Project or of any ground
lease or mortgage to which this Lease is subordinate; (xi) the repair of any
part of the Common Area to the extent covered by a construction warranty; (xii)
costs attributable to maintenance, repair and replacement of any building;
(xiii) all costs associated with the removal and clean up of hazardous wastes
and toxic substances; (xiv) cost of compliance with ADA access requirements in
connection with the initial construction of the Common Area of the Project; (xv)
all management fees other than the four percent (4%) fee set forth above; and
(xvi) expenses incurred to keep the Project clean, and in good condition during
Landlord's construction activities.
The charges for any services provided by affiliates, related or
designated parties of Landlord which are included in operating expenses shall be
reasonable, customary and competitive with charges for similar services of
independent contractors in the area where the Project is located.
Tenant shall have the right, but not more than once per year on
reasonable prior notice to Landlord, to inspect, examine and make copies of,
Landlord's books, records and computations with respect to Operating Expenses,
real estate taxes and insurance and Landlord shall retain such books, records
and computations for at least three (3) years following the period to which they
relate. In the event of any overpayment by Tenant, Landlord shall, within thirty
(30) days after demand, refund the amount of overpayment to Tenant with interest
thereon, from the date of overpayment to the date refunded at the rate set forth
in Section 13.3 of the Lease. Alternatively, in the event of any overpayment by
Tenant, Tenant shall be entitled to offset such excess against payments becoming
due as additional rent. If the audit discloses a discrepancy in excess of five
percent (5%), Landlord shall be obligated to pay all costs associated with such
audit.
(2) Taxes and Assessments. In addition to the minimum rent, Tenant
shall pay as additional rent its share of all real property taxes and
assessments of any public authority against the Project and the cost of
contesting any tax. Real property taxes and assessments shall include all real
property taxes and assessments of any public authority assessed against the
Project and any rent tax, gross receipts tax, tax on Landlord's interest under
this Lease, or any tax in lieu of the foregoing, whether or not such tax is now
in effect (excluding any tax based upon Landlord's net income). Real property
taxes and assessments shall not include any interest or penalties imposed by the
assessing authority except if arising as a result of Tenant's late payment of
Tenant's share thereof. If general or special assessments may be paid in
installments over a period of years, only the installments coming due during the
tax year in question during the Lease term shall be included in taxes and
assessments payable by Tenant for such year. If Landlord shall obtain a refund
or abatement of any taxes or assessments to which Tenant contributes, Landlord
shall refund to Tenant its share thereof less its share of Landlord's reasonable
expenses of obtaining same. If any portion of the Project is occupied by a tax
exempt tenant so that the Project has a partial tax exemption under ORS 307.112
or a similar statute, the real property taxes and assessments shall mean real
property taxes and assessments computed as if such partial exemption did not
exist.
Page 3 - MURRAY SCHOLLS
(3) Tenant's Share. Tenant's share of operating expenses of the
Project shall be a percentage thereof equal to the percentage which the net
rentable area of the Premises (i.e., 17,247 square feet) bears to the total net
rentable area of the Project. Except as otherwise provided in Section 3.2(5),
during any period that the total net rentable area of the Project is less than
135,000 square feet, the total net rentable area of the Project for the purpose
of determining Tenant's share of operating expenses shall be deemed to be
135,000 and during such period operating expenses which vary with occupancy will
be adjusted to reflect the operating expenses which in the reasonable judgment
of Landlord would have been incurred had occupancy been 135,000 square feet for
the entire period. Notwithstanding the foregoing, Landlord shall be permitted to
adjust Tenant's percentage share of any item of operating expense to allocate
such operating expense among tenants in the Project in an equitable manner based
upon the usage of and benefits afforded to such tenants, respectively. Tenant's
share of taxes and assessments shall be a percentage thereof equal to the
percentage which the net rentable area of the Premises bears to the total net
rentable area of the Project. Except as otherwise provided in Section 3.2(5),
during any period that the total net rentable area of the Project is less than
165,000 square feet, the total net rentable area of the Project for the purpose
of determining Tenant's share of taxes attributable to land (but not
improvements) shall be deemed to be 165,000. Landlord shall modify Tenant's
share if the net rentable area of the Project is increased or decreased.
(4) Payment. Upon commencement of the Lease and at the beginning of
each calendar year during the term of the Lease, Landlord may estimate Tenant's
share of operating expenses and taxes and assessment for the ensuing calendar
year or portion thereof. Landlord may revise the estimate during the course of
any year. Tenant will pay Tenant's estimated share of operating expenses and
taxes and assessments on the first day of each calendar month during the term
hereof. If Landlord bills on an estimated basis, Landlord shall within 120-days
(or as soon thereafter as possible) after the end of any calendar year give
Tenant written notice of Tenant's actual share of operating expenses and taxes
and assessments. If Tenant's payments of its estimated share for such calendar
year differ from Tenant's actual share, an appropriate adjustment shall be made
within 30-days after the giving of such notice. Any objections by Tenant to the
annual statement shall be made in writing within 30-days after receipt thereof.
Otherwise, the annual statement shall be deemed conclusive and binding on the
parties. If Landlord bills on an actual basis Tenant will pay Tenant's actual
share of operating expenses and taxes and assessments on the first day of the
first calendar month after such bill.
(5) Land Division. Landlord reserves the right to divide the Project
into multiple lots or parcels. In the event of such division, the term the
"Project" shall thereafter be deemed to mean the lot or parcel of which the
Premises are a part. Landlord also reserves the right at the time of any such
division to subject the Project to reciprocal easements, covenants and
restrictions to which this Lease shall automatically be subordinate. In such
event, the operating expenses for the Project shall be deemed to include,
without limitation, Landlord's share of such costs under the reciprocal
easements, covenants and restrictions.
3.3 Interest and Late Charges. All rent or other payments not paid within
thirty (30) days after it is due shall bear interest from the due date until
fully paid at the prime rate, as quoted in The Wall Street Journal from time to
time, plus five percent (5%) per annum, but not in any event at a rate greater
than the maximum rate of interest permitted by law. In addition, Tenant
acknowledges that late payment of any rent or other payment required by this
Lease from Tenant to Landlord will result in collection costs to Landlord, the
extent of which additional costs is extremely difficult and economically
impractical to ascertain. Tenant therefore agrees that if Tenant fails to make
any rent or other payment required by this Lease to be paid to Landlord within
five (5) day after it is due, Landlord may elect to impose a late charge of
three cents (3(cent)) per dollar of the overdue payment, to reimburse Landlord
for the costs of collecting the overdue payment. Tenant shall pay the late
charge upon demand by Landlord. Tenant agrees that the late charge is a
reasonable estimate of the costs to Landlord of collecting the overdue payment.
Landlord may levy and collect a late charge in addition to all other remedies
available for Tenant's default, and collection of a late charge shall not waive
the breach caused by the late payment.
Page 4 - MURRAY SCHOLLS
3.4 Net Lease Provision. All payments required to be paid by Tenant under
this Lease, other than minimum rent, will constitute additional rent. Except as
specifically set forth herein, this is intended to be a net lease, meaning that
Tenant shall pay all expenses of every type relating to the Premises after
commencement of the lease term, and all rent (including minimum and additional
rent) shall be received by Landlord without set off, offset, abatement, or
deduction of any kind.
Section 4.- BUSINESS PURPOSE.
4.1 Permitted Use. Tenant shall use the Premises only for the purpose of
general office and telecommunications business center with administrative
offices, hardware and software testing, and operators and for no other purpose
without the written consent of the Landlord. Tenant shall not place any antenna,
satellite dish or other equipment on the roof of the Premises. Tenant shall not
use the Premises for retail purposes. The uses listed on Exhibit C shall be
prohibited. If Tenant fails to occupy or use the Premises for the purposes
permitted by this Lease for a total of ninety (90) consecutive days during the
Lease term, Landlord shall have the right at its option, to terminate this Lease
by written notice to Tenant and upon the giving of such notice neither party
shall have any further obligation hereunder to the other except for matters
occurring or obligations arising prior to the date of such termination. Tenant
shall limit occupancy in the Premises to a maximum of 5 persons per 1000
rentable square feet.
4.2 Compliance with Laws. In connection with its use, Tenant shall comply
at its expense with all applicable laws, regulations and requirements of any
public authority, including those regarding maintenance, operation and use of
the Premises and any appliances on the Premises (including signs as well as any
master plans or restrictive covenants that Landlord may from time to time
adopt).
4.3 Insurance. Tenant shall not conduct or permit any activities on the
Premises which will: increase the fire insurance rate upon the Project or cause
a cancellation of the fire insurance policy; or create a nuisance or damage the
reputation of the Project.
4.4 Supervision. Tenant shall keep the Premises clean and orderly. Tenant
will supervise its employees and cause Tenant's agents, independent contractors
and employees to conduct their activities in such a manner as to comply with the
requirements of this Lease and the rules and regulations described herein.
Tenant shall take reasonable steps to cause its suppliers to comply with the
requirements of this Lease and the rules and regulations described herein.
Except as relates to the requirements set forth in Section 9.2, Tenant shall not
be responsible to Landlord for noncompliance of Tenant's customers and invitees
with the requirement of this Lease and the rules and regulations described
herein.
4.5 Common Areas. All common areas within the Project shall be used in
strict compliance with Landlord's nondiscriminatory rules, regulations and
requirements for such areas as modified from time to time.
4.6 Storage, Trash. Tenant shall not store anything outside except in
areas approved by Landlord. Tenant will use only trash and garbage receptacles
approved by Landlord. Tenant shall dispose of trash and other matter in a manner
acceptable to Landlord, at Tenant's expense.
Section 5.- SERVICES.
5.1 Building Maintenance. Landlord shall maintain the public and common
areas of the Building and the Building structure in good condition and repair.
5.2 Service. Landlord shall supply the Premises with electricity for
lighting and operation of normal office equipment, heating ventilation and
cooling to a standard of comfort customary in other comparable office buildings
in the area, janitorial services and such other services as Landlord may elect
during the times and in the manner that such services are customarily furnished
in comparable office buildings in the area. Landlord shall not be in default
hereunder or be liable for any failure or interruption of utilities or services
to the
Page 5 - MURRAY SCHOLLS
Premises except if such interruption of utilities or services is caused by
Landlord's negligence provided however that Landlord shall not in any event be
liable for consequential damages or lost profits. Landlord shall take reasonable
steps to restore service as soon as practical subject to causes beyond
Landlord's reasonable control. Gas and electricity shall be separately metered
or submetered (at Landlord's option) to the Premises and water and sewer used in
the office portion of the Building shall be separately metered from the water
and sewer used in the retail portion of the Building. Tenant shall pay when due
all charges for separately metered utilities directly to the provider and all
charges for submetered utilities to Landlord. Tenant shall pay its proportionate
share of water and sewer charges allocated to the office portion of the
Building. Tenant shall pay Tenant's share of any other charges which are not
separately metered or submetered in accordance with Section 3.2(4). Landlord
shall reasonably allocate operating expenses to the retail and office portions
of the Building based on projected and actual costs associated with each such
portion. The Building shall have an elevator within the common area core
connecting the ground floor common area to the second floor common area.
5.3 Operating Expense - Building. Tenant shall pay Tenant's share of the
operating expenses of the office portion of the Building. Tenant's share of such
costs shall be a percentage thereof equal to the percentage which the net
rentable area of the Premises bears to the total net rentable area of the office
portion of the Building. Tenant shall pay its share of such costs accordance
with Section 3.2(4). As used herein "operating expenses of the Building" shall
mean all costs of operating and maintaining the Building (and excluding any
retail portions of the Building) as determined by standard real estate
accounting practice including but not limited to the cost of all utilities for
the Building, sewer, lighting, power, heating, air conditioning and ventilating
(excluding utilities to tenant spaces); the cost of janitorial service and
supplies, waste disposal service, window washing and other services furnished
for the benefit of tenant of the Building; wages, salaries and benefits of
employees to the extent engaged in the operation and maintenance of the
Building; costs of consumable supplies; costs of maintenance and service
agreements; costs of maintenance, repairs and replacements; accounting, legal
and professional fees incurred in connection with the operation of the Building.
Operating Expenses of the Building shall not include (i) the initial cost of any
construction of the Building or any part thereof; (ii) costs for any capital
expenditure in excess of $10,000; provided, however that operating expenses
shall include the annual amortization charge for such capital expenditure
assuming amortization over the useful life of the capital asset in question
together with interest thereon at the rate of 9% per annum; (iii) salary,
employee benefit and payroll taxes for offsite executive or managerial
personnel; (iv) brokerage fees and commissions incurred in connection with the
sale or leasing of space in the Building; (v) such portion of any expenses for
which Landlord is entitled to reimbursement by insurance proceeds, condemnation
awards, other tenants (excluding reimbursements of operating expenses pursuant
to lease provisions similar to this Section) or any other source; (vi) cost of
performing additions, alterations, improvements or individual services for other
tenants or vacant or vacated space; (vii) any payments required in connection
with any debt or ground lease encumbering the Building; (viii) any amounts not
actually expended, such as contingency funds, reserve funds or sinking funds;
(ix) costs and expenses of enforcing lease provisions against other tenants in
the Building, including legal fees; (x) expenses resulting from a violation of
Landlord of the terms of any lease of space in the Building or of any ground
lease or mortgage to which this Lease is subordinate; (xi) the repair of any
part of the Building to the extent covered by a construction warranty; (xii) all
costs associated with the removal and clean up of hazardous wastes and toxic
substances; (xiii) cost of compliance with ADA access requirements in connection
with the initial construction of the Building; (xiv) all management fees other
than the four percent (4%) fee set forth in Section 3.2 above; and (xv) the
tenant improvement allowance provided for under this Lease.
The charges for any services provided by affiliates, related or
designated parties of Landlord which are included in operating expenses shall be
reasonable, customary and competitive with charges for similar services of
independent contractors in the area where the Building is located.
Page 6 - MURRAY SCHOLLS
Tenant shall have the right, but not more than once per year on
reasonable prior notice to Landlord, to inspect, examine and make copies of,
Landlord's books, records and computations with respect to Operating Expenses,
real estate taxes and insurance and Landlord shall retain such books, records
and computations for at least three (3) years following the period to which they
relate. In the event of any overpayment by Tenant, Landlord shall, within thirty
(30) days after demand, refund the amount of overpayment to Tenant with interest
thereon, from the date of overpayment to the date refunded at the rate set forth
in Section 13.3 of the Lease. Alternatively, in the event of any overpayment by
Tenant, Tenant shall be entitled to offset such excess against payments becoming
due as additional rent. If the audit discloses a discrepancy in excess of five
percent (5%), Landlord shall be obligated to pay all costs associated with such
audit, not to exceed $1,000.
Section 6.- INSURANCE; INDEMNITY.
6.1 Public Liability Insurance. Tenant shall continuously maintain at its
expense comprehensive general liability insurance, with limits of not less than
$2,000,000 per person, $2,000,000 per occurrence for injury to, illness of, or
death of persons occurring in, upon or about the Premises or Project, and
$100,000 per occurrence for property damage occurring in, upon or about the
Project with fire legal liability endorsement with limits no less than $100,000.
All such insurance shall insure the performance by Tenant of the indemnity
agreement set forth in Section 6.5 hereof.
6.2 Fire Insurance of Tenant. Tenant, at its expense, shall maintain in
effect; (a) fire and extended coverage insurance on furnishings, leasehold
improvements, fixtures, inventory and equipment located on the Premises, for the
full replacement value, and (b) insurance on all plate glass on the Premises for
its replacement cost. The proceeds of such insurance, so long as this Lease
remains in effect, shall be used to repair or replace the leasehold
improvements, fixtures, equipment and plate glass so insured.
6.3 Insurance Policies. All insurance policies shall name Landlord as
additional insured and shall be with companies and with loss-payable clauses
satisfactory to Landlord and with ratings no less than A+ by A.M. Best. Copies
of all policies or certificates evidencing such insurance shall be delivered to
Landlord by Tenant prior to Tenant's occupancy of the Premises. All policies
shall bear endorsements requiring 30 days written notice to Landlord prior to
any change or cancellation.
6.4 Waiver of Subrogation. Neither party shall be liable to the other for
any loss or damage caused by water damage or any of the risks covered by a
standard fire insurance policy with extended coverage endorsements or for any
other risks which the other party has insurance coverage for, and there shall be
no subrogated claim by one party's insurance carrier against the other party
arising out of any such loss.
6.5 Indemnity of Landlord. Except to the extent caused by Landlord's
negligence, Tenant hereby waives all claims against Landlord for damage to any
property or injury, illness or death of any person in, upon, or about the
Premises and/or Project arising at any time and from any cause whatsoever.
Except to the extent caused by Landlord's negligence, Tenant shall indemnify and
hold Landlord harmless and defend Landlord from any and all claims or liability
for any damage to any property or injury, illness, or death of any person
occurring in or on the Premises or occurring elsewhere in the Project to the
extent such damage, injury, illness, or death shall be caused by the act or
failure to act of Tenant, its agents, servants, employees, licensees or
contractors.
6.6 Indemnity. Landlord shall indemnify, hold harmless and defend Tenant
from and against any and all claims, demands, damages, judgments, fines,
penalties, losses, costs and expenses, including reasonable attorneys' fees
incurred by Tenant as a result of the negligent or willful acts or omissions of
Landlord, its agents, contractors or employees.
Page 7 - MURRAY SCHOLLS
Section 7. - REPAIRS, MAINTENANCE AND ALTERATIONS.
7.1 Condition of Premises. Subject to the punch list items as provided for
in paragraph 10 of Exhibit B, and the defects warranty described below, by entry
hereunder upon delivery of possession of the Premises to Tenant with work to be
performed by Landlord substantially complete, Tenant accepts the Premises as
being in the condition in which Landlord is obligated to deliver the Premises.
Tenant shall, at Tenant's own expense, keep the Premises in good condition and
repair, including without limitation, the maintenance, replacement and repair of
any walls, floors, ceilings, interior doors, exterior and interior windows and
fixtures, plumbing, electrical wiring and conduits, as well as damage caused by
Tenant, its agents, employees, contractors or invitees (subject to Section 6.4).
Tenant shall, upon the termination of this Lease, surrender the Premises to
Landlord, in good condition except for ordinary wear and tear and for damage
covered by Landlord's fire and extended coverage insurance. Landlord shall cause
to be made all structural repairs to the roof, walls, subflooring and foundation
of the Building as and when needed and the cost thereof shall be an operating
expense of the Building as defined in Section 5.3. If Landlord has not commenced
repair or maintenance required to be performed by Landlord hereunder within
thirty (30) days after written notice thereof from Tenant, or if so commenced,
is not diligently pursuing same to completion, and such failure materially
impairs Tenant's ability to conduct its business in the Premises, then Tenant
shall have the right, but not the obligation, to make such repairs and Landlord
shall reimburse Tenant for the reasonable cost thereof plus an administrative
fee of 4% within thirty (30) days after receipt of a bill therefor from Tenant.
In the event of an emergency, Tenant may (but shall not be obligated to) perform
such repairs which would otherwise be Landlord's obligation hereunder which may
be reasonably necessary after having given Landlord such notice, if any, as may
be practicable under the circumstances if such failure materially impairs
Tenant's ability to conduct its business in the Premises. Landlord represents
that the Building will be constructed in a good and workmanlike manner and
warrants that the Building and all building systems will be free of defects for
a period of one year from the commencement date.
7.2 Alterations. Tenant shall not make any alterations or improvements to
the Premises without the prior written consent of Landlord which consent shall
not be unreasonably withheld. If Landlord gives its consent to such alterations,
Landlord may post notices of nonresponsibility in accordance with Oregon law.
Any alterations or improvements to the Premises (excluding trade fixtures
installed by Tenant), shall become part of the Premises and belong to Landlord
and shall be surrendered with the Premises without disturbance upon the
termination of the Lease. In the event Landlord consents to the making of any
alterations or improvement, the same shall be made at Tenant's sole expense.
Notwithstanding anything to the contrary herein, Tenant, without Landlord's
consent may make nonstructural alterations or improvements to the interior of
the Premises if the aggregate costs thereof, for any calendar year do not exceed
$25,000 and provided that Tenant shall upon expiration or termination of this
Lease remove any alterations or improvements made without Landlord's consent and
repair any damage caused by such removal.
7.3 Trade Fixtures. Upon expiration or earlier termination of the Lease,
Tenant shall remove all trade fixtures, movable furniture and equipment located
on the Premises which belong to the Tenant, and repair at its expense any damage
caused to the Premises by such removal. If Tenant fails to remove such property,
this shall be an abandonment of the property and Landlord may retain the
property and all rights of Tenant with respect to it shall cease or, by notice
in writing given to Tenant within 20 days after removal was required, Landlord
may elect to hold Tenant to its obligation of removal. If Landlord elects to
require Tenant to remove, Landlord may effect a removal and place the property
in storage for Tenant's account. Tenant shall be liable to Landlord for the cost
or reasonable value of removal, restoration, transportation to storage and
storage, with interest on all such as expenses as provided in paragraph 13.3
below.
7.4 Compliance With The Laws. Tenant should not use the Premises or permit
anything to be done in or about the Premises which will conflict with any law or
regulation.
Page 8 - MURRAY SCHOLLS
7.5 Entry and Inspection. With at least 24 hours' prior written or oral
notice in a non-emergency and without notice in an emergency, Landlord or its
agents may enter the Premises at any time to determine Tenant's compliance with
this Lease, to make necessary repairs, or to show the Premises to prospective
tenants or purchasers. Landlord shall take reasonable steps to minimize
interference with Tenant's business because of such entry.
Section 8.- RECONSTRUCTION AND RESTORATION.
8.1 Minor Damage. If during the term hereof the Premises are destroyed or
damaged by fire or other perils and such damage is not "substantial," Landlord
shall promptly repair such damage.
8.2 Substantial Damage. If during the term hereof the Premises are
destroyed or damaged by fire or other perils exceeding twenty-five percent (25%)
of its full construction-replacement cost, then Landlord may elect to terminate
this Lease by giving Tenant written notice of such termination within 60 days
after the date of such damage provided that Landlord concurrently terminates the
leases of all other similarly affected tenants in the Project. Otherwise,
Landlord shall proceed to restore the Premises to a condition comparable to that
existing prior to the damage. If Landlord fails to complete the restoration
within one hundred eighty (180) days after the date of the damage for any reason
except Force Majeure as defined in Section 16.16, Tenant may terminate this
Lease by written notice to Landlord within ten (10) days after the expiration of
such one hundred eighty (180) day period (but not in any event after Landlord
completes the restoration).
8.3 Restoration. Tenant shall cooperate with Landlord during the period of
repair and vacate all or any part of the Premises to the extent necessary for
the performance of the required work.
8.4 Abatement of Rent. The minimum rent and additional rent shall be
abated during the period and to the extent the Premises is not reasonably usable
for Tenant's use. If the damage does not cause any material interference with
Tenant's use, there shall be no rent abatement.
8.5 Repair of Tenant's Property. Repair, replacement, or restoration of
any fixtures, equipment and personal property owned by Tenant, and tenant
improvements shall be the responsibility of Tenant.
Section 9.- ASSIGNMENT AND SUBLETTING.
9.1 Assignment and Subletting. Tenant shall not (voluntarily or by
operation of law) assign, mortgage, pledge, hypothecate or encumber the Premises
or Tenant's leasehold estate or sublet any portion of the Premises, or otherwise
transfer any interest in the Premises without Landlord's prior written consent
in each instance which shall not be unreasonably withheld. If Tenant requests
consent to a proposed transfer, Tenant shall pay a review fee of $200 at the
time of the request for application to Landlord's expenses in reviewing the
request for consent to transfer. For a period of ten (10) days after a request
for consent, Landlord shall have the right by written notice to Tenant, if
Tenant has requested consent to an assignment of this Lease or a sublease of all
of the Premises, to terminate this Lease as of a date specified in such notice.
Tenant shall be permitted to assign this Lease or sublet all or part of the
Premises to an entity controlling, controlled by or under common control with
Tenant or in connection with a merger or consolidation or the sale of all or
substantially all of the stock or assets of Tenant without Landlord's consent.
Section 10. - CONDEMNATION.
10.1 Entire or Substantial Taking. If more than twenty-five percent (25%)
of the Premises (notwithstanding restoration by Landlord as herein provided)
shall be taken under the power of eminent domain, this Lease shall automatically
terminate on the date the condemning
Page 9 - MURRAY SCHOLLS
authority takes possession provided that the leases of all other similarly
affected tenants in the Project terminate concurrently..
10.2 Partial Taking. In the event of any taking under the power of eminent
domain which does not so result in a termination of this Lease, the minimum rent
payable hereunder shall be reduced, effective on the date the condemning
authority takes possession, in the same proportion as the reduction in rentable
floor area of the Premises. Landlord shall promptly, at its sole expense,
restore the portion of the Premises not taken to as near its former condition as
is reasonably possible, and this Lease shall continue in full force and effect.
10.3 Awards. Any award for taking of all or any part of the Premises under
the power or eminent domain shall be the property of the Landlord, whether such
award shall be made as compensation for diminution in value of the leasehold or
for taking of the fee. Nothing herein, however, shall be deemed to preclude
Tenant from obtaining, or to give Landlord any interest in, any award to Tenant
for loss of or damage to or cost of removal of Tenant's trade fixtures and
removable personal property, or for damages for cessation or interruption of
Tenant's business.
10.4 Sale Under Threat of Condemnation. A sale by Landlord to any
authority with power of eminent domain, either under threat of condemnation or
while condemnation proceedings are pending, shall be deemed a taking under the
power of eminent domain under this Section. Landlord need not incur expenses for
restoration in excess of the amount of condemnation proceeds received by
Landlord after payment of all reasonable costs, expenses and attorneys' fees
paid or incurred by Landlord in connection with the condemnation.
Section 11. - SIGNS. Tenant shall not construct or install any signs
visible from the exterior of the Premises. Tenant shall be permitted to place
identification signage on the door to the Premises. Tenant shall comply with
Landlord's signage criteria for the Building. Tenant shall place no window
covering on exterior windows without Landlord's prior written consent. Tenant
shall be permitted to display Tenant's name and location in the Building
directory, subject to Landlord's restriction on the amount of directory space
utilized by any tenant. Landlord shall treat Tenant as any other office tenant
in the Building with respect to the amount and location of signage in and on the
Building.
Section 12. - OTHER OBLIGATIONS OF PARTIES.
12.1 Liens. Tenant shall pay as due all claims for work done on the
Premises or for services rendered or materials furnished to the Premises at
Tenant's request or on Tenant's behalf or on behalf of any person claiming under
Tenant and shall keep the Premises free from any other liens created by Tenant.
If Tenant fails to pay such claim or to discharge any lien, Landlord may do so
and collect such amount as additional rent. Amounts paid by Landlord shall bear
interest and be repaid by Tenant as provided in paragraph 13.3 below. Such
payment by Landlord shall not constitute a waiver of any right or remedy
Landlord may have because of Tenant's default.
12.2 Holding Over. If Tenant does not vacate the Premises at the time
required, Landlord shall have the option to treat Tenant as a tenant from month
to month, subject to all of the provisions of this Lease (except that the term
will be month to month and the initial minimum monthly rent will be one hundred
twenty-five percent (125%) of the minimum monthly rent then being paid by
Tenant), or to eject Tenant from the Premises and recover damages caused by
wrongful hold over.
12.3 Non merger. The voluntary or other surrender of this Lease by Tenant,
or a mutual cancellation thereof, shall not work a merger, and shall, at the
option of the Landlord, terminate all and any existing subtenancies, or may, at
the option of Landlord, operate as an assignment to it of any and all such
subtenancies.
12.4 Rights of Landlord. Landlord shall have the right to change the name
or designation of the Project without notice or liability to Tenant.
Page 10 - MURRAY SCHOLLS
12.5 Priority of Lease. This Lease shall be subject and subordinated at
all times to the lien of all mortgages and deeds of trust subsequently placed
upon the Project all without the necessity of having further instruments
executed on the part of Tenant to effectuate such subordination provided that
the holder of such encumbrance shall execute an agreement in commercially
reasonable form whereby such holder agrees that Tenant will be permitted to
remain in undisturbed possession, use and enjoyment of the Premises so long as
Tenant is not in default under the terms and conditions of this Lease after the
giving of notice by Landlord and the expiration of the applicable grace or cure
periods provided hereunder. If any party providing financing or funding to
Landlord requires, as a condition to such financing or funding, that Tenant send
such party written notice of any default by Landlord under this Lease, giving
such party the right to cure such default until it has completed foreclosure and
preventing Tenant from terminating this Lease unless such default remains
uncured after foreclosure has been completed, Tenant will execute and deliver
any agreement required by such party in order to accomplish this purpose.
12.6 Landlord's Liability; Sale. Following completion of Landlord's Work
as provided for in Section 15 and Exhibit B, the liability of Landlord under
this Lease will be limited to Landlord's interest in the Project, and any
judgment against Landlord will be enforceable solely against Landlord's interest
in the Project, including, without limitation, Landlord's interest in any
casualty insurance proceeds or condemnation award relating thereto. In the event
the original Landlord hereunder, or any successor owner of the Project, shall
sell or convey the Project, all liabilities and obligations on the part of the
original Landlord, or such successor owner, under this Lease accruing thereafter
shall terminate, and thereupon all such liabilities and obligations shall be
binding upon the new owner. Tenant agrees to attorn to such new owner.
12.7 Estoppel Certificate. Within 10 days after written request by either
party, the other party shall deliver a written statement stating the date to
which the rent and other charges have been paid, whether the Lease is unmodified
and in full force and effect, and any other matters that may reasonably be
requested by the requesting party.
12.8 Rules and Regulations. Tenant agrees to comply with any rules and
regulations for the Project adopted and published by Landlord from time to time
and to cause Tenant's agents, employees, contractors and invitees to abide by
such rules and regulations provided the same are applied in a non-discriminatory
manner. Tenant agrees that Landlord shall not be responsible to Tenant for the
noncompliance by any other tenant or occupancy of the Project with such rules
and regulations.
Section 13.- DEFAULTS; REMEDIES.
13.1 Default. The following shall be events of default:
(1) Payment Default. Failure of Tenant to make any base or
additional rent or other payment under this Lease within five (5) days after
written notice that it is due.
(2) Unauthorized Transfer. Any transfer by Tenant without Landlord's
prior written consent as required under Section 9.
(3) Default In Other Covenant. Failure of Tenant to comply with any
other term or condition or fulfill any other obligation of this Lease within 20
days after written notice by Landlord specifying the nature of the default with
reasonable particularity. No notice and no opportunity to cure shall be required
if Landlord has previously given Tenant notice of failure to comply with such
term or condition or fulfill such other obligation of this Lease during the
preceding twelve (12) months of the term hereof.
(4) Insolvency Defaults. Dissolution, termination of existence,
insolvency on a balance sheet basis or business failure of Tenant; the
commencement by Tenant of a voluntary case under the federal bankruptcy laws or
under any other federal or state law relating to insolvency or debtor's relief;
the entry of a decree or order for relief against Tenant in an
Page 11 - MURRAY SCHOLLS
involuntary case under the federal bankruptcy laws or under any other applicable
federal or state law relating to insolvency or debtor's relief; the appointment
of or the consent by Tenant to the appointment of a receiver, trustee or
custodian of Tenant or of any of Tenant's property; an assignment for the
benefit of creditors by Tenant; Tenant's failure generally to pay its debts as
such debts become due; the making or suffering by Tenant of a fraudulent
transfer under applicable federal or state law; concealment by Tenant of any of
its property in fraud of creditors; the making or suffering by Tenant of a
preference within the meaning of federal bankruptcy law; or the imposition of a
lien through legal proceedings or distraint upon any of the property of Tenant
which is not discharged or bonded. During any period in which there is a
Guarantor(s) of this Lease, each reference to "Tenants" in this paragraph shall
be deemed to refer to "Guarantor or Tenant," separately.
13.2 Remedies on Default. Upon default, Landlord may exercise any one or
more of the following remedies, or any other remedy available under applicable
law:
(1) Retake Possession. To the extent permitted by law, Landlord may
re-enter and retake possession of the Premises, without notice, either by
summary proceedings, force, any other applicable action or proceeding, or
otherwise. Landlord may use the Premises for Landlord's own purposes or relet it
upon any reasonable terms without prejudice to any other remedies that Landlord
may have by reason of Tenant's default. None of these actions will be deemed an
acceptance of surrender by Tenant. To the extent permitted by law, Tenant
expressly waives the service of any notice of intention to terminate this Lease
or to retake the Premises, and waives service of any demand for payment of rent
or for possession, and of any and every other notice or demand required or
permitted under applicable law.
(2) Relet the Premises. Landlord at its option may relet the whole
or any part of the Premises, from time to time, either in the name of Landlord
or otherwise, to such tenants, for such terms ending before, on, or after the
expiration date of the lease term, at such rentals and upon such other
conditions (including concessions and free rent periods) as Landlord, in its
sole discretion, may determine to be appropriate. Landlord shall have no
obligation to relet the Premises or any part and shall not be liable for refusal
or failure to relet the Premises, or in the event of any such reletting, for
refusal or failure to collect any rent due upon such reletting. No such refusal
or failure shall operate to relieve Tenant of any liability under this Lease or
otherwise affecting such liability except as to Landlord's obligation under
Oregon law to mitigate damages. Landlord at its option may make such physical
changes to the Premises as Landlord, in its sole discretion, considers advisable
or necessary in connection with any such reletting or proposed reletting without
relieving Tenant of any liability under this Lease or otherwise affecting
Tenant's liability. If there is other comparable unleased space in the Project,
Landlord shall have no obligation to attempt to relet the Premises prior to
leasing other space in the Project.
(3) Damages for Default. Whether or not Landlord retakes possession
or relets the Premises, Landlord may recover all damages caused by the default
(including but not limited to unpaid rent, attorneys' fees relating to the
default, and costs of reletting). Landlord may sue periodically to recover
damages as they accrue during the remainder of the lease term without barring a
later action for further damages. Landlord may at any time bring an action for
accrued damages plus damages for the remaining lease term equal to the
difference between the rent specified in this Lease and the reasonable rental
value of the Premises for the remainder of the term, discounted to the time of
judgment at the rate of nine percent (9%) per annum.
13.3 Cure of Tenant's Default. Without prejudice to any other remedy for
default, Landlord may perform any obligation or make any payment required to
cure a default by Tenant. The cost of performance, including attorneys' fees and
all disbursements, shall immediately be repaid by Tenant upon demand, together
with interest from the date of expenditure until fully paid at the rate of
eighteen percent (18%) per annum, but not in any event at a rate greater than
the maximum rate of interest permitted by law.
Page 12 - MURRAY SCHOLLS
Section 14.- SECURITY DEPOSITS. Intentionally Deleted.
Section 15. - LANDLORD'S AND TENANT'S WORK.
15.1 By Landlord. Landlord shall perform the work to be performed by
Landlord pursuant to attached Exhibit B. Landlord warrants that as of the date
of substantial completion of Landlord's Work all building mechanical systems are
in good working order and the building is in conformity with current legal
requirements regarding asbestos and other Hazardous Substances as defined in
Section 16.8.
15.2 By Tenant. Tenant shall perform all other work required to
ready the Premises for Tenant's use and occupancy.
Section 16. - MISCELLANEOUS.
16.1 Waivers. No waiver by Landlord of performance of any provision of
this Lease shall be deemed to be a waiver of nor prejudice Landlord's right to
otherwise require performance of the same provision or any other provision.
16.2 Recording. Tenant shall not record this Lease without the prior
written consent of Landlord, which consent Landlord may withhold in its sole
discretion.
16.3 Notices. All notices under this Lease shall be in writing effective
when delivered in person, or if mailed, upon deposit in the United States Mail,
certified and postage prepaid and addressed to the address of Tenant or Landlord
shown below or at such other address as may be designated by either party by
notice to the other.
16.4 Exhibits and Riders. The following exhibits and riders are
attached to this Lease and made a part hereof:
Exhibit A-1 Premises
Exhibit A-2 Building
Exhibit A-3 Project
Exhibit B Work Letter
Exhibit C Prohibited Uses
Exhibit D Building Standard Improvements
Rider 1 Option to Extend
Rider 2 Expansion Provisions
16.5 Construction. (a) This Lease shall be construed and governed by the
laws of the State of Oregon; (b) the invalidity or unenforceability of any
provision hereof shall not affect or impair any other provisions hereof; (c)
this Lease constitutes the entire agreement of the parties and supersedes all
prior agreements or understandings between the parties with respect to the
subject matter hereof; (d) this Lease may not be modified or amended except by
written agreement signed and acknowledged by both parties; (e) if there be more
than one tenant, the obligations hereunder imposed upon Tenant shall be joint
and several; (f) time is of the essence of this Lease in each and every
provision hereof; and (g) nothing contained herein shall create the relationship
of principal and agent or of partnership or of joint venture between the parties
hereto and no provisions contained herein shall be deemed to create any
relationship other than that of landlord and tenant.
16.6 Successor. Subject to any limitations on assignments herein, all of
the provisions of this Lease shall inure to the benefit of and be binding upon
the successors and assigns of the parties hereto.
16.7 Attorneys' Fees. In the event suit or action is instituted to
interpret or enforce the terms of this Lease, the prevailing party shall be
entitled to recover from the other party such
Page 13 - MURRAY SCHOLLS
sum as the court may adjudge reasonable as attorneys' fees at trial, on petition
for review, or on appeal, in addition to all other sums provided by law.
16.8 Hazardous Substances. Tenant shall not use, generate transport,
treat, store, dispose of or otherwise handle Hazardous Substances on the
Premises without the prior written consent of Landlord. Landlord may withhold
such consent in its sole discretion or may condition such consent upon Tenant's
agreement to comply with requirements designated by Landlord. The term
"Hazardous Substances" shall mean any and all hazardous, toxic, infectious or
radioactive substances, wastes or materials as defined or listed by any federal,
state or local statute, regulation or ordinance pertaining to the protection of
human health or the environment and shall specifically include petroleum oil and
its fractions. Tenant agrees to indemnify, hold harmless and defend Landlord
from any and all claims, demands, losses, liabilities, penalties, damages, costs
and expenses, including without limitation, reasonable attorneys' fees and cost
arising out of or in any way connected with Tenants' breach of this provision.
Landlord agrees to indemnify, hold harmless and defend Tenant from any and all
claims, demands, losses, liabilities, penalties, damages (excluding
consequential damages or lost profits) cost and expenses arising out of or
connected with the presence of pre-existing Hazardous Substances located in, on,
or under the Project as of the date hereof or the presence of any Hazardous
Substances located in, on, or under the Project after the date hereof caused by
Landlord or its agents.
16.9 Brokers. Each party represents and warrants that it has negotiated
this Lease directly with the other and has not authorized or employed or acted
by implication to authorize or to employ any real estate broker or salesman to
act for it in connection with this Lease.
16.10 No Offer. This Lease is submitted to Tenant on the understanding
that it will not be considered an offer and will not bind Landlord in any way
until (a) Tenant has duly executed and delivered duplicated originals to
Landlord and (b) Landlord has executed and delivered one of such originals to
Tenant.
16.11 Lien Waiver. Landlord hereby waives and releases any liens for
minimum or additional rent which Landlord may have against Tenant's personal
property, trade fixtures, or equipment whether the lien is statutory or
contractual or arises out of operation of law or otherwise. Landlord agrees that
it will execute any reasonable document requested by Tenant's lender to evidence
this waiver and to allow such lender access to the Premises to realize on its
security interest.
16.12 Zoning. Landlord represents, warrants and covenants that the
Premises are presently zoned so as to permit the use of the Premises for offices
and that title to the Premises will not at the commencement of the term be
subject to any covenant, agreement, reservation, lien, easement, restriction or
encumbrance which would prohibit Tenant from using the Premises for the use
permitted by Section 4.1.
16.13 Consent. Unless Landlord's consent or approval is required by the
express terms of this Lease not to be unreasonably withheld, such approval or
consent may be withheld, delayed or conditioned by Landlord in its sole and
arbitrary discretion.
16.14 Quiet Enjoyment. So long as Tenant complies with all terms of this
Lease, Tenant shall be entitled to peaceable and undisturbed possession of the
Premises free from interference by Landlord or those claiming through Landlord.
16.15 Force Majeure. In the event that Landlord or Tenant is delayed or
hindered in or prevented from the performance of any act required hereunder
(except for the payment of Rent or any other payment required by a party under
this Lease) by acts of God, floods, fire, riots or other similar events beyond
the control of either party, then performance of such act shall be excused for
the period of delay and the period for the performance of any such act shall be
extended for a period equivalent to the period of such delay.
Page 14 - MURRAY SCHOLLS
16.16 Authority. Each party hereby warrants to the other that the
execution of this Lease by such party and the performance of all of the
obligations to be performed by such party hereunder have been duly authorized by
all necessary corporate or limited liability company action. Each party further
warrants to the other that each individual signing this Lease on behalf of such
party has been fully authorized and empowered to do so by each party.
16.17 Prohibited Uses. No portion of the Project shall be used for any of
the Prohibited Uses described on Exhibit C.
WHEREFORE, the parties have executed this Lease this ____ day of __________,
2000.
LANDLORD: TENANT:
Murray Scholls, LLC, Metro One Telecommunications, Inc.
an Oregon limited liability company
By:
By: Gramor Murray Scholls, LLC, -------------------
an Oregon limited liability company, Timothy A. Timmins
Manager
Title: President and Chief
By: Gramor Development, Inc., Executive Officer
an Oregon corporation, Manager
Tenant Address:
By: 11200 SW Murray Scholls Place
------------------------- Beaverton OR 97007
Barry A. Cain, President (503) 643-9500
Landlord Address: and a copy to:
19767 S.W. 72nd Avenue Arthur L. Tarlow
Suite 100 Tarlow Jordan & Schrader
Portland, Oregon 97062-8352 PO Box 230669
(503) 245-1976 Portland OR 97281
and a copy to:
Thomas R. Page
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204
Page 15 - MURRAY SCHOLLS
STATE OF OREGON
ss.
County of ________________
- -------------------------------------
This instrument was acknowledged before me on ___________________ , 2000,
by Timothy A. Timmins, President and Chief Executive Officer of METRO ONE
COMMUNICATIONS, INC., an Oregon corporation.
--------------------------------------------
Notary Public for Oregon
My commission expires:
----------------------
STATE OF OREGON
ss.
County of ________________
- -------------------------------------
This instrument was acknowledged before me on _______________________,
2000, by Barry A. Cain, President of Gramor Development, Inc., an Oregon
corporation, Manager of Gramor Murray Scholls, LLC, an Oregon limited liability
company, Manager of Murray Scholls, LLC, an Oregon limited liability company.
--------------------------------------------
Notary Public for Oregon
My commission expires:
----------------------
Page 16 - MURRAY SCHOLLS
EXHIBIT "B"
WORK LETTER
This WORK LETTER is dated May 15, 2000, between Murray Scholls LLC, an
Oregon limited liability company ("Landlord") and Metro One Telecommunications,
Inc. ("Tenant").
RECITALS
This WORK LETTER is attached to and forms a part of the certain commercial
lease dated May 15, 2000, (the "Lease"), pursuant to which Landlord has leased
to Tenant space in the building shown crosshatched on the site plan attached as
Exhibit A-2 to the Lease.
Landlord desires to make improvements to the Premises, and Tenant desires
to have Landlord make them, upon the terms and conditions contained in this WORK
LETTER.
1. Definitions. In this WORK LETTER, some defined terms are used. They
are:
(a) Tenant's Representative: (to be identified prior to commencement
of the Improvements)
(b) Landlord's Representative: (to be identified prior to
commencement of the Improvements)
(c) Tenant Allowance: $22.50 per rentable square foot, which is to
be applied by Tenant to the cost of the Improvements. Tenant is not entitled to
a cash allowance in any circumstance; provided, however, any unused portion of
the Improvement allowance may be credited against minimum rent first due and
payable under the Lease.
(d) Final Space Plan: a final drawing of the Premises showing all
Tenant Improvements.
(e) Final Space Plan Submission Date: Twenty-one (21) days after the
date hereof.
(f) Working Drawings: construction documents detailing the
improvements and conforming to codes, complete in form and content and
containing sufficient information and detail to allow for competitive bidding by
contractors selected by Tenant.
(g) Improvements:
(1) The costs of development of the Final Space Plan and
Working Drawings, including supporting engineering studies (that is, structural
design or analysis, lighting or acoustical evaluations, or others as determined
by Tenant's designers and architect).
(2) All construction work necessary to construct Tenant
Improvements in accordance with the Working Drawings.
The Improvements will NOT include building standard improvements specified in
Exhibit D to the Lease, personal property items, such as decorator items or
services, art work, plants, furniture, equipment, or other fixtures not
permanently affixed to the Premises, exterior work, parking lot work and work on
any other portions of the Project.
(h) Cost of the Improvements: the cost includes, but is not limited
to, the following:
___LDL Exhibit B - 1
___TNT
___TNT
(1) All space planning, architectural and engineering fees and
expenses to prepare the Working Drawings.
(2) The price of the construction contract for construction of
the work specified in the Working Drawings.
(3) All building permit fees necessary to construct the work
specified in the Working Drawings.
(4) No management fee to Landlord or its affiliates of any
kind or nature will be included as part of the cost of Improvements.
(i) Change Order: any change, modification, or addition to the Final
Space Plan or Working Drawings after Landlord has approved the same.
(j) Base Building:. the retail/office building ("Building") to be
constructed by Landlord at 14795 SW Murray Scholls Drive, Beaverton, Oregon,
substantially in accordance with the construction documents prepared by SIENNA
Architects dated November 8, 1999 ("Building Plans") and including the Building
Standard Vanilla Shell improvements described in Exhibit D to the Lease.
2. Representatives. Landlord appoints Landlord's Representative to act for
Landlord in all matters associated with this WORK LETTER. Tenant appoint
Tenant's Representative to act for Tenant in all matters associated with this
WORK LETTER. All inquiries, requests, instructions, authorizations, and other
communications with respect to the matters covered by this WORK LETTER will be
made to Landlord's Representative or Tenant's Representative, as the case may
be. Landlord will not make any inquiries of or requests to, and will not give
any instructions or authorizations to, any employee or agent of Tenant,
including without limitation Tenant's architect, engineers, and contractors, or
any of their agents or employees, with regard to matters associated with this
WORK LETTER. Either party may change its representative under this WORK LETTER
at any time by providing 3 days' prior written notice to the other party.
3. Project Design and Construction. All space layout, design work and
preparation of the Working Drawings will be performed by designers and
architects selected by Tenant as reasonably approved by Landlord. All
construction work will be performed by contractors selected and engaged by
Tenant as reasonably approved by Landlord.
4. Cost Responsibilities.
(a) Landlord: Landlord will install all building standard
improvements specified in the Building Plans and Exhibit D to the Lease at its
sole cost and expense. In addition, Landlord will pay up to the amount of the
Tenant Allowance for the cost of constructing the Improvements.
(b) Tenant: Tenant will pay for all cost of the Improvements which
exceed the Tenant Allowance.
5. Landlord's Approval. Landlord, in its sole discretion, may withhold its
approval of any Final Space Plan, Working Drawings, or Change Order that:
___LDL Exhibit B - 2
___TNT
___TNT
(a) Exceeds or adversely affects the structural integrity of the
Building, or any part of the heating, ventilating, air conditioning, plumbing,
mechanical, electrical, communication, or other systems of the Building;
(b) Is not approved by the holder of any mortgage or deed of trust
encumbering the Building at the time the work is proposed;
(c) Would not be approved by a prudent owner of property similar to
the Building;
(d) Landlord reasonably believes will unreasonably increase the cost
of operation or maintenance of any of the systems of the Building;
(e) Landlord reasonably believes will reduce the market value of the
Premises or the Building at the end of the term; or
(f) Does not conform to applicable building code or is not approved
by any governmental, quasi-governmental, or utility authority with jurisdiction
over the Premises.
If Landlord fails to approve the Final Space Plan or the Working Drawings
for any of the reasons set forth in (b), (c), (d) or (e), Tenant may terminate
this Lease by written notice to Landlord given within ten (10) days after
receiving written notice of such disapproval.
6. Schedule of Improvement Activities.
(a) On or before the Final Space Plan Submission Date, Tenant will
submit to Landlord the Final Space Plan. Landlord will approve or approve with
conditions the Final Space Plan within ten (10) days after the Final Space Plan
Submission Date.
(b) Tenant's architect will prepare Working Drawings within thirty
(30) days after receipt of the Landlord's approval of the Final Space Plans.
Tenant's architect will forward the Working Drawings to Landlord. Landlord will
give Tenant written notice whether or not Landlord approves the Working Drawings
within five (5) business days after its receipt.
(c) Following approval of the Working Drawings, Tenant will obtain
bids for the Improvements from at least three (3) general contractors reasonably
approved by Landlord and submit the bids to Landlord. Tenant shall be obligated
to pay the amount by which the cost of the Improvements exceeds the allowance in
the manner provided for in paragraph 7 below ("Excess Cost"). All risk of
construction cost overruns or costs of unknown conditions shall be borne by
Tenant.
(d) Following approval of the Working Drawings, Tenant or Tenant's
contractor will cause application to be made to the appropriate governmental
authorities for necessary approvals and building permits. Upon receipt of the
necessary approvals and permits, Tenant will begin construction of the
Improvements.
7. Tenant Allowance. Landlord shall provide Tenant with a Tenant Allowance
in the amount of Twenty-two and 50/100 dollars ($22.50) per rentable square
foot. The Tenant Allowance shall be applied by Tenant towards the cost of the
design and construction of the Tenant Improvements, including without
limitation, design, engineering and consulting fees (collectively, the "Tenant
Improvement Costs"). Any and all Tenant Improvement Costs in excess of the
Tenant Allowance shall be the sole and exclusive obligation and responsibility
of Tenant.
___LDL Exhibit B - 3
___TNT
___TNT
(a) Permitted Use of Tenant Allowance. The Tenant Allowance shall be
used for payment of the following Tenant Improvement Costs:
(1) Preparation of the Final Space Plans and Working Drawings,
Schedule and Budget, as provided in this Work Letter, including without
limitation all fees charged by any governmental subdivision or agency (including
without limitation fees for building permits and plan checks) in connection with
the Tenant Improvements work in the Premises:
(2) Construction work for completion of the Tenant
Improvements as reflected on the Working Drawings and in the construction
contract;
(3) All contractors' charges, general conditions, performance
bond premiums, and construction management fees.
(b) Excluded Use of Tenant Allowance. The Tenant Allowance may not
be used for furniture, equipment, trade fixtures or other items of personal
property, whether they are or are not physically attached to the Building.
(c) Payment of Tenant Allowance. Tenant shall first pay all Excess
Cost. After Tenant has paid all Excess Cost, on or before the fifth (5th)
calendar day of every month, Tenant shall submit to Landlord for its review and
approval AIA Form No. G702 and No. G703 invoices (or comparable invoices
acceptable to Landlord) for work performed and materials furnished to the
Premises in connection with construction of the Tenant Improvements ("Payment
Request"). Each Payment Request shall be accompanied by a certification signed
by the Tenant (as to soft costs) and Tenant's general contractor and the
Tenant's Architect (as to hard costs) showing that the work reflected in such
Payment Request was performed in accordance with this Work Letter, the approved
Working Drawings and the terms of the construction contract; the total soft
costs and hard costs to construct the Tenant Improvements, including change
orders; and the amount expended for such items to date and the estimated costs
to complete the Tenant Improvements. In addition, each Payment Request shall be
accompanied by lien release waivers from all contractors, subcontractors and
materialmen to be paid through such Payment Request and, with respect to
completed work, final lien release waivers, all in form and content reasonably
acceptable to Landlord. Within ten (10) business days after Landlord's approval
of each such Payment Request, Landlord shall cause to be disbursed to (i) Tenant
an amount equal to one hundred percent (100%) of its approved soft costs and to
(ii) Tenant's general contractor an amount equal to ninety-five percent (95%) of
such approved hard costs times the ratio which the Tenant Improvement Allowance
bears to the total construction cost set forth in the approved Budget. Landlord
shall cause to be disbursed the five percent (5%) retention amount, up to the
limit of the Tenant Improvement Allowance, upon the issuance of an unqualified
Certificate of Occupancy for the Premises and the expiration of the period in
which liens may be filed against the Building or the Premises by any contractor,
subcontractor or materialmen furnishing goods or services in connection with the
Tenant Improvements (or receipt of lien waivers covering all such potential
claimants).
8. Change Orders. Tenant may request and obtain changes to the
Improvements during construction provided that all such changes will be subject
to Landlord's prior written approval in accordance with paragraph 5. Prior to
commencing any change, Tenant will prepare and deliver to Landlord for
Landlord's approval, a change order setting forth the total cost of such change,
the associated architectural, engineering, construction contractor's costs and
fees, completion schedule changes, and the extent, if any, to which such change
will cause the Cost of the Improvements to exceed the Tenant Allowance. Upon
Tenant's receipt of Landlord's approval , Tenant may proceed with the change.
Tenant shall pay the amount by which such
___LDL Exhibit B - 4
___TNT
___TNT
change will cause the Cost of the Improvements to exceed the Tenant Allowance
prior to the submission to Landlord of any further Payment Request.
9. INSURANCE .
a. Required Insurance. Tenant shall procure, pay for and maintain,
or shall require its prime contractor under the construction contract to
procure, pay for and maintain in full force and effect throughout the
construction period for the Tenant Improvements, for the protection and benefit
of the Landlord, the following policies of insurance to be written by an insurer
reasonably acceptable to Landlord and who is qualified to do business in the
State of Oregon and which shall, as a minimum, afford the following types of
limits of coverage:
1. Broad Form Comprehensive or Commercial General Liability
Insurance written on an occurrence basis (including Premises/Operations
Liability, Products and Completed Operations Liability, Independent Contractors
Liability, Contractual Liability, Broad Form Property Damage Liability,
Explosion, Collapse and Underground Hazard Liability and Personal Injury
Liability) ("CGL") in the minimum amount of One Million Dollars ($1,000,000.00)
per occurrence combined single limit for bodily injury and property damage and
in the minimum amount of Two Million Dollars ($2,000,000.00) total aggregate
liability;
2. Workers' Compensation Insurance in the amount not less than
the limits required by law; and
3. Comprehensive Automobile Liability Insurance to cover
owned, long-term leased, hired, and non-owned automobiles (including medical
payments and uninsured motorists coverages) in the minimum amount of One Million
and no/100 Dollars ($1,000,000.00) per occurrence for bodily injury and Two
Hundred Fifty Thousand and no/100 Dollars ($250,000.00) per occurrence for
Property damage.
b. Landlord an Additional Insured. The Broad Form CGL Policy shall
name Landlord as an additional insured and shall expressly provide that the
interest of Landlord shall not be affected by any breach by the Tenant or the
Tenant's contractor. The coverage afforded under any insurance policy obtained
under or pursuant to this section shall be primary to any valid and collectible
insurance carried separately by the Landlord. Furthermore, all policies and
certificates of insurance shall expressly provide that no less than thirty (30)
days' prior written notice shall be given to the Landlord in the event of
material alteration, cancellation, non-renewal or expiration of the coverage
contained in such policy or as evidenced by such certificate of insurance.
10. Additional Improvements. Landlord shall, at Landlord's expense, make
the following improvements to the Building as part of the Building Standard
Improvements:
(a) Construct an entrance to the Building from ground floor on east
elevation of the Building with key card security;
(b) Construct a separate entrance to the Premises from the common
hallway on the ground floor level near the east building entry with an exclusive
stairwell to the second floor portion of the Premises;
(c) Install two (2) 4" conduits from Tenant's existing network
closet in Tenant's space in Building 1 to the new network closet in the Premises
to accommodate installation of telephone/low voltage/communications/data wiring.
___LDL Exhibit B - 5
___TNT
___TNT
Exhibit C
PROHIBITED USES
1. Any operation primarily used as a warehouse operation and any
assembling, manufacturing, distilling, refining, smelting, agricultural or
mining operation;
2. any "second hand" store or "surplus" store over 2,500 square feet;
3. any mobile home park, trailer court, labor camp, junkyard, or stockyard
(except that this provision shall not prohibit the temporary use of construction
trailers during periods of construction, reconstruction or maintenance).
4. any drilling for or removal of hydrocarbon or mineral substances;
5. any bar, tavern restaurant or other establishment whose reasonably
Projected annual gross revenues from the sale of alcoholic beverages for
on-premises consumption exceeds eighty percent (80%) of the gross revenues of
such business.
6. any flea market;
7. any church or other place of public assembly;
8. the establishment or maintenance of a massage parlor, bingo parlor,
gambling operation (except video poker incidental to a restaurant), adult
theater, adult bookstore, sex shop, peep show, or bawdy house or brothel;
9. any dumping, disposing, incineration or reduction of garbage (exclusive
of trash receptacles located in trash enclosures);
10. any automobile, truck, trailer or recreational vehicle sales, leasing,
display or repair;
11. any bowling alley;
12. any skating rink;
13. any animal raising facilities (except that this prohibition shall not
prohibit veterinary hospitals or pet shops; and
14. any mortuary.
___LDL Exhibit C
___TNT
___TNT
Exhibit D
BUILDING STANDARD VANILLA SHELL
The Vanilla Shell to be delivered by Landlord to Tenant shall include the
following:
Demising Walls: 3-1/2" 20 gauge metal studs with 5/8" smooth finished
drywall full height.
Exterior Walls: All exterior walls to be open studs.
Acoustic Ceiling: 1" white T-bar, except at skylight areas, with 2' x 4'
Armstrong fissured Second Look II tile, (stacked on
floor).
Insulation: R-19 fiberglass batt insulation is to be installed in
all exterior walls.
Window Coverings: 1" horizontal mini-blinds, manufacturer and color to be
determined by Landlord.
Plumbing: Fire sprinkler drops from shell system and all finish
heads per CDP.
HVAC: Roof mounted gas pack heating units with cooling and
variable air volume controls. The size of the units will
be appropriately determined by Landlord's architect to
handle loads uniformly through the Premises. All
distribution ductwork, one supply per 200 square feet
and one return register per 900 feet, roof curbs and
waterproofing are included.
Lighting: 2' x 4' three-lamp flourescent lay-in type with 24 cell
paracube lens, one fixture per 75 rentable square feet
(stacked on floor).
Power:
The Building shall be provided with 277/480V
three-phase, four-wire service, step-down transformers
to provide 208/120V power, sub-panels, feeders and HVAC
Door: connections.
One 3' x 8' x 1-3/4" stain grade solid core door with
metal frame and building standard handle/latch set and
four pair butt hinges, provided at suite entry.
Floor:
Concrete slab, level and ready to accommodate Tenant's
Elevator: floor covering.
Elevator in Building Common Area serving second floor.
___LDL EXHIBIT D
___TNT
___TNT
RIDER 1: OPTION TO EXTEND
Terms of Option: Tenant shall have an option to extend the term of this Lease
for two (2) additional terms of five (5) years so long as Tenant is not in
default hereunder at the time it exercises each such option or at the time the
extended term begins. The other terms and conditions of this Lease will remain
the same except the minimum monthly rent shall be as provided below and Tenant
shall have no further option to extend. Tenant shall exercise the five (5) year
options by delivering written notice to Landlord not more than 365 days nor less
than 270 days prior to the end of the preceding Lease term.
The minimum monthly rent, as specified in Section 3.1 hereof, for each
extended term shall be a sum agreed upon by Landlord and Tenant as the then
current fair market rental rate. In the event the parties are unable to agree on
such fair market rent at least 90 days prior to commencement of the extended
term, the fair market rent shall be determined by appraisal in the following
manner:
(i) If appraisal is required, each party shall select an appraiser
at least 75 days prior to commencement of the extended term. Each of the
appraisers shall be instructed to deliver its approval at least 45 days prior to
commencement of the extended term. If either appraiser fails to deliver its
appraisal by such date, such delinquent appraisal shall be disregarded and the
minimum monthly rent shall be the amount stated in the timely appraisal. The
fair market rent shall be the average of two appraisals. Each party shall bear
the cost of its own appraiser.
(ii) If either appraisal exceeds the other by more than ten percent
(10%), a third appraiser shall be selected by mutual agreement of the Landlord
and Tenant or, in the absence of agreement within ten (10) days, by the
presiding Judge of the Washington County Circuit Court. The third appraiser
shall be requested to complete its appraisal as soon as possible.
(iii)If a third appraiser is required, the rent shall be the average
of the two appraisals which are closest in amount to each other. The cost of the
third appraisal shall be shared equally between Landlord and Tenant.
(iv) If notice of exercise is given by the date set herein above,
the fact that the monthly rental has not been finally determined by the date the
extended term begins shall not interfere with or limit Tenants right hereunder
to extend, however; such new monthly rental shall be effective as of the first
day of the extended term.
In no event shall the rent in any year of the extended term be less
than the rent due during the last year of the preceding term.
LANDLORD: TENANT:
Murray Scholls, LLC, Metro One Telecommunications, Inc.,
an Oregon limited liability company
By: Gramor Murray Scholls, LLC, an By:_________________________________
Oregon limited liability company, Timothy A. Timmins
Manager President and Chief Executive Officer
By: Gramor Development, Inc.,
an Oregon corporation, Manager
By: _____________________
Barry A. Cain, President
___LDL RIDER 1: OPTION TO EXTEND
___TNT
___TNT
RIDER 2: EXPANSION RIGHTS
1. Right of First Refusal.
Landlord hereby grants to Tenant a right of first refusal during the
twelve months following the Commencement Date of this Lease for approximately
5,000 rentable square feet of space located adjacent to the Premises as shown on
Exhibit A-1 ("Refusal Space"). Within three (3) business days after Landlord
receives an acceptable third party offer to lease the Refusal Space or a portion
of the Building that includes all or part of the Refusal Space ("Offer"),
Landlord shall notify Tenant of the Offer. Such notice shall include a copy of
the Offer, but may exclude the offeror's identity. Provided that (i) after
notice and opportunity to cure as provided under the Lease, Tenant is not in
default and (ii) the Lease has not been terminated, Tenant shall have ten (10)
days following receipt of the Offer within which to notify Landlord that it will
accept or reject the Offer as to the Refusal Space. Such acceptance may,
however, be based on a term that matches the term of the Lease. Failure to
timely give such notice shall be deemed a rejection of the Offer. If Tenant
fails to timely exercise its right to lease the Refusal Space then Landlord
shall be entitled to lease such space to the third party who made the Offer in
accordance with its terms. If Landlord does not execute a lease with such
offeror (in accordance with the terms of the Offer) within 180 days after the
Offer date, then Landlord shall resubmit to Tenant any revised offer or new
offers to lease the Refusal Space and such offer(s) shall be subject to Tenant's
right of first refusal under this Rider 2. Upon timely execution of a
third-party lease for the Refusal Space, Tenant shall have no further refusal
right. If Tenant accepts the Offer as to the Refusal Space, an amendment to this
Lease shall incorporate the terms of the Offer as to the Refusal Space and,
except to the extent the Offer terms are inconsistent with the terms of the
Lease, the Refusal Space shall be subject to all terms and conditions hereof.
Such expansion may require an additional security deposit if necessary to meet
documented lender requirements.
2. Notice of Availability.
Landlord agrees to give Tenant written notice not less than thirty (30)
days prior to the expiration of any lease which includes all or part of the
Refusal Space referred to in paragraph 1 above. Landlord further agrees not to
sign a lease for any such space for a period of thirty (30) days after giving
Tenant such notice. Should Landlord become aware of expiration or termination of
any lease on all or part of the Refusal Space fewer than thirty (30) days prior
to the expiration or termination of such lease, Landlord agrees to furnish
Tenant written notice of the expiration or termination within five (5) working
days of receipt of such knowledge by Landlord.
LANDLORD: TENANT:
Murray Scholls, LLC, Metro One Telecommunications, Inc.,
an Oregon limited liability company
By: Gramor Murray Scholls, LLC, an By:_________________________________
Oregon limited liability company, Timothy A. Timmins
Manager President and Chief Executive Officer
By: Gramor Development, Inc.,
an Oregon corporation, Manager
By: _____________________
Barry A. Cain, President
___LDL RIDER 2: EXPANSION RIGHTS
___TNT
___TNT