Exhibit 10.32
FIRST AMENDMENT
TO
MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE
THIS FIRST AMENDMENT (the "First Amendment") is made and entered into this
30 day of June, 2006, by and between CATELLUS OPERATING LIMITED PARTNERSHIP, a
Delaware Limited Partnership, successor in interest to Catellus Development
Corporation ("Landlord"), and SYNETICS SOLUTIONS, INC., an Oregon corporation
("Tenant").
RECITALS
A. Landlord and Tenant entered into a Multi-Tenant Industrial Triple Net
Lease dated as of December 15, 2000 (the "Lease"), pursuant to which Landlord
leased to Tenant certain premises located at Southshore Corporate Park -
Building C, 4293 NE 185th Avenue; Gresham, Oregon 97230, as more particularly
described in the Lease.
B. Landlord and Tenant desire to amend the Lease and provide for a Security
Deposit in the amount of $23,564.42 and delete from the Lease, Section 3.3
Letter of Credit, to become effective on June 30, 2006; on the terms and
conditions below
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties, intending to be legally bound, agree as follows:
1. Amendment to Section 3.3. Subject to the terms and conditions stated,
Section 3.3 Letter of Credit of the Lease is deleted and replaced with the
following:
"3.3 Security Deposit. Upon the execution of this First Amendment,
Tenant shall pay to Landlord the Security Deposit, in the amount of
$23,564.42. The Security Deposit shall secure the full and faithful
performance of each provision of the Lease to be performed by Tenant.
Landlord shall not be required to pay interest on the Security Deposit or
to keep the Security Deposit separate from Landlord's own funds. If Tenant
fails to perform fully and timely on all or any of Tenant's covenants and
obligations hereunder, Landlord may, but without obligation, apply all or
any portion of the Security Deposit toward fulfillment of Tenant's
unperformed covenants and/or obligations. If Landlord does so apply any
portion of the Security Deposit, Tenant shall immediately pay Landlord
sufficient cash to restore the Security Deposit to the amount of the then
current Base Rent per month. After Tenant vacates the Premises, upon the
expiration or sooner termination of this Lease, if Tenant is not then in
default, Landlord shall return to Tenant any unapplied balance of the
Security Deposit. If a change in control of Tenant occurs during this Lease
and following such change the financial condition of Tenant is, in
Landlord's reasonable judgment, reduced, Tenant shall deposit such
additional monies with Landlord as Landlord and Tenant shall agree in good
faith to be sufficient to cause the Security Deposit to be at a
commercially reasonable level based on said change in financial condition."
2. Effect of Lease. Except as expressly amended herein, all other terms,
conditions and covenants of the Lease shall remain binding and in full force
and effect.
IN WITNESS WHEREOF, the parties have caused this First Amendment to be
executed on the respective dates set forth below, effective of the day and year
first above written.
LANDLORD: TENANT:
CATTELLUS OPERATING LIMITED SYNETICS SOLUTIONS, INC., an Oregon
PARTNERSHIP, corporation
A DELAWARE LIMITED PARTNERSHIP
BY: PALMTREE ACQUISITION CORPORATION, BY: /s/ Akira Hijikuro
A DELAWARE CORPORATION, ITS GENERAL ------------------------------------
PARTNER SUCCESSOR IN INTEREST TO NAME: Akira Hijikuro
CATELLUS DEVELOPMENT CORPORATION, TITLE: TreasureR
DATE:
--------------------
BY: /s/ W. Scott Lamson
---------------------------------
NAME: W. SCOTT LAMSON
TITLE: SENIOR VICE PRESIDENT
DATE:
-------------------
Page 2 - FIRST AMENDMENT TO MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE
LEASE GUARANTY
The undersigned (collectively the "Guarantor") hereby absolutely and
unconditionally, jointly and severally, guarantees the prompt, complete, and
full and punctual payment, observance, and performance of all the terms,
covenants, and conditions provided to be paid, kept, and performed by the tenant
under that certain Lease Agreement (such lease, as amended, being herein
referred to as the "Lease"), dated July 20, 2000, between Catellus Operating
Limited Partnership, a Delaware Limited Partnership, as Landlord ("Landlord"),
and Synetics Solutions Inc., an Oregon Corporation, as Tenant ("Tenant"),
covering the premises located at 18870 NE Riverside Parkway, Gresham, OR 97230.
United States of America and all renewals, amendments, expansions, and
modifications of the Lease. This Guaranty shall include any liability of Tenant
which shall accrue under the Lease for any period preceding as well as any
period following the term of the Lease.
The obligation of the Guarantor is primary and independent of Tenant's
obligations under the Lease and may be enforced directly against the Guarantor
independently of and without proceeding against the Tenant or exhausting or
pursuing any remedy against Tenant or any other person or entity. Guarantor
waives any requirement that Landlord mitigate damages under the Lease.
This instrument may not be changed, modified, discharged, or terminated
orally or in any manner other than by an agreement in writing signed by
Guarantor and the Landlord.
The obligations of Guarantor under this Guaranty shall not be released or
otherwise affected by reason of any sublease, assignment, or other transfer of
the Tenant's interest under the Lease, whether or not Landlord consents to such
sublease, assignment, or other transfer.
Any act of Landlord, or the successors or assigns of Landlord, consisting
of a waiver of any of the terms or conditions of said Lease, or the giving of
any consent to any manner or thing relating to said Lease, or the granting of
any indulgences or extensions of time to Tenant, may be done without notice to
Guarantor and without releasing the obligations of Guarantor hereunder.
The obligations of Guarantor hereunder shall not be released by Landlord's
receipt, application, or release of security given for the performance and
observance of covenants and conditions in said Lease contained on Tenant's part
to be performed or observed nor by any modification of such Lease; but in case
of any such modification, the liability of Guarantor shall be deemed modified in
accordance with the terms of any such modification of the Lease.
Guarantor waives any defense or right arising by reason of any disability
or lack of authority or power of Tenant and shall remain liable hereunder if
Tenant or any other party shall not be liable under the Lease for such reason.
Until all the covenants and conditions in said Lease on Tenant's part to be
performed and observed are fully performed and observed, Guarantor (i) shall
have no right of subrogation against Tenant by reason of any payments or acts of
performance by the Guarantor, in compliance with the obligations of the
Guarantor hereunder; (ii) waives any right to enforce any remedy which Guarantor
now or hereafter shall have against Tenant by reason of any one or more payments
or acts of performance in compliance with the obligations of Guarantor
hereunder; and (iii) subordinates any liability or indebtedness of Tenant now or
hereafter held by Guarantor to the obligations of Tenant to the Landlord under
said Lease.
The liability of Guarantor hereunder shall not be released or otherwise
affected by (i) the release or discharge of Tenant in any insolvency,
bankruptcy, reorganization, receivership, or other debtor relief proceeding
involving Tenant (collectively "proceeding for relief); (ii) the impairment,
limitation, or modification of the liability of Tenant or the estate of the
Tenant in any proceeding for relief, or of any remedy for the enforcement of
Tenant's liability under the Lease, resulting from the operation of any law
relating to bankruptcy, insolvency, or similar proceeding or other law or from
the decision in any court; (iii) the rejection or disaffirmance of the Lease in
any proceeding for relief; or (iv) the cessation from any cause whatsoever of
the liability of Tenant.
This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment by Tenant to Landlord under the Lease is
rescinded or must otherwise be returned by Landlord upon the insolvency,
bankruptcy, reorganization, receivership, or other debtor relief proceeding
involving Tenant, all as though such payment had not been made.
This Guaranty is executed and delivered for the benefit of Landlord and its
successors and assigns, and is and shall be binding upon Guarantor and its
successors and assigns, but Guarantor may not assign its obligations hereunder
without the prior written consent of Landlord, which may be withheld in
Landlord's sole discretion.
GUARANTOR AND LANDLORD WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN
LANDLORD AND GUARANTOR ARISING OUT OF THIS GUARANTY OR ANY OTHER DOCUMENT OR
INSTRUMENT EXECUTED IN CONNECTION HEREWITH OR ANY TRANSACTION RELATED TO THIS
GUARANTY.
Guarantor agrees to pay all costs and expenses, including reasonable
attorneys' fees, incurred by Landlord in enforcing the terms of this Guaranty.
This Guaranty shall be governed by and construed in accordance with the
internal laws of the State which governs the Lease excluding any principles of
conflicts of laws. For the purpose solely of litigating any dispute under this
Guaranty, the undersigned submits to the jurisdiction of the courts of said
state.
if the Guarantor is more than one person or entity, the liability of each such
Guarantor shall be joint and several.
WITNESS THE EXECUTION hereof this _____ day of June, 2006.
GUARANTOR:
Brooks Automation, Inc.
By: /s/ Edward C. Grady
------------------------------------
Name: Edward C. Grady
Title: President & CEO
FIRST AMENDMENT TO
MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE
AND COMMENCEMENT DATE MEMORANDUM
THIS FIRST AMENDMENT TO MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE AND
COMMENCEMENT DATE MEMORANDUM ("Amendment") is made and entered into as of the
19th day of December, 2000, by and between CATELLUS DEVELOPMENT CORPORATION, a
Delaware corporation ("Landlord"), and SYNETICS SOLUTIONS, INC., an Oregon
corporation ("Tenant").
RECITALS:
A. Landlord and Tenant are parties to that certain Multi-Tenant Industrial
Triple Net Lease dated as of July 20, 2000 (the "Lease"), pursuant to which
Landlord leased to Tenant certain premises located at Southshore Corporate Park
- - Building A, 18870 NE Riverside Parkway, Gresham, Oregon, as more particularly
described in the Lease.
B. Landlord and Tenant desire (a) to acknowledge, among other things, the
Commencement Date (as such term is defined in the Lease) and the rentable square
footage of the Premises and (b) to amend the Lease on the terms and conditions
set forth below.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby amend
the Lease and Landlord and Tenant agree as follows:
1. INCORPORATION; DEFINED TERMS. The Lease, including all exhibits and
schedules attached thereto, is incorporated into this Amendment by this
reference. All capitalized terms used and not otherwise defined in this
Amendment, but defined in the Lease, shall have the meaning set forth in the
Lease.
2. CONFIRMATION OF COMMENCEMENT DATE AND BASE RENT. Notwithstanding any
provision to the contrary contained in the Lease, Tenant's obligation to pay
Shell Base Rent (as set forth in the Basic Lease Information) under the Lease,
but subject to the terms of this Paragraph 2, commenced on December 12, 2000.
Concurrently with the execution of this Amendment, Tenant shall pay to Landlord
the amount of Twenty Two Thousand Two Hundred Twenty Nine and 38/100 Dollars
($22,229.38) as Shell Base Rent for the month of December 2000. Tenant shall be
under no obligation to pay the First Allowance Rent or the Second Allowance Rent
for December 2000. In no event shall Landlord's acceptance of Shell Base Rent
for the month of December accelerate the Commencement Date which shall be
conclusively deemed to be January 1, 2001, and, notwithstanding any provision to
the contrary contained in the Lease, the Term of the Lease shall commence on
such date. In accordance with the foregoing, rather than enter into a separate
Commencement Date Memorandum ("Memorandum"), as contemplated in Section 2 of the
Lease, the parties desire to incorporate the provisions of the Memorandum herein
as follows:
(a) The Commencement Date, as defined in the Lease, is January 1,
2001.
(b) The Premises contains 109,906 rentable square feet.
(c) Base Rent is payable on the Commencement Date (i.e., January
1, 2001) in accordance with the following rent schedule:
Months Shell Base Rent First Allowance Rent Second Allowance Rent* Total Base Rent
------ --------------- -------------------- ---------------------- ---------------
1-24 $36,269.00 $5,343.00 $11,535.00 $53,147.00
25-48 $38,487.00 $5,343.00 $11,535.00 $55,365.00
49-72 $40,821.00 $5,343.00 $11,535.00 $57,699.00
73-96 $43,307.00 $5,343.00 $11,535.00 $60,185.00
97 -120 $45,944.00 $5,343.00 $11,535.00 $62,822.00
121-144+ $48,742.00 $ 0 $ 0 $48,742.00
145-168+ $51,710.00 $ 0 $ 0 $51,710.00
169-180+ $54,859.00 $ 0 $ 0 $54,859.00
* Subject to prepayment pursuant to Section 9(d) of the Work Letter
+ Subject to the provisions of the Option to Extend set forth in Section 19
of the Addendum to Lease
3. RIGHT OF FIRST OFFER ON ADJACENT SPACE. A new Section 20 is hereby added
to the Addendum to Lease as follows:
"20. Right of First Offer
20.1 Provided that (i) no Event of Default has occurred and is
continuing under the Lease, (ii) Tenant is in occupancy of at least
ninety percent (90%) of the Premises, (iii) Landlord has not given
more than two (2) notices of default in any twelve (12) month period
for nonpayment of monetary obligations, if at any time prior to the
last twelve (12) months of the Term Landlord intends to offer the
approximately 55,094 square feet portion of the Building not occupied
by Tenant pursuant to the Lease (the "Additional Premises") for lease
to third parties or to accept an offer of a third party to lease the
Additional Premises, Landlord shall first give written notice to
Tenant of the rental rate and other material terms upon which Landlord
is willing to lease the Additional Premises ("Landlord's Lease
Notice"). Landlord's Lease Notice shall constitute an offer to lease
the Additional Premises to Tenant at the rental rate and upon the
terms and conditions contained in Landlord's Lease Notice and shall
state the anticipated date of availability of the Additional Premises.
Tenant shall have five (5)
-2-
business days after receipt of Landlord's Lease Notice to accept such
offer. Tenant shall accept such offer, if at all, only by delivery to
Landlord of Tenant's irrevocable written commitment to lease the
Additional Premises at the rental rate and upon the terms and
conditions contained in Landlord's Lease Notice (the "Expansion
Commitment"). Notwithstanding the foregoing, such first offer right of
Tenant shall commence only following the expiration or earlier
termination of the initial lease of the Additional Premises, including
any renewal, extension or expansion rights set forth in such leases,
regardless of whether such renewal, extension or expansion rights are
executed strictly in accordance with their terms, or pursuant to a
lease amendment or a new lease (collectively, the "Superior Right
Holders") with respect to such Additional Premises. Tenant's right of
first offer shall be on the terms and conditions set forth in this
Section 20.
20.2 Provided that no Superior Right Holder wishes to lease the
Additional Premises, if Tenant delivers to Landlord the Expansion
Commitment within such five (5) business day period, all (but not
part) of the Additional Premises shall be leased to Tenant commencing
on the date Landlord delivers possession of the Additional Premises to
Tenant and continuing for a period of time coterminous with the
remaining Term of the Lease, including any options to extend the Term.
Tenant shall lease the Additional Premises upon the same terms,
conditions and covenants as are contained in the Lease except that (i)
the Base Rent for the Additional Premises shall be at the rate set
forth in Landlord's Lease Notice, and (ii) any terms and conditions
set forth in Landlord's Lease Notice that are inconsistent with the
terms and conditions of the Lease shall control.
20.3 Except as otherwise set forth in Landlord's Lease Notice,
possession of the Additional Premises shall be delivered to Tenant on
an "as-is" basis and the construction of improvements in the
Additional Premises shall comply with the terms of Section 10 and
Exhibit G of this Lease. Landlord shall prepare and Landlord and
Tenant shall execute and deliver a written agreement modifying and
supplementing the Lease and specifying that the Additional Premises
are part of the Premises and, except as otherwise specified in
Landlord's Lease Notice, subject to all of the terms and conditions of
the Lease.
20.4 Time is of the essence with respect to the exercise by
Tenant of its rights granted hereunder. In the event Tenant fails to
deliver to Landlord Tenant's Expansion Commitment within the five (5)
business day period prescribed above, all rights of Tenant to lease
the Additional Premises shall terminate and Landlord shall have no
further obligation to notify Tenant of any proposed leasing of the
Additional Premises, and Landlord shall thereafter have the
unconditional right to lease the Additional Premises to third parties
or to accept offers from third parties to lease the Additional
Premises without further obligation to Tenant. The rights granted to
Tenant under this Section shall not apply to any sales or similar
transfers of the Additional Premises. Notwithstanding anything to the
contrary contained herein, Tenant must elect to exercise its right of
first offer, if at all, with
-3-
respect to all of the space offered by Landlord to Tenant at any
particular time, and Tenant may not elect to lease only a portion
thereof.
20.5 The rights granted to Tenant under this Section 20 are
personal to Tenant, may not be exercised by or assigned to any person
or entity other than Tenant, and shall terminate and be of no
further force or effect upon any assignment of this Lease or
subletting of the Premises unless specifically agreed and consented to
in writing by Landlord in connection with any such sublease or
assignment."
4. PAYMENT OF ABOVE-STANDARD TENANT IMPROVEMENT COSTS. Pursuant to Section
5(b) of the Work Letter, Landlord and Tenant have previously approved the Work
Cost Estimate dated December 18, 2000, attached hereto as Exhibit A (the "Work
Cost Statement"). The Work Cost Statement provides that the total costs
associated with the completion of the Tenant Improvements are to be
approximately Six Million Six Hundred Eighty Thousand Nine Hundred Twenty Seven
Dollars ($6,680,927.00) (the "Total TI Costs"). In connection with the payment
of the Total TI Costs, Landlord and Tenant hereby acknowledge that (i) the
Allowance of One Million Two Hundred Thousand Dollars ($1,200,000.00) has been
applied toward the Total TI Costs, and (ii) Tenant has previously paid to
Landlord the Tenant Contribution pursuant to Section 9(a) of the Work Letter in
the amount of Five Million Dollars ($5,000,000.00) which has also been applied
toward the Total TI Costs. As of the date of this Amendment, the unpaid balance
of the Total TI Costs set forth in the approved Work Cost Statement is Four
Hundred Eighty Thousand Nine Hundred Twenty Seven Dollars ($480,927.00).
Landlord and Tenant hereby agree that, notwithstanding any provision to the
contrary contained in the Lease (including, without limitation, Section 9(b) of
the Work Letter), Tenant shall pay to Landlord the balance of the Total TI Costs
(which the parties estimate to be approximately $480,927.00) in accordance
with the following schedule:
(a) On or before January 15, 2001, Tenant shall pay to Landlord
in Immediately Available Funds the amount of Four Hundred Twenty Thousand
Nine Hundred Twenty Seven Dollars ($420,927.00).
(b) On or about February 15, 2001, Tenant shall pay to Landlord
in Immediately Available Funds the balance of the Total TI Costs, which the
parties currently estimate to be approximately Sixty Thousand Dollars
($60,000.00), all in accordance with the terms and conditions set forth in
the Lease; provided, however, any cost savings or cost increases shall be
reconciled in connection with this final installment of the Total TI Costs.
If an any time Tenant does not timely make any installment of the outstanding
Total TI Costs to Landlord in accordance with the foregoing, such failure shall
constitute a Tenant Delay and Landlord may, but shall not be obligated to,
instruct the Contractor to stop all Work until such time as Tenant has fulfilled
its obligations hereunder to make payment(s) to Landlord. Tenant's failure to
pay any installment of the Total TI Costs in accordance with schedule set forth
above shall constitute an Event of Default under the Lease.
-4-
5. MISCELLANEOUS.
(a) Effect of Amendments. Except to the extent the Lease is modified
by this Amendment, the remaining terms and provisions of the Lease shall remain
unmodified and in full force and effect. In the event of conflict between the
terms of the Lease and the terms of this Amendment, the terms of this Amendment
shall prevail.
(b) Entire Agreement. This Amendment embodies the entire understanding
between Landlord and Tenant with respect to its subject matter and can be
changed only by an instrument in writing signed by Landlord and Tenant.
(c) Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original, but all of which, together, shall
constitute one in the same Amendment.
(d) Corporate and Partnership Authority. If Tenant is a corporation or
partnership, or is comprised of either or both of them, each individual
executing this Amendment for the corporation or partnership represents that he
or she is duly authorized to execute and deliver this Amendment for the
corporation or partnership and that this Amendment is binding upon the
corporation or partnership in accordance with its terms.
(e) Attorneys' Fees. The provisions of the Lease respecting payment of
attorneys' fees shall also apply to this Amendment.
"LANDLORD" "TENANT"
CATELLUS DEVELOPMENT SYNETICS SOLUTIONS, INC.,
CORPORATION, a Delaware corporation an Oregon corporation
By: Catellus Commercial Group, LLC, By: /s/ Greg Marvell
a Delaware limited liability ------------------------------------
company Name: GREG MARVELL
Its: Duly Authorized Agent Its: PRESIDENT
By: By: /s/ Koki Nakamura
--------------------------------- ------------------------------------
Name: Ted Antenucci Name: KOKI NAKAMURA
Its: Executive Vice President Its: Chairman & CEO
-5-
SYNETICS
WORK COST ESTIMATE FOR LEASED PREMISES
LOCATED AT 18870 NE RIVERSIDE PARKWAY, GRESHAM, OR
6/14/00 12/18/00
------------- -------------
ARCHITECTURAL/ENGINEERING GROUP MACKENZIE/INTERFACE ENG.
Architectural/Interiors $ 87,000.00 $ 87,000.00
Structural $ 27,000.00 $ 27,000.00
Mechanical/Electrical $ 132,000.00 $ 132,000.00
Reimbursable Expenses(prints, copying, faxing, mileage) $ 16,500.00 $ 16,500.00
Add. Design/Project mgmt. Fees(attached letter of 07/18/00) $ 24,220.00 $ 24,220.00
Interior design and finish services $ 9,100.00
Delete powder coat and metal fab. Misc. revisions $ 11,700.00
SUBTOTAL $ 286,720.00 $ 307,520.00
PRELIM. PERMIT FEES(ACTUAL FEES MAY VARY)
Building $ 20,939.00 $ 20,939.00
Mechanical $ 6,176.00 $ 6,176.00
Plumbing $ 1,815.00 $ 1,930.00
Electrical $ 6,066.00 $ 5,427.00
Fire Alarm TBD TBD
Low Voltage $ 43.00 $ 475.00
Fire Sprinklers $ 532.00 $ 533.00
Traffic Impact Fee- add. 2nd floor $ 19,373.00 $ 19,373.00
SUBTOTAL $ 54,944.00 $ 54,853.00
CDC ADMINISTRATIVE AND COORDINATION FEE
5% of design, permit and construct Tenant Improvement Work $ 286,817.00 $ 316,567.95
CONSTRUCTION COST FROM MCCORMACK PACIFIC $5,187,177.00 $5,217,821.00
Allowance for Powder Coat, Metal Fab and Mech Systems $ 200,000.00 N.A.
Change order No. 1 Approved 8/24/00 $ 148,686.00
Change order No. 2 Approved 9/30/00 $ 344,934.00
Change order No. 3 Approved 10/26/00 $ 188,222.00
Change order No. 4 Approved 11/13/00 $ 20,643.00
Change order No. 5 Approved 11/28/00 $ (24,505.00)
Contingency $ 259,358.00 $ 60,000.00
Testing and Inspections $ 7,500.00 $ 13,185.00
Subtotal $5,654,035.00 $5,968,986.00
POTENTIAL ADDITIONAL COST
Front Entry Allowance (formerly carried at $100,000) By Synetics
Misc. revisions still being estimated (Allowance) $ 33,000.00
Subtotal $ 33,000.00
Est. Total Work Cost: Design, permits, Const., CDC. Poten. Costs $6,282,516.00 $6,680,926.95
Synetics'$5MM prog. pay received and Catellus $1.2MM contribution ($6,200,000)
Amount due per terms of lease $ 480,926.95
-------------
Partial progress payment for project work completed $ 420,927
-------------
Synetics to pay any remaining balance upon final const. accounting Approx. $ 60,000.00
-------------
Final costs should be done in early Feb.2001
EXHIBIT A
EXHIBIT I
FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
Beneficiary
Metropolitan Life Insurance Company
c/o Preston Gates and Ellis, LLP
One Maritime Plaza, Suite 2400
San Francisco, California 94111
Attn: Susan Reid, Esq. )
Space above for Recorder's Use
SUBORDINATION, NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS
IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE
LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
This Subordination, Nondisturbance and Attornment Agreement ("Agreement")
is entered into as of the ________ day of March, 2001 by and among SYNETICS
SOLUTIONS INC., an Oregon corporation ("Tenant"), Catellus Development
Corporation, a Delaware corporation ("Borrower") and Metropolitan Life Insurance
Company (Beneficiary).
FACTUAL BACKGROUND
A. Borrower owns certain real property in the County of Multnomah, State of
Oregon, more particularly described in the attached Schedule 1 term "Property"
herein means that real property together with all improvements (the
"Improvements") located on it.
B. Beneficiary has made or agreed to make a loan to Borrower in the
principal amount of Two Hundred Million and no/100 Dollars ($200,000,000.00)
(the "Loan") as provided in a loan application (the "Loan Application"). The
Loan is or will be evidenced by a promissory note (the "Note") which is or will
be secured by a deed of trust encumbering the Property (the "Deed of Trust")
with an assignment of rents. The Note, the Deed of Trust, this Agreement and all
other documents and instruments identified in the Deed of Trust as "Loan
Documents" shall be collectively referred to herein as the "Loan Documents".
C. Tenant and Borrower (as landlord) entered into a lease dated December
15, 2000 (the "Lease") under which Borrower leased to Tenant a portion of the
Improvements located within the Property and more particularly described in the
Lease (the "Premises").
D. It is a requirement of the Loan to Borrower that Tenant agree, among
other things, to subordinate Tenant's rights under the Lease to the lien of the
Loan Documents and to attorn to Beneficiary on the terms and conditions of this
Agreement. Tenant is willing to agree to such subordination and attornment and
other conditions, provided that Beneficiary agrees to a nondisturbance
provision, all as set forth more fully below.
EXHIBIT I
-1-
AGREEMENT:
Therefore, the parties agree as follows:
1. Subordination. The Loan Documents and all supplements, amendments,
modifications, renewals, replacements and extensions of and to them shall
unconditionally be and remain at all times a lieu on the Property prior and
superior to the Lease, to the leasehold estate created by it, and to all rights
and privileges of Tenant under it. The Lease and leasehold estate, together with
all rights and privileges of Tenant under that Lease, are hereby unconditionally
made subordinate to the lien of the Loan Documents in favor of Beneficiary.
Tenant consents to Borrower and Beneficiary entering into the Deed of Trust and
the other Loan Documents. Tenant further declares, agrees and acknowledges that
in making disbursements under the Loan Documents Beneficiary has no obligation
or duty to, nor has Beneficiary represented that it will, see to the application
of such proceeds by the person or persons to whom they are disbursed by
Beneficiary, and any application or use of such proceeds for purposes other than
those provided for in the Loan Documents shall not defeat the subordination made
in this Agreement, in whole or in part.
2. Definitions of "Transfer of the Property" and "Purchaser". As used
herein, the term "Transfer of the Property" means any transfer of Borrower's
interest in the Property by foreclosure, trustee's sale or other action or
proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof.
The term "Purchaser", as used herein, means any transferee, including
Beneficiary, of the interest of Borrower as a result of any such Transfer of the
Property and also includes any and all successors and assigns, including
Beneficiary, of such transferee.
3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate
the Lease or disturb Tenant in the possession and use of the Premises unless at
the time of foreclosure Tenant is in significant default under the Lease or this
Agreement beyond any applicable grace or cure periods, and Beneficiary or
Purchaser so notifies Tenant in writing by the later of (i) 120 days prior to or
after the Transfer of the Property, or (ii) if Beneficiary and Purchaser did not
have notice of the pre-foreclosure default, within 120 days of notice of the
default that the Lease will be terminated by foreclosure because of such
default. The nondisturbance herein granted is subject to Section 5 below. To the
extent that the Lease is extinguished by law as a result of the foreclosure, a
new lease shall automatically go into effect upon the same provisions as
contained in the Lease, as modified by this Agreement, for the unexpired term of
the Lease. This nondisturbance applies to any option to extend or renew the
Lease term which is set forth in the Lease as of the date of this Agreement.
4. Attornment. Subject to Section 3 above, if any Transfer of the Property
should occur, Tenant shall and hereby does attorn to Purchaser, including
Beneficiary if it should be the Purchaser, as the landlord under the Lease, and
Tenant shall be bound to Purchaser under all of the terms, covenants and
conditions of the Lease for the balance of the Lease term and any extensions or
renewals of it which may then or later be in effect under any validly exercised
extension or renewal option contained in the Lease, all with the same force and
effect as if Purchaser had been the original landlord under the Lease. This
attornment shall be effective and self-operative without the execution of any
further instruments upon Purchaser's succeeding to the interest of the landlord
under the Lease.
5. Subordination of Options and Rights of First Refusal. The Loan Documents
and all supplements, amendments, modifications, renewals, replacements and
extensions of and to them shall unconditionally be and remain at all times a
lien on the Property prior and superior to any existing or future right of
Tenant, whether arising out of the Lease or otherwise, to exercise any option or
right of first refusal to:
(a) purchase the Premises or the Property or any interest or portion in or
of either of them; or
(b) expand into other space in the Improvements.
Tenant specifically agrees and acknowledges that upon any Transfer of the
Property, any such purchase or expansion option or right of first refusal,
whether now existing or in the future arising, shall terminate and be
inapplicable to the Property notwithstanding the nondisturbance granted to
Tenant in Section 3 above. If any option or right of first refusal to purchase
is exercised prior to a Transfer of the Property, any title so acquired to all
or any part of the Property shall be subject to the lien of the Loan Documents,
which lien shall in no way be impaired by
EXHIBIT I
-2-
the exercise of such option or right of first refusal. Beneficiary specifically
reserves all of its rights to enforce any accelerating transfer, due on sale,
due on encumbrance or similar provision in the Deed of Trust or any other Loan
Document.
6. Notices of Default; Material Notices; Beneficiary's Rights to Cure
Default. Tenant shall send a copy of any notice of default or similar statement
with respect to the Lease to Beneficiary at the same time such notice or
statement is sent to Borrower. In the event of any act or omission by Borrower
which would give Tenant the right to terminate the Lease or to claim a partial
or total eviction, Tenant shall not exercise any such right or make any such
claim until it has given Beneficiary written notice of such act or omission and
has given Beneficiary either thirty (30) days to cure the default if the default
is monetary or a reasonable time for Beneficiary to cure the default if the
default is nonmonetary. Nothing in this Agreement, however, shall be construed
as a promise or undertaking by Beneficiary to cure any default of Borrower.
7. Limitation on Beneficiary's Performance. Nothing in this Agreement shall
be deemed or construed to be an agreement by Beneficiary to perform any covenant
of Borrower as landlord under the Lease. Tenant agrees that if Beneficiary
becomes Purchaser then, upon subsequent transfer of the Property by Beneficiary
to a new owner, Beneficiary shall have no further liability under the Lease
after said transfer.
8. Limitation on Liability. No Purchaser who acquires title to the Property
shall have any obligation or liability beyond its interest in the Property.
Purchaser shall not have any obligations or liability with respect to the
completion of improvements which were part of the initial tenant improvements at
the commencement of the Lease.
9. Tenant's Covenants. Tenant agrees that during the term of the Lease,
without Beneficiary's prior written consent, Tenant shall not:
(a) pay any rent or additional rent more than one month in advance to
any landlord including Borrower; or
(b) cancel, terminate or surrender the Lease, except at the normal
expiration of the Lease term or as provided in Section 6 above; or
(c) enter into any material amendment, modification or other agreement
relating to the Lease; or
(d) assign or sublet any portion of the Lease or the Premises, except
as expressly permitted in the Lease.
10. Beneficiary Not Obligated. Beneficiary, if it becomes the Purchaser or
if it takes possession under the Deed of Trust, and any other Purchaser shall
not (a) be liable for any damages or other relief attributable to any act or
omission of any prior Landlord under the Lease including Borrower; or (b) be
subject to any offset or defense which Tenant may have against any prior
landlord under the Lease; or (c) be bound by any prepayment by Tenant of more
than one month's installment of rent; or (d) be obligated for any security
deposit not actually delivered to Purchaser; (e) be bound by any modification or
amendment of or to the Lease unless the amendment or modification shall have
been approved in writing by Beneficiary or (f) be liable to Tenant or any other
party for any conflict between the provisions of the Lease and the provisions of
any other lease affecting the Property which is not entered into by Purchaser;
or (g) be liable with respect to any representation, warranty or indemnity not
made by Purchaser. Borrower agrees to deliver to Purchaser any security deposits
in its possession at the time Purchaser takes possession of the Property.
11. Tenant's Estoppel Certificate.
(a) True and Complete Lease. Tenant represents and warrants to
Beneficiary that Schedule 2 accurately identifies the Lease and all
amendments, supplements, side letters and other agreements and memoranda
pertaining to the Lease, the leasehold and/or the Premises.
EXHIBIT I
-3-
(b) Tenant's Option Rights. Tenant has no right or option of any
nature whatsoever, whether arising out of the Lease or otherwise, to
purchase the Premises or the Property, or any interest or portion in or of
either of them, to expand into other space in the Improvements or to extend
or renew the term of the Lease, except as described in the attached
Schedule 3.
(c) No Default. As of the date of this Agreement, Tenant represents
and warrants that to the best of Tenant's knowledge there exist no events
of default or events that with notice or the passage of time or both would
be events of default under the Lease on either the Tenant's part or the
Borrower's, nor is there any right of offset against any of Tenant's
obligations under the Lease, except as described in the attached Schedule
4. Tenant represents and warrants that the Lease is in full force and
effect as of the date of this Agreement.
(d) Hazardous Substances. Tenant represents and warrants that it has
not used, generated, released, discharged, stored or disposed of any
Hazardous Substances on, under, in or about the Property other than
Hazardous Substances used in the ordinary and commercially reasonable
course of Tenant's business in compliance with all applicable laws. Except
for such legal and commercially reasonable use by Tenant, Tenant has no
actual knowledge that any Hazardous Substance is present or has been used,
generated, released, discharged, stored or disposed of by any party on,
under, in or about the Property. As used herein "Hazardous Substance" means
any substance, material or waste (including petroleum and petroleum
products), which is designated, classified or regulated as being "toxic" or
"hazardous" or a "pollutant" or which is similarly designated, classified
or regulated under any federal, state or local law, regulation or
ordinance.
12. Integration; Etc. This Agreement integrates all of the terms and
conditions of the parties' agreement regarding the subordination of the Lease to
the Loan Documents, attornment, nondisturbance and the other matters contained
herein. This Agreement supersedes and cancels all oral negotiations and prior
and other writings with respect to (a) such subordination (only to such extent,
however, as would affect the priority between the Lease and the Loan Documents),
including any provisions of the Lease which provide for the subordination of the
Lease to a deed of trust or to a mortgage and (b) such attornment,
non-disturbance and other matters contained herein. If there is any conflict
between the terms, conditions and provisions of this Agreement and those of any
other agreement or instrument, including the Lease, the terms, conditions and
provisions of this Agreement shall prevail. This Agreement may not be modified
or amended except by a written agreement signed by the parties or their
respective successors in interest. This Agreement may be executed in
counterparts, each of which is an original but all of which shall constitute one
and the same instrument.
13. Notices. All notices given under this Agreement shall be in writing and
shall be given by personal delivery, overnight receipted courier or by
registered or certified United States mail, postage prepaid, sent to the party
at its address appearing below. Notices shall be effective upon receipt (or on
the date when proper delivery is refused). Addresses for notices may be changed
by any party by notice to all other parties in accordance with this Section.
Service of any notice on any one Borrower shall be effective service on Borrower
for all purposes.
To Beneficiary: Metropolitan Life Insurance Company
400 South El Camino Real, 8th Floor
San Mateo, California 94402
Attn: Vice President-Real Estate
Investments
To Borrower: Catellus Development Corporation
201 Mission Street
San Francisco, California 94105
Attn: Asset Management
EXHIBIT I
-4-
To Tenant: Synetics Solutions Inc.
18870 NE Riverside Pkwy.
Tigard, Oregon 97224
Attn: Koki Nakamura
14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration is
commenced which arises out of or relates to this Agreement, the prevailing party
shall be entitled to recover from each other party such sums as the court,
referee or arbitrator may adjudge to be reasonable attorneys' fees, including
the costs for any legal services by in-house counsel, in addition to costs and
expenses otherwise allowed by law.
15. Miscellaneous Provisions. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
This Agreement is governed by the laws of the State of Oregon without regard to
the choice of law rules of that State. This Agreement satisfies any condition or
requirement in the Lease relating to the granting of a nondisturbance agreement
by Beneficiary. As used herein, the word "include(s)" means "inciude(s) without
limitation," and the word "including" means "including but not limited to."
Beneficiary, at its sole discretion, may but shall not be obligated to record
this Agreement.
EXHIBIT I
-5-
NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON
OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR
PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.
"TENANT" SYNETICS SOLUTIONS INC.,
an Oregon corporation
By: /s/ Koki Nakamura
------------------------------------
Name: Koki Nakamura
Title: CEO & Chairman
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"BORROWER" CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
By: Catellus Commercial Group, LLC,
a Delaware limited liability company
Its: Duly Authorized Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"BENEFICIARY" Metropolitan Life Insurance Company,
a New York corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT I
-6-
STATE OF Oregon )
)ss.
COUNTY OF Multnomah )
On March 27, 2001, before me, Sarah Culver, a Notary Public in and for said
state, personally appeared Koki Nakamura, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
/s/ Sarah M. Culver
----------------------------------------
Notary Public in and for said State
(STAMP)
(SEAL)
STATE OF _________________ )
)ss.
COUNTY OF _________________ )
On _____________________, before me, _____________________________________,
a Notary Public in and for said state, personally appeared _____________________
___________________________________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
EXHIBIT I
-7-
STATE OF _________________ )
)ss.
COUNTY OF _________________ )
On ______________, before me, ______________________, a Notary Public in
and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
STATE OF _________________ )
)ss.
COUNTY OF _________________ )
On ____________, before me, ____________________, a Notary Public in and
for said state, personally appeared __________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
EXHIBIT I
-8-
STATE OF _________________ )
)ss.
COUNTY OF _________________ )
On _________________, before me, _____________________________, a Notary
Public in and for said state, personally appeared ___________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
STATE OF _________________ )
)ss.
COUNTY OF _________________ )
On ___________________, before me, ________________________________, a
Notary Public in and for said state, personally appeared _______________________
________________________________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
EXHIBIT I
-9-
SCHEDULE 1
PROPERTY DESCRIPTION
Lot 2, Southshore Corporate Park, in the City of Gresham, County of
Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.
SCHEDULE 1 to EXHIBIT I
-1-
SCHEDULE 2
IDENTIFY LEASE AND LIST ALL AMENDMENTS,
SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY
1) Multi-Tenant Industrial Triple Net Lease dated December 15, 2000 between
Borrower and Tenant.
SCHEDULE 2 to EXHIBIT I
-1-
SCHEDULE 3
LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
EXTENSION AND RENEWAL OPTIONS
1) One (1) five (5) year option to extend the term of the Lease pursuant to
Section 19 of the Addendum to Lease.
SCHEDULE 3 to EXHIBIT I
-1-
SCHEDULE 4
LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE
None.
SCHEDULE 4 to EXHIBIT I
-1-
SCHEDULE 5
MODIFIED LEASE TERMS
None
SCHEDULE 5 to EXHIBIT I
-1-
EXHIBIT I
FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
Beneficiary
Metropolitan Life Insurance Company
c/o Preston Gates and Ellis, LLP
One Maritime Plaza, Suite 2400
San Francisco, California 94111
Attn: Susan Reid, Esq. )
Space above for Recorder's Use
SUBORDINATION, NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS
IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE
LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
This Subordination, Nondisturbance and Attornment Agreement ("Agreement")
is entered into as of the ______ day of March, 2001 by and among
SYNETICS SOLUTIONS INC., an Oregon corporation ("Tenant"), Catellus Development
Corporation, a Delaware corporation ("Borrower") and Metropolitan Life Insurance
Company (Beneficiary).
FACTUAL BACKGROUND
A. Borrower owns certain real property in the County of Multnomah, State of
Oregon, more particularly described in the attached Schedule 1 term "Property"
herein means that real property together with all improvements (the
"Improvements") located on it.
B. Beneficiary has made or agreed to make a loan to Borrower in the
principal amount of Two Hundred Million and no/100 Dollars ($200,000,000.00)
(the "Loan") as provided in a loan application (the "Loan Application"). The
Loan is or will be evidenced by a promissory note (the "Note") which is or will
be secured by a deed of trust encumbering the Property (the "Deed of Trust")
with an assignment of rents. The Note, the Deed of Trust, this Agreement and all
other documents and instruments identified in the Deed of Trust as "Loan
Documents" shall be collectively referred to herein as the "Loan Documents".
C. Tenant and Borrower (as landlord) entered into a lease dated December
15, 2000 (the "Lease") under which Borrower leased to Tenant a portion of the
Improvements located within the Property and more particularly described in the
Lease (the "Premises").
D. It is a requirement of the Loan to Borrower that Tenant agree, among
other things, to subordinate Tenant's rights under the Lease to the lien of the
Loan Documents and to attorn to Beneficiary on the terms and conditions of this
Agreement. Tenant is willing to agree to such subordination and attornment and
other conditions, provided that Beneficiary agrees to a nondisturbance
provision, all as set forth more fully below.
EXHIBIT I
-1-
AGREEMENT:
Therefore, the parties agree as follows:
1. Subordination. The Loan Documents and all supplements, amendments,
modifications, renewals, replacements and extensions of and to them shall
unconditionally be and remain at all times a lien on the Property prior and
superior to the Lease, to the leasehold estate created by it, and to all rights
and privileges of Tenant under it. The Lease and leasehold estate, together with
all rights and privileges of Tenant under that Lease, are hereby unconditionally
made subordinate to the lien of the Loan Documents in favor of Beneficiary.
Tenant consents to Borrower and Beneficiary entering into the Deed of Trust and
the other Loan Documents. Tenant further declares, agrees and acknowledges that
in making disbursements under the Loan Documents Beneficiary has no obligation
or duty to, nor has Beneficiary represented that it will, see to the application
of such proceeds by the person or persons to whom they are disbursed by
Beneficiary, and any application or use of such proceeds for purposes other than
those provided for in the Loan Documents shall not defeat the subordination made
in this Agreement, in whole or in part.
2. Definitions of "Transfer of the Property" and "Purchaser". As used
herein, the term "Transfer of the Property" means any transfer of Borrower's
interest in the Property by foreclosure, trustee's sale or other action or
proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof.
The term "Purchaser", as used herein, means any transferee, including
Beneficiary, of the interest of Borrower as a result of any such Transfer of the
Property and also includes any and all successors and assigns, including
Beneficiary, of such transferee.
3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate
the Lease or disturb Tenant in the possession and use of the Premises unless at
the time of foreclosure Tenant is in significant default under the Lease or this
Agreement beyond any applicable grace or cure periods, and Beneficiary or
Purchaser so notifies Tenant in writing by the later of (i) 120 days prior to or
after the Transfer of the Property, or (ii) if Beneficiary and Purchaser did not
have notice of the pre-foreclosure default, within 120 days of notice of the
default that the Lease will be terminated by foreclosure because of such
default. The nondisturbance herein granted is subject to Section 5 below. To the
extent that the Lease is extinguished by law as a result of the foreclosure, a
new lease shall automatically go into effect upon the same provisions as
contained in the Lease, as modified by this Agreement, for the unexpired term of
the Lease. This nondisturbance applies to any option to extend or renew the
Lease term which is set forth in the Lease as of the date of this Agreement.
4. Attornment. Subject to Section 3 above, if any Transfer of the Property
should occur, Tenant shall and hereby does attorn to Purchaser, including
Beneficiary if it should be the Purchaser, as the landlord under the Lease, and
Tenant shall be bound to Purchaser under all of the terms, covenants and
conditions of the Lease for the balance of the Lease term and any extensions or
renewals of it which may then or later be in effect under any validly exercised
extension or renewal option contained in the Lease, all with the same force and
effect as if Purchaser had been the original landlord under the Lease. This
attornment shall be effective and self-operative without the execution of any
further instruments upon Purchaser's succeeding to the interest of the landlord
under the Lease.
5. Subordination of Options and Rights of First Refusal. The Loan Documents
and all supplements, amendments, modifications, renewals, replacements and
extensions of and to them shall unconditionally be and remain at all times a
lien on the Property prior and superior to any existing or future right of
Tenant, whether arising out of the Lease or otherwise, to exercise any option or
right of first refusal to:
(a) purchase the Premises or the Property or any interest or portion
in or of either of them; or
(b) expand into other space in the Improvements.
Tenant specifically agrees and acknowledges that upon any Transfer of the
Property, any such purchase or expansion option or right of first refusal,
whether now existing or in the future arising, shall terminate and be
inapplicable to the Property notwithstanding the nondisturbance granted to
Tenant in Section 3 above. If any option or right of first refusal to purchase
is exercised prior to a Transfer of the Property, any title so acquired to all
or any part of the Property shall be subject to the lien of the Loan Documents,
which lien shall in no way be impaired by
EXHIBIT I
-2-
the exercise of such option or right of first refusal. Beneficiary specifically
reserves all of its rights to enforce any accelerating transfer, due on sale,
due on encumbrance or similar provision in the Deed of Trust or any other Loan
Document.
6. Notices of Default; Material Notices; Beneficiary's Rights to Cure
Default. Tenant shall send a copy of any notice of default or similar statement
with respect to the Lease to Beneficiary at the same time such notice or
statement is sent to Borrower. In the event of any act or omission by Borrower
which would give Tenant the right to terminate the Lease or to claim a partial
or total eviction, Tenant shall not exercise any such right or make any such
claim until it has given Beneficiary written notice of such act or omission and
has given Beneficiary either thirty (30) days to cure the default if the default
is monetary or a reasonable time for Beneficiary to cure the default if the
default is nonmonetary. Nothing in this Agreement, however, shall be construed
as a promise or undertaking by Beneficiary to cure any default of Borrower.
7. Limitation on Beneficiary's Performance. Nothing in this Agreement shall
be deemed or construed to be an agreement by Beneficiary to perform any covenant
of Borrower as landlord under the Lease. Tenant agrees that if Beneficiary
becomes Purchaser then, upon subsequent transfer of the Property by Beneficiary
to a new owner, Beneficiary shall have no further liability under the Lease
after said transfer.
8. Limitation on Liability. No Purchaser who acquires title to the Property
shall have any obligation or liability beyond its interest in the Property.
Purchaser shall not have any obligations or liability with respect to the
completion of improvements which were part of the initial tenant improvements at
the commencement of the Lease.
9. Tenant's Covenants. Tenant agrees that during the term of the Lease,
without Beneficiary's prior written consent, Tenant shall not:
(a) pay any rent or additional rent more than one month in advance to
any landlord including Borrower; or
(b) cancel, terminate or surrender the Lease, except at the normal
expiration of the Lease term or as provided in Section 6 above; or
(c) enter into any material amendment, modification or other agreement
relating to the Lease; or
(d) assign or sublet any portion of the Lease or the Premises, except
as expressly permitted in the Lease.
10. Beneficiary Not Obligated. Beneficiary, if it becomes the Purchaser or
if it takes possession under the Deed of Trust, and any other Purchaser shall
not (a) be liable for any damages or other relief attributable to any act or
omission of any prior Landlord under the Lease including Borrower; or (b) be
subject to any offset or defense which Tenant may have against any prior
landlord under the Lease; or (c) be bound by any prepayment by Tenant of more
than one month's installment of rent; or (d) be obligated for any security
deposit not actually delivered to Purchaser; (e) be bound by any modification or
amendment of or to the Lease unless the amendment or modification shall have
been approved in writing by Beneficiary or (f) be liable to Tenant or any other
party for any conflict between the provisions of the Lease and the provisions of
any other lease affecting the Property which is not entered into by Purchaser;
or (g) be liable with respect to any representation, warranty or indemnity not
made by Purchaser. Borrower agrees to deliver to Purchaser any security deposits
in its possession at the time Purchaser takes possession of the Property.
11. Tenant's Estoppel Certificate.
(a) True and Complete Lease. Tenant represents and warrants to
Beneficiary that Schedule 2 accurately identifies the Lease and all
amendments, supplements, side letters and other agreements and memoranda
pertaining to the Lease, the leasehold and/or the Premises.
EXHIBIT I
-3-
(b) Tenant's Option Rights. Tenant has no right or option of any
nature whatsoever, whether arising out of the Lease or otherwise, to
purchase the Premises or the Property, or any interest or portion in or of
either of them, to expand into other space in the Improvements or to extend
or renew the term of the Lease, except as described in the attached
Schedule 3.
(c) No Default. As of the date of this Agreement, Tenant represents
and warrants that to the best of Tenant's knowledge there exist no events
of default or events that with notice or the passage of time or both would
be events of default under the Lease on either the Tenant's part or the
Borrower's, nor is there any right of offset against any of Tenant's
obligations under the Lease, except as described in the attached Schedule
4. Tenant represents and warrants that the Lease is in full force and
effect as of the date of this Agreement.
(d) Hazardous Substances. Tenant represents and warrants that it has
not used, generated, released, discharged, stored or disposed of any
Hazardous Substances on, under, in or about the Property other than
Hazardous Substances used in the ordinary and commercially reasonable
course of Tenant's business in compliance with all applicable laws. Except
for such legal and commercially reasonable use by Tenant, Tenant has no
actual knowledge that any Hazardous Substance is present or has been used,
generated, released, discharged, stored or disposed of by any party on,
under, in or about the Property. As used herein "Hazardous Substance" means
any substance, material or waste (including petroleum and petroleum
products), which is designated, classified or regulated as being "toxic" or
"hazardous" or a "pollutant" or which is similarly designated, classified
or regulated under any federal, state or local law, regulation or
ordinance.
12. Integration; Etc. This Agreement integrates all of the terms and
conditions of the parties' agreement regarding the subordination of the Lease to
the Loan Documents, attornment, nondisturbance and the other matters contained
herein. This Agreement supersedes and cancels all oral negotiations and prior
and other writings with respect to (a) such subordination (only to such extent,
however, as would affect the priority between the Lease and the Loan Documents),
including any provisions of the Lease which provide for the subordination of the
Lease to a deed of trust or to a mortgage and (b) such attornment,
non-disturbance and other matters contained herein. If there is any conflict
between the terms, conditions and provisions of this Agreement and those of any
other agreement or instrument, including the Lease, the terms, conditions and
provisions of this Agreement shall prevail. This Agreement may not be modified
or amended except by a written agreement signed by the parties or their
respective successors in interest. This Agreement may be executed in
counterparts, each of which is an original but all of which shall constitute one
and the same instrument.
13. Notices. All notices given under this Agreement shall be in writing and
shall be given by personal delivery, overnight receipted courier or by
registered or certified United States mail, postage prepaid, sent to the party
at its address appearing below. Notices shall be effective upon receipt (or on
the date when proper delivery is refused). Addresses for notices may be changed
by any party by notice to all other parties in accordance with this Section.
Service of any notice on any one Borrower shall be effective service on Borrower
for all purposes.
To Beneficiary: Metropolitan Life Insurance Company
400 South El Camino Real, 8th Floor
San Mateo, California 94402
Attn: Vice President-Real Estate Investments
To Borrower: Catellus Development Corporation
201 Mission Street
San Francisco, California 94105
Attn: Asset Management
EXHIBIT I
-4-
To Tenant: Synetics Solutions Inc.
18870 NE Riverside Pkwy.
Tigard, Oregon 97224
Attn: Koki Nakamura
14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration is
commenced which arises out of or relates to this Agreement, the prevailing party
shall be entitled to recover from each other party such sums as the court,
referee or arbitrator may adjudge to be reasonable attorneys' fees, including
the costs for any legal services by in-house counsel, in addition to costs and
expenses otherwise allowed by law.
15. Miscellaneous Provisions. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
This Agreement is governed by the laws of the State of Oregon without regard to
the choice of law rules of that State. This Agreement satisfies any condition or
requirement in the Lease relating to the granting of a nondisturbance agreement
by Beneficiary. As used herein, the word "include(s)" means "include(s) without
limitation," and the word "including" means "including but not limited to."
Beneficiary, at its sole discretion, may but shall not be obligated to record
this Agreement.
EXHIBIT I
-5-
NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON
OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR
PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.
"TENANT" SYNETICS SOLUTIONS INC.,
an Oregon corporation
By: /s/ Koki Nakamura
------------------------------------
Name: KOKI NAKAMURA
Title: CEO & Chairman
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"BORROWER" CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
By: Catellus Commercial Group, LLC,
a Delaware limited liability company
Its: Duly Authorized Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"BENEFICIARY" Metropolitan Life Insurance Company,
a New York corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT I
-6-
STATE OF Oregon )
)ss.
COUNTY OF Multnomah )
On March 27, 2001, before me, Sarah Culver, a Notary Public in and for said
state, personally appeared Koki Nakamura, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
/s/ Sarah M. Culver
----------------------------------------
Notary Public in and for said State
(STAMP)
(SEAL)
STATE OF __________ )
)ss.
COUNTY OF _________ )
On ___________, before me, ___________, a Notary Public in and for said
state, personally appeared ______________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
EXHIBIT I
-7-
STATE OF __________ )
)ss.
COUNTY OF _________ )
On ___________, before me, ___________, a Notary Public in and for said
state, personally appeared ______________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
STATE OF __________ )
)ss.
COUNTY OF _________ )
On ___________, before me, ___________, a Notary Public in and for said
state, personally appeared ______________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
EXHIBIT I
-8-
STATE OF __________ )
)ss.
COUNTY OF _________ )
On ___________, before me, ___________, a Notary Public in and for said
state, personally appeared ______________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
STATE OF __________ )
)ss.
COUNTY OF _________ )
On ___________, before me, ___________, a Notary Public in and for said
state, personally appeared ______________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
EXHIBIT I
-9-
SCHEDULE 1
PROPERTY DESCRIPTION
Lot 2, Southshore Corporate Park, in the City of Gresham, County of
Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.
SCHEDULE 1 to EXHIBIT I
-1-
SCHEDULE 2
IDENTIFY LEASE AND LIST ALL AMENDMENTS,
SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY
1) Multi-Tenant Industrial Triple Net Lease dated December 15, 2000 between
Borrower and Tenant.
SCHEDULE 2 to EXHIBIT I
-1-
SCHEDULE 3
LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
EXTENSION AND RENEWAL OPTIONS
1) One (1) five (5) year option to extend the term of the Lease pursuant to
Section 19 of the Addendum to Lease.
SCHEDULE 3 to EXHIBIT I
-1-
SCHEDULE 4
LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE
None.
SCHEDULE 4 to EXHIBIT I
-1-
SCHEDULE 5
MODIFIED LEASE TERMS
None
SCHEDULE 5 to EXHIBIT I
-1-
TENANT ESTOPPEL CERTIFICATE
__________, 2001
Metropolitan Life Insurance Company
400 S. El Camino Real, 8th Floor
San Mateo, California 94402
Gentlemen:
The undersigned, Synetics Solutions, Inc., an Oregon corporation
("Tenant"), as tenant under a lease (the "Lease") of certain premises dated July
20, 2000 executed by Tenant and Catellus Development Corporation, a Delaware
corporation, ("Landlord"), does hereby state, declare, represent and warrant as
follows:
1. The copy of the Lease attached hereto as Exhibit A is a true and
correct copy of the Lease and the Lease is in full force and effect and has not
been amended, supplemented or changed, except as follows [if none, so state]:
First Amendment to Lease dated December 19, 2000.
2. Tenant has accepted possession of the premises demised under the
Lease, and all items of an executory nature have been completed under the terms
of the Lease, including, but not limited to, completion of construction of the
demised premises (and all other improvements required under the Lease) in
accordance with applicable plans and specifications and within the time periods
set forth in the Lease and otherwise in accordance with the Lease, and payment
of any improvement allowance or other funds owing by Landlord to Tenant. Tenant
further acknowledges that the term commenced on January 1, 2001 and shall expire
on December 31, 2010 unless sooner terminated or extended in accordance with the
terms of the Lease.
3. No default or event that with the passing of time or the giving of
notice, or both, would constitute a default (referred to herein collectively as
a "default") on the part of the undersigned exists under the Lease in the
performance of the terms, covenants and conditions of the Lease required to be
performed on the part of the undersigned.
4. No default on the part of Landlord exists under the Lease in the
performance of the terms, covenants and conditions of the Lease required to be
performed on the part of Landlord.
5. Tenant has no option or right to purchase the property of which the
premises are a part, or any part thereof.
6. No rentals are accrued and unpaid under the Lease.
7. No prepayments of rentals due under the Lease have been made and no
security or deposits as security have been made thereunder, except as set forth
in the Lease.
8. The undersigned has no defense as to its obligations under the
Lease and claims no setoff or counterclaim against Landlord.
9. The undersigned has not received notice of any assignment,
hypothecation, mortgage, or pledge of Landlord's interest in the Lease or the
rents or other amounts payable thereunder.
10. The undersigned agrees to notify you of any default on the part of
Landlord under the Lease which would entitle the undersigned to cancel the Lease
or to abate the rent payable thereunder, and further agrees that,
notwithstanding any provisions of the Lease, no notice or cancellation thereof
shall be effective unless you have received said notice and have failed within
thirty (30) days after the expiration of the cure period provided to Landlord
under the Lease to cure or commence to cure the default which gave rise to the
notice of cancellation.
11. The undersigned understands and acknowledges that you are about to
make a loan to Landlord and receive as part of the security for such loan (i) a
Deed of Trust, Security Agreement and Fixture Filing encumbering Landlord's fee
interest in the property of which the leased premises are a portion and the
rents, issues and profits of the Lease and (ii) an Assignment of Leases which
affects the Lease, and that you are relying upon the representations and
warranties contained herein in making such loan.
Synetics Solutions, Inc.,
An Oregon corporation
By /s/ Koki Nakamura
-------------------------------------
Name: KOKI NAKAMURA
Its: CEO & Chairman
By
-------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
2
EXHIBIT A
TO TENANT ESTOPPEL CERTIFICATE
Copy of Lease and Amendments to Lease
4
TENANT ESTOPPEL CERTIFICATE
__________, 2001
Metropolitan Life Insurance Company
400 S. El Camino Real, 8th Floor
San Mateo, California 94402
Gentlemen:
The undersigned, Synetics Solutions, Inc., an Oregon corporation
("Tenant"), as tenant under a lease (the "Lease") of certain premises dated
December 15, 2000 executed by Tenant and Catellus Development Corporation, a
Delaware corporation, ("Landlord"), does hereby state, declare, represent and
warrant as follows:
1. The copy of the Lease attached hereto as Exhibit A is a true and
correct copy of the Lease and the Lease is in full force and effect and has not
been amended, supplemented or changed, except as follows [if none, so state]:
None
2. Tenant has accepted possession of the premises demised under the
Lease, and all items of an executory nature have been completed under the terms
of the Lease, including, but not limited to, completion of construction of the
demised premises (and all other improvements required under the Lease) in
accordance with applicable plans and specifications and within the time periods
set forth in the Lease and otherwise in accordance with the Lease, and payment
of any improvement allowance or other funds owing by Landlord to Tenant. Tenant
further acknowledges that the term commenced on January 1, 2001 and shall expire
on December 31, 2011 unless sooner terminated or extended in accordance with the
terms of the Lease.
3. No default or event that with the passing of time or the giving of
notice, or both, would constitute a default (referred to herein collectively as
a "default") on the part of the undersigned exists under the Lease in the
performance of the terms, covenants and conditions of the Lease required to be
performed on the part of the undersigned.
4. No default on the part of Landlord exists under the Lease in the
performance of the terms, covenants and conditions of the Lease required to be
performed on the part of Landlord.
5. Tenant has no option or right to purchase the property of which the
premises are a part, or any part thereof.
6. No rentals are accrued and unpaid under the Lease.
7. No prepayments of rentals due under the Lease have been made and no
security or deposits as security have been made thereunder, except as set forth
in the Lease.
8. The undersigned has no defense as to its obligations under the
Lease and claims no setoff or counterclaim against Landlord.
9. The undersigned has not received notice of any assignment,
hypothecation, mortgage, or pledge of Landlord's interest in the Lease or the
rents or other amounts payable thereunder.
10. The undersigned agrees to notify you of any default on the part of
Landlord under the Lease which would entitle the undersigned to cancel the Lease
or to abate the rent payable thereunder, and further agrees that,
notwithstanding any provisions of the Lease, no notice or cancellation thereof
shall be effective unless you have received said notice and have failed within
thirty (30) days after the expiration of the cure period provided to Landlord
under the Lease to cure or commence to cure the default which gave rise to the
notice of cancellation.
11. The undersigned understands and acknowledges that you are about to
make a loan to Landlord and receive as part of the security for such loan (i) a
Deed of Trust, Security Agreement and Fixture Filing encumbering Landlord's fee
interest in the property of which the leased premises are a portion and the
rents, issues and profits of the Lease and (ii) an Assignment of Leases which
affects the Lease, and that you are relying upon the representations and
warranties contained herein in making such loan.
Synetics Solutions. Inc.,
An Oregon corporation
By /s/ Koki Nakamura
-------------------------------------
Name: KOKI NAKAMURA
Its: CEO & Chairman
By
-------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
2
EXHIBIT A
TO TENANT ESTOPPEL CERTIFICATE
Copy of Lease and Amendments to Lease
3
EXHIBIT I
FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
Beneficiary
Metropolitan Life Insurance Company
c/o Preston Gates and Ellis, LLP
One Maritime Plaza, Suite 2400
San Francisco, California 94111
Attn: Susan Reid, Esq. )
Space above for Recorder's Use
SUBORDINATION, NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS
IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE
LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
This Subordination, Nondisturbance and Attornment Agreement ("Agreement")
is entered into as of the __________ day of March, 2001 by and among SYNETICS
SOLUTIONS INC., an Oregon corporation ("Tenant"), Catellus Development
Corporation, a Delaware corporation ("Borrower") and Metropolitan Life Insurance
Company (Beneficiary).
FACTUAL BACKGROUND
A. Borrower owns certain real property in the County of Multnomah, State of
Oregon, more particularly described in the attached Schedule 1 term "Property"
herein means that real property together with all improvements (the
"Improvements") located on it.
B. Beneficiary has made or agreed to make a loan to Borrower in the
principal amount of Two Hundred Million and no/100 Dollars ($200,000,000.00)
(the "Loan") as provided in a loan application (the "Loan Application"). The
Loan is or will be evidenced by a promissory note (the "Note") which is or will
be secured by a deed of trust encumbering the Property (the "Deed of Trust")
with an assignment of rents. The Note, the Deed of Trust, this Agreement and all
other documents and instruments identified in the Deed of Trust as "Loan
Documents" shall be collectively referred to herein as the "Loan Documents".
C. Tenant and Borrower (as landlord) entered into a lease dated December
15, 2000 (the "Lease") under which Borrower leased to Tenant a portion of the
Improvements located within the Property and more particularly described in the
Lease (the "Premises").
D. It is a requirement of the Loan to Borrower that Tenant agree, among
other things, to subordinate Tenant's rights under the Lease to the lien of the
Loan Documents and to attorn to Beneficiary on the terms and conditions of this
Agreement. Tenant is willing to agree to such subordination and attornment and
other conditions, provided that Beneficiary agrees to a nondisturbance
provision, all as set forth more fully below.
EXHIBIT I
-1-
AGREEMENT:
Therefore, the parties agree as follows:
1. Subordination. The Loan Documents and all supplements, amendments,
modifications, renewals, replacements and extensions of and to them shall
unconditionally be and remain at all times a lien on the Property prior and
superior to the Lease, to the leasehold estate created by it, and to all rights
and privileges of Tenant under it. The Lease and leasehold estate, together with
all rights and privileges of Tenant under that Lease, are hereby unconditionally
made subordinate to the lien of the Loan Documents in favor of Beneficiary.
Tenant consents to Borrower and Beneficiary entering into the Deed of Trust and
the other Loan Documents. Tenant further declares, agrees and acknowledges that
in making disbursements under the Loan Documents Beneficiary has no obligation
or duty to, nor has Beneficiary represented that it will, see to the application
of such proceeds by the person or persons to whom they are disbursed by
Beneficiary, and any application or use of such proceeds for purposes other than
those provided for in the Loan Documents shall not defeat the subordination made
in this Agreement, in whole or in part.
2. Definitions of "Transfer of the Property" and "Purchaser". As used
herein, the term "Transfer of the Property" means any transfer of Borrower's
interest in the Property by foreclosure, trustee's sale or other action or
proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof.
The term "Purchaser", as used herein, means any transferee, including
Beneficiary, of the interest of Borrower as a result of any such Transfer of the
Property and also includes any and all successors and assigns, including
Beneficiary, of such transferee.
3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate
the Lease or disturb Tenant in the possession and use of the Premises unless at
the time of foreclosure Tenant is in significant default under the Lease or this
Agreement beyond any applicable grace or cure periods, and Beneficiary or
Purchaser so notifies Tenant in writing by the later of (i) 120 days prior to or
after the Transfer of the Property, or (ii) if Beneficiary and Purchaser did not
have notice of the pre-foreclosure default, within 120 days of notice of the
default that the Lease will be terminated by foreclosure because of such
default. The nondisturbance herein granted is subject to Section 5 below. To the
extent that the Lease is extinguished by law as a result of the foreclosure, a
new lease shall automatically go into effect upon the same provisions as
contained in the Lease, as modified by this Agreement, for the unexpired term of
the Lease. This nondisturbance applies to any option to extend or renew the
Lease term which is set forth in the Lease as of the date of this Agreement.
4. Attornment. Subject to Section 3 above, if any Transfer of the Property
should occur, Tenant shall and hereby does attorn to Purchaser, including
Beneficiary if it should be the Purchaser, as the landlord under the Lease, and
Tenant shall be bound to Purchaser under all of the terms, covenants and
conditions of the Lease for the balance of the Lease term and any extensions or
renewals of it which may then or later be in effect under any validly exercised
extension or renewal option contained in the Lease, all with the same force and
effect as if Purchaser had been the original landlord under the Lease. This
attornment shall be effective and self-operative without the execution of any
further instruments upon Purchaser's succeeding to the interest of the landlord
under the Lease.
5. Subordination of Options and Rights of First Refusal. The Loan Documents
and all supplements, amendments, modifications, renewals, replacements and
extensions of and to them shall unconditionally be and remain at all times a
lien on the Property prior and superior to any existing or future right of
Tenant, whether arising out of the Lease or otherwise, to exercise any option or
right of first refusal to:
(a) purchase the Premises or the Property or any interest or portion
in or of either of them; or
(b) expand into other space in the Improvements.
Tenant specifically agrees and acknowledges that upon any Transfer of the
Property, any such purchase or expansion option or right of first refusal,
whether now existing or in the future arising, shall terminate and be
inapplicable to the Property notwithstanding the nondisturbance granted to
Tenant in Section 3 above. If any option or right of first refusal to purchase
is exercised prior to a Transfer of the Property, any title so acquired to all
or any part of the Property shall be subject to the lien of the Loan Documents,
which lien shall in no way be impaired by
EXHIBIT I
-2-
the exercise of such option, or right of first refusal. Beneficiary specifically
reserves all of its rights to enforce any accelerating transfer, due on sale,
due on encumbrance or similar provision in the Deed of Trust or any other
Loan Document.
6. Notices of Default; Material Notices; Beneficiary's Rights to Cure
Default. Tenant shall send a copy of any notice of default or similar statement
with respect to the Lease to Beneficiary at the same time such notice or
statement is sent to Borrower. In the event of any act or omission by Borrower
which would give Tenant the right to terminate the Lease or to claim a partial
or total eviction, Tenant shall not exercise any such right or make any such
claim until it has given Beneficiary written notice of such act or omission and
has given Beneficiary either thirty (30) days to cure the default if the default
is monetary or a reasonable time for Beneficiary to cure the default if the
default is nonmonetary. Nothing in this Agreement, however, shall be construed
as a promise or undertaking by Beneficiary to cure any default of Borrower.
7. Limitation on Beneficiary's Performance. Nothing in this Agreement shall
be deemed or construed to be an agreement by Beneficiary to perform any covenant
of Borrower as landlord under the Lease. Tenant agrees that if Beneficiary
becomes Purchaser then, upon subsequent transfer of the Property by Beneficiary
to a new owner, Beneficiary shall have no further liability under the Lease
after said transfer.
8. Limitation on Liability. No Purchaser who acquires title to the Property
shall have any obligation or liability beyond its interest in the Property.
Purchaser shall not have any obligations or liability with respect to the
completion of improvements which were part of the initial tenant improvements at
the commencement of the Lease.
9. Tenant's Covenants. Tenant agrees that during the term of the Lease,
without Beneficiary's prior written consent, Tenant shall not:
(a) pay any rent or additional rent more than one month in advance to
any landlord including Borrower; or
(b) cancel, terminate or surrender the Lease, except at the normal
expiration of the Lease term or as provided in Section 6 above; or
(c) enter into any material amendment, modification or other agreement
relating to the Lease; or
(d) assign or sublet any portion of the Lease or the Premises, except
as expressly permitted in the Lease.
10. Beneficiary Not Obligated. Beneficiary, if it becomes the Purchaser or
if it takes possession under the Deed of Trust, and any other Purchaser shall
not (a) be liable for any damages or other relief attributable to any act or
omission of any prior Landlord under the Lease including Borrower, or (b) be
subject to any offset or defense which Tenant may have against any prior
landlord under the Lease; or (c) be bound by any prepayment by Tenant of more
than one month's installment of rent; or (d) be obligated for any security
deposit not actually delivered to Purchaser; (e) be bound by any modification or
amendment of or to the Lease unless the amendment or modification shall have
been approved in writing by Beneficiary or (f) be liable to Tenant or any other
party for any conflict between the provisions of the Lease and the provisions of
any other lease affecting the Property which is not entered into by Purchaser;
or (g) be liable with respect to any representation, warranty or indemnity not
made by Purchaser. Borrower agrees to deliver to Purchaser any security deposits
in its possession at the time Purchaser takes possession of the Property.
11. Tenant's Estoppel Certificate.
(a) True and Complete Lease. Tenant represents and warrants to
Beneficiary that Schedule 2 accurately identifies the Lease and all
amendments, supplements, side letters and other agreements and memoranda
pertaining to the Lease, the leasehold and/or the Premises.
EXHIBIT I
-3-
(b) Tenant's Option Rights. Tenant has no right or option of any
nature whatsoever, whether arising out of the Lease or otherwise, to
purchase the Premises or the Property, or any interest or portion in or of
either of them, to expand into other space in the Improvements or to extend
or renew the term of the Lease, except as described in the attached
Schedule 3.
(c) No Default. As of the date of (his Agreement, Tenant represents
and warrants that to the best of Tenant's knowledge there exist no events
of default or events that with notice or the passage of time or both would
be events of default under the Lease on either the Tenant's part or the
Borrower's, nor is there any right of offset against any of Tenant's
obligations under the Lease, except as described in the attached Schedule
4. Tenant represents and warrants that the Lease is in full force and
effect as of the date of this Agreement.
(d) Hazardous Substances. Tenant represents and warrants that it has
not used, generated, released, discharged, stored or disposed of any
Hazardous Substances on, under, in or about the Property other than
Hazardous Substances used in the ordinary and commercially reasonable
course of Tenant's business in compliance with all applicable laws. Except
for such legal and commercially reasonable use by Tenant, Tenant has no
actual knowledge that any Hazardous Substance is present or has been used,
generated, released, discharged, stored or disposed of by any party on,
under, in or about the Property. As used herein "Hazardous Substance" means
any substance, material or waste (including petroleum and petroleum
products), which is designated, classified or regulated as being "toxic" or
"hazardous" or a "pollutant" or which is similarly designated, classified
or regulated under any federal, state or local law, regulation or
ordinance.
12. Integration; Etc. This Agreement integrates all of the terms and
conditions of the parties' agreement regarding the subordination of the Lease to
the Loan Documents, attornment, nondisturbance and the other matters contained
herein. This Agreement supersedes and cancels all oral negotiations and prior
and other writings with respect to (a) such subordination (only to such extent,
however, as would affect the priority between the Lease and the Loan Documents),
including any provisions of the Lease which provide for the subordination of the
Lease to a deed of trust or to a mortgage and (b) such attornment,
non-disturbance and other matters contained herein. If there is any conflict
between the terms, conditions and provisions of this Agreement and those of any
other agreement or instrument, including the Lease, the terms, conditions and
provisions of this Agreement shall prevail. This Agreement may not be modified
or amended except by a written agreement signed by the parties or their
respective successors in interest. This Agreement may be executed in
counterparts, each of which is an original but all of which shall constitute one
and the same instrument.
13. Notices. All notices given under this Agreement shall be in writing and
shall be given by personal delivery, overnight receipted courier or by
registered or certified United States mail, postage prepaid, sent to the party
at its address appearing below. Notices shall be effective upon receipt (or on
the date when proper delivery is refused). Addresses for notices may be changed
by any party by notice to all other parties in accordance with this Section.
Service of any notice on any one Borrower shall be effective service on Borrower
for all purposes.
To Beneficiary:
Metropolitan Life Insurance Company
400 South El Camino Real, 8th Floor
San Mateo, California 94402
Attn: Vice President-Real Estate Investments
To Borrower: Catellus Development Corporation
201 Mission Street
San Francisco, California 94105
Attn: Asset Management
EXHIBIT I
-4-
To Tenant: Synetics Solutions Inc.
18870 NE Riverside Pkwy.
Tigard, Oregon 97224
Attn: Koki Nakamura
14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration is
commenced which arises out of or relates to this Agreement, the prevailing party
shall be entitled to recover from each other party such sums as the court,
referee or arbitrator may adjudge to be reasonable attorneys' fees, including
the costs for any legal services by in-house counsel, in addition to costs and
expenses otherwise allowed by law.
15. Miscellaneous Provisions. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
This Agreement is governed by the laws of the State of Oregon without regard to
the choice of law rules of that State. This Agreement satisfies any condition or
requirement in the Lease relating to the granting of a nondisturbance agreement
by Beneficiary. As used herein, the word "include(s)" means "include(s) without
limitation," and the word "including" means "including but not limited to."
Beneficiary, at its sole discretion, may but shall not be obligated to record
this Agreement.
EXHIBIT I
-5-
NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON
OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR
PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.
"TENANT" SYNETICS SOLUTIONS INC.,
an Oregon corporation
By: /s/ Koki Nakamura
------------------------------------
Name: KOKI NAKAMURA
Title: CEO & Chairman
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"BORROWER" CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
By: Catellus Commercial Group, LLC,
a Delaware limited liability company
Its: Duly Authorized Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"BENEFICIARY" Metropolitan Life Insurance Company,
a New York corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT I
-6-
STATE OF Oregon )
) ss.
COUNTY OF Multnomah )
On March 27, 2001, before me, Sarah Culver, a Notary Public in and for said
state, personally appeared Koki Nakamura, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
/s/ Sarah M. Culver
----------------------------------------
Notary Public in and for said State
(STAMP)
(SEAL)
STATE OF _______________)
) ss.
COUNTY OF ______________)
On _____________________, before me, _______________________, a Notary
Public in and for said state, personally appeared __________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her authorized capacity, and that by
his/her signature on the instrument, the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
EXHIBIT I
-7-
STATE OF _______________)
) ss.
COUNTY OF ______________)
On _______________________, before me, _____________________, a Notary
Public in and for said state, personally appeared ______________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
STATE OF _______________)
) ss.
COUNTY OF ______________)
On _______________________, before me, _______________________, a Notary
Public in and for said state, personally appeared _______________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
EXHIBIT I
-8-
STATE OF ___________________________ )
)ss.
COUNTY OF __________________________ )
On _______________, before me, ____________________, a Notary Public in and
for said state, personally appeared ________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
STATE OF ___________________________ )
)ss.
COUNTY OF __________________________ )
On _________________, before me, __________________, a Notary Public in and
for said state, personally appeared ________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------
Notary Public in and for said State
(SEAL)
EXHIBIT I
-9-
SCHEDULE 1
PROPERTY DESCRIPTION
Lot 2, Southshore Corporate Park, in the City of Gresham, County of
Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.
SCHEDULE 1 to EXHIBIT I
-1-
SCHEDULE 2
IDENTIFY LEASE AND LIST ALL AMENDMENTS,
SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY
1) Multi-Tenant Industrial Triple Net Lease dated December 15, 2000 between
Borrower and Tenant.
SCHEDULE 2 to EXHIBIT I
-1-
SCHEDULE 3
LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
EXTENSION AND RENEWAL OPTIONS
1) One (1) five (5) year option to extend the term of the Lease pursuant to
Section 19 of the Addendum to Lease.
SCHEDULE 3 to EXHIBIT I
-1-
SCHEDULE 4
LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE
None.
SCHEDULE 4 to EXHIBIT I
-1-
SCHEDULE 5
MODIFIED LEASE TERMS
None
SCHEDULE 5 to EXHIBIT I
-1-
MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE
Effective Date: December 15, 2000
(the date set forth below Landlord's signature)
BASIC LEASE INFORMATION
Landlord: CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
Landlord's Address For 201 Mission Street
Notice: San Francisco, California 94105
Attn: Asset Management & Office of General Counsel
Telephone: (415)974-4500
Fax: (415)974-4687
With a Copy to: CB Richard Ellis
1300 SW 5th Avenue, Suite 2600
Portland, Oregon 97201
Attn: Property Management
Telephone: (503)221-1900
Fax: (503)221-4873
Landlord's Address For File # 1918
Payment of Rent: P.O. Box 61000
San Francisco, California 94161-1918
Tenant: SYNETICS SOLUTIONS INC.,
an Oregon corporation
Tenant's Address For 7440 S.W. Bonita Avenue
Notice: Tigard, Oregon 97224
Attn: Koki Nakamura
Telephone: (503) 670-9934
Fax: (503)639-2264
Project: Those portions of "Southshore Corporate Park" located
in the City of Gresham, County of Multnomah, State of
Oregon. A conceptual plot plan of Southshore Corporate
Park (the "Site Plan") is attached hereto as Exhibit
A-1 (which indicates thereon the approximate location
of the Premises and other parcels of land within
Southshore Corporate Park as presently contemplated by
Landlord). Tenant acknowledges that Exhibit A-1 is
intended to be used only for illustrative purposes and
nothing contained therein shall constitute a
representation or warranty by Landlord.
Land: Approximately 10.2 acre parcel of land shown on the
Site Plan attached hereto as Exhibit A-1.
(i)
Building: An office/manufacturing/warehouse building
located on the Land and containing
approximately 180,000 rentable square feet.
Premises: Approximately 44,930 rentable square feet
located within the Building as shown on Exhibit
A-2.
Premises Address: Southshore Corporate Park - Building C
Street: 4293 NE 189th Avenue
City and State: Gresham, Oregon 97230
Term: One Hundred Twenty (120) months
Possession Date: December 15, 2000
Commencement Date: January 1, 2001
Monthly Base Rent: Monthly
Months Base Rent
------- ------------
1-24 $16,399.45
25-48 $17,383.42
49-72 $18,462.42
73-96 $19,532.00
97-120 $20,703.93
121-144+ $21,946.16
145-168+ $23,262.93
169-180+ $24,658.71
+ Subject to the provisions of the Option to
Extend set forth in Section 19 of the
Addendum to Lease
Tenant's Share of Building 24.96%
Operating Expenses:
Tenant's Share of Project 10.01%
Operating Expenses:
Letter of Credit: $98,394.00, subject to adjustment pursuant to
Section 3.3
Broker: Landlord's Broker: CB Richard Ellis
Tenant's Broker: Macadam Forbes, Inc.
(ii)
Lease Year: Shall refer to each twelve (12) month period
during the Term commencing on the Commencement
Date.
Permitted Uses: The manufacturing, warehousing and distribution
of mini-clean room environment equipment and
other related activities, together with
collateral office space, all to the extent
consistent with the character of the Project as
a first-class industrial project. No other uses
shall be permitted without the prior written
consent of Landlord, which may be given or
withheld in Landlord's sole and absolute
discretion. In no event shall any use of the
Premises violate the Prohibited Uses set forth
in Exhibit E attached hereto or the terms of
the CC&Rs (defined in Section 11 of the Lease)
and all uses of the Premises shall at all times
comply with and be consistent with all of the
provisions of this Lease (including, without
limitation, the Rules and Regulations attached
hereto as Exhibit F) and applicable law.
Parking Spaces: Forty-Eight (48) unreserved parking spaces,
subject to the terms of Section 1.4
Rentable Square Feet of Shall mean (a) the total square footage of the
Premises: Premises, measured from the outside of the
exterior walls of the Building and to the
center of any demising walls separating the
Premises from other premises in the Building,
plus (b) a pro rata share of any common utility
rooms and/or electrical vaults located in the
Building that do not exclusively serve the
Premises or other premises leased to other
tenants of the Building (which pro rata share
shall be the same percentage as Tenant's Share
of Building Operating Expenses).
Rentable Square Feet of Shall mean the total square footage of the
Building: Building, measured from the outside of the
exterior walls of the Building to the center
thereof.
Option to Extend: One (1) five (5) year Option to Extend in
accordance with Section 19 in the Addendum to
Lease.
ADDENDUM
EXHIBITS
A-1 Site Plan
A-2 Premises
B Work Letter
C Commencement Date Memorandum
D Insurance Certificate
E Prohibited Uses
F Rules and Regulations
G Requirements for Improvements or Alterations by Tenant
H Estoppel Certificate
I Subordination, Non-Disturbance and Attornment Agreement
J Arbitration Procedures
K Form of Letter of Credit
(iii)
TABLE OF CONTENTS
PAGE
----
1. PREMISES .......................................................... 1
1.1 Premises ................................................... 1
1.2 Common Area ................................................ 1
1.3 Reserved Rights ............................................ 1
1.4 Parking .................................................... 1
2. TERM .............................................................. 2
2.1 Commencement Date .......................................... 2
2.2 Intentionally Deleted ...................................... 2
2.3 Early Entry ................................................ 2
3. RENT .............................................................. 2
3.1 Rent ....................................................... 2
3.2 Late Charge and Interest ................................... 3
3.3 Letter of Credit ........................................... 3
4. UTILITIES ......................................................... 4
5. TAXES ............................................................. 4
5.1 Real Property Taxes ........................................ 4
5.2 Definition of Real Property Taxes .......................... 4
5.3 Personal Property Taxes .................................... 5
6. OPERATING EXPENSES ................................................ 5
6.1 Operating Expenses ......................................... 5
6.2 Definition of Operating Expenses ........................... 5
7. ESTIMATED EXPENSES ................................................ 6
7.1 Payment .................................................... 6
7.2 Adjustment ................................................. 6
7.3 Audit Right ................................................ 6
8. INSURANCE ......................................................... 7
8.1 Landlord ................................................... 7
8.2 Tenant ..................................................... 7
8.3 General .................................................... 8
8.4 Indemnity .................................................. 8
8.5 Exemption of Landlord from Liability ....................... 9
9. REPAIRS AND MAINTENANCE ........................................... 9
9.1 Tenant ..................................................... 9
9.2 Landlord ................................................... 10
9.3 Landlord's Failure to Perform .............................. 10
10. ALTERATIONS ....................................................... 11
10.1 Trade Fixtures; Alterations ................................ 11
10.2 Damage; Removal ............................................ 11
10.3 Liens ...................................................... 12
10.4 Standard of Work ........................................... 12
11. USE ............................................................... 12
12. ENVIRONMENTAL MATTERS ............................................. 13
12.1 Hazardous Materials ........................................ 13
12.2 Tenant's Indemnification ................................... 13
12.3 Pre-existing Conditions and Indemnification ................ 14
13. DAMAGE AND DESTRUCTION ............................................ 14
13.1 Casualty ................................................... 14
13.2 Tenant's Fault ............................................. 16
(v)
PAGE
----
13.3 Uninsured Casualty ......................................... 16
13.4 Waiver ..................................................... 16
14. EMINENT DOMAIN .................................................... 16
14.1 Total Condemnation ......................................... 16
14.2 Partial Condemnation ....................................... 16
14.3 Award ...................................................... 17
14.4 Temporary Condemnation ..................................... 17
15. DEFAULT ........................................................... 17
15.1 Events of Defaults ......................................... 17
15.2 Remedies ................................................... 17
15.3 Cumulative ................................................. 18
16. ASSIGNMENT AND SUBLETTING ......................................... 19
17. ESTOPPEL, ATTORNMENT AND SUBORDINATION ............................ 19
17.1 Estoppel ................................................... 19
17.2 Subordination .............................................. 20
17.3 Attornment ................................................. 20
18. MISCELLANEOUS ..................................................... 20
18.1 General .................................................... 20
18.2 Signs ...................................................... 21
18.3 Waiver ..................................................... 21
18.4 Financial Statements ....................................... 21
18.5 Limitation of Liability .................................... 22
18.6 Notices .................................................... 22
18.7 Brokerage Commission ....................................... 22
18.8 Authorization .............................................. 22
18.9 Holding Over; Surrender .................................... 22
18.10 Join and Several ........................................... 23
18.11 Convenants and Conditions .................................. 23
18.12 Auctions ................................................... 23
18.13 Consents ................................................... 23
18.14 Force Majeure .............................................. 23
18.15 Mortgage Protection ........................................ 23
18.16 Hazardous Substance Disclosure ............................. 24
18.17 ADA Compliance ............................................. 24
18.18 Addenda .................................................... 24
(vi)
1. PREMISES
1.1 Premises. Landlord hereby leases to Tenant that portion of the Building
as shown on Exhibit A-2 attached hereto (the "Premises"), but excluding the
Common Area (defined below) and any other portion of the Building, the Land
and/or the Project. Tenant has determined that the Premises are acceptable for
Tenant's use and Tenant acknowledges that, except as set forth in the Work
Letter attached hereto as Exhibit B (the "Work Letter"), neither Landlord nor
any broker or agent has made any representations or warranties in connection
with the physical condition of the Premises or their fitness for Tenant's use
upon which Tenant has relied directly or indirectly for any purpose. By taking
possession of the Premises, Tenant accepts the Premises "AS-IS" and waives all
claims of defect in the Premises, except as set forth herein or in the Work
Letter. Tenant shall be responsible for confirming the street address of
Premises with the City.
1.2 Common Area. Tenant may, subject to rules made by Landlord, use the
following areas on the Land or within the Building ("Building Common Area") in
common with Landlord and other tenants of the Building: hallways, stairwells,
entranceways, restroom facilities, refuse facilities, landscaped areas,
driveways necessary for access to the Premises, parking spaces and other common
facilities located in the Building and/or on the Land designated by Landlord
from time to time for the common use of all tenants of the Building. Tenant may,
subject to the CC&Rs (as defined in Section 11 below) and any rules or
regulations made by Landlord, use the following areas of the Project ("Project
Common Area") in common with Landlord, tenants of the Building and/or other
owners or lawful users of the Project: refuse facilities, landscaped areas,
roads, driveways necessary for access to the Premises, parking spaces, retention
basins and other common facilities designated by Landlord from time to time for
the common use of all tenants and owners of the Project. The Building Common
Area and the Project Common Area are collectively referred to herein as the
"Common Area".
1.3 Reserved Rights. Landlord reserves the right to enter the Premises for
any reason upon reasonable notice to Tenant (or without notice in case of an
emergency) and/or to undertake the following all without abatement of rent or
liability to Tenant: inspect the Premises and/or the performance by Tenant of
the terms and conditions hereof; make such alterations, repairs, improvements or
additions to the Premises as required or permitted hereunder; change boundary
lines of the Land so long as such change does not materially and adversely
impact Tenant's use of the parking area and/or access to the Premises; install,
use, maintain, repair, alter, relocate or replace any pipes, ducts, conduits,
wires, equipment and other facilities (including, without limitation, cabling
and conduit for telecommunications facilities of any kind) in the Common Area or
the Building; install, maintain and operate conduit cabling within the utility
and/or conduit ducts and risers within the Building, as well as, grant lease,
license or use rights to third parties, to utilize the foregoing grant easements
or licenses on the Land and/or the Project; dedicate for public use portions of
the Land and/or the Project and record covenants, conditions and restrictions
affecting the Land and/or the Project and/or amendments to existing CC&Rs (as
defined below in Section 11 below) which do not unreasonably interfere with
Tenant's use of the Premises or impose additional material monetary obligations
on Tenant; change the name of the Building and/or the Project; affix reasonable
signs and displays on the Building and/or the Land; and, during the last six (6)
months of the Term, place signs for the rental of, and show the Premises to
prospective tenants.
1.4 Parking. So long as this Lease is in effect and provided Tenant is not
in default hereunder, Landlord grants to Tenant and Tenant's customers,
suppliers, employees and invitees ("Tenant's Authorized Users") a non-exclusive
license to use up to forty-eight (48) parking spaces in the areas designated by
Landlord as parking facilities for the Building. All visitor parking will be on
a non-exclusive, in common basis with all other visitors and guests of the
Project Tenant will not use or allow any of Tenant's Authorized Users to use any
parking spaces which have been specifically assigned by Landlord for other uses
such as visitor parking or which have been designated by any governmental entity
as being restricted to certain uses. Landlord may assign any unreserved and
unassigned parking spaces and/or make all or any portion of such spaces
reserved, if Landlord reasonably determines that it is necessary for orderly and
efficient parking or for any other reasonable reason. Tenant and Tenant's
Authorized Users shall comply with all rules and regulations regarding parking
set forth in Exhibit F attached hereto and Tenant agrees to cause Tenant's
Authorized Users to comply with such rules and regulations. Landlord reserves
the right from time to time to modify and/or adopt such other reasonable and
non-discriminatory rules and regulations for the parking facilities as it deems
reasonably necessary for the operation of the parking facilities, but in no
event shall Landlord be entitled to charge fees for parking without the prior
written consent of Tenant, which is not to be unreasonably withheld or delayed.
Tenant may, at Tenant's sole cost and expense,
provide for the striping of additional parking spaces in the paved areas
adjacent to Tenant's loading docks and the fifty foot (50') wide concrete dock
apron, provided that (i) the addition of such spaces in the loading dock and
apron areas is in compliance with all applicable laws and (ii) any and all costs
associated with providing such parking spaces in the loading dock areas shall be
at Tenant's sole cost and expense, including, without limitation, any
landscaping requirements imposed by the City.
2. TERM
2.1 Commencement Date. The Term of the Lease shall commence ("Commencement
Date") on January 1, 2001; provided, however, Tenant's obligation to pay Rent
(as defined in Section 3.1 below) shall commence on December 15, 2000 (the
"Possession Date"). Rent shall be paid for the period between the Possession
Date and the Commencement Date (e.g., December 15 to January 1, 2001) at the
rate stated in the Basic Lease Information, prorated on the basis of a thirty
(30) day month, and shall be due and payable to Landlord on or before the
Possession Date. Concurrently with the execution of this Lease, Tenant shall
execute and deliver to Landlord the Commencement Date Memorandum attached hereto
as Exhibit C acknowledging (i) the Commencement Date, (ii) the Possession Date,
and (iii) the final square footage of the Premises.
2.2 Intentionally Deleted
2.3 Early Entry. Subject to the following provisions of this Section 2.3,
Tenant shall have the right to enter the Premises no earlier than fifteen (15)
days prior to the Possession Date to install phone systems, furniture, fixtures
and equipment, etc. and such early entry for such purposes shall not constitute
occupancy for operation of Tenant's business and shall not trigger the
Possession Date or the Commencement Date. Tenant agrees (i) any such early entry
by Tenant shall be at Tenant's sole risk, (ii) Tenant shall not interfere with
Landlord or Landlord's contractors completing work within the Premises or cause
any labor difficulties; Tenant, together with its employees, agents and
independent contractors will be subject to and will work under the direction of
Landlord's contractor, (iii) Tenant shall comply with and be bound by all
provisions of this Lease during the period of any such early entry except for
the payment of Rent, (iv) prior to entry upon the Premises by Tenant, Tenant
agrees to pay for and provide to Landlord certificates evidencing the existence
and amounts of liability insurance carried by Tenant, which coverage must comply
with the provisions of this Lease relating to insurance, (v) Tenant and its
agents and contractors agree to comply with all applicable laws, regulations,
permits and other approvals required to perform its work during the early entry
on the Premises, and (vi) Tenant agrees to indemnify, protect, defend and save
Landlord and the Premises harmless from and against any and all liens,
liabilities, losses, damages, costs, expenses, demands, actions, causes of
action and claims (including, without limitation, attorneys' fees and legal
costs) arising out of the early entry, use, construction, or occupancy of the
Premises by Tenant or its agents, employees or contractors.
3. RENT
3.1 Rent. Tenant shall pay to Landlord, at Landlord's Address for Payment
of Rent designated in the Basic Lease Information, or at such other address as
Landlord may from time to time designate in writing to Tenant for the payment of
Rent, the Base Rent, without notice, demand, offset or deduction, in advance, on
the first day of each calendar month. Landlord shall have no obligation to
notify Tenant of any increase in Rent and Tenant's obligation to pay all Rent
(and any increases) when due shall not be modified or altered by such lack of
notice from Landlord. It is intended that this Lease be a "triple net lease,"
and that the Rent to be paid hereunder by Tenant will be received by Landlord
without any deduction or offset whatsoever by Tenant, foreseeable or
unforeseeable. Except as expressly provided to the contrary in this Lease,
Landlord shall not be required to make any expenditure, incur any obligation, or
incur any liability of any kind whatsoever in connection with this Lease or the
ownership, construction, maintenance, operation or repair of the Premises or the
Project Upon the execution of this Lease, Tenant shall pay to Landlord the first
month's Base Rent. If the Term commences (or ends) on a date other than the
first (or last) day of a month, Base Rent shall be prorated on the basis of a
thirty (30) day month. All sums other than Base Rent which Tenant is obligated
to pay under this Lease shall be deemed to be additional rent due hereunder
("Additional Rent"), whether or not such sums are designated Additional Rent
and, together with the Base Rent, shall be due and payable to Landlord
commencing on the Possession Date. The term "Rent" means the Base Rent and all
Additional Rent payable hereunder.
-2-
3.2 Late Charge and Interest. The late payment of any Rent will cause
Landlord to incur additional costs, including administration and collection
costs and processing and accounting expenses and increased debt service
("Delinquency Costs"). If Landlord has not received any installment of Rent
within five (5) days after such amount is due, Tenant shall pay a late charge of
five percent (5%) of the delinquent amount, which is agreed to represent a
reasonable estimate of the Delinquency Costs incurred by Landlord. In addition,
all such delinquent amounts shall bear interest from the date such amount was
due until paid in full at a rate per annum ("Applicable Interest Rate") equal to
the lesser of (a) the maximum interest rate permitted by law or (b) five
percent (5%) above the rate publicly announced by Bank of America, N.A. (or if
Bank of America, N.A. ceases to exist, the largest bank then headquartered in
the State of California) ("Bank") as its "Reference Rate". If the use of the
announced Reference Rate is discontinued by the Bank, then the term Reference
Rate shall mean the announced rate charged by the Bank which is, from time to
time, substituted for the Reference Rate. Landlord and Tenant recognize that the
damage which Landlord shall suffer as a result of Tenant's failure to pay such
amounts is difficult to ascertain and said late charge and interest are the best
estimate of the damage which Landlord shall suffer in the event of late payment.
If a late charge becomes payable for any three (3) installments of Rent within
any twelve (12) month period, then the Rent shall automatically become due and
payable quarterly in advance.
3.3 Letter of Credit
3.3.1 Form of Letter of Credit. Concurrently with Tenant's execution
and delivery of this Lease, Tenant shall deliver to Landlord an unconditional,
irrevocable, standby letter of credit (the "Letter of Credit") with an
expiration date no earlier than twelve (12) months from the date of issuance in
the amount of Ninety Eight Thousand Three Hundred Ninety Four and No/100 Dollars
($98,394.00). The Letter of Credit shall be in the same form as Exhibit K
attached hereto. The Letter of Credit shall secure the full and faithful
performance of each provision of this Lease to be performed by Tenant. The
Letter of Credit shall be issued by a money-center bank, or another financial
institution acceptable to Landlord in its sole discretion. The Letter of Credit
must be presentable in San Francisco, California. If Tenant fails to pay Rent or
otherwise defaults with respect to any provision of this Lease and fails to cure
any such default within any applicable notice and cure period provided in this
Lease, then Landlord may execute one or more drafts on the Letter of Credit for
the payment of any Rent, or for the payment of any other sum for which Landlord
may become obligated by reason of Tenant's default, or for any payment to which
Landlord may become entitled by reason of Tenant's default, or for payment to
Landlord for any loss or damage which Landlord may suffer thereby. The Letter of
Credit shall contain language allowing Landlord to draw upon the Letter of
Credit upon presentation to the issuer of the Letter of Credit of Landlord's
written statement that Landlord is entitled to the funds represented by such
Letter of Credit in accordance with the terms hereof. If Landlord so uses or
applies all or any portion of the amount represented by the Letter of Credit,
then Tenant shall, within ten (10) days after written demand therefor, at
Landlord's sole option, (i) deposit cash with Landlord in lieu of the Letter of
Credit in the amount drawn, or (ii) deliver a replacement letter of credit in
the amount drawn so that the total amounts represented by the Letter of Credit
and the replacement letter of credit equals Ninety Eight Thousand Three Hundred
Ninety Four and No/100 Dollars ($98,394.00), and Tenant's failure to do so shall
be an Event of Default
3.3.2 Annual Renewals. The Letter of Credit shall provide for
automatic annual renewals throughout the Term of this Lease unless, at least
sixty (60) days prior to any such date of expiration, the issuing bank shall
have given written notice to Landlord, by certified mail, return receipt
requested and at the Landlord's Address stated in the Basic Lease Information or
such other address as Landlord shall have given to the issuing bank, that the
Letter of Credit will not be renewed. Tenant shall, no later than thirty (30)
days prior to the expiration of the Letter of Credit or any replacement or
renewal thereof, deliver a new Letter of Credit substantially in the same form
as the then existing Letter of Credit except that the expiration date set forth
in such new Letter of Credit shall not be earlier than twelve (12) months after
the expiration date set forth in the Letter of Credit which is then being
replaced, and the issuer may be changed by Tenant to a financial institution
acceptable to Landlord in its sole discretion. If Tenant fails to deliver a new
Letter of Credit as required herein, then Landlord shall have the right, at its
sole option, to draw upon and present the then existing Letter of Credit for the
entire amount available thereunder. Until such time as Tenant shall thereafter
deliver a new Letter of Credit in the form and substance required hereunder,
Landlord shall retain possession of the funds so drawn as a security deposit to
secure Tenant's obligations under this Lease. Any such replacement Letter of
Credit shall satisfy and be subject to the provisions set forth in subparagraph
(a) above. Should the Letter of Credit then in effect be revoked or should the
creditworthiness of the issuer of the Letter of Credit then in effect become
impaired (in Landlord's sole judgment), then Tenant shall deliver a replacement
Letter of Credit in the form and substance required hereunder.
-3-
3.3.3 Changes. If the Permitted Use is amended (in Landlord's sole and
absolute discretion) to accommodate a change in the business of Tenant or to
accommodate a subtenant or assignee approved by Landlord, Landlord shall have
the right to increase the amount of the Letter of Credit to the extent
necessary, in Landlord's reasonable judgment, to account for any increased risk
to the Premises or increased wear and tear that the Premises may suffer as a
result thereof. If a change in control of Tenant occurs during this Lease and
following such change the financial condition of Tenant is, in Landlord's
reasonable judgment, reduced, Tenant shall cause the amount of the Letter of
Credit to be increased to an amount reasonably determined by Landlord based on
said change in financial condition.
3.3.4 Return of Letter of Credit. After Tenant vacates the Premises,
upon the expiration or sooner termination of this Lease, if Tenant is not then
in default or breach of any provision of this Lease, Landlord shall return to
Tenant the Letter of Credit and any unapplied cash balance of the Letter of
Credit that bad been previously drawn upon.
4. UTILITIES. Tenant shall pay all charges for heat, water, gas, electricity,
telephone and any other utilities used on or provided to the Premises. Landlord
shall not be liable to Tenant for interruption in or curtailment of any utility
service, nor shall any such interruption or curtailment constitute constructive
eviction or grounds for rental abatement. In the event the Premises is not
separately metered, Tenant shall have the option, subject to Landlord's prior
written consent and the terms of this Lease, to cause the Premises to be
separately metered at Tenant's cost and expense. If Tenant does not elect to
cause the Premises to be separately metered, Tenant shall pay a reasonable
proration of utilities, as determined by Landlord. Notwithstanding any provision
to the contrary contained in this Lease, in no event shall Tenant use or be
entitled to use more than 3,000 amps of power within the Premises.
Notwithstanding any provision of this Lease to the contrary, Landlord shall be
under no obligation to provide or cause to be provided any electrical service to
the Premises prior to the Commencement Date.
5. TAXES
5.1 Real Property Taxes. Tenant shall pay to Landlord Tenant's Share of
Real Property Taxes (as defined in Section 5.2) as a part of Operating Expenses
for each full or partial calendar year during the Lease Term in accordance with
the terms and provisions of Section 7.1 below.
5.2 Definition of Real Property Taxes. "Real Property Taxes" shall be the
sum of the following: all real property taxes, assessments, supplementary taxes,
escape taxes, possessory-interest taxes, business or license taxes or fees,
service payments in lieu of such taxes or fees, annual or periodic license or
use fees, excises, transit and traffic charges, housing fund assessments, open
space charges, childcare fees, school, sewer and parking fees or any other
assessments, levies, fees, exactions or charges, general and special, ordinary
and extraordinary, unforeseen as well as foreseen (including fees "in-lieu" of
any such tax or assessment) which are assessed, levied, charged, conferred or
imposed by any public authority upon the Land, the Building or any other
improvements located on the Land and/or Project (or any real property comprising
any portion thereof) or its operations, together with all taxes, assessments or
other fees imposed by any public authority upon or measured by any Rent or other
charges payable hereunder, including any gross receipts tax or excise tax levied
by any governmental authority with respect to receipt of rental income, or upon,
with respect to or by reason of the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof, or documentary transfer taxes upon this transaction or any
document to which Tenant is a party creating or transferring an interest in the
Premises, together with any tax imposed in substitution, partially or totally,
of any tax previously included within the aforesaid definition or any additional
tax the nature of which was previously included within the aforesaid definition,
together with any and all costs and expenses (including, without limitation,
attorneys', administrative and expert witness fees and costs) of challenging any
of the foregoing or seeking the reduction in or abatement, redemption or return
of any of the foregoing, but only to the extent of any such reduction,
abatement, redemption or return. All references to Real Property Taxes during a
particular year shall be deemed to refer to taxes accrued during such year,
including supplemental tax bills regardless of when they are actually assessed
and without regard to when such taxes are payable. Real Property Taxes shall
expressly include One Hundred Percent (100%) of any increase or supplemental
assessments accruing as a result of the construction of the Building, or any
other improvements located on the Land. In addition to Tenant's Share of Real
Property Taxes (paid as a part of Operating Expenses), Tenant shall pay to
Landlord One Hundred Percent (100%) of any increase in the assessed value of the
Land directly attributable to the value of any Tenant Improvements (as defined
in the Work Letter, if
-4-
any). The obligation of Tenant to pay Real Property Taxes (including any
supplemental taxes) for the last full and/or partial year(s) of the Term shall
survive the expiration or early termination of this Lease. In no event shall
Tenant or any Tenant Party (as defined in Section 12.1) be entitled to file any
property tax assessment appeal; provided, however, Tenant may appeal any
personal property taxes assessed on personal property which (x) is owned by
Tenant, (y) is not affixed to any portion of the Premises and (z) is not deemed
to be a fixture under the laws of the State of Oregon. Nothing contained in this
Lease shall require Tenant to pay any franchise, corporate, estate or
inheritance tax of Landlord, or any income, profits or revenue tax or charge
upon the net income of Landlord. Subject to the terms of this Section 5.2, Real
Property Taxes for partial years, if any, falling within the Term shall be
prorated.
5.3 Personal Property Taxes. Prior to delinquency, Tenant shall pay all
taxes and assessments levied upon trade fixtures, alterations, additions,
improvements, inventories and other personal property located and/or installed
on the Premises by Tenant; and Tenant shall provide Landlord copies of receipts
for payment of all such taxes and assessments. To the extent any such taxes are
not separately assessed or billed to Tenant, Tenant shall pay the amount thereof
as invoiced by Landlord.
6. OPERATING EXPENSES
6.1 Operating Expenses. Tenant shall pay to Landlord Tenant's Share of the
Building Operating Expenses and Tenant's Share of Project Operating Expenses for
each full or partial calendar year during the Lease Term, as provided in Section
7.1 below.
6.2 Definition of Operating Expenses. "Operating Expenses" shall mean
collectively the "Building Operating Expenses" and the "Project Operating
Expenses" as defined in this Section 6.2.
6.2.1 "Building Operating Expenses" means the total costs and expenses
incurred by Landlord in the ownership, operation, maintenance, repair and
management of the Building, the Land and/or the Building Common Area, including,
but not limited to: (a) repair, replacement, maintenance, utility costs and
landscaping of the Building Common Area, including, but not limited to, any and
all costs of maintenance, repair and replacement of all parking areas (including
bumpers, sweeping, striping and slurry coating), common driveways, loading and
unloading areas, trash areas, outdoor lighting, sidewalks, walkways,
landscaping, irrigation systems, fences and gates and other costs which are
allocable to the Building and/or the Land including any costs under the terms of
any CC&Rs affecting the real property, (b) non-structural maintenance, repair
and replacement of the roof (and roof membrane), skylights and exterior walls of
the Premises (including painting); (c) insurance deductibles and the costs
relating to the insurance maintained by Landlord as described in Section 8.1
below, including, without limitation, Landlord's cost of any deductible or self
insurance retention; (d) maintenance contracts for, and the repair and
replacement of, the heating, ventilation and air-conditioning (HVAC) systems and
elevators, if any; (e) maintenance, repair, replacement, monitoring and
operation of the fire/life safety and sprinkler system (to the extent Landlord
is obligated to do so pursuant to Section 9.2); (f) trash collection; (g)
capital improvements or capital replacements (excluding the roof structure) made
to or capital assets acquired for the Building or the Land after the
Commencement Date that in Landlord's good faith judgment are intended to reduce
Building Operating Expenses or are reasonably necessary for the health and
safety of the occupants of the Building or are required under any governmental
law or regulation, which capital costs, or an allocable portion thereof, shall
be amortized over the period determined by Landlord, together with interest on
the unamortized balance at the Applicable Interest Rate, all in accordance with
"generally accepted accounting principles" ("GAAP") consistently applied; (h)
commercially reasonable reserves set aside for maintenance and repair; (i) Real
Property Taxes attributable to the Land; and (j) any other costs, except as
noted in this Lease, incurred by Landlord related to the Building and/or the
Land and not related to the Project as a whole. Notwithstanding any provision to
the contrary contained in this Section 6.2.1, Tenant shall pay to Landlord an
amount equal to three percent (3%) of Rent for the costs and fees incurred by
Landlord in connection with the management of this Lease, the Premises, the
Building and/or the Land including the cost of those services which are
customarily performed by a property management services company, whether
performed internally or through an outside management company. Building
Operating Expenses shall not include (i) replacement of or structural repairs to
the roof, slab or the exterior walls; (ii) repairs to the extent covered by
insurance proceeds, or paid by Tenant or other third parties; (iii) alterations
solely attributable to tenants of the Project other than Tenant; (iv) marketing
and legal expenses; (v) any cost or expense associated with compliance with any
laws, ordinances, rules or regulations regarding any condition existing in the
Building or on the Land if
-5-
such condition existed prior to the Commencement Date, including, but not
limited to removal of any and all asbestos and other toxic and hazardous
substances located in the Premises; and (vi) any costs or expenses being charged
directly and solely to other tenants in the Building (other than pursuant to the
operating expenses clauses of the lease(s) of such other tenant(s)).
62.2 Project Operating Expenses. "Project Operating Expenses" shall
include all reasonable and necessary expenses incurred by Landlord in the
ownership, operation, maintenance, repair and management of the Project Common
Area, including, without limitation, Real Property Taxes attributable to the
Project Common Area; provided, however that all improvements or replacements
made to or assets acquired for the Project after the Commencement Date that are
reasonably expected to reduce Project Operating Expenses or are reasonably
necessary for the health and safety of the occupants of the Project or required
under any government of law or regulation, which costs, or an allocable portion
thereof, shall be amortized over the period determined by Landlord, together
with interest on the unamortized balance at the Applicable interest Rate
actually paid to third party lenders, all in accordance with GAAP consistently
applied.
7. ESTIMATED EXPENSES
7.1 Payment. "Estimated Expenses" for any particular year shall mean
Landlord's estimate of Operating Expenses for a calendar year. Tenant shall pay
Tenant's Share of the Estimated Expenses with installments of Base Rent in
monthly installments of one-twelfth (l/12th) thereof on the first day of each
calendar month during such year. If at any time Landlord determines that
Operating Expenses are projected to vary from the then Estimated Expenses,
Landlord may, by notice to Tenant, revise such Estimated Expenses, and Tenant's
monthly installments for the remainder of such year shall be adjusted so that by
the end of such calendar year Tenant has paid to Landlord Tenant's Share of the
revised Estimated Expenses for such year.
7.2 Adjustment. "Operating Expenses Adjustment" (or "Adjustment") shall
mean the difference between Tenant's Share of Estimated Expenses and Tenant's
Share of Operating Expenses for any calendar year. After the end of each
calendar year, Landlord shall deliver to Tenant a statement of Tenant's Share of
Operating Expenses for such calendar year, accompanied by a computation in
sufficient detail of the Adjustment. If Tenant's payments are less than Tenant's
Share, then Tenant shall pay the difference within twenty (20) days after
receipt of such statement Tenant's obligation to pay such amount shall survive
the expiration or termination of this Lease. If Tenant's payments exceed
Tenant's Share, then (provided that Tenant is not in material default), Landlord
shall credit such excess amount to future installments of Tenant's Share for the
next calendar year. If Tenant is in material default, Landlord may, but shall
not be required to, credit such amount to Rent arrearages.
7.3 Audit Right. In the event of any dispute as to the amount of Tenant's
Share of Operating Expenses, Tenant or an accounting firm selected by Tenant and
reasonably satisfactory to Landlord will have the right, by prior written notice
("Audit Notice") given within ninety (90) days ("Audit Period") following
receipt of an actual statement of Operating Expenses ("Actual Statement") and at
reasonable times during normal business hours, to audit Landlord's accounting
records with respect to Operating Expenses relative to the year to which such
Actual Statement relates at the office of Landlord at which records are kept or,
at Landlord's election, the office of Landlord's property manager (if any). In
no event will Landlord or its property manager be required to (i) photocopy any
accounting records or other items or contracts, (ii) create any ledgers or
schedules not already in existence, (iii) incur any costs or expenses relative
to such inspection, or (iv) perform any other tasks other than making available
such accounting records as aforesaid. Neither Tenant nor its auditor may leave
the office of Landlord with originals of any materials supplied by Landlord.
Tenant must pay Tenant's Share of Operating Expenses when due pursuant to the
terms of this Lease and may not withhold payment of Operating Expenses or any
other rent pending results of the audit or during a dispute regarding Operating
Expenses. The audit must be completed within sixty (60) days of the date of
Tenant's Audit Notice and the results of such audit shall be delivered to
Landlord within seventy-five (75)days of the date of Tenant's Audit Notice. If
Tenant does not comply with any of the aforementioned time frames, then such
Actual Statement will be conclusively binding on Tenant. If such audit or review
correctly reveals that Landlord has overcharged Tenant, then within thirty (30)
days after the results of such audit are made available to Landlord, the amount
of such overcharge shall be deducted from the installments of Tenant's Share of
Operating Expenses next becoming due. If the audit reveals that Tenant was
undercharged, then within thirty (30) days after the results of the audit are
made available to Tenant, Tenant agrees to reimburse Landlord the amount of such
undercharge. Tenant agrees to pay the cost of such audit, provided that if the
audit
-6-
reveals that Landlord's determination of Tenant's Share of Operating Expenses as
set forth in the relevant Actual Statement was in error in Landlord's favor by
more than five percent (5%) of the amount charged by Landlord to Tenant pursuant
to such Actual Statement, then Landlord agrees to pay the reasonable,
third-party cost of such audit incurred by Tenant. To the extent Landlord must
pay the cost of such audit, such cost shall not exceed a reasonable hourly
charge for a reasonable amount of hours spent by such third-party in connection
with the audit. Tenant agrees to keep the results of the audit confidential and
will cause its agents, employees and contractors to keep such results
confidential. To that end, Landlord may require Tenant and its auditor to
execute a confidentiality agreement provided by Landlord.
8. INSURANCE
8.1 Landlord. Landlord shall maintain insurance through individual or
blanket policies insuring the Building against fire and extended coverage
(including, if Landlord elects, "all risk" coverage, earthquake/volcanic action,
flood and/or surface water insurance) for the full replacement cost of the
Building, with deductibles and the form and endorsements of such coverage as
selected by Landlord, together with rental abatement insurance against loss of
Rent in an amount equal to the amount of Rent for a period of at least twelve
(12) months commencing on the date of loss. Landlord may also carry such other
insurance as is commercially reasonable (when compared to insurance customarily
carried by sophisticated, institutional landlords for the protection of such
landlords and the production of properties similar to the Premises), including,
without limitation, liability insurance in such amounts and on such terms as
Landlord shall determine. Tenant shall pay to Landlord, as a portion of the
Operating Expenses, the costs of the insurance coverages described herein,
including, without limitation, Landlord's cost of any self-insurance deductible
or retention.
8.2 Tenant. Tenant shall, at Tenant's expense, obtain and keep in force at
all times the following insurance:
8.2.1 Commercial General Liability Insurance (Occurrence Form). A
policy of commercial general liability insurance (occurrence form) having a
combined single limit of not less than Two Million Dollars ($2,000,000) per
occurrence and Two Million Dollars ($2,000,000) aggregate per location if Tenant
has multiple locations, providing coverage for, among other things, blanket
contractual liability, premises, products/completed operations with an
"Additional Insured-Managers or Lessors of Premises Endorsement" and containing
the "Amendment of the Pollution Exclusion Endorsement" for damage caused by
heat, smoke or fumes from a hostile fire, and personal and advertising injury
coverage, with deletion of the exclusion for operations within fifty (50) feet
of a railroad track (railroad protective liability), if applicable, and if
applicable, and, if necessary, Tenant shall provide for restoration of the
aggregate limit, and provided that the policy shall not contain any
intra-insured exclusions as between insured persons or organizations, but shall
include coverage for liability assumed under this Lease as an "insured contract"
for the performance of Tenant's indemnity obligations under this Lease;
8.2.2 Automobile Liability Insurance. Business automobile liability
insurance having a combined single limit of not less than Two Million Dollars
($2,000,000) per occurrence and insuring Tenant against liability for claims
arising out of ownership, maintenance, or use of any owned, hired or non-owned
automobiles;
8.2.3 Workers' Compensation and Employer's Liability Insurance.
Workers' compensation insurance having limits not less than those required by
state statute and federal statute, if applicable, and covering all persons
employed by Tenant in the conduct of its operations on the Premises (including
the all states endorsement and, if applicable, the volunteers endorsement),
together with employer's liability insurance coverage in the amount of at least
One Million Dollars ($1,000,000);
8.2.4 Property Insurance. "All risk" property insurance including
boiler and machinery comprehensive form, if applicable, covering damage to or
loss of any of Tenant's personal property, fixtures, equipment and alterations,
including electronic data processing equipment (collectively "Tenant's
Property") (and coverage for the full replacement cost thereof including
business interruption of Tenant), together with, if the property of Tenant's
invitees is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
invitees and located in the Premises; and
-7-
8.2.5 Business Interruption. Loss of income and extra expense
insurance in amounts as will reimburse Tenant for direct or indirect loss of
earnings attributable to all peril commonly insured against by prudent lessees
in the business of Tenant or attributable to prevention of access to the
Premises as a result of such perils.
8.3 General
8.3.1 Insurance Companies. Insurance required to be maintained by
Tenant shall be written by companies licensed to do business in the state in
which the Premises are located and having a "General Policyholders Rating" of at
least "A-/VIII" (or such higher rating as may be required by a lender having a
lien on the Premises) as set forth in the most current issue of "Best's
Insurance Guide."
8.3.2 Certificates of Insurance. Tenant shall deliver to Landlord
certificates of insurance for all insurance required to be maintained by Tenant
in the form of Exhibit D, attached hereto (or in a form acceptable to Landlord
in its sole discretion), no later than seven (7) days prior to the date of
possession of the Premises. Tenant shall, at least ten (10) days prior to
expiration of the policy, furnish Landlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification except after sixty
(60) days prior written notice to the parties named as additional insureds in
this Lease (except in the case of cancellation for nonpayment of premium in
which case cancellation shall not take effect until at least ten (10) days'
notice has been given to Landlord). If Tenant fails to maintain any insurance
required in this Lease, Tenant shall be liable for all losses and costs suffered
or incurred by Landlord (including litigation costs and attorneys' fees and
expenses) resulting from said failure.
8.3.3 Additional Insureds. Landlord, Landlord's lender, if any, and
any property management company of Landlord for the Premises shall be named as
additional insureds on a form approved by Landlord under all of the policies
required by Section 8.2.1. The policies required under Section 8.2.1 shall
provide for severability of interest.
8.3.4 Primary Coverage. All insurance to be maintained by Tenant
shall, except for workers' compensation and employer's liability insurance, be
primary, without right of contribution from insurance of Landlord. Any umbrella
liability policy or excess liability policy (which shall be in "following form")
shall provide that if the underlying aggregate is exhausted, the excess coverage
will drop down as primary insurance. The limits of insurance maintained by
Tenant shall not limit Tenant's liability under this Lease.
8.3.5 Mutual Waiver of Subrogation. Subject to Section 13.2, whenever
(a) any loss, cost, damage or expense resulting from fire, explosion or any
other casualties incurred by either Landlord or Tenant or by anyone claiming by,
through or under Landlord or Tenant in connection with the Premises, and (b)
such party is covered in whole or in part by insurance (or would have been
covered but for such party's failure to maintain the coverage required in this
Section 8) with respect to such loss, cost, damage or expense or as required
under this Lease to be self-insured, then the party so insured (or so required)
hereby waives (on its own behalf and on behalf of its insured) any claims
against and releases the party from any liability said other party may have on
account of such loss, cost, damage or expense. All insurance which is carried by
either party to insure against damage or loss to property shall include
provisions denying to each respective insurer rights of subrogation and recovery
against the other party.
8.3.6 Notification of Incidents. Tenant shall notify Landlord within
twenty-four (24) hours after the occurrence of any accidents or incidents in the
Premises, the Building, Common Areas or the Project which could give rise to a
claim under any of the insurance policies required under this Section 8.
8.4 Indemnity. Tenant shall indemnify, protect, defend (by counsel
acceptable to Landlord) and hold harmless Landlord and Landlord's affiliated
entities, and each of their respective members, managers, partners, directors,
officers, employees, shareholders, lenders, agents, contractors, successors and
assigns from and against any and all claims, judgments, causes of action,
damages, penalties, costs, liabilities, and expenses, including all costs,
reasonable attorneys' fees, expenses and liabilities incurred in the defense of
any such claim or any action or proceeding brought thereon, arising at any time
during or after the Term as a result (directly or indirectly) of or in
connection with (i) any default in the performance of any obligation on Tenant's
part to be performed under the terms of this Lease, or (ii) Tenant's use of the
Premises, the conduct of Tenant's business or any activity, work or
-8-
things done, permitted or suffered by Tenant or any Tenant Party in or about the
Premises, the Building, the Common Area or other portions of the Project, except
for claims caused solely by Landlord's gross negligence or willful misconduct.
The obligations of Tenant under this Section 8.4 shall survive the termination
of this Lease with respect to any claims or liability arising prior to such
termination. Landlord shall indemnify, protect, defend (by counsel reasonably
acceptable to Tenant) and hold harmless Tenant and Tenant's affiliated entities,
and each of their respective members, managers, partners, directors, officers,
employees, shareholders, lenders, agents, contractors, successors and assigns
from and against any and all claims, judgments, causes of action, damages,
penalties, costs, liabilities, and expenses, including all costs, reasonable
attorney's fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon caused solely by Landlord's
gross negligence or willful misconduct. The obligations of Landlord under this
Section 8.4 shall survive the termination of this Lease with respect to any
claims or liability arising prior to such termination.
8.5 Exemption of Landlord from Liability. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property
including, but not limited to, Tenant's fixtures, equipment, furniture and
alterations or illness or injury to persons in, upon or about the Premises, the
Building, the Land, the Common Area or other portions of the Project arising
from any cause, and Tenant hereby expressly releases Landlord and waives all
claims in respect thereof against Landlord, except only such claims which are
caused solely by Landlord's gross negligence or willful misconduct or which are
expressly provided for in Section 12.3 hereof. Tenant hereby agrees that
Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom. Tenant hereby further agrees that Landlord shall not be liable
for damage to the property of Tenant, or injury to or illness or death of Tenant
or any Tenant Party or any other person in or about the Premises, the Building,
the Common Area or the Project, whether such damage, illness or injury is caused
by fire, steam, electricity, gas, water or rain, or from the breakage, leakage
or other defects of sprinklers, wires, appliances, ventilation, plumbing, air
conditioning or lighting fixtures, or from any other cause, and whether said
damage, illness or injury results from conditions arising upon the Premises,
upon other portions of the Building or from other sources or places, and
regardless of whether the cause of such damage, illness or injury or the means
of repairing the same is inaccessible to Tenant, except only damage, illness or
injury caused solely by Landlord's gross negligence or willful misconduct or
which is expressly provided to the contrary in Section 12.3 hereof. Landlord
shall not be liable for any damages arising from any act or neglect of any
contractor or other tenant, if any, of the Building or the Project or Landlord's
failure to enforce the terms of any agreements with parties other than Tenant;
provided that Landlord shall use its commercially reasonable efforts to enforce
the terms of any agreements with parties other than Tenant.
9. REPAIRS AND MAINTENANCE
9.1 Tenant. Tenant, at Tenant's sole cost and expense, shall keep and
maintain the Premises (interior and exterior, excluding roofing and painting),
including, without limitation, loading docks, roll up doors and ramps, floors,
subfloors and floor coverings, walls and wall coverings, doors, windows, glass,
plate glass, locks, ceilings, skylights, lighting systems, interior plumbing,
electrical and mechanical systems and wiring, appliances and devices using or
containing refrigerants, fixtures and equipment in good repair and in a clean
and safe condition, and repair and/or replace any and all of the foregoing in a
clean and safe condition, in good order, condition and repair. Without limiting
the foregoing, Tenant shall, at Tenant's sole expense, immediately replace all
broken glass in the Premises with glass equal to or in excess of the
specification and quality of the original glass; and repair any area damaged by
Tenant, Tenant's agents, employees, invitees and visitors, including any damage
caused by any roof penetration, whether or not such roof penetration was
approved by Landlord. All repairs and replacements by Tenant shall be made and
performed: (a) at Tenant's cost and expense and at such time and in such manner
as Landlord may designate, (b) by contractors or mechanics approved by Landlord,
(c) so that same shall be at least equal in quality, value and utility to the
original work or installation, (d) in a manner and using equipment and materials
that will not interfere with or impair the operations, use or occupation of the
Building or any of the mechanical, electrical, plumbing or other systems in the
Building or the Project, and (e) in accordance with the Rules and Regulations
and all Applicable Laws (as defined in Section 11). In the event Tenant fails,
in the reasonable judgment of Landlord, to maintain the Premises in accordance
with the obligations under the Lease, which failure continues at the end of
fifteen (15) days following Tenant's receipt of written notice from Landlord
stating the nature of the failure, or in the case of an emergency immediately
without prior notice, Landlord shall have the right to enter the Premises and
perform such maintenance, repairs or refurbishing at Tenant's sole cost and
expense (including a sum for overhead to Landlord equal to ten percent (10%) of
the costs of maintenance, repairs or refurbishing). Tenant shall maintain
written records of maintenance and repairs, as required by any Applicable
-9-
Law, and shall use certified technicians to perform such maintenance and
repairs, as so required. Tenant shall deliver full and complete copies of all
service or maintenance contracts entered into by Tenant for the Premises to
Landlord within one hundred twenty (120) days after the Commencement Date.
9.2 Landlord. Landlord shall, subject to the following limitations, repair
damage to structural portions of the roof, foundation and load-bearing portions
of walls (excluding wall coverings, painting, glass and doors) of the Building,
and damage to the exterior walls and other structural portions of the Building;
provided, if such damage is caused by an act or omission of Tenant, or any
Tenant Party, then such repairs shall be at Tenant's sole expense. Landlord
shall not be required to make any repair resulting from (i) any alteration or
modification to the Building or to mechanical equipment within the Building
performed by, for or because of Tenant or to special equipment or systems
installed by, for or because of Tenant, (ii) the installation, use or operation
of Tenant's property, fixtures and equipment, (iii) the moving of Tenant's
property in or out of the Building or in and about the Premises, (iv) Tenant's
use or occupancy of the Premises in violation of Section 11 of this Lease or in
the manner not contemplated by the parties at the time of the execution of this
Lease, (v) the acts or omissions of Tenant or any Tenant Party, (vi) fire and
other casualty, except as provided by Section 13 of this Lease or (vii)
condemnation, except as provided in Section 14 of this Lease. Landlord shall
have no obligation to make repairs under this Section 9.2 until a reasonable
time after receipt of written notice from Tenant of the need for such repairs.
Subject to Section 9.3, there shall be no abatement of Rent during the
performance of such work, provided that neither the access to nor use of the
Premises is materially impaired in which case Tenant's exclusive remedy shall be
determined in accordance with Section 9.3 below. Landlord shall not be liable to
Tenant for injury or damage that may result from any defect in the construction
or condition of the Premises, nor for any damage that may result from
interruption of Tenant's use of the Premises during any repairs by Landlord,
provided that Landlord shall use its commercially reasonable efforts to enforce
the terms of any agreements with parties other than Tenant. Tenant waives any
right to repair the Premises, the Building and/or the Common Area at the expense
of Landlord under any Applicable Law.
9.3 Landlord's Failure to Perform. In the event Landlord fails to commence
the repair of the Premises as required by Section 9.2 above ("Landlord Repair
Obligations") and such failure to commence such repair(s) continues at the end
of thirty (30) days following Landlord's receipt of written notice from Tenant
stating with particularity the nature of such failure, Tenant shall
simultaneously give Landlord and Landlord's mortgagee (provided Tenant has been
provided written notice of the address of such mortgagee) written notice
specifying such default and containing the following phrase (or substantially
similar to the following phrase) on page 1 of the notice in all capital letters
and boldface type (or it shall not be deemed validly given to Landlord) "YOUR
FAILURE TO COMMENCE THE CURE OF LANDLORD'S REPAIR OBLIGATIONS SET FORTH IN THIS
NOTICE WITHIN TEN (10) BUSINESS DAYS SHALL ENTITLE THE UNDERSIGNED TO CURE SUCH
DEFAULT AT LANDLORD'S EXPENSE WITHOUT FURTHER NOTICE". Landlord shall thereupon
have ten (10) business days in which to commence to cure the applicable Landlord
Repair Obligation. In addition, Landlord's mortgagee shall have the right (but
not the obligation) to cure or remedy Landlord's Repair Obligations upon the
terms and conditions of any SNDA (as defined in Section 17.2 below) entered into
by and between Tenant and any such lender, and if no such SNDA exists, then upon
the terms and conditions described in Section 18.15. In the event Landlord fails
to commence to cure the applicable Landlord Repair Obligation within said ten
(10) business day period and Tenant undertakes a Landlord Repair Obligation,
Tenant shall use a qualified, licensed and bondable contractor which normally
and regularly performs similar work on concrete tilt-up industrial buildings. If
Tenant thereafter delivers to Landlord an invoice by Tenant of its costs of
taking action which Tenant claims should have been taken by Landlord (the
"Tenant Invoice"), and if such Tenant Invoice sets forth a reasonably
particularized breakdown of its costs and expenses in connection with
undertaking such Landlord Repair Obligation, then Tenant shall be entitled to
offset against Base Rent the amount set forth in such Tenant Invoice following
delivery of the additional written notice described below; provided, however,
the amount of offset during any single month shall not exceed the greater of (A)
fifteen percent (15%) of the total Base Rent payable by Tenant to Landlord for
each applicable month or (B) the amount necessary to amortize fully Tenant's
costs of cure (plus interest at ten percent (10%) per annum on such costs) from
the date of completion of such cure to the expiration date of the Lease Term
(without regard to any unexercised renewal options), but in no event greater
than twenty percent (20%) of the total monthly Base Rent for any one month. The
unpaid balance of the Tenant's Invoice, if any, shall bear interest at an annual
rate of ten percent (10%). If, at any time, Landlord delivers to Tenant a
written objection to Tenant's claim that a particular Landlord Repair Obligation
is not required under the terms of this Lease, setting forth with reasonable
particularity Landlord's reasons for its claim that such repair action did not
have to be taken by Landlord
-10-
pursuant to the terms of this Lease, then Tenant shall not be entitled to such
offset, but as Tenant's sole remedy, Tenant may proceed to claim a Landlord
default and, if elected by either Landlord or Tenant, the matter shall proceed
to resolution by arbitration pursuant to the arbitration procedures set forth in
attached Exhibit J. The costs of such arbitration (including reasonable
attorneys fees and costs awarded to the prevailing party, if any) shall be paid
to the prevailing party in the arbitration if and to the extent awarded by the
arbitrator. In the event that Landlord fails to pay any amount to Tenant within
twenty (20) days following delivery of the Tenant Invoice, then Tenant may
provide to Landlord a written demand therefor ("Final Demand") which contains
the following phrase (or substantially similar to the following phrase) on page
1 of the notice in all capital letters and boldface type (or it shall not be
deemed validly delivered to Landlord) "YOUR FAILURE TO REIMBURSE TENANT AS
REQUIRED HEREIN WITHIN FIFTEEN (15) DAYS SHALL ENTITLE THE UNDERSIGNED TO
EXERCISE CERTAIN OFFSET RIGHTS AS SET FORTH IN THE LEASE WITHOUT FURTHER
NOTICE." If Landlord fails to pay to Tenant the amount due to Tenant within
fifteen (15) days following Landlord's receipt of the Final Demand or if
Landlord fails to pay any award granted to Tenant pursuant to an arbitration
proceeding in the manner described above within the time frame established
pursuant to any such proceeding, then Tenant may offset from the next
installments of rent and other charges coming due under this Lease the full
amount owed by Landlord to Tenant (together with all accrued interest).
10. ALTERATIONS
10.1 Trade Fixtures; Alterations. Tenant may install necessary trade
fixtures, equipment and furniture in the Premises, provided that such items are
installed and are removable without structural or material damage to the
Premises, or the Building. Without limiting the generality of the foregoing,
Landlord and Tenant hereby acknowledge that Tenant intends to install within the
Premises certain trade fixtures and equipment related to Tenant's Permitted Use
including, without limitation, powder coat room equipment ("Tenant's
Equipment"). Notwithstanding the foregoing, Tenant shall, prior to the
installation of Tenant's Equipment, deliver to Landlord for Landlord's review
and approval, which approval shall not be unreasonably withheld or delayed, an
inventory of Tenant's Equipment, the proposed location of such equipment within
the Premises and the specifications related to such items (including the gross
weight of each item included in Tenant's Equipment). Tenant shall not install or
locate any of Tenant's Equipment within the Premises unless and until Landlord
has approved the same in accordance with the preceding sentence. Tenant shall
not construct, nor allow to be constructed, any alterations or physical
additions in, about or to the Premises without obtaining the prior written
consent of Landlord, which consent shall be conditioned upon Tenant's compliance
with the provisions of Exhibit G and any other applicable requirements of
Landlord regarding construction of improvements and alterations. If Landlord
does not respond to a written request from Tenant made in accordance with
Exhibit G within ten (10) business days, then Landlord shall be deemed to
disapprove such request. In the event Tenant makes any alterations to the
Premises that trigger or give rise to a requirement that the Building or the
Premises come into compliance with any governmental laws, ordinances, statutes,
orders and/or regulations (such as ADA requirements), Tenant shall be fully
responsible for complying, at its sole cost and expense, with same. Tenant shall
file a notice of completion after completion of such work and provide Landlord
with a copy thereof.
10.2 Damage; Removal. Tenant shall repair all damage to the Premises, the
Building, the Common Area or the Project caused by the Installation or removal
of Tenant's fixtures, equipment, furniture or alterations. Upon the expiration
or earlier termination of this Lease, Tenant shall remove any or all trade
fixtures, alterations, additions, improvements (including the Tenant
Improvements [as defined in the Work Letter]) and partitions ("Alteration(s)")
made or installed by or on behalf of Tenant; provided, however, Landlord has the
absolute right to require Tenant to have all or any portion of such items
designated by Landlord to remain on the Premises, in which event they shall be
and become the property of Landlord upon the termination of this Lease. Should
Tenant make any Alterations without the prior written approval of Landlord,
Landlord may require that Tenant remove any or all of such Alterations and
repair any damage to the Premises resulting from the installation and/or removal
of such Alterations at any time and from time to time. Subject to the conditions
set forth above, Tenant shall restore the Premises to its condition existing
prior to the construction of any Alterations. Tenant shall further patch and
fill all holes within the Premises. All penetrations of the roof shall be
resealed to a water tight condition. In no event shall Tenant remove from the
Building any mechanical or electrical systems or any wiring or any other aspect
of any systems within the Premises, unless Landlord specifically permits such
removal in writing. All such removals and restoration shall be accomplished in a
good and workmanlike manner and so as not to cause any damage to the Premises,
the Building, the Common Area or the Project whatsoever.
-11-
10.3 Liens. Tenant shall promptly pay and discharge all claims for labor
performed, supplies furnished and services rendered at the request of Tenant and
shall keep the Premises free of all mechanics' and materialmen's liens in
connection therewith. Tenant shall provide at least ten (10) days prior written
notice to Landlord before any labor is performed, supplies furnished or services
rendered on or at the Premises and Landlord shall have the right to post on the
Premises notices of non-responsibility. If any lien is filed, Tenant shall cause
such lien to be released and removed within ten (10) days after the date of
filing, and if Tenant fails to do so, Landlord may take such action as may be
necessary to remove such lien and Tenant shall pay Landlord such amounts
expended by Landlord together with interest thereon at the Applicable Interest
Rate from the date of expenditure.
10.4 Standard of Work. All work to be performed by or for Tenant pursuant
hereto shall be performed diligently and in a first class, workmanlike manner,
and in compliance with the terms of provisions of Exhibit G, all Applicable
Laws, and/or Tenant and Landlord's insurance carriers. Landlord shall have the
right, but not the obligation, to inspect periodically the work on the Premises
and Landlord may require changes in the method or quality of the work.
11. USE. The Premises shall be used only for the Permitted Uses set forth in the
Basic Lease Information and for no other uses. Tenant's use of the Premises
shall be in compliance with and subject to all applicable laws, statutes, codes,
ordinances, orders, rules, regulations, conditions of approval and requirements
of all federal, state, county, municipal and governmental authorities and all
administrative or judicial orders or decrees and all permits, licenses,
approvals and other entitlements issued by governmental entities, and rules of
common law, relating to or affecting the Project, the Premises or the Building
or the use or operation thereof, whether now existing or hereafter enacted,
including, without limitation, the Americans with Disabilities Act of 1990, 42
U.S.C. 12111 et seg. (the "ADA") as the same may be amended from time to time,
all Environmental Laws (as defined in Section 12.1), and any covenants,
conditions and restrictions encumbering the Land and/or the Project or any
supplement thereto recorded in any official or public records with respect to
the Project or any portion thereof ("Applicable Laws"). From and after the date
hereof Tenant shall use the Premises and permit the Premises to be used solely
for uses permitted by that certain Declaration of Covenants, Conditions and
Restrictions for Southshore Corporate Park executed by Catellus Development
Corporation and recorded in the Official Records of Multnomah County, State of
Oregon on June 7, 1999 as Instrument No. 99113258 (the "CC&Rs"). In addition,
Tenant acknowledges that the Premises are subject to that certain Administrative
Order on Consent made and entered into by and among the United States
Environmental Protection Agency, the State of Oregon Department of Environmental
Quality and Winmar Pacific, Inc. dated effective as of April 16, 1991 (the
"Administrative Order"), which imposes certain covenants, conditions and
restrictions on Southshore Corporate Park. Tenant shall be responsible for
obtaining any permit, business license, or other permits or licenses required by
any governmental agency permitting Tenant's use or occupancy of the Premises. In
no event shall the Premises be used for any of the Prohibited Uses set forth on
Exhibit E attached hereto, as such Exhibit has been modified to conform to
Tenant's proposed use of the Premises. Notwithstanding any provision to the
contrary in this Section 11, in the event that a change in technology or similar
change in circumstances reasonably requires Tenant to use additional chemicals
or increased quantities of the permitted chemicals set forth on Schedule 1 to
Exhibit E (the "Permitted Hazardous Materials") in the manufacturing process
related to Tenant's Permitted Use, Tenant may submit to Landlord a written
request to modify Exhibit E which request shall identify the specific chemicals
and quantities to be used on the Premises (the "Proposed Hazardous Materials").
Landlord shall have ten (10) days from receipt of such a Tenant request to
approve or disapprove Tenant's request to modify the Permitted Hazardous
Materials in which case Landlord and Tenant shall execute an amendment to
Exhibit E of the Lease accordingly, provided, however, Landlord's approval
rights related to the Proposed Hazardous Materials shall be limited to the
Proposed Hazardous Materials' compliance with the CC&Rs and all Applicable Laws.
Subject to Tenant's obligation to comply with all Applicable Laws and the CC&Rs,
Landlord's failure to disapprove Tenant's requested modification to the
Permitted Hazardous Materials within such ten (10) day period shall be deemed
Landlord's approval thereof. Tenant shall comply with the rules and regulations
attached hereto as Exhibit F, together with such additional rules and
regulations as Landlord may from time to time prescribe. Tenant shall not commit
waste, overload the floors or structure of the Building, subject the Premises,
the Building, the Common Area or the Project to any use which would damage the
same or increase the risk of loss or violate any insurance coverage, permit any
unreasonable odors, smoke, dust, gas, substances, noise or vibrations to emanate
from the Premises, take any action which would constitute a nuisance or would
disturb, obstruct or endanger any other tenants, take any action which would
abrogate any warranties, or use or allow the Premises to be used for any
unlawful purpose. Tenant shall have the right in common with other tenants of
Landlord to use the parking facilities of the Project. Tenant agrees not to
overburden the parking facilities and
-12-
agrees to cooperate with Landlord and other tenants in the use of parking
facilities. Landlord shall provide the number of parking spaces set forth in the
Basic Lease Information for use by Tenant. Landlord shall not be responsible for
non-compliance by any other tenant or occupant of the Project with, or
Landlord's failure to enforce, any of the rules or regulations or CC&Rs or any
other terms or provisions of such tenant's or occupant's lease. Tenant shall
promptly comply with the reasonable requirements of any board of fire insurance
underwriters or other similar body now or hereafter constituted. Tenant shall
not do any act which shall in any way encumber the title of Landlord in and to
the Premises, the Building or the Project.
12. ENVIRONMENTAL MATTERS
12.1 Hazardous Materials. Except as is specifically permitted pursuant to
Exhibit E (as modified from time to time in accordance with Section 11 of the
Lease), Tenant shall not cause nor permit, nor allow any of Tenant's employees,
agents, customers, visitors, invitees, licensees, contractors, assignees or
subtenants (individually, a "Tenant Party" and collectively, "Tenant's Parties")
to cause or permit, any Hazardous Materials to be brought upon, stored,
manufactured, generated, blended, handled, recycled, treated, disposed or used
on, under or about the Premises, the Building, the Common Area or the Project,
except for the Permitted Hazardous Materials and/or routine office and
janitorial supplies in usual and customary quantities stored, used and disposed
of in accordance with all applicable Environmental Laws. As used herein,
"Hazardous Materials" means any chemical, substance, material, controlled
substance, object, condition, waste, living organism or combination thereof,
whether solid, semi-solid, liquid or gaseous, which is or may be hazardous to
human health or safety or to the environment due to its radioactivity,
ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity,
mutagenicity, phytotoxicity, infectiousness or other harmful or potentially
harmful properties or effects, including, without limitation, tobacco smoke,
petroleum and petroleum products, asbestos, radon, polychlorinated biphenyls
(PCBs), refrigerants (including those substances defined in the Environmental
Protection Agency's "Refrigerant Recycling Rule," as amended from time to time)
and all of those chemicals, substances, materials, controlled substances,
objects, conditions, wastes, living organisms or combinations thereof which are
now or become in the future listed, defined or regulated in any manner by any
Environmental Law based upon, directly or indirectly, such properties or
effects. As used herein, "Environmental Laws" means any and all federal, state
or local environmental, health and/or safety-related laws, regulations,
standards, decisions of courts, ordinances, rules, codes, orders, decrees,
directives, guidelines, permits or permit conditions, currently existing and as
amended, enacted, issued or adopted in the future which are or become applicable
to Tenant, the Premises, the Building, the Common Area or the Project. Tenant
and Tenant's Parties shall comply with all Environmental Laws and promptly
notify Landlord in writing of the violation of any Environmental Law (or the
presence of any Hazardous Materials, other than the Permitted Hazardous
Materials and/or office and janitorial supplies as permitted above), or the
spill and/or release of any Hazardous Materials (including the Permitted
Hazardous Materials), in, on, under or about the Premises or the improvements or
the soil or groundwater thereunder. Landlord shall have the right to enter upon
and inspect the Premises and to conduct tests, monitoring and investigations. If
such tests indicate the presence of any environmental condition caused or
exacerbated by Tenant or any Tenant Party or arising during Tenant's or any
Tenant Party's occupancy, Tenant shall reimburse Landlord for the cost of
conducting such tests. The phrase "environmental condition" shall mean any
adverse condition relating to any Hazardous Materials or the environment,
including surface water, groundwater, drinking water supply, land, surface or
subsurface strata or the ambient air and includes air, land and water
pollutants, noise, vibration, light and odors. In the event of any such
environmental condition, Tenant shall promptly take any and all steps necessary
to rectify the same to the satisfaction of the applicable agencies and Landlord,
or shall, at Landlord's election, reimburse Landlord, upon demand, for the cost
to Landlord of performing rectifying work. The reimbursement shall be paid to
Landlord in advance of Landlord's performing such work, based upon Landlord's
reasonable estimate of the cost thereof; and upon completion of such work by
Landlord, Tenant shall pay to Landlord any shortfall promptly after receipt of
Landlord's bills therefor or Landlord shall promptly refund to Tenant any excess
deposit, as the case may be.
12.2 Tenant's Indemnification. Tenant shall indemnify, protect, defend (by
counsel acceptable to Landlord) and hold harmless Landlord and Landlord's
affiliated entities, and each of their respective members, managers, partners,
directors, officers, employees, shareholders, lenders, agents, contractors,
successors and assigns (individually and collectively, "Indemnitees") from and
against any and all claims, judgments, causes of action, damages, penalties,
fines, taxes, costs, liabilities, losses and expenses arising at any time during
or after the Term as a result (directly or indirectly) of or in connection with
(a) Tenant and/or any Tenant Party's breach of this Section 12, or (b) the
presence, spill and/or release of Hazardous Materials on, under or about the
Premises or other property
-13-
as a result (directly or indirectly) of Tenant's and/or any Tenant Party's
activities, including, without limitation, those involving any Hazardous
Materials (including the Permitted Hazardous Materials), or failure to act with
respect thereto, in connection with the Premises. This indemnity shall include,
without limitation, the cost of any required or necessary repair, cleanup or
detoxification, and the preparation and implementation of any closure,
monitoring or other required plans, whether such action is required or necessary
prior to or following the termination of this Lease. Neither the written consent
by Landlord to the presence of Hazardous Materials on, under or about the
Premises, nor the strict compliance by Tenant with all Environmental Laws, shall
excuse Tenant from Tenant's obligation of indemnification pursuant hereto.
Tenant's obligations pursuant to the foregoing indemnity shall survive the
expiration or termination of this Lease.
12.3 Pre-existing Conditions and Indemnification
12.3.1 Landlord hereby represents to Tenant that, to its actual
knowledge, no environmental condition (as defined in Section 12.1) in violation
of law presently exists as of the Effective Date on, under, or within the
Premises (a "Pre-existing Condition"). For purposes of this Lease, current
"actual knowledge" shall mean the actual, present knowledge of Dan Marcus and
Jim Adams as of the date of this Lease, without investigation or inquiry of any
kind.
12.3.2 Landlord shall indemnify, protect, defend (by counsel
reasonably acceptable to Tenant) and hold harmless Tenant and its directors,
officers, employees, shareholders, lenders, and each of their respective
successors and assigns, from and against any and all claims, judgments, causes
of action, damages, penalties, fines, taxes, costs, liabilities, losses and
expenses (collectively, a "Claim") arising at any time during or after the Term
to the extent that such Claim results from any Pre-existing Condition which (i)
constitutes a breach of the representation set forth in Section 12.3.1, or (ii)
was authorized by Landlord or caused by the acts or omissions of Landlord (but
not the agents or contractors of Landlord or any other third party). The
indemnity obligation set forth in this Section 12.3.2 is limited to claims and
shall not include any consequential damages including, without limitation, any
relocation expenses, loss of revenue, or other losses incurred by any party.
Landlord's obligations pursuant to the foregoing indemnity shall survive the
termination of this Lease for a period of one (1) year and shall not apply to
any Claim not presented to Landlord in writing within said one (1) year period.
12.3.3 Landlord shall indemnify, protect, defend (by counsel
reasonably acceptable to Tenant) and hold harmless Tenant and its directors,
officers, employees, shareholders, and lenders, and each of their respective
successors and assigns, from and against any and all orders, penalties, fines,
administrative actions, or other proceedings (collectively, a "Compliance
Obligation") commenced by any governmental agency including, without limitation,
the United States Environmental Protection Agency as a result of any
Pre-existing Condition (except to the extent that such Pre-existing Condition is
caused or aggravated by the act or omission of Tenant and/or Tenant's Parties).
The indemnity obligation set forth in this Section 12.3.3 is limited to
Compliance Obligations and shall not include any consequential damages
including, without limitation, any relocation expenses, loss of revenue, or
other losses incurred by any party. Landlord's obligations pursuant to the
foregoing indemnity shall survive the termination of this Lease for a period of
one (1) year and shall not apply to any Compliance Obligation not presented to
Landlord in writing within said one (1) year period.
12.3.4 The indemnity obligations of Landlord set forth in Sections
12.3.2 and 12.3.3 above shall not be binding upon any lender acquiring
Landlord's interest in the Premises and/or this Lease pursuant to any
foreclosure proceeding, deed in lieu of foreclosure, or other enforcement action
taken pursuant to a deed of trust or mortgage encumbering the Premises.
13. DAMAGE AND DESTRUCTION
13.1 Casualty. If the Premises or Building should be damaged or destroyed
by fire or other casualty, Tenant shall give immediate written notice to
Landlord. Within thirty (30) days after receipt from Tenant of such written
notice, Landlord shall notify Tenant whether, after the date of the issuance of
permits for the necessary repair or reconstruction of the portion of the
Building or the Premises which was damaged, the necessary repairs can reasonably
be made: (a) within ninety (90) days; (b) in more than ninety (90) days but in
less than one hundred eighty (180) days; or (c) in more than one hundred eighty
(180) days.
-14-
13.1.1 Less Than 90 Days. If the Premises or Building should be
damaged only to such extent that rebuilding or repairs can reasonably be
completed within ninety (90) days after the issuance of permits for the
necessary repair or reconstruction of the portion of the Building or Premises
which was damaged or destroyed, this Lease shall not terminate and, provided
that insurance proceeds are available to fully repair the damage, subject to
Section 13.2 below, Landlord shall repair the Premises, except that Landlord
shall not be required to rebuild, repair or replace Tenant's Property which may
have been placed in, on or about the Premises by or for the benefit of Tenant.
If Tenant is required to vacate all or a portion of the Premises during
Landlord's repair thereof, the Rent payable hereunder shall be abated
proportionately on the basis of the size of the area of the Premises that is
damaged (i.e., the number of square feet of floor area of the Premises that is
damaged compared to the total square footage of the floor area of the Premises)
from the date Tenant vacates all or a portion of the Premises that was damaged
only to the extent rental abatement insurance proceeds are received by Landlord
(or would have been received but for Landlord's failure to carry the insurance
required to be carried by Landlord pursuant to Section 8.1 above) and only
during the period the Premises are unfit for occupancy.
13.1.2 Greater Than 90 Days. If the Premises or Building should be
damaged only to such extent that rebuilding or repairs can reasonably be
completed in more than ninety (90) days but in less than one hundred eighty
(180) days after the issuance of permits for the necessary repair or
reconstruction of the portion of the Building or Premises which was damaged or
destroyed, then Landlord shall have the option of: (a) terminating the Lease
effective upon the occurrence of such damage, in which event the Rent shall be
abated from the date Tenant vacates the Premises; or (b) electing to repair the
Premises, provided insurance proceeds are available (or such proceeds would have
been available but for Landlord's failure to carry insurance as described in
Section 8.1 above) to fully repair the damage, except that Landlord shall not
be required to rebuild, repair or replace Tenant's Property which may have been
placed in, on or about the Premises by or for the benefit of Tenant. If Tenant
is required to vacate all or a portion of the Premises during Landlord's repair
thereof, the Rent payable hereunder shall be abated proportionately on the basis
of the size of the area of the Premises that is damaged (i.e., the number of
square feet of floor area of the Premises that is damaged compared to the total
square footage of the floor area of the Premises) from the date Tenant vacates
all or a portion of the Premises that was damaged only to the extent rental
abatement insurance proceeds are received by Landlord (or such proceeds would
have been received by Landlord but for Landlord's failure to carry rental
abatement insurance as described in Section 8.1 above) and only during the
period the Premises are unfit for occupancy. In the event that Landlord should
fail to substantially complete such repairs within one hundred eighty (180) days
after the issuance of permits for the necessary repair or reconstruction of the
portion of the Building or Premises which was damaged or destroyed, (such period
to be extended for delays caused by Tenant or because of any items of Force
Majeure, as hereinafter defined) and Tenant has not re-occupied the Premises,
Tenant shall have the right, as Tenant's exclusive remedy, within ten (10) days
after the expiration of such one hundred eighty (180) day period, and provided
that such repairs have not been substantially completed within such ten (10) day
period, to terminate this Lease by delivering written notice to Landlord as
Tenant's exclusive remedy, whereupon all rights hereunder shall cease and
terminate thirty (30) days after Landlord's receipt of such notice.
13.1.3 Greater Than 180 Days. If the Premises or Building should be so
damaged that rebuilding or repairs cannot be completed within one hundred eighty
(180) days after the issuance of permits for the necessary repair or
reconstruction of the portion of the Building or Premises which was damaged or
destroyed, either Landlord or Tenant may terminate this Lease by giving written
notice within ten (10) days after notice from Landlord specifying such time
period of repair; and this Lease shall terminate and the Rent shall be abated
from the date Tenant vacates the Premises. In the event that neither party
elects to terminate this Lease, Landlord shall promptly commence and diligently
prosecute to completion the repairs to the Building or Premises, provided
insurance proceeds are available (or such proceeds would have been available but
for Landlord's failure to carry insurance as described in Section 8.1 above) to
repair the damage except that Landlord shall not be required to rebuild, repair
or replace Tenant's Property which may have been placed in, on or about the
Premises by or for the benefit of Tenant. If Tenant is required to vacate all or
a portion of the Premises during Landlord's repair thereof, the Rent payable
hereunder shall be abated proportionately on the basis of the size of the area
of the Premises that is damaged (i.e., the number of square feet of floor area
of the Premises that is damaged compared to the total square footage of the
floor area of the Premises), from the date Tenant vacates all or a portion of
the Premises that was damaged only to the extent rental abatement insurance
proceeds are received by Landlord (or such proceeds would have been received by
Landlord but for Landlord's failure to carry rental abatement insurance as
described in Section 8.1 above) and only during the period that the Premises are
unfit for occupancy.
-15-
13.1.4 Casualty During the Last Year of the Lease term.
Notwithstanding any other provisions hereof, if the Premises or the Building
shall be damaged within the last year of the Lease Term, and if the cost to
repair or reconstruct the portion of the Building or the Premises which was
damaged or destroyed shall exceed Landlord's then-applicable insurance
deductible, then, irrespective of the time necessary to complete such repair or
reconstruction, Landlord shall have the right, in its sole discretion, to
terminate the Lease effective upon the occurrence of such damage, in which event
the Rent shall be abated from the date Tenant vacates the Premises. The
foregoing right shall be in addition to any other right and option of Landlord
under this Section 13.
13.2 Tenant's Fault. If the Premises or any portion of the Building is
damaged resulting from the negligence or breach of this Lease by Tenant or any
of Tenant's Parties, Rent shall not be reduced during the repair of such damage
and Tenant shall be liable to Landlord for the cost of the repair caused thereby
to the extent such cost is not covered by insurance proceeds received by
Landlord.
13.3 Uninsured Casualty. Tenant shall be responsible for and shall pay to
Landlord Tenant's Share of any deductible or retention amount payable under the
property insurance for the Building. Notwithstanding Section 13.1, in the event
that the Premises or any portion of the Building is damaged to the extent Tenant
is unable to use the Premises and such damage is not covered by insurance
proceeds received by Landlord or in the event that the holder of any
indebtedness secured by the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right at Landlord's
option either (i) to repair such damage as soon as reasonably possible at
Landlord's expense, or (ii) to give written notice to Tenant within thirty (30)
days after the date of the occurrence of such damage of Landlord's intention to
terminate this Lease as of the date of the occurrence of such damage. In the
event Landlord elects to terminate this Lease, Tenant shall have the right
within ten (10) days after receipt of such notice to give written notice to
Landlord of Tenant's commitment to pay the cost of repair of such damage, in
which event this Lease shall continue in full force and effect, and Landlord
shall make such repairs as soon as reasonably possible subject to the following
condition: Tenant shall deposit with Landlord Landlord's estimated cost of such
repairs not later man ten (10) days prior to Landlord's commencement of the
repair work. If the cost of such repairs exceeds the amount deposited, Tenant
shall reimburse Landlord for such excess cost within fifteen (15) days after
receipt of an invoice from Landlord. Any amount deposited by Tenant in excess of
the cost of such repairs shall be refunded within thirty (30) days of Landlord's
final payment to Landlord's contractor. If Tenant does not give such notice
within the ten (10) day period, or fails to make such deposit as required, this
Lease shall terminate automatically as of the date of the occurrence of the
damage.
13.4 Waiver. With respect to any damage or destruction which Landlord is
obligated to repair or may elect to repair, Tenant waives all rights to
terminate this Lease pursuant to rights otherwise presently or hereafter
accorded by law.
14. EMINENT DOMAIN
14.1 Total Condemnation. If all of the Premises is condemned by eminent
domain, inversely condemned or sold under threat of condemnation for any public
or quasi-public use or purpose ("Condemned"), this Lease shall terminate as of
the earlier of the date the condemning authority takes title to or possession of
the Premises, and Rent shall be adjusted to the date of termination.
14.2 Partial Condemnation. If any portion of the Premises or the Building
is Condemned and such partial condemnation materially impairs Tenant's ability
to use the Premises for Tenant's business, Landlord shall have the option of
either (i) relocating Tenant to comparable space within the Project or (ii)
terminating this Lease as of the earlier of the date title vests in the
condemning authority or as of the date an order of immediate possession is
issued and Rent shall be adjusted to the date of termination. In the event of
relocation, Landlord shall pay the cost of constructing tenant improvements in
the new premises that are substantially equivalent to the improvements made
pursuant to the Work Letter, provided that Landlord receive from the condemning
authority proceeds sufficient to construct such improvements. If such partial
condemnation does not materially impair Tenant's ability to use the Premises for
the business of Tenant, Landlord shall promptly restore the Premises to the
extent of any condemnation proceeds recovered by Landlord, excluding the portion
thereof lost in such condemnation, and this Lease shall continue in full force
and effect except that after the date of such title vesting or order of
immediate possession Rent shall be adjusted as reasonably determined by
Landlord.
-16-
14.3 Award. If the Premises are wholly or partially Condemned, Landlord
shall be entitled to the entire award paid for such condemnation, and Tenant
waives any claim to any part of the award from Landlord or the condemning
authority; provided, however, Tenant shall have the right to recover from the
condemning authority such compensation as may be separately awarded to Tenant in
connection with costs in removing Tenant's merchandise, furniture, fixtures,
leasehold improvements and equipment to a new location, for business
interruption, loss of good will or other consequential damages. No condemnation
of any kind shall be construed to constitute an actual or constructive eviction
of Tenant or a breach of any express or implied covenant of quiet enjoyment.
14.4 Temporary Condemnation. In the event of a temporary condemnation not
extending beyond the Term, this Lease shall remain in effect, Tenant shall
continue to pay Rent and Tenant shall receive any award made for such
condemnation except damages to any of Landlord's property. If a temporary
condemnation is for a period which extends beyond the Term, this Lease shall
terminate as of the date of initial occupancy by the condemning authority and
any such award shall be distributed in accordance with the preceding section. If
a temporary condemnation remains in effect at the expiration or earlier
termination of this Lease, Tenant shall pay Landlord the reasonable cost of
performing any obligations required of Tenant with respect to the surrender of
the Premises.
15. DEFAULT
15.1 Events of Defaults. The occurrence of any of the following events
shall, at Landlord's option, constitute an "Event of Default":
15.1.1 Abandonment of the Premises for a period of thirty (30)
consecutive days;
15.1.2 Failure to pay Rent on the date when due and the failure
continuing for a period of five (5) days after such payment is due;
15.1.3 Failure to perform Tenant's covenants and obligations hereunder
(except default in the payment of Rent) where such failure continues for a
period of thirty (30) days after written notice from Landlord; provided,
however, if the nature of the default is such that more than thirty (30) days
are reasonably required for its cure, Tenant shall not be deemed to be in
default if Tenant commences the cure within ten (10) days after written notice
from Landlord and diligently and continuously prosecutes such cure to
completion;
15.1.4 The making of a general assignment by Tenant for the benefit of
creditors; the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing; the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold; Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due; any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets; Tenant taking
any action toward the dissolution or winding up of Tenant's affairs; the
cessation or suspension of Tenant's use of the Premises; or the attachment,
execution or other judicial seizure of substantially all of Tenant's, assets or
this leasehold;
15.1.5 The making of any material misrepresentation or omission by
Tenant or any successor in interest of Tenant in any materials delivered by or
on behalf of Tenant to Landlord or Landlord's lender pursuant to this Lease; or
15.1.6 The occurrence of an Event of Default set forth in Section
15.1.4 or 15.1.5 with respect to any guarantor of this Lease, if applicable.
15.2 Remedies
15.2.1 Termination. In the event of the occurrence of any Event of
Default, Landlord shall have the right to give a written termination notice to
Tenant (which notice may be the notice given under Section 15.1 above, if
applicable, and which notice shall be in lieu of any notice required by O.R.S.
Section 105.120 or any other
-17-
Oregon law) and, on the date specified in such notice, this Lease shall
terminate unless on or before such date all arrears of Rent and all other sums
payable by Tenant under this Lease and all costs and expenses incurred by or on
behalf of Landlord hereunder shall have been paid by Tenant and all other Events
of Default at the time existing shall have been fully remedied to the
satisfaction of Landlord.
15.2.1.1 Repossession. Following termination, without prejudice
to other remedies Landlord may have, Landlord may (i) peaceably re-enter the
Premises upon voluntary surrender by Tenant or remove Tenant therefrom and any
other persons occupying the Premises, using such legal proceedings, or other
procedures permitted by applicable law, as may be available; (ii) repossess the
Premises or relet the Premises or any part thereof for such term (which may be
for a term extending beyond the Term), at such rental and upon such other terms
and conditions as Landlord in Landlord's sole discretion shall determine, with
the right to make reasonable alterations and repairs to the Premises; and (iii)
remove all personal property therefrom.
15.2.1.2 Unpaid Rent. Landlord shall have all the rights and
remedies of a landlord provided by Applicable Law, including the right to
recover from Tenant: (a) the worth, at the time of award, of the unpaid Rent
that had been earned at the time of termination, (b) the worth, at the time of
award, of the amount by which the unpaid Rent that would have been earned after
the date of termination until the time of award exceeds the amount of loss of
rent that Tenant proves could have been reasonably avoided, (c) the worth, at
the time of award, of the amount by which the unpaid Rent for the balance of the
Term after the time of award exceeds the amount of the loss of rent that Tenant
proves could have been reasonably avoided, and (d) any other amount, and court
costs, necessary to compensate Landlord for all detriment proximately caused by
Tenant's default. The phrase "worth, at the time of award," as used in (a) and
(b) above, shall be computed at the Applicable Interest Rate, and as used in (c)
above, shall be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
15.2.2 Continuation. Even though an Event of Default may have
occurred, this Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession; and Landlord may enforce all of
Landlord's rights and remedies under this Lease allowed by law ("lessor" may
continue the Lease in effect after "lessee's" breach and abandonment and recover
Rent as it becomes due) to recover Rent as it becomes due. Landlord, without
terminating this Lease, may, during the period Tenant is in default, enter the
Premises and relet the same, or any portion thereof, to third parties for
Tenant's account and Tenant shall be liable to Landlord for all costs Landlord
incurs in reletting the Premises, including, without limitation, brokers'
commissions, expenses of remodeling the Premises and like costs. Reletting may
be for a period shorter or longer than the remaining Term. Tenant shall continue
to pay the Rent on the date the same is due. No act by Landlord hereunder,
including acts of maintenance, preservation or efforts to lease the Premises or
the appointment of a receiver upon application of Landlord to protect Landlord's
interest under this Lease, shall terminate this Lease unless Landlord notifies
Tenant that Landlord elects to terminate this Lease. In the event that Landlord
elects to relet the Premises, the rent that Landlord receives from reletting
shall be applied to the payment of, first, any indebtedness from Tenant to
Landlord other than Base Rent and Tenant's Share of Operating Expenses
(including Real Property Taxes); second, all costs, including maintenance,
incurred by Landlord in reletting; and, third, Base Rent and Tenant's Share of
Operating Expenses (including Real Property Taxes) under this. Lease. After
deducting the payments referred to above, any sum remaining from the rental
Landlord receives from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event, and
notwithstanding anything in Section 16 to the contrary, shall Tenant be entitled
to any excess rent received by Landlord. If, on the date Rent is due under this
Lease, the rent received from the reletting is less than the Rent due on that
date, Tenant shall pay to Landlord, in addition to the remaining Rent due, all
costs, including maintenance, which Landlord incurred in reletting the Premises
that remain after applying the rent received from reletting as provided
hereinabove. So long as this Lease is not terminated, Landlord shall have the
right to remedy any default of Tenant, to maintain or improve the Premises, to
cause a receiver to be appointed to administer the Premises and new or existing
subleases and to add to the Rent payable hereunder all of Landlord's reasonable
costs in so doing, with interest at the Applicable Interest Rate from the date
of such expenditure. Landlord shall have no duty to relet the Premises so long
as it has other unleased space available in the Project.
15.3 Cumulative. Each right and remedy of Landlord provided for herein or
now or hereafter existing at law, in equity, by statute or otherwise shall be
cumulative and shall not preclude Landlord from exercising any other rights or
remedies provided for in this Lease or now or hereafter existing at law or in
equity, by statute or
-18-
otherwise. No payment by Tenant of a lesser amount than the Rent nor any
endorsement on any check or letter accompanying any check or payment as Rent
shall be deemed an accord and satisfaction of full payment of Rent; and Landlord
may accept such payment without prejudice to Landlord's right to recover the
balance of such Rent or to pursue other remedies.
16. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, sublet or otherwise
transfer, whether voluntarily or involuntarily or by operation of law, the
Premises or any part thereof without Landlord's prior written approval, which
shall not be unreasonably withheld; provided, however, Tenant agrees it shall be
reasonable for Landlord to disapprove of a requested sublease or assignment, if
the proposed subtenant or assignee does not have a tangible net worth (as
determined in accordance with generally accepted accounting principles
consistently applied) equal to or greater than that of Tenant as of the date of
the Lease as shown in the financial information provided to Landlord, or if the
proposed subtenant or assignee is currently a tenant in any other space leased
by Landlord or if such proposed subtenant or assignee is in the process of
negotiation with Landlord to lease other space owned or managed by Landlord. The
merger of Tenant with any other entity in which Tenant does not retain a
controlling ownership or beneficial interest or the transfer of any controlling
or managing ownership or beneficial interest in Tenant, or the assignment of a
substantial portion of the assets of Tenant, whether or not located at the
Premises, shall constitute an assignment hereunder. If Tenant desires to assign
this Lease or sublet any or all of the Premises, Tenant shall give Landlord
written notice thereof with copies of all related documents and agreements
associated with the assignment or sublease, including without limitation, the
financial statements of any proposed assignee or subtenant, forty-five (45) days
prior to the anticipated effective date of the assignment or sublease. Tenant
shall pay Landlord's reasonable attorneys' fees incurred in the review of such
documentation plus an administrative fee of Five Hundred Dollars ($500.00) for
each proposed transfer. Landlord shall have a period of thirty (30) days
following receipt of such notice and all related documents and agreements to
notify Tenant in writing of Landlord's approval or disapproval of the proposed
assignment or sublease. If Landlord fails to notify Tenant in writing of such
election, Landlord shall be deemed to have disapproved such assignment or
subletting. This Lease may not be assigned by operation of law. If the proposed
assignment or sublease is for substantially the remainder of the Term, Landlord
may terminate the Lease (or in the case of a partial sublease, terminate the
Lease with respect to the portion of the Premises proposed to be subject to the
sublease) by giving written notice to Tenant within such thirty (30) day period.
Any purported assignment or subletting contrary to the provisions hereof shall
be void and shall constitute an Event of Default hereunder. If Tenant receives
rent or other consideration for any such transfer in excess of the Rent, or in
case of the sublease of a portion of the Premises, in excess of such Rent that
is fairly allocable to such portion, after appropriate adjustments to assure
that all other payments required hereunder are appropriately taken into account,
Tenant shall pay Landlord one hundred percent (100%) of the difference between
each such payment of rent or other consideration and the Rent required
hereunder. Landlord may, without waiving any rights or remedies, collect rent
from the assignee, subtenant or occupant and apply the net amount collected to
the Rent herein reserved and apportion any excess rent so collected in
accordance with the terms of the preceding sentence. Such acceptance of Rent
shall in no event be deemed to imply that Landlord is approving a subtenant or
assignee which Landlord has not approved in writing pursuant to the requirements
of this Section 16. Tenant shall continue to be liable as a principal and not as
a guarantor or surety to the same extent as though no assignment had been made.
Landlord may consent to subsequent assignments or subletting of this Lease or
amendments or modifications to the Lease by assignees of Tenant without
notifying Tenant or any successor of Tenant and without obtaining their consent.
No permitted assignment (but excluding a permitted sublease) shall be effective
until there has been delivered to Landlord a counterpart of the assignment
instrument in which the assignee agrees to be and remain jointly and severally
liable with Tenant for the payment of Rent pertaining to the Premises and for
the performance of all the terms and provisions of this Lease relating thereto
arising on or after the date of the transfer.
17. ESTOPPEL, ATTORNMENT AND SUBORDINATION
17.1 Estoppel. Within ten (10) days after written request by Landlord,
Tenant shall deliver an estoppel certificate duly executed (and acknowledged if
required by any lender), substantially in the form attached hereto as Exhibit H,
or in such other form as may be acceptable to the lender, which form may include
some or all of the provisions contained in Exhibit H, to any proposed mortgagee,
purchaser or Landlord. Tenant's failure to deliver said statement in such time
period shall be an Event of Default hereunder and shall be conclusive upon
Tenant that (a) this Lease is in full force and effect, without modification
except as may be represented by Landlord; (b) there are no uncured defaults in
Landlord's performance and Tenant has no right of offset, counterclaim or
deduction against Rent hereunder; and (c) no more than one month's Base Rent has
been paid in advance. If any financier
-19-
should require that this Lease be amended (other than in the description of the
Premises, the term, the Permitted Use, the Rent or as will substantially,
materially or adversely affect the rights of Tenant), Landlord shall give
written notice thereof to Tenant, which notice shall be accompanied by a Lease
supplement embodying such amendments. Tenant shall, within ten (10) days after
the receipt of Landlord's notice, execute and deliver to Landlord the tendered
Lease supplement. If Tenant fails to deliver to Landlord the tendered Lease
supplement within ten (10) days after receipt of Landlord's notice, Tenant shall
be deemed to have given Landlord a power of attorney to execute such supplement
on behalf of Tenant.
17.2 Subordination. This Lease shall be subject and subordinate to all
ground leases, master leases and the lien of all mortgages and deeds of trust
which now or hereafter affect the Premises or the Project or Landlord's interest
therein, and all amendments thereto, provided that Tenant receives a
Subordination, Nondisturbance and Attornment Agreement ("SNDA") in the form
attached hereto as Exhibit I (or such other form as may be commercially
reasonable which form may include some or all of the provisions contained in
Exhibit I, so long as such form of SNDA includes a non-disturbance agreement in
favor of Tenant) or as otherwise may be required by the applicable lender,
ground lessee and/or master lessor (so long as such documentation includes a
non-disturbance agreement in favor of Tenant). If requested, Tenant shall
execute and deliver to Landlord within ten (10) days after Landlord's request
whatever documentation that may reasonably be required to further effect the
provisions of this paragraph including an SNDA in the form attached hereto as
Exhibit I (or such other form as may be commercially reasonable which form may
include some or all of the provisions contained in Exhibit I, so long as such
form of SNDA includes a non-disturbance agreement in favor of Tenant) or as
otherwise may be required by the applicable lender, ground lessee and/or master
lessor (so long as such documentation includes a non-disturbance agreement in
favor of Tenant).
17.3 Attornment. Tenant hereby agrees that Tenant will recognize as its
landlord under this Lease and shall attorn to any person succeeding to the
interest of Landlord in respect of the land and the buildings governed by this
Lease upon any foreclosure of any mortgage upon such land or buildings or upon
the execution of any deed in lieu of foreclosure in respect to such deed of
trust. If requested, Tenant shall execute and deliver an instrument or
instruments confirming its attornment as provided for herein; provided, however,
that no such beneficiary or successor-in-interest shall be bound by any payment
of Base Rent for more than one (1) month in advance, or any amendment or
modification of this Lease made without the express written consent of such
beneficiary where such consent is required under applicable loan documents.
18. MISCELLANEOUS
18.1 General
18.1.1 Entire Agreement. This Lease sets forth all the agreements
between Landlord and Tenant concerning the Premises; and there are no agreements
either oral or written other than as set forth herein.
18.1.2 Time of Essence. Time is of the essence of this Lease.
18.1.3 Attorneys' Fees. In any action or proceeding which either
party brings against the other to enforce its rights hereunder, the
nonprevailing party shall pay all costs incurred by the prevailing party,
including reasonable attorneys' fees, which amounts shall be a part of the
judgment in said action or proceeding.
18.1.4 Severability. If any provision of this Lease or the application
of any such provision shall be held by a court of competent jurisdiction to be
invalid, void or unenforceable to any extent, the remaining provisions of this
Lease and the application thereof shall remain in full force and effect and
shall not be affected, impaired or invalidated.
18.1.5 Law. This Lease shall be construed and enforced in accordance
with the laws of the state in which the Premises are located.
-20-
18.1.6 No Option. Submission of this Lease to Tenant for examination
or negotiation does not constitute an option to lease, offer to lease or a
reservation of, or option for, the Premises; and this document shall become
effective and binding only upon the execution and delivery hereof by Landlord
and Tenant.
18.1.7 Successors and Assigns. This Lease shall be binding upon and
inure to the benefit of the successors and assigns of Landlord and, subject to
compliance with the terms of Section 16, Tenant.
18.1.8 Third Party Beneficiaries. Nothing herein is intended to create
any third party benefit.
18.1.9 Memorandum of Lease. On or before fifteen (15) business days
following a written request by either Landlord or Tenant, the parties agree to
execute and record a short form memorandum of this Lease, in a recordable form
reasonably acceptable to Landlord and Tenant. Within five (5) business days
following the expiration or earlier termination of this Lease, Tenant shall
execute (and have properly notarized) and deliver to Landlord a Quitclaim Deed,
in recordable form, quitclaiming, terminating and forever surrendering any and
all right, title or interests Tenant may have in or to the Premises.
18.1.10 Agency, Partnership or Joint Venture. Nothing contained herein
nor any acts of the parties hereto shall be deemed or construed by the parties
hereto, nor by any third party, as creating the relationship of principal and
agent or of partnership or of joint venture by the parties hereto or any
relationship other than the relationship of landlord and tenant.
18.1.11 Merger. The voluntary or other surrender of this Lease by
Tenant or a mutual cancellation thereof or a termination by Landlord shall not
work a merger and shall, at the option of Landlord, terminate all or any
existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all of such subtenancies.
18.1.12 Headings. Section headings have been inserted solely as a
matter of convenience and are not intended to define or limit the scope of any
of the provisions contained therein.
18.1.13 Security Measures. Tenant hereby acknowledges that Landlord
shall have no obligation to provide a guard service or other security measures
whatsoever. Tenant assumes all responsibility for the protection of the
Premises, Tenant, its agents and invitees and their property from the acts of
third parties.
18.2 Signs. All signs and graphics of every kind visible in or from public
view or corridors, the Common Areas or the exterior of the Premises (whether
located inside or outside of the Premises) shall be subject to Landlord's prior
written approval (not to be unreasonably withheld) and shall be subject to the
CC&Rs and any applicable governmental laws, ordinances, and regulations and in
compliance with Landlord's signage program (if any). Tenant shall remove all
such signs and graphics prior to the termination of this Lease. Such
installations and removals shall be made in such manner as to avoid injury or
defacement of the Premises; and Tenant shall repair any injury or defacement,
including without limitation, discoloration caused by such installation or
removal.
18.3 Waiver. No waiver of any default or breach hereunder shall be implied
from any omission to take action on account thereof, notwithstanding any custom
and practice or course of dealing. No waiver by either party of any provision
under this Lease shall be effective unless in writing and signed by such party.
No waiver shall affect any default other than the default specified in the
waiver and then such waiver shall be operative only for the time and to the
extent therein stated. Waivers of any covenant shall not be construed as a
waiver of any subsequent breach of the same.
18.4 Financial Statements. Tenant shall provide, and cause each Guarantor,
if applicable, to provide to any lender, any purchaser of the Building and/or
the Project or Landlord, within ten (10) days after request, a current,
accurate, audited (or reviewed and certified by Tenant) financial statement for
Tenant and Tenant's business and financial statements for Tenant and Tenant's
business for each of the three (3) years prior to the current financial
statement year prepared under generally accepted accounting principles
consistently applied. Tenant shall also provide within said 10-day period such
other financial information as may be reasonably required by Landlord, any
-21-
purchaser of the Building and/or the Project or any lender; Landlord shall keep
or cause to be kept all such financial information strictly confidential.
18.5 Limitation of Liability. The obligations of Landlord under this Lease
are not personal obligations of the individual partners, members, managers,
directors, officers, shareholders, agents or employees of Landlord; and, subject
to this Section 18.5, Tenant shall look solely to the Building and the Land for
satisfaction of any liability of Landlord and shall not look to other assets of
Landlord nor seek recourse against the assets of the individual partners,
directors, officers, shareholders, agents or employees of Landlord. Whenever
Landlord transfers its interest, Landlord shall be automatically released from
further performance under this Lease and from all further liabilities and
expenses hereunder and the transferee of Landlord's interest shall assume all
liabilities and obligations of Landlord hereunder from the date of such
transfer, provided, however, Landlord shall remain liable for any unperformed
obligations arising prior to the date of such transfer.
18.6 Notices. All notices to be given hereunder shall be in writing and
mailed postage prepaid by certified or registered mail, return receipt
requested, or delivered by personal or courier delivery, or sent by facsimile,
electronically confirmed, (immediately followed by one of the preceding
methods), to Landlord's Address and Tenant's Address, or to such other place as
Landlord or Tenant may designate in a written notice given to the other party.
Notices shall be deemed served upon the first attempted delivery by the U.S.
Postal Service, the courier or a recognized overnight delivery service, or upon
receipt of the facsimile prior to 5 p.m. on any business day, or, if after 5
p.m., on the next business day.
18.7 Brokerage Commission. Landlord shall pay a brokerage commission to
Landlord's Broker specified in the Basic Lease Information in accordance with a
separate agreement between Landlord and Landlord's Broker. Landlord shall have
no further or separate obligation for payment of any commissions or fees to any
other broker or finder. Tenant warrants to Landlord that Tenant's sole contact
with Landlord or with the Premises in connection with this transaction has been
directly with Landlord, Landlord's Broker and Tenant's Broker specified in the
Basic Lease Information, and that no other broker or finder can properly claim a
right to a commission or a finder's fee based upon contacts between the claimant
and Tenant. Any commissions or fees payable to Tenant's Broker with respect to
this transaction shall be paid by Landlord's Broker, and Landlord and Tenant
shall have no obligation with respect thereto. Subject to the foregoing, Tenant
agrees to indemnify and hold Landlord harmless from any claims or liability,
including reasonable attorneys' fees, in connection with a claim by any person
for a real estate broker's commission, finder's fee or other compensation based
upon any statement, representation or agreement of Tenant, and Landlord agrees
to indemnify and hold Tenant harmless from any such claims or liability,
including reasonable attorneys' fees, based upon any statement, representation
or agreement of Landlord.
18.8 Authorization. Each individual executing this Lease on behalf of
Tenant represents and warrants that he or she is duly authorized to execute and
deliver this Lease on behalf of Tenant and that such execution is binding upon
Tenant.
18.9 Holding Over: Surrender
18.9.1 Holding Over. If Tenant holds over the Premises or any part
thereof after expiration of the Term, such holding over shall, at Landlord's
option, constitute a month-to-month tenancy, at a rent equal to one hundred
fifty percent (150%) of the Base Rent in effect immediately prior to such
holding over and shall otherwise be on all the other terms and conditions of
this Lease. This paragraph shall not be construed as Landlord's permission for
Tenant to hold over. Acceptance of Rent by Landlord following expiration or
termination shall not constitute a renewal of this Lease or extension of the
Term except as specifically set forth above. If Tenant fails to surrender the
Premises upon expiration or earlier termination of this Lease, Tenant shall
indemnify and hold Landlord harmless from and against all loss or liability
resulting from or arising out of Tenant's failure to surrender the Premises,
including, but not limited to, any amounts required to be paid to any tenant or
prospective tenant who was to have occupied the Premises after the expiration or
earlier termination of this Lease and any related attorneys' fees and brokerage
commissions.
18.9.2 Surrender. Upon the expiration or earlier termination of this
Lease, Tenant shall repair any damage to and restore the condition of the
Premises in accordance with Section 10.2. Tenant shall surrender the Premises,
together with all keys, to Landlord broom clean and in as good a condition as
when received, ordinary
-22-
wear and tear and damage by fire or casualty excepted. In addition, Tenant shall
remove any and all debris from the Common Area caused by Tenant and surrender
any portion of the Common Area regularly used by Tenant broom clean and in as
good a condition as when Tenant's use thereof commenced, ordinary wear and tear
and damage by fire or casualty excepted. Conditions existing because of Tenant's
failure to perform maintenance, repairs or replacements shall not be deemed
"reasonable wear and tear."
18.10 Joint and Several. If Tenant consists of more than one person, the
obligation of all such persons shall be joint and several.
18.11 Covenants and Conditions. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.
18.12 Auctions. Tenant shall not conduct, nor permit to be conducted, any
auction upon the Premises without Landlord's prior written consent. Landlord
shall not be obligated to exercise any standard of reasonableness in determining
whether to permit an auction.
18.13 Consents. Except as otherwise provided elsewhere in this Lease,
Landlord's actual reasonable costs and expenses (including, but not limited to,
architects', attorneys', engineers' and other consultants' fees) incurred in the
consideration of, or response to, a request by Tenant for any Landlord consent,
including but not limited to, consents to an assignment, a subletting or the
presence or use of a Hazardous Material, shall be paid by Tenant upon receipt of
an invoice and supporting documentation therefor. Landlord's consent to any act,
assignment or subletting shall not constitute an acknowledgment that no Event of
Default or breach by Tenant of this Lease exists, nor shall such consent be
deemed a waiver of any then existing Event of Default or breach, except as may
be otherwise specifically stated in writing by Landlord at the time of such
consent. Except as otherwise set forth herein, the failure to specify herein any
particular condition to Landlord's consent shall not preclude the imposition by
Landlord at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.
18.14 Force Majeure. "Force Majeure" as used herein means delays resulting
from causes beyond the reasonable control of the other party, including, without
limitation, any delay caused by any action, inaction, order, ruling, moratorium,
regulation, statute, condition or other decision of any private party or
governmental agency having jurisdiction over any portion of the Project, over
the construction anticipated to occur thereon or over any uses thereof, or by
delays in inspections or in issuing approvals by private parties or permits by
governmental agencies, or by fire, flood, inclement weather, strikes, lockouts
or other labor or industrial disturbance (whether or not on the part of agents
or employees of either party hereto engaged in the construction of the
Premises), civil disturbance, order of any government, court or regulatory body
claiming jurisdiction or otherwise, act of public enemy, war, riot, sabotage,
blockage, embargo, failure or inability to secure materials, supplies or labor
through ordinary sources by reason of shortages or priority, discovery of
hazardous or toxic materials, earthquake, or other natural disaster, delays
caused by any dispute resolution process, or any cause whatsoever beyond the
reasonable control (excluding financial inability) of the party whose
performance is required, or any of its contractors or other representatives,
whether or not similar to any of the causes hereinabove stated.
18.15 Mortgagee Protection. Tenant agrees to give any holder of any
mortgage or deed of trust secured by the Real Property, by registered or
certified mail or nationally recognized overnight delivery service, a copy of
any notice of default served upon the Landlord by Tenant, provided that, prior
to such notice, Tenant has been notified in writing (by way of service on Tenant
of a copy of assignment of rents and leases or otherwise) of the address of such
holder of a mortgage or deed of trust. Tenant further agrees that if Landlord
shall have failed to cure such default within thirty (30) days after such notice
to Landlord (or if such default cannot be cured or corrected within that time,
then such additional time as may be necessary if Landlord has commenced within
such thirty (30) day period and is diligently pursuing the remedies or steps
necessary to cure or correct such default), then the holder of any mortgage or
deed of trust shall have an additional sixty (60) days within which to cure or
correct such default (or if such default cannot be cured or corrected within
that time, then such additional time as may be necessary if such holder of any
mortgage or deed of trust has commenced within such sixty (60) day period and is
diligently pursuing the remedies or steps necessary to cure or correct such
default). Notwithstanding the foregoing, in no event shall any holder of any
mortgage or deed of trust have any obligation to cure any default of the
Landlord.
-23-
l8.l6 Hazardous Substance Disclosure. Gasoline and other automotive fluids,
asbestos containing materials, maintenance fluids, copying fluids and other
office supplies and equipment, certain construction and finish materials,
tobacco smoke, cosmetics and other personal items may be present on the project.
Gasoline and other automotive fluids are found in the garage and parking areas
of the Project. Cleaning, lubricating and hydraulic fluids used in the operation
and maintenance of the Building are found in the utility areas of the Building
not generally accessible to Building occupants or the public. Many Building
occupants use copy machines and printers with associated fluids and toners, and
pens, markers, inks, and office equipment that may contain Hazardous Materials.
Certain adhesives, paints and other construction materials and finishes used in
portions of the Building may contain Hazardous Materials. The Building may from
time to time be exposed to tobacco smoke. Building occupants and other persons
entering the Building from time to time may use or carry prescription and
non-prescription drugs, perfumes, cosmetics and other toiletries, and foods and
beverages, some of which may contain Hazardous Materials. By its execution of
this Lease, Tenant acknowledges the notice set forth hereinabove.
18.17 ADA Compliance. Notwithstanding Section 1.1 above, Landlord warrants
to Tenant that on the Commencement Date, the Premises (including any
improvements constructed by Landlord pursuant to the Work Letter) shall comply
with the requirements of the Americans with Disabilities Act [42 U.S.C. Section
12101 et seq.] ("ADA") as in effect and promulgated on the Commencement Date
(the "ADA Warranty"). The ADA Warranty shall not apply to any improvements or
alterations made by or at the request of Tenant (except as specifically set
forth in the Work Letter). Except as otherwise provided in this Lease, if the
Premises do not comply with the ADA Warranty, promptly after Landlord's receipt
of written notice from Tenant given within six (6) months after the
Commencement Date specifying in detail the nature and extent of such
non-compliance, Landlord, at Landlord's sole cost and expense, shall take such
action as is reasonably necessary to remedy such non-compliance.
18.18 Addenda. The Addenda attached hereto, if any, and identified with
this Lease are incorporated herein by this reference as if fully set forth
herein.
IN WITNESS WHEREOF, the parties have executed this Lease as of the date set
forth above.
"Landlord" "Tenant"
CATELLUS DEVELOPMENT CORPORATION, SYNETICS SOLUTIONS INC.,
a Delaware corporation an Oregon corporation
By: Catellus Commercial Group, LLC, By: /s/ Koki Nakamura
a Delaware limited liability ------------------------------------
company Name: KOKI NAKAMURA
Its: Duly Authorized Agent Its: CEO
By: /s/ TWA Date:
--------------------------------- ----------------------------------
Name:
-------------------------------
Title:
------------------------------
Date: 12-20-00 By: /s/ GREG MARVELL
------------------------------------
Name: GREG MARVELL
Its: PRESIDENT
Date: 12/9/00
-24-
ADDENDUM TO LEASE
THIS ADDENDUM TO LEASE ("Addendum") is attached to and constitutes an
integral part of the Lease between CATELLUS DEVELOPMENT CORPORATION, as
Landlord, and SYNETICS SOLUTIONS, INC., Inc., as Tenant. The terms of this
Addendum shall be incorporated in the Lease for all purposes. In the event of a
conflict between the provisions of the Lease and the provisions of this
Addendum, this Addendum shall control.
The following new Section is hereby added to the Lease which state in their
entirety as follows:
19. Option to Extend Provided (i) Tenant is not in default under the terms
of this Lease at the time this renewal option is exercised or at the
commencement of the Extension Term (as hereinafter defined), (ii) Tenant is
occupying at least ninety percent (90%) of the Premises, including any expansion
space, and (iii) Landlord has not given more than two (2) notices of default in
any twelve (12) month period for nonpayment of monetary obligations, Tenant
shall have the option to renew this Lease for an additional period of sixty (60)
months ("Extension Term"). The Extension Term shall be on all the terms and
conditions of this Lease, except that Landlord shall have no additional
obligation for free rent, leasehold improvements or for any other tenant
inducements for the Extension Term. Base Rent during the Extension Term shall be
equal to the Base Rent set forth in the Basic Lease Information for one hundred
twenty-first (121st) month through the one hundred eightieth (180th) month of
the Lease Term and the Security Deposit will be increased to reflect any
increase in Base Rent payable under the Lease. There shall be no additional
extension terms beyond the Extension Term set forth herein. Tenant must exercise
its option to extend this Lease by giving Landlord written notice of its
election to do so no later than one hundred eighty (180) nor earlier than three
hundred sixty (360) days prior to the end of the initial Term (i.e. the last day
of the one hundred twentieth (120th) month). Any notice not given in a timely
manner, shall be void, and Tenant shall be deemed to have waived its extension
rights. The extension option set forth herein is personal to Tenant and shall
not be included in any assignment of this Lease.
T.A. K.N.
- ------------------------------------- ----------------------------------------
Landlord's Initials Tenant's Initials
CATELLUS
(SOUTHSHORE CORPORATE PARK PLAN)
EXHIBIT A-1
(SITE PLAN)
EXHIBIT A-2
EXHIBIT B
WORK LETTER
THIS WORK LETTER ("Work Letter") is entered into as of this ____ day of
December, 2000, by and between CATELLUS DEVELOPMENT CORPORATION, a Delaware
corporation ("Landlord"), and SYNETICS SOLUTIONS INC., an Oregon corporation
("Tenant").
RECITALS:
A. Landlord and Tenant have entered into that certain Multi-Tenant
Industrial Triple Net Lease (the "Lease") dated as of the date hereof, covering
certain premises (the "Premises") more particularly described in the Lease. This
Work Letter is attached to the Lease as Exhibit B. The Lease is hereby
incorporated into this Work Letter by this reference. Capitalized terms not
defined in this Work Letter shall have the meanings given to such terms in the
Lease.
B. In consideration of the mutual covenants contained in the Lease and this
Work Letter, Landlord and Tenant hereby agree as follows:
AGREEMENT:
1. Definitions. As used in this Work Letter and in the Lease, the term
"Shell" shall mean the completed concrete, precast industrial building
containing approximately 180,000 square feet of floor area (the "Building") of
which the Premises is a part, excluding the Tenant Improvements (as hereinafter
defined). As used in this Work Letter and in the Lease, the term "Tenant
Improvements" shall mean those certain improvements to be constructed in the
Premises set forth on the "Final Plans" (defined in Section 5(c) of this Work
Letter). As used in this Work Letter and in the Lease, "Improvements" shall mean
the Shell and the Tenant Improvements. The construction and installation of the
Tenant Improvements is sometimes referred to herein as the "Work".
2. Completion of Improvements. Subject to the terms of the Lease and this
Work Letter and any "Tenant Delay" or "Force Majeure Delay" as provided herein,
Landlord shall use its commercially reasonable and diligent efforts to cause the
"Contractor" (defined in Section 7 of this Work Letter) to complete the
construction and installation of the Tenant Improvements in accordance with the
terms of this Work Letter.
3. Designation of Representatives. With respect to the planning, design and
construction of the Tenant Improvements, Landlord hereby designates Dan Marcus,
Jeffrey Lee and Bill Schmitt as "Landlord's Representatives" and Tenant hereby
designates Phil Coons and Steve Burchett as "Tenant's Representatives". Tenant
hereby confirms that Tenant's Representatives have full authority to act on
behalf of and to bind Tenant with respect to all matters pertaining to the
planning, design and construction of the Tenant Improvements. Landlord hereby
confirms that Landlord's Representatives have limited authority to act on behalf
of Landlord with respect to matters pertaining to the planning, design and
construction of the Improvements. Either party may change its designated
representative upon five (5) days prior written notice to the other party.
4. Architect. Deutsch & Associates ("Architect") shall act as the architect
with respect to the design and construction of the Tenant Improvements. Landlord
has previously provided to Tenant, and Tenant has approved, the form of contract
to be entered into with Architect for such services (the "Architect Contract").
The parties acknowledge and agree that the Architect Contract entered into with
the Architect will obligate the Architect to issue to both Landlord and Tenant
an architect's certificate ("Architect's Certificate") upon substantial
completion of the Tenant Improvements certifying the substantial completion of
the Improvements in accordance with the Final Plans. Landlord reserves the right
to retain a development consultant to assist Landlord in performing its
obligations
EXHIBIT B
-1-
under this Work Letter and under the Lease. All costs associated with any such
developer shall be included within the cost of the Work.
5. Improvement Plans
(a) Preliminary Plans. Attached hereto are the following preliminary
plans, base building specifications and preliminary scope of work for the Tenant
Improvements (collectively, the "Preliminary Plans"), which have been reviewed
and approved by Landlord and Tenant: (i) Schedule 1 is a Tenant Improvement Site
Plan; (ii) Schedule 2 is the "Base Building Specifications" for the Shell of the
Building; and Schedule 3 is the Preliminary Scope of Work Outline for Tenant
Improvements.
(b) Final Plans. Within ten (10) business days following the Effective
Date of the Lease, the parties shall agree upon final plans and specifications
and the final scope of Landlord's work related to the Tenant Improvements
("Final Plans") which shall be consistent with the Preliminary Plans, except for
the changes, if any, mutually agreed to be made thereto by the parties. Included
in the Final Plans will be the civil, architectural and structural plans for the
Tenant Improvements. The Final Plans shall not include any equipment to be
located or installed in the Premises in accordance with Section 10.2 of the
Lease. When the Final Plans have been approved by Tenant and Landlord, Architect
shall submit the Final Plans to the appropriate governmental agency for plan
checking and the issuance of building permit for the Tenant Improvements.
Architect shall make any and all changes to the Final Plans required by any
applicable governmental entity to obtain a building permit for the Tenant
Improvements.
(c) Work Cost Estimate. Prior to the commencement of construction of
any of the Tenant Improvements, Landlord shall submit to Tenant a written
estimate of the cost to complete the Tenant Improvements, which written estimate
will be based upon the Final Plans taking into account any modifications which
may be required to reflect changes in the Final Plans required by the
appropriate governmental authorities in connection with the issuance of a
building permit (the "Work Cost Estimate"). Tenant hereby acknowledges that
Tenant has previously reviewed and approved that portion of the Tenant
Improvement costs Telated to the construction of the 300' demising wall and the
installation of an additional 2,000 Amps of electrical service to the Premises,
all as more particularly set forth in that certain letter agreement between
Landlord and Tenant dated November 15, 2000 which is attached hereto as Schedule
5, and that such costs shall be included in the Work Cost Estimate, in addition
to the other costs related to the construction of the Tenant Improvements.
Tenant will either approve the Work Cost Estimate, or disapprove specific items,
and submit to Landlord revisions to the Final Plans in the form of a Change
Order. Submission and approval of the Work Cost Estimate will proceed in
accordance with the work schedule provided by Landlord. Upon Tenant's approval
of the Work Cost Estimate (the "Work Cost Statement"), Landlord will have the
right to purchase materials and to commence the construction of the items
included in the Work Cost Statement. If the total costs reflected in the Work
Cost Statement exceed the Allowance (as such term is defined in Section 9
below), Tenant shall pay such excess to Landlord in cash or by wire transfer of
funds, within ten (10) days after Tenant's approval of the Work Cost Statement.
(d) No Representations. Notwithstanding anything to the contrary
contained in the Lease or herein, Landlord's participation in the preparation of
the Preliminary Plans, the Final Plans, the cost estimates for the Improvements
and the construction thereof shall not constitute any representation or
warranty, express or implied, that the Improvements, if built in accordance with
the Preliminary Plans and/or the Final Plans, will be suitable for Tenant's
intended purpose. Tenant acknowledges and agrees that the Improvements are
intended for use by Tenant and the specifications and design requirements for
such Improvements are not within the special knowledge or experience of
Landlord. Landlord's sole obligation shall be to arrange the construction of the
Improvements in accordance with the requirements of the Final Plans; and any
additional costs or expense required for the modification thereof to more
adequately meet Tenant's use, whether during or after Landlord's construction
thereof, shall be borne entirely by Tenant except as otherwise provided in this
Work Letter. Notwithstanding the foregoing, Landlord agrees to assign to Tenant
on a non-exclusive basis the benefit of all construction and architectural
warranties pertaining to the Tenant Improvements to the extent that they do not
relate to structural or other portions of the Improvements that Landlord is
required to maintain and repair under the Lease.
6. Change Orders. After the parties approve the Final Plans and a building
permit for the Tenant Improvements is issued, any further changes to the Final
Plans shall require the prior written approval of Tenant and
EXHIBIT B
-2-
Landlord (not to be unreasonably withheld or delayed), provided that Landlord
shall not need the consent or approval of Tenant for changes to the Final Plans
that do not affect the Tenant Improvements and/or the Premises or materially
alter the character of the Building. If Tenant desires any change in the Final
Plans relative to the Tenant Improvements which is reasonable and practical
(which shall be conclusively determined by the Architect), such changes may only
be requested by the delivery to Landlord by Tenant of a proposed written "Change
Order" specifically setting forth the requested change. Landlord shall have five
(5) business days from the receipt of the proposed Change Order to provide
Tenant with the Architect's disapproval of the proposed change stating the
reason(s) for such disapproval, or if the Architect approves the proposed
change, the following items: (i) a summary of any increase in the cost caused by
such change (the "Change Order Cost"), (ii) a statement of the number of days of
any delay caused by such proposed change (the "Change Order Delay"), and (iii) a
statement of the cost of the Change Order Delay (the "Change Order Delay
Expense"), which Change Order Delay Expense shall be the product of the number
of days of delay multiplied by the estimated daily Base Rent rate. Tenant shall
then have three (3) business days to approve the Change Order Cost, the Change
Order Delay and the Change Order Delay Expense. If Tenant approves these items,
Tenant shall pay to Landlord the Change Order Cost and Change Order Delay
Expense within two (2) business days after Tenant's approval thereof, and
Landlord shall promptly following receipt of such payment execute the Change
Order and cause the appropriate changes to the Final Plans to be made. If Tenant
fails to respond to Landlord within said three (3) business day period, the
Change Order Cost, the Change Order Delay and the Change Order Delay Expense
shall be deemed disapproved by Tenant and Landlord shall have no further
obligation to perform any Work set forth in the proposed Change Order. The
Change Order Cost shall include all costs associated with the Change Order,
including, without limitation, architectural fees, engineering fees and
construction costs, as conclusively determined by the Architect and the
Contractor (defined in Section 7), respectively, together with a five percent
(5%) fee of these costs as reimbursement for the expense of administration and
coordination of such Change Order by Landlord's Representative. The Change Order
Delay shall include all delays caused by the Change Order, including, without
limitation, all design and construction delays, as conclusively determined by
the Architect and the Contractor (defined in Section 7), respectively.
7. Contractor. McCormack Pacific, a contractor selected by Landlord and
approved by Tenant ("Contractor"), shall be used to construct the Tenant
Improvements.
8. Construction of the Improvements. Landlord shall enter into a
construction contract with the Contractor on a form reasonably acceptable to
Landlord ("Construction Contract") for the construction and installation of the
Tenant Improvements in accordance with the Final Plans; provided, however, the
Construction Contract shall contain substantially the same provisions set forth
on Schedule 3 attached to this Work Letter and incorporated herein by this
reference.
9. Payment for Cost of the Tenant Improvements.
(a) Allowance. Landlord hereby grants to Tenant a tenant improvement
allowance for the work related to the Tenant Improvements described on the Final
Plans of One Hundred Seventy Nine Thousand Seven Hundred Twenty Dollars
($179,720.00) (the "Allowance"). The Allowance may be used only for the
following costs approved by Landlord:
(i) Payment of the cost of preparing the Preliminary Plans
relative to the Tenant Improvements (including, without limitation, Architect's
costs under the Architect Contract) and the Final Plans, including mechanical,
electrical, plumbing and structural drawings and of all other aspects necessary
to complete the Final Plans.
(ii) The payment of plan check, permit and license fees relating
to construction of the Tenant Improvements.
(iii) Construction of the Tenant Improvements as provided in the
Final Plans, including without limitation, the following:
(aa) Installation within the Premises of all partitioning,
demising walls, doors, floor coverings, ceilings, wall coverings and painting
and similar items;
EXHIBIT B
-3-
(bb) All electrical wiring, lighting fixtures, outlets and
switches, and other electrical work necessary for the Premises including,
without limitation, any electrical distribution work;
(cc) The furnishing, installation and screening of all HVAC
units, duct work, terminal boxes, diffusers and accessories necessary for the
heating, ventilation and air conditioning systems within the Premises;
(dd) Any additional improvements to the Premises required
for Tenant's use of the Premises including, but not limited to, odor control,
special heating, ventilation and air conditioning, noise or vibration control or
other special systems or improvements;
(ee) All fire and life safety control systems such as fire
walls, sprinklers, halon, fire alarms, including piping, wiring and accessories,
necessary for the Premises;
(ff) All plumbing, fixtures, pipes and accessories necessary
for the Premises;
(gg) Testing and inspection costs; and
(hh) Fees for the Contractor and tenant improvement
coordinator including, but not limited to, fees and costs attributable to
general conditions associated with the construction of the Tenant Improvements.
(iv) The payment of interest and reasonable loan fees incurred in
connection with the Project Loan (defined in Section 11).
(v) An administrative and coordination fee charged by Landlord
against the Allowance equal to five percent (5%) of the total cost to complete
the design, permit process and construction of the Tenant Improvements.
In no event will the Allowance be used to pay for Tenant's moving
expenses or for furniture, artifacts, equipment, telephone systems or any other
item of personal property which is not affixed to the Premises.
(b) Costs in Excess of Allowance. The cost of each item referenced in
Section 9(a) above shall be charged against the Allowance. If the cost of
constructing the Tenant Improvements exceeds the Allowance, such Costs shall be
paid for by Tenant to the extent not already paid for in connection with
Tenant's approval of the Work Cost Estimate within ten (10) days after written
demand from Landlord.
(c) Unused Allowance Amounts. Any unused portion of the Allowance upon
completion of the Tenant Improvements will not be refunded to Tenant or monies
to which Tenant is entitled.
10. Payment for Cost of the Shell. Landlord shall pay the cost of designing
and constructing the Shell as provided in the Final Plans.
11. Financing of Construction of Improvements. Landlord may elect to
finance the construction of the Improvements with the proceeds of a loan
("Project Loan") from a third party lender ("Lender") at the then prevailing
market rate and market terms for similar projects. The documents securing or
given in connection with the Project Loan; if any, are herein collectively
called "Loan Documents." Any Project Loan may be secured by the lien of a deed
of trust encumbering the Land and Improvements. Tenant agrees to execute and/or
provide all documents reasonably required by any Lender in connection with any
Project Loan, including, without limitation, estoppel certificates,
subordination agreements (subject to a commercially reasonable non-disturbance
agreement), consents to the assignment of this Agreement, written confirmation
of the satisfaction of closing conditions, and evidence of the due execution,
validity and enforceability of this Agreement. The costs of any Project Loan
shall be included within the cost of the Allowance for purposes of the
provisions of this Work Letter.
EXHIBIT B
-4-
12. Commencement of Lease. Notwithstanding any provision to the contrary
contained in this Work Letter, Tenant's obligation to pay Rent, independent and
irrespective of whether the Tenant Improvements have been substantially
completed, shall be governed in accordance with Section 2.1 of the Lease.
13. Tenant Delays; Force Majeure Delays. As used herein, "Tenant Delays"
means any delay in the completion of the Improvements resulting from any or all
of the following: (1) Tenant's failure to timely perform any of its obligations
pursuant to this Work Letter, including Tenant's failure to process timely the
building permit for the Tenant Improvements and any failure to complete, on or
before the due date therefor, any action item which is Tenant's responsibility
pursuant to this Work Letter, including Tenant's failure to grant approvals
and/or make payments within the time frames described herein; (2) Tenant's
requested modifications to the Preliminary Plans, the Final Plans or any
Tenant-initiated Change Orders; (3) Tenant's request for materials, finishes, or
installations which are not readily available, (4) any delay in any way
whatsoever arising from Tenant's right to conduct "Inspections" under Section 14
below, (5) Change Order Delays, (6) any delay due to Tenant's failure to timely
approve fee plans and specifications and/or the budget related to the Tenant
Improvements, or (7) any other act or failure to act by Tenant, Tenant's
Representative, Tenant's Architect, Tenant's employees, agents, independent
contractors, consultants and/or any other person performing or required to
perform services on behalf of Tenant. "Force Majeure Delays" as used herein
means delays resulting from causes beyond the reasonable control of Landlord or
the Contractor, including, without limitation, any delay caused by any action,
inaction, order, ruling, moratorium, regulation, statute, condition or other
decision of any private party or governmental agency having jurisdiction over
any portion of the project, over the construction of the Improvements or over
any uses thereof, or by delays in inspections or in issuing approvals by private
parties or permits by governmental agencies, or by fire, flood, inclement
weather, strikes, lockouts or other labor or industrial disturbance (whether or
not on the part of agents or employees of either party hereto engaged in the
construction of the Improvements), civil disturbance, order of any government,
court or regulatory body claiming jurisdiction or otherwise, act of public
enemy, war, riot, sabotage, blockage, embargo, failure or inability to secure
materials, supplies or labor through ordinary sources by reason of shortages or
priority, discovery of hazardous or toxic materials, earthquake, or other
natural disaster, delays caused by any dispute resolution process, or any cause
whatsoever beyond the reasonable control (excluding financial inability) of the
party whose performance is required, or any of its contractors or other
representatives, whether or not similar to any of the causes hereinabove stated.
14. Tenant's Inspection Rights. Landlord shall schedule and attend monthly
progress meetings, walkthroughs and any other meetings with the Architect, the
Contractor and Tenant to discuss the progress of the construction of the Tenant
Improvements ("Meetings"). Landlord shall give Tenant at least twenty-four (24)
hours prior notice (written or telephonic) of all such Meetings. Tenant shall
designate in writing the person or persons appointed by Tenant to attend the
Meetings and such designated party shall be entitled to be present at and to
participate in the discussions during all Meetings; but Landlord may conduct the
Meetings even if Tenant's appointees are not present. Tenant or its agents shall
have the right at any and all reasonable times to conduct inspections, tests,
surveys and reports of work in progress ("Inspections") for the purpose of
reviewing whether the Tenant Improvements are being constructed in accordance
with the Final Plans, as amended by any approved Change Orders or other agreed
upon changes. Tenant agrees to protect, hold harmless and indemnify Landlord
from all claims, demands, costs and liabilities (including reasonable attorneys'
fees) arising from Tenant's or Tenant's agents entry onto the Land for the
purpose of conducting Inspections.
15. Walk-Through and Punch List. Upon the issuance of the Architect's
Certificate pursuant to Section 4 above, Tenant, Landlord, the Architect shall
jointly conduct a walk-through of the Tenant Improvements and shall jointly
prepare a punch list ("Punch List") of items needing additional work ("Punch
List Items"); provided, however, the Punch List shall be limited to items which
are required by the Construction Contract, the Final Plans, Change Orders and
any other changes agreed to by the parties.
16. Miscellaneous Construction Covenants.
(a) Coordination with Lease. Nothing herein contained shall be
construed as (i) constituting Tenant as Landlord's agent for any purpose
whatsoever, or (ii) a waiver by Landlord or Tenant of any of the terms or
provisions of the Lease. Any default by either party with respect to any portion
of this Work Letter, shall be deemed a breach of the Lease for which Landlord
and Tenant shall have all the rights and remedies as in the case of a breach of
the Lease by the other party.
EXHIBIT B
-5-
(b) Cooperation. Landlord and tenant agree to cooperate with one
another and to cause their respective employees, agents and contractors to
cooperate with one another to coordinate any work being performed by Landlord
and/or Tenant under this Work Letter, and their respective employees, agents and
contractors so as to avoid unnecessary interference and delays with the
completion of the Work.
17. No Representations. Landlord does not warrant that the Building or any
component thereof will be free of latent defects or that it will not require
maintenance and/or repair within any particular period of time, except as
expressly provided herein. Tenant acknowledges and agrees that it shall rely
solely on the warranty or guaranty, if any, from Contractor, Architect or other
material and/or service providers relative to the proper design and construction
of the Improvements or any component thereof. Notwithstanding the foregoing,
Landlord represents and warrants to Tenant that the construction of the Tenant
Improvements shall be completed in a lien-free condition and workmanlike manner.
IN WITNESS WHEREOF, this Work Letter is executed as of the date first
written above.
"Landlord" "Tenant"
CATELLUS DEVELOPMENT CORPORATION, SYNETICS SOLUTIONS INC,
a Delaware corporation an Oregon corporation
By: Catellus Commercial Group, LLC, By: /s/ Koki Nakamura
a Delaware limited liability ------------------------------------
company Name: KOKI NAKAMURA
Its: Duly Authorized Agent Its: CEO
Date: __________________________________
By: /s/ TWA
-----------------------------
Name: By: /s/ Greg Marvell
--------------------------- ------------------------------------
Title: Name: GREG MARVELL
-------------------------- Its: PRESIDENT
Date: 12-20-00 Date: 12/9/00
EXHIBIT B
-6-
(BASE BUILDING SPECIFICATION PLAN)
SCHEDULE 1
to
EXHIBIT "B"
SCHEDULE 2 to EXHIBIT B
BASE BUILDING SPECIFICATIONS
Building Size: 180,000 SF (300x600)
Clear Height: 30' clear
Number of Dock Doors: (62)9'-0"xl0'0"
Number of Drive-in Doors: (8)12'0"xl4'0"
Concrete Slab: 6" thick 4,000 psi
Concrete Dock Aprons: 6" thick
Fire Sprinkler System: ESFR ready (.495/2,000)
Heating: Freeze Protection
Sanitary Sewer: 4"
Roof lnsulation: R-19
Over-Door Protection: Z metal
Column Spacing (Steel Column): 50' x 50'
Smoke Vents: 75 vents; 1 sf vent/75 sf bldg.
SCHEDULE 2 to EXHIBIT B
-1-
SCHEDULE 3 to EXHIBIT B
PRELIMINARY SCOPE OF WORK OUTLINE FOR TENANT IMPROVEMENTS
SCOPE OF LANDLORD'S WORK. THE FOLLOWING ITEMS SHALL BE INCLUDED IN THE SCOPE OF
WORK TO BE PERFORMED BY LANDLORD PURSUANT TO THE WORK LETTER:
1. Installation of a 300' demising wall and certain electrical work described
in letter dated November 15, 2000 attached to the Work Letter as Schedule
5.
2. 3,000 square feet of first floor office per Final Plans.
3. Electrical distribution to equipment areas; Final electrical hook-up of
equipment shall be the sole responsibility of Tenant.
4. Interior demising wall on Gridline E, powder coat staging area and outside
receiving area.
5. Permit and plan check fees.
6. Testing and inspections.
ITEMS EXCLUDED FROM LANDLORD'S SCOPE OF WORK/TENANT IMPROVEMENTS. ALL ITEMS NOT
EXPRESSLY INCLUDED IN LANDLORD'S SCOPE OF WORK ABOVE SHALL BE THE RESPONSIBILITY
OF TENANT AND SHALL BE COMPLETED IN ACCORDANCE WITH SECTION 10 OF THE LEASE AND
EXHIBIT G THERETO, INCLUDING, WITHOUT LIMITATION, THE FOLLOWING:
1. Architectural and engineering related to the Tenant Improvements including
the structural, mechanical, electrical and plumbing components thereof.
2. Manufacturing equipment and fixtures.
3. Manufacturing equipment hookup.
SCHEDULE 3 to EXHIBIT B
-1-
SCHEDULE 4 to EXHIBIT B
CONSTRUCTION CONTRACT PROVISIONS
1. Contractor's Warranty. Contractor shall warrant on behalf of itself, and
its subcontractors, materialmen, suppliers and sureties, that all material and
equipment incorporated into the Construction Contract will be new and free from
any and all claims, liens and security interests of any third parties and that
the work required thereunder ("Work") will be of good quality and free from
defects (whether latent or patent) in workmanship and will conform to the
requirements of the Contract Documents (as defined in the Construction Contract)
and that the materials used in the Contractor's express warranty herein shall be
in addition to, and not in lieu of, any other remedies Catellus may have under
the Contract Documents, at law, or in equity for defective or nonconforming
Work. No payment made by Catellus to Contractor, nor any acceptance, use or
occupancy of the Project by Catellus or any other person, shall constitute
acceptance of any defective Work or any Work not in compliance with the Contract
Documents.
2. Other Warranties. Contractor shall assemble and transmit to Catellus two
complete copies in loose-leaf binders of all applicable warranties and operating
and maintenance data for all equipment furnished under the Construction
Contract, in sufficient detail to allow inspections, testing, operating and
maintenance. All warranties procured by Contractor from its subcontractors and
materialmen shall be properly executed on a form approved by Catellus and shall
be submitted to Catellus prior to the final acceptance of the Work. Whenever
possible, Contractor shall cause such warranties to be made directly to
Catellus, or, if the same shall be made to Contractor, Contractor, if possible,
shall assign the same to Catellus on request. The parties have agreed that
Catellus may assign any such warranties at any time and in its sole discretion
without the consent of Contractor. During the Correction Period (as defined
below), upon written request from Catellus, such warranties as may not be
assignable shall be enforced by Contractor for Catellus' benefit.
3. Guaranty of Correction. As used herein, the term "Correction Period"
shall mean the period from Substantial Completion (as defined in the
Construction Contract) to the date one year after Substantial Completion, or,
for any portion of the Work which is completed after Substantial Completion, one
year after Final Completion (as defined in the Construction Contract).
Contractor shall, to Catellus' reasonable satisfaction, (i) re-execute or
otherwise remedy any parts of the Work that fail to conform with the
requirements of the Contract Documents and any defects in the Work due to faulty
materials or workmanship and that become apparent during the progress of the
Work or during the Correction Period, and (ii) replace, repair or restore any
other parts of the Project or the furniture, fixtures, equipment and other items
placed therein (whether by Catellus or any other party) that are damaged or
destroyed by any such parts of the Work that do not conform to the requirements
of the Contract Documents or as a result of defects in the Work or the
correction thereof. Contractor shall remove from the Project site portions of
the Work and materials which are not in conformance with the Contract Documents
and which are not either corrected by Contractor or accepted by Catellus. All
such corrective work shall be performed at such times as are acceptable to
Catellus and so as to avoid, to the extent practicable, disruption to the
activities of Catellus or the occupants of the Project. The provisions of this
Section shall apply to Work performed by subcontractors as well as work done
directly by employees of Contractor.
The cost to Contractor of performing any of its obligations under this
Section shall be paid for by Contractor, and Contractor shall receive no
reimbursement or compensation from Contractor for performing any such corrective
work, and all such work shall be at no cost to Catellus. Contractor's
obligations under this Section are in addition to and not in limitation of its
express warranty above, or any other obligation of Contractor under the Contract
Documents. Enforcement of Contractor's obligations under this Section shall be
in addition to and not in limitation of any other right or remedy of Catellus
under the Contract Documents or otherwise at law or in equity.
Notwithstanding the foregoing provisions of this Section, Catellus may, at
its option, by notice to Contractor, elect to accept nonconforming or defective
Work instead of requiring its removal or correction, in which case the Contract
Sum shall be reduced by an amount equal to the difference between the value to
Catellus of the Work had it been in conformance with the Contract Documents, and
the value to Catellus of such nonconforming or defective Work. Such election
shall be exercised only by written notice to Contractor and shall not be implied
by any action or inaction of Catellus.
SCHEDULE 4 to EXHIBIT B
-1-
4. Warranties, Guaranties for Substitutions. In addition to the
guarantee/warranties required on all materials, equipment and workmanship (which
shall not be less than one year), Contractor and the material suppliers or
equipment manufacturers, will provide the maximum available extended
guarantee/warranty submitted on Contractor's business stationery and signed by
both Contractor and the supplier and/or manufacturer for each substitution
proposed by Contractor. In all cases in which a manufacturer's name, trade name
or other proprietary designation is used in connection with materials or
articles to be furnished under this Contract, whether or not the phrase "or
equal" is used after such name, Contractor shall furnish the product of the
named manufacturer(s) without substitution, unless a written request for a
substitute has been submitted by Contractor and approved in writing by the
Architect and Catellus.
SCHEDULE 4 to EXHIBIT B
-2-
SCHEDULE 5 TO EXHIBIT B
(CATELLUS LOGO)
CATELLUS
Date: November 15, 2000 DELIVERED BY HAND
To: Phil Coons
Synetics Solutions
7440 SW Bonita Road
Tigard, OR 97224
RE: Synetics Tenant Improvement to Building C(45,000sf)
Southshore Corporate Park
Dear Phil:
We are submitting here with the cost estimate for the above referenced job.
DESCRIPTION:
1. CONSTRUCTION OF A 300' LONG DEMISING WALL SPLITTING THE 90,000SF
VACANT SPACE INTO TWO 45,000SF SPACES.
General Conditions $ 4,800.00
Demolition/Patch 5,000.00
Landscape Repair 2,750.00
New Demising Wall 27,000.00
2. INSTALL ONE LAYER OF SHEETROCK TO THE VACANT SIDE OF THE EXISTING
DEMISING WALL.
One Layer Sheetrock $ 6,000.00
3. 2,000 AMP SERVICE ADDED TO THE EXISTING BUILDING SERVICE.
Electrical Service $ 73,061.00
Contractor's Fee $ 5,931.00
-----------
SUBTOTAL: $124,542.00
Catellus Management Fee $ 6,227.00
-----------
TOTAL COST FOR PROPOSED WORK: $130,769.00
Please execute this project estimate by signing and returning to catellus within
3 days. Please fax to (415)974-4651 and return original to my attention. Thank
you.
Sincerely, Approved & Accepted:
Catellus Development Corporation Synetics Solutions
/s/ Bill Schmitt By: /s/ Phil Coons
- ------------------------------------- ------------------------------------
Bill Schmitt Phil Coons
Director Construction Services
DATE: 11/14/00
Cc:
Jeff Lee, CDC
Dan Marcus, CDC
201 MISSION STREET, 2ND FLOOR SAN FRANCISCO, CALIFORNIA 94105
- TEL (415) 974-4500 - FAX (415) 974-4687
SCHEDULE 5 TO EXHIBIT B
A Joint Venture
(PERLO MCCORMACK PACIFIC LOGO)
Construction Managers/General Contractors
7190, S.W. Sandburg St.
Portland, Oregon 97223
F: 503.639.4134
P: 503.624.2090
November 15, 2000
Mr. Jeffrey Lee
Catellus Development Corporation
201 Mission Street, 2nd Floor
San Francisco, California 94105
Re: Demising Wall and Electrical Services for Synetics at Bldg. 'C'
Gentlemen:
We are pleased to present the following costs to construct a 300 long demising
wall splitting the 90,000 s.f. vacant space into two 45,000 s.f. spaces, and to
install one layer of sheetrock to the vacant side of the existing demising wall
(excluding permits, fees, and architectural costs). In addition, we present the
following costs for a 2,000 Amp service added to the existing building service.
At this time we do not believe there are any additional PGE fees or costs
associated with the additional work. Should this change, an appropriate cost.
change will be required.
With standard delivery, the service will be ready 13 weeks after a notice to
proceed is received.
General Conditions $ 4,800.00
Demolition/Patch 5,000.00
Landscape Repair 2,750.00
New Demising Wall 27,000.00
One Layer Sheetrock 6,000.00
Electrical Service 73,061.00
-----------
$118,611.00
Fee 5,931.00
-----------
Total Bid $124,542.00
Please review and call should you have any questions.
Very truly yours,
PERLO McCORMACK PACIFIC
Construction Managers/General Contractors
/s/ Gayland R. Looney
- -------------------------------------
GAYLAND R. LOONEY
DIRECTOR OF CONSTRUCTION
GRL/cm
info@perlomccormackpacific.com
CCB# 144525
EXHIBIT C
COMMENCEMENT DATE MEMORANDUM
With respect to that certain Multi-Tenant Triple Net Industrial Lease
("Lease") dated December __, 2000, between Synetics Solutions Inc., an Oregon
corporation ("Tenant"), and Catellus Development Corporation, a Delaware
corporation ("Landlord"), whereby Landlord leased to Tenant and Tenant leased
from Landlord approximately 44,930 rentable square feet of the building located
at 4293 NE 189th Avenue, Gresham, Oregon ("Premises"), Tenant hereby
acknowledges and certifies to Landlord as follows:
(1) The Possession Date occurred on December 15, 2000;
(2) The Commencement Date occurred on January 1, 2001; and
(3) The Premises contains 44,930 Rentable Square Feet (as defined in the
Basic Lease Information).
IN WITNESS WHEREOF, this Commencement Date Memorandum is executed this __
day of December, 2000.
"Tenant" SYNETICS SOLUTIONS INC,
an Oregon corporation
By: /s/ Koki Nakamura
------------------------------------
Its: C.E.O.
By: /s/ Greg Marvell
------------------------------------
Its: PRESIDENT
EXHIBIT C
-1-
ACORD. CERTIFICATE OF INSURANCE
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY
AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE
AFFORDED BY THE POLICIES BELOW.
COMPANIES AFFORDING COVERAGE
COMPANY
A
INSURED COMPANY
B
COMPANY
C
COMPANY
D
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE SEEN ISSUED TO THE INSURED NAMED ABOVE
FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER
DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE
POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS
SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
POLICY POLICY
EFFECTIVE EXPIRATION
CO POLICY DATE DATE
LTR TYPE OF INSURANCE NUMBER (MM/DD/YY) (MM/DD/YY) LIMITS
- --- -------------------------------- ------ ---------- ---------- --------------------------------
GENERAL LIABILITY GENERAL AGGREGATE $_____
[ ] COMMERCIAL GENERAL LIABILITY PRODUCTS-COMP-OP AGG $_____
[ ] [ ] CLAIMS MADE [ ] OCCUR PERSONAL & ADV INJURY $_____
[ ] OWNERS & CONT PROT EACH OCCURRENCE $_____
[ ] _______________ FIRE DAMAGE (ANY ONE PRO) $_____
[ ] _______________ MED EXP (ANY ONE PERSON) $_____
AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $_____
[ ] ANY AUTO
[ ] ALL OWNED AUTOS BOOILY INJURY $_____
[ ] SCHEDULED AUTOS (Per Person)
[ ] HIRED AUTOS BOOILY INJURY $_____
[ ] NON-OWNED AUTOS (Per accident)
[ ] _______________
[ ] _______________ PROPERTY DAMAGE $_____
GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $_____
[ ] ANY AUTO OTHER THAN AUTO ONLY:
[ ] _______________ EACH ACCIDENT $_____
[ ] _______________ AGGREGATE $_____
EXCESS LIABILITY
[ ] UMBRELLA FORM EACH OCCURRENCE $_____
[ ] OTHER THAN UMBRELLA FORM AGGREGATE $_____
$_____
WORKERS COMPENSATION AND [ ] STATUTORY LIMITS
EMPLOYERS' LIABILITY EACH ACCIDENT $_____
DISEASE - POLICY LIMIT $_____
THE PROPRIETOR/ [ ] INCL DISEASE - EACH EMPLOYEE $_____
PARTNERS/EXECUTIVE
OFFICERS ARE: [ ] EXCL
OTHER
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
CERTIFICATE HOLDER CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED
BEFORE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL
___ DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO
THE
AUTHORIZED REPRESENTATIVE
ACORD 25-S (3/93) (C) ACORD CORPORATION
EXHIBIT D
EXHIBIT E
PROHIBITED USES
Subject to the terms of the Lease and this Exhibit E, the following types of
operations and activities are expressly prohibited on the Premises:
1. automobile/truck/forklift maintenance, repair or fueling; provided,
however, Tenant may perform routine maintenance with respect to motorized
material-handling equipment as required in the course of Tenant's
day-to-day business operations;
2. battery manufacturing or reclamation;
3. ceramics and jewelry manufacturing or finishing;
4. chemical (organic or inorganic) storage, use or manufacturing; provided,
however, Tenant may use the chemicals listed on Schedule 1 to this Exhibit
E in an amount not to exceed the quantity specified thereon, all in
accordance with the Lease and all applicable Environmental Laws;
5. drum recycling;
6. dry cleaning;
7. electronic components manufacturing (distribution of such components is
permitted); provided, however, Tenant may assemble electronic components so
long as such assembly does not involve any wet electronic chemical
processes whatsoever;
8. electroplating and metal finishing; provided, however, Tenant may perform
machining, welding, deburring and power coating activities as such
activities relate to the finishing of Tenant's products;
9. explosives manufacturing, use or storage;
10. hazardous waste treatment, storage, or disposal;
11. leather production, tanning or finishing;
12. machinery and tool manufacturing; provided, however, Tenant may manufacture
OEM equipment and tools consistent with Tenant's existing manufacturing
facilities and the Permitted Use set forth in the Basic Lease Information;
13. medical equipment manufacturing and hospitals;
14. metal shredding, recycling or reclamation; provided, however, Tenant shall
be permitted to recover and recycle naturally occurring materials so long
as such materials are processed and recovered by an outside vendor. All
storage and collection of this material will be limited to the inside of
the Premises;
15. metal smelting and refining;
16. mining;
17. paint, pigment and coating operations; provided, however, Tenant may
incorporate full powder coating processes, subject to any and all
applicable governmental laws, rules, regulations and/or requirements;
18. petroleum refining;
19. plastic and synthetic materials manufacturing; provided, however, Tenant
may use machine welding and extracting processes in the ordinary course of
Tenant's business;
20. solvent reclamation;
21. tire and rubber manufacturing;
22. above- and/or underground storage tanks; provided, however, Tenant shall be
permitted to transfer a limited amount of process water from the powder
coat cleaning line to an evaporator tank with a closed loop system. Any
secondary containment shall be subject to Landlord's prior review and/or
approval; and
23. residential use or occupancy.
EXHIBIT E
-1-
SCHEDULE 1 to EXHIBIT E
CHEMICALS TO BE STORED AND
USED ON THE PREMISES*
1. Isopropyl Alcohol (one 55 gallon drum)
2. Diphenylmethane Diisocyanate (one 55 gallon drum)
3. Glycerol Polyether (one 55 gallon drum)
4. Simple Asphyxiant (Argon 75%, Co(2) 25%), in the quantity set forth in that
certain Hazardous Substance Information Survey dated October 1, 1999 for
Facility ID No. 064875 (the "Survey")
5. Acetylene, in the quantity set forth in the Survey
6. Ammonia/Air (5000 ppm), in the quantity set forth in the Survey
7. Gaseous NH(3) in air mixtures in 300 ft(3) cylinders
(a) (9)100 ppm
(b) (9)1000 ppm
(c) (17)5000 ppm
8. (1) Pure N(2),300 ft(3) cylinder
9. (1) Pure N(2),80 ft(3) cylinder
10. (2) NH(3) Permeation tubes (-20 ng/L emission) (2 grams)
11. N-methyl pyrrolidone permeation tube (-20 ng/L emission) (2 grams)
12. Dimethyl methylphosphonate (DMMP) permeation tube (2 grams)
13. (3) Ni63 radiation sources (-15 mCu)
14. Ammonium hydroxide, 1 gal.
15. Hydrochloric acid, 1 gal.
16. Acetone, 1 gal.
17. Colorimeter (Puremate) tubes
(a) Silica gel (2 grams)
(b) Phosphoric acid (2 grams)
(c) Bromomethyl blue (2 grams)
18. Trichloroethylene (less than one gallon)
19. Hydrochloric acid (less than one gallon)
20. Phosphoric acid (less than one gallon)
21. Citric acid (less than one gallon)
22. Nitric acid (less than one gallon)
23. Hydrofluoric acid (less than one gallon)
24. Acetic acid (less than one gallon)
25. Sulfuric acid (less than one gallon)
26. N-methyl pyrrolidone (less than one gallon)
* Subject to modification pursuant to Section 11 of the Lease.
SCHEDULE 1 to EXHIBIT E
-1-
EXHIBIT F
RULES AND REGULATIONS
1. No automobile, recreational vehicle or any other type of vehicle or
equipment shall remain upon the Common Area longer than 72 hours and no
vehicle or equipment of any kind shall be dismantled or repaired or
serviced on the Common Area. All vehicle parking shall be restricted to
areas designated and marked for vehicle parking. The foregoing restrictions
shall not be deemed to prevent temporary parking for loading or unloading
of vehicles in designated areas.
2. Signs will conform to sign standards and criteria established from time to
time by Landlord. No other signs, placards, pictures, advertisements, names
or notices shall be inscribed, displayed or printed or affixed on or to any
part of the outside or inside of the building without the written consent
of Landlord and Landlord shall have the right to remove any such
non-conforming signs, placards, pictures, advertisements, names or notices
without notice to and at the expense of Tenant.
3. No antenna, aerial, discs, dishes or other such device shall be erected on
the roof or exterior walls of the Premises, or on the grounds, without the
written consent of the Landlord in each instance. Any device so installed
without such written consent shall be subject to removal without notice at
any time.
4. No loud speakers, televisions, phonographs, radios or other devices shall
be used in a manner so as to be heard or seen outside of the Premises
without the prior written consent of the Landlord.
5. The outside areas immediately adjoining the Premises shall be kept clean
and free from dirt and rubbish by the Tenant to the satisfaction of
Landlord and Tenant shall not place or permit any obstruction or materials
in such areas or permit any work to be performed outside the Premises.
6. No open storage shall be permitted in the Project.
7. All garbage and refuse shall be placed in containers placed at the location
designated for refuse collection, in the manner specified by Landlord.
8. No vending machine or machines of any description shall be installed,
maintained or operated upon the Common Area.
9. Tenant shall not disturb, solicit, or canvass any occupant of the building
and shall cooperate to prevent same.
10. No noxious or offensive trade or activity shall be carried on upon any
units or any part of the Common Area nor shall anything be done thereon
which would in any way interfere with the quiet enjoyment of each of the
other tenants of the Project or which would increase the rate of insurance
or overburden utility facilities from time to time existing in the Project.
11. Landlord reserves the right to make commercially reasonable amendments to
these rules and regulations from time to time as are nondiscriminatory and
not inconsistent with the Lease, provided that Landlord provides Tenant
with prior notice of any such change or amendment.
EXHIBIT F
-1-
EXHIBIT G
REQUIREMENTS FOR IMPROVEMENTS OR ALTERATIONS BY TENANT
If Landlord shall permit Tenant to construct any initial tenant
improvements in the Premises or to have any work performed in the Premises at
any time prior to or during the Lease term by a contractor retained by Tenant
("Tenant's Work"), then Tenant shall comply with the requirements set forth
herein. If tenant's Work has been properly authorized, Tenant will receive
written approval and consent for alterations to the Premises.
1. SUBMITTAL OF PLANS. Prior to commencing any work in the Premises, Tenant
shall submit to Landlord for approval its proposed plans for the work. Without
limiting the foregoing, Tenant shall provide:
(a) A separate scale drawing denoting all proposed construction
and/or demolition, if necessary.
(b) A separate drawing for each trade proposing structural,
electrical, mechanical, civil or landscaping modifications.
(c) Specify all dimensions and complete references to all work to be
performed in the affected areas.
(d) If adding extra electrical or mechanical equipment, provide
complete operating and maintenance specifications for each item.
Landlord shall use its commercially reasonable efforts to respond to any written
request from Tenant. Landlord's failure to respond to a written request from
Tenant shall be deemed be Landlord's disapproval of the applicable request for
approval hereunder.
2. CHECKLIST. With respect to each project, Landlord will provide Tenant
with a checklist listing the items required to be furnished to Landlord in
connection with the proposed work. Tenant shall furnish to Landlord prior to,
during, or upon completion of Tenant's Work, as applicable, each of the
items specified in the checklist attached hereto as Attachment 1.
3. CONTRACTORS PROVIDING TENANT IMPROVEMENT SERVICES.
(a) The contractor employed by Tenant and any subcontractors shall be
(i) duly licensed in the state in which the Premises are located, and (ii)
subject to Landlord's prior written approval, which approval shall not be
unreasonably withheld. If more than one trade is employed on a single job, state
law requires the services of a general contractor in addition to contractors for
specialty work being performed.
(b) Each contractor shall provide proof of licensing as a general or
specialty contractor in accordance with state law. Additionally, each contractor
shall furnish proof of licensing in the city or municipality in which the
construction related activity is to take place.
(c) Tenant shall use Landlord's subcontractor for mechanical,
electrical, plumbing, roofing and roofing consultant; provided, however, Tenant
may, without the prior consent or approval of, but with notice to Landlord,
engage Current Electric and/or Christenson Electric (collectively, the
"Pre-Approved Electrical Contractors") to serve as the subcontractor(s) to
perform any electrical work related to the Premises. Notwithstanding the
foregoing, all work to be performed by the Pre-Approved Electrical Contractors
shall otherwise comply with all of the terms and conditions of this Exhibit G.
(d) Tenant and Tenant's contractors shall comply with all Applicable
Laws pertaining to the performance of Tenant's Work and the completed
improvements and all applicable safety regulations established by Landlord or
the general contractor.
EXHIBIT G
-1-
(e) Prior to commencement of any work in the Premises, Tenant and
Tenant's contractors (and any subcontractors) shall obtain and provide Landlord
with certificates evidencing Workers' Compensation, public liability and
property damage insurance in amounts and forms and with companies satisfactory
to Landlord. Each general contractor (and any subcontractor) employed on the
Premises shall provide Landlord with a current certificate of insurance in
effect for that contractor with a thirty day notice of cancellation or
revocation clause. Insurance requirements are as follows:
(i) Comprehensive General Liability with a $2,000,000 Combined
Single Limit covering the liability of Landlord and contractor for bodily injury
and property damage arising as a result of the construction of the improvements
and the services performed thereunder. Landlord shall be named as an additional
insured.
(ii) Comprehensive Automobile Liability with a $2,000,000
Combined Single Limit covering Landlord and vehicles used by contractor (and any
subcontractor) in connection with the construction of the improvements.
(iii) Workers' Compensation and Employer's Liability as required
by law, for employees of the contractor (and any subcontractors) performing work
on the Premises.
(f) The following requirements shall be incorporated as "Special
Conditions" into the contract between Tenant and its contractors and a copy of
the contract shall be furnished to Landlord prior to the commencement of
Tenant's Work:
(i) Prior to start of Tenant's Work, Tenant's contractor shall
provide Landlord with a construction schedule in "bar graph" form indicating the
completion dates of all phases of Tenant's Work.
(ii) Tenant's contractor shall be responsible for the repair,
replacement or clean-up of any damage done by it to other contractors' work
which specifically includes accessways to the Premises which may be concurrently
used by others.
(iii) Tenant's contractor shall accept the Premises prior to
starting any trenching operations. Any rework of sub-base or compaction required
after the contractor's initial acceptance of the Premises shall be done by
Tenant's contractor, which shall include the removal from the Project of any
excess dirt or debris.
(iv) Tenant's contractor shall contain its storage of materials
and its operations within the Premises and such other space as it may be
assigned by Landlord or Landlord's contractor. Should Tenant's contractor be
assigned space outside the Premises, it shall move to such other space as
Landlord or Landlord's contractor shall direct from time to time to avoid
interference or delays with other work.
(v) Tenant's contractor shall clean up the construction area and
surrounding exterior areas daily. All trash, demolition materials and surplus
construction materials shall be stored within the Premises and promptly removed
from the Premises and the Project and disposed of in an approved sanitation
site.
(vi) Tenant's contractor shall provide temporary utilities,
portable toilet facilities, and potable drinking water as required for its work
within the Premises and shall pay to Landlord's contractor the cost of any
temporary utilities and facilities provided by Landlord's contractor at Tenant's
contractor's request.
(vii) Tenant's contractor shall notify Landlord or Landlord's
project manager of any planned work to be done on weekends or other than normal
job hours.
(viii) Tenant's contractor or subcontractors shall not post signs
on any part of the Project or on the Premises, except for any notices required
to be posted by any applicable federal, state or local law or regulation.
EXHIBIT G
-2-
(g) Tenant shall provide Landlord with a set of "As-Built" drawings
for any work performed to the Premises.
4. COSTS.
(a) Tenant shall promptly pay any and all costs and expenses in
connection with or arising out of the performance of Tenant's Work (including
the costs of permits therefor) and shall furnish to Landlord evidence of such
payment upon request.
(b) Tenant shall reimburse Landlord for all costs which Landlord may
incur in connection with granting approval to Tenant for any alteration and/or
addition, including any costs or expenses which Landlord may incur in electing
to have outside architects and engineers review said matters. Tenant shall pay
Landlord an amount equal to five percent (5%) of the total hard costs of
construction and installation of Tenant's Work as compensation to Landlord for
review of plans, use of facilities and other miscellaneous costs of Landlord
incurred as a result of such work. Notwithstanding the foregoing, such five
percent (5%) charge shall not apply to the work related to the tenant
improvements contemplated in the Work Letter attached to the Lease as Exhibit B.
5. CONTRACTOR'S BONDS. Prior to the commencement of construction, Tenant
shall obtain or cause its contractor to obtain and deliver evidence thereof to
Landlord payment and performance bonds covering the faithful performance of the
contract for the construction of the Tenant's Work and the payment of all
obligations arising thereunder. In the alternative, and at Landlord's option,
Tenant may appoint Landlord as its contractor, and in so doing, Tenant shall
deposit with the Landlord a sum of money equal to the entire amount of the
estimated construction cost, as is required for the installation of the Tenant
improvements on the Premises. If Tenant deposits with Landlord monies for
construction costs, it is agreed that Landlord will not be placed in a fiduciary
capacity as a trustee, or any other fiduciary title, for the sums of monies in
Landlord's possession. Tenant agrees to hold Landlord harmless from any and all
claims, for workmanship and installation of improvements, and for
merchantability and quality of goods used for the installation of Tenant's
improvements, as are requested by Tenant. Any bonds obtained pursuant hereto
shall be for the mutual benefit of both Landlord and Tenant as obligees and
beneficiaries.
6. MECHANIC'S LIENS.
(a) Tenant shall not suffer or permit to be enforced against the
Premises or any part of the Project any mechanic's, materialman's, contractor's
or subcontractor's lien arising out of any work of improvement, however it may
arise.
(b) Tenant shall notify Landlord at least ten (10) days prior to the
commencement of construction of any Tenant's Work and Landlord shall have the
right to post and record a notice of nonresponsibility in conformity with
applicable law. Within ten (10) days following completion of Tenant's
Work, Tenant shall file a Notice of Completion and deliver to Landlord an
unconditional release and waiver of lien executed by each contractor,
subcontractor and materialman involved in Tenant's Work.
(c) In the event any lien is filed against the Project or any portion
thereof or against Tenant's leasehold interest therein, Tenant shall obtain the
release and/or discharge of said lien, within ten (10) days after the filing
thereof. In the event Tenant fails to do so, Landlord may obtain the release
and/or discharge of said lien and Tenant shall indemnify Landlord for the costs
thereof, including reasonable attorney's fees, together with interest at the
Applicable Interest Rate from the date of demand. Nothing herein shall prohibit
Tenant from contesting the validity of any such asserted claim, provided Tenant
has furnished to Landlord a lien release bond freeing the Premises from the
effect of the lien claim.
7. INDEMNITY. The respective indemnity obligations of Landlord and Tenant
created pursuant to Section 8.4 of the Lease shall apply with respect to any and
all of Tenant's Work (whether occurring on or before the Commencement Date) and
with respect to any work to be performed by Landlord under this Exhibit G.
Tenant shall repair or replace (or, at Landlord's election, reimburse Landlord
for the cost of repairing or replacing) any portion of the Building or item of
Landlord's equipment or any of Landlord's real or personal property damaged,
lost or destroyed in the performance of Tenant's Work.
EXHIBIT G
-3-
8. BUILDING STANDARDS. All work shall conform to Landlord's established
building standards and specifications. Tenant is required to make these
standards part of the construction documents.
9. ROOF PENETRATIONS. If improvements penetrate the roof membrane, the
penetrations will be sealed per Landlord/IRC roofing specifications and
inspected by IRC to maintain roof warranty. The cost of inspection and all
corrective work shall be borne by Tenant. Tenant shall use Landlord's original
roofing contractor.
10. BUILDING MODIFICATIONS. Work will only be approved within the confines
of a given space. Tenant will not be allowed without Landlord's written consent
to modify building exterior or mechanical and electrical service as provided to
the building in common with other tenants.
11. ELECTRICAL WORK. All electrical work shall be approved from the unit
space electrical panel only. Additional service requirements shall be. secured
only by direction of Landlord. Tenant shall use Landlord's original electrical
contractor.
12. SCHEDULE OF WORK. Tenant may be required to provide a schedule of all
work to be performed, subject to Landlord approval. All costs to produce such
schedule shall be borne solely by Tenant.
13. CLEAN UP AND DISPOSAL OF CONSTRUCTION DEBRIS. Building trash containers
are provided for office generated trash only and are not to be used for disposal
of construction-related materials and debris. Unapproved usage will result in a
penalty assessment to the Tenant equal to the cost of an extra pick-up service
as provided under the current rate schedule of regular trash removal service.
14. INSPECTION BY LANDLORD. Landlord reserves the following rights: (i) the
right of inspection prior to, during and at completion of all construction
and/or demolition, (ii) the right to post and record a notice of
nonresponsibility in conformity with Oregon law, and (iii) the right to order a
total stop to all improvements underway for non-compliance with any of the
requirements hereof.
15. GENERAL PROVISIONS.
(a) If Landlord has agreed to provide an allowance toward the cost of
tenant improvements, Landlord shall retain from such funds an amount determined
by Landlord until Tenant has fully complied with the requirements hereof.
(b) All materials, work, installations and decorations of any nature
whatsoever brought on or installed in the Premises before the commencement of
the Term or throughout the Term shall be at Tenant's risk, and neither Landlord
nor any party acting on Landlord's behalf shall be responsible for any damage
thereto or loss or destruction thereof due to any reason or cause whatsoever.
(c) Nothing contained herein shall make or constitute Tenant as the
agent of Landlord.
EXHIBIT G
-4-
ATTACHMENT TO EXHIBIT G
ITEMS TO BE FURNISHED TO LANDLORD FOR EACH WORK OF IMPROVEMENT
1. Plan of Alterations for Landlord Approval.
2. Contractor(s), Address, Telephone Number, Contact Person.
3. Copy of Contractor's State and City Business License.
4. Copy of Building Permit.
5. Copy of Final Inspection and Signed Building Permit Cards.
6. Copy of Certificate of Insurance Naming Catellus Development Corporation as
Additional Insured. Insurance to include Comprehensive General Liability,
Comprehensive Auto, Workers' Compensation and Employer's Liability.
7. Signed Unconditional Lien Waiver in Favor of Catellus Development
Corporation.
8. Schedule of Work.
9. Copy of Completion and Payment Bond.
10. Architect's License and Expiration.
11. Tenant and Architect Agreement.
12. Tenant and Contractor Agreement.
13. Copy of Permit Plans.
14. Copy of As-Builts.
15. Copy of Recorded Notice of Completion.
16. Certificate of Occupancy.
17. Evidence of Insurance for All-Risk/builder's Risk Insurance to the Amount
of Improvements.
ATTACHMENT to EXHIBIT G
-1-
EXHIBIT H
TENANT ESTOPPEL CERTIFICATE
To: [Insert name of party to rely on document] ("Relying Party")
__________________________________________
__________________________________________
__________________________________________
Attn: ____________________________________
Re: Lease Dated: ________________________
Current Landlord: ________________________
Current Tenant: ________________________
Square Feet: Approximately __________
Floor(s): ________________________
Located at: ________________________
("Tenant") hereby certifies that as of ______________, 200_:
1. Tenant is the present owner and holder of the tenant's interest under
the lease described above, as it may be amended to date (the "Lease") with
__________ as Landlord (who is called "Landlord" for the purposes of this
Certificate). (USE THE NEXT SENTENCE IF THE LANDLORD OR TENANT NAMED IN THE
LEASE IS A PREDECESSOR TO THE CURRENT LANDLORD OR TENANT.) [The original
landlord under the Lease was __________, and the original tenant under the Lease
was __________.] The Lease covers the premises commonly known as __________ (the
"Premises") in the building (the "Building") at the address set forth above.
(CHOOSE ONE OF THE FOLLOWING SECTION 2(a)s BELOW)
[2. (a) A true, correct and complete copy of the Lease (including all
modifications, amendments, supplements, side letters, addenda and riders of and
to it) is attached to this Certificate as Exhibit A.]
[2 (a) The attached Exhibit A accurately identifies the Lease and all
modifications, amendments, supplements, side letters, addenda and riders of and
to it.]
(b) (IF APPLICABLE) [The Lease provides that in addition to the
Premises, Tenant has the right to use or rent __________ [assigned/unassigned]
parking spaces near the Building or in the garage portion of the building during
the term of the Lease.]
(c) The term of the Lease commenced on ___________, 200_ and will
expire on ___________, _____, including any presently exercised option or
renewal term. (CHOOSE ONE OF THE FOLLOWING TWO SENTENCES.) [Tenant has no option
or right to renew, extend or cancel the Lease, or to lease additional space in
the Premises or Building, or to use any parking (IF APPLICABLE) [other than that
specified in Section 2(b) above].] [Except as specified in Paragraph(s)
___________ of the Lease (copy attached), Tenant has no option or right to
renew, extend or cancel the Lease, or to lease additional space in the Premises
or Building, or to use any parking (IF APPLICABLE) [other than that specified in
Section 2(b) above].]
(CHOOSE ONE OF THE FOLLOWING SECTION 2(d)s)
[(d) Tenant has no option or preferential right to purchase all or any
part of the Premises (or the land of which the Premises are a part). Tenant has
no right or interest with respect to the Premises or the Building other than as
Tenant under the Lease.]
EXHIBIT H
-1-
[(d) Except as specified in Paragraph(s) ___________ of the Lease
(copy attached), Tenant has no option or preferential right to purchase all or
any part of the Premises (or the land of which the Premises are a part). Except
for the foregoing, Tenant has no right or interest with respect to the Premises
or the Building other than as Tenant under the Lease.]
(e) The annual minimum rent currently payable under the Lease is
$__________ and such rent has been paid through ___________, 200_. (IF
APPLICABLE) [The annual percentage rent currently payable under the Lease is at
the rate of ___________ and such rent has been paid through ___________, 200_.]
(f) (IF APPLICABLE) [Additional rent is payable under the Lease for
(i) operating, maintenance or repair expenses, (ii) property taxes, (iii)
consumer price index cost of living adjustments, or (iv) percentage of gross
sales adjustments (i.e., adjustments made based on underpayments of percentage
rent). Such additional rent has been paid in accordance with Landlord's rendered
bills through ___________, 200_. The base year amounts for additional rental
items are as follows; (1) operating, maintenance or repair expenses
$___________, (2) property taxes $___________, and (3) consumer price index
___________ (please indicate base year CPI level).]
(g) Tenant has made no agreement with Landlord or any agent,
representative or employee of Landlord concerning free rent, partial rent,
rebate of rental payments or any other similar rent concession (IF APPLICABLE)
[except as expressly set forth in Paragraph(s) ___________ of the Lease (copy
attached)].
(h) Landlord currently holds a security deposit in the amount of
$___________ which is to be applied by Landlord or returned to Tenant in
accordance with Paragraph(s)___________ of the Lease. Tenant acknowledges and
agrees that Relying Party shall have no responsibility or liability for any
security deposit, except to the extent that any security deposit shall have been
actually received by Relying Party.
3. (a) The Lease constitutes the entire agreement between Tenant and
Landlord with respect to the Premises, has not been modified changed, altered or
amended and is in full force and effect in the form (CHOOSE ONE) [attached
as/described in] Exhibit A. There are no other agreements, written or oral,
which affect Tenant's occupancy of the Premises.
(b) All insurance required of Tenant under the Lease has been provided
by Tenant and all premiums have been paid.
(c) To the best knowledge of Tenant, no party is in default under the
Lease. To the best knowledge of Tenant, no event has occurred which, with the
giving of notice or passage of time, or both, would constitute such a default.
(d) The interest of Tenant in the Lease has not been assigned or
encumbered. Tenant is not entitled to any credit against any rent or other
charge or rent concession under the Lease except as set forth in the Lease. No
rental payments have been made more than one month in advance.
4. All contributions required to be paid by Landlord to date for
improvements to the Premises have been paid in full and all of Landlord's
obligations with respect to tenant improvements have been fully performed.
Tenant has accepted the Premises, subject to no conditions other than those set
forth in the Lease.
5. Neither Tenant nor any guarantor of Tenant's obligations under the Lease
is the subject of any bankruptcy or other voluntary or involuntary proceeding,
in or out of court, for the adjustment of debtor-creditor relationships.
6. (a) As used here, "Hazardous Substance" means any substance, material or
waste (including petroleum and petroleum products) which is designated,
classified or regulated as being "toxic" or "hazardous" or a "pollutant" or
which is similarly designated, classified or regulated, under any federal, state
or local law, regulation or ordinance.
EXHIBIT H
-2-
(b) Tenant represents and warrants that it has not used, generated,
released, discharged, stored or disposed of any Hazardous Substances on, under,
in or about the Building or the land on which the Building is located (IF
APPLICABLE) [, other than Hazardous Substances used in the ordinary and
commercially reasonable course of Tenant's business in compliance with all
applicable laws]. (IF APPLICABLE) [Except for such commercially reasonable use
by Tenant,] Tenant has no actual knowledge that any Hazardous Substance is
present, or has been used, generated, released, discharged, stored or disposed
of by any party, on, under, in or about such Building or land.
7. Tenant hereby acknowledges that Landlord intends to [discuss action to
be taken vis-a-vis Relying Party]. Tenant acknowledges the right of Landlord,
Relying Party and any and all of Landlord's present and future lenders and their
successors and assigns to rely upon the statements and representations of Tenant
contained in this Certificate and further acknowledges that any action taken by
such parties will be made and entered into in material reliance on this
Certificate.
8. Tenant hereby agrees to furnish Relying Party with such other and
further estoppel as Relying Party may reasonably request.
----------------------------------------
,
---------------------------------------
a
--------------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT H
-3-
EXHIBIT I
FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
Bank of America N.A. )
600 Montgomery Street, 22nd Floor )
San Francisco, CA 94111 )
Attention: Donald H. Moses, Principal )
Space above for Recorder's Use
SUBORDINATION, NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS
IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE
LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
This Subordination, Nondisturbance and Attornment Agreement ("Agreement")
is entered into as of the __________ day of __________, 2000 by and among
SYNETICS SOLUTIONS INC., an Oregon corporation ("Tenant"). Catellus Development
Corporation, a Delaware corporation ("Borrower") and Bank of America National
Trust and Savings Association ("Bank").
FACTUAL BACKGROUND
A. Borrower owns certain real property in the County of Multnomah, State of
Oregon, more particularly described in the attached Schedule 1 term "Property"
herein means that real property together with all improvements (the
"Improvements") located on it.
B. Bank has made or agreed to make a loan to Borrower in the principal
amount of __________ and _____ /100 Dollars ($__________) (the "Loan") as
provided in a loan agreement (the "Loan Agreement"). The Loan is or will be
evidenced by a promissory note (the "Note") which is or will be secured by a
deed of trust encumbering the Property (the "Deed of Trust") with an assignment
of rents. The Loan Agreement, the Note, the Deed of Trust, this Agreement and
all other documents and instruments identified in the Loan Agreement as "Loan
Documents" shall be collectively referred to herein as the "Loan Documents".
C. Tenant and Borrower (as landlord) entered into a lease dated
___________, 2000 (the "Lease") under which Borrower leased to Tenant a portion
of the Improvements located within the Property and more particularly described
in the Lease (the "Premises").
D. It is a requirement of the Loan to Borrower that Tenant agree, among
other things, to subordinate Tenant's rights under the Lease to the lien of the
Loan Documents and to attorn to Bank on the terms and conditions of this
Agreement. Tenant is willing to agree to such subordination and attornment and
other conditions, provided that Bank agrees to a nondisturbance provision, all
as set forth more fully below.
EXHIBIT I
-1-
AGREEMENT:
Therefore, the parties agree as follows:
1. Subordination. The Loan Documents and all supplements, amendments,
modifications, renewals, replacements and extensions of and to them shall
unconditionally be and remain at all times a lien on the Property prior and
superior to the Lease, to the leasehold estate created by it, and to all rights
and privileges of Tenant under it. The Lease and leasehold estate, together with
all rights and privileges of Tenant under that Lease, are hereby unconditionally
made subordinate to the lien of the Loan Documents in favor of Bank. Tenant
consents to Borrower and Bank entering into the Deed of Trust and the other Loan
Documents. Tenant further declares, agrees and acknowledges that in making
disbursements under the Loan Documents Bank has no obligation or duty to, nor
has Bank represented that it will, see to the application of such proceeds by
the person or persons to whom they are disbursed by Bank, and any application or
use of such proceeds for purposes other than those provided for in the Loan
Documents shall not defeat the subordination made in this Agreement, in whole or
in part.
2. Definitions of "Transfer of the Property" and "Purchaser". As used
herein, the term "Transfer of the Property" means any transfer of Borrower's
interest in the Property by foreclosure, trustee's sale or other action or
proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof.
The term "Purchaser", as used herein, means any transferee, including Bank, of
the interest of Borrower as a result of any such Transfer of the Property and
also includes any and all successors and assigns, including Bank, of such
transferee.
3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate
the Lease or disturb Tenant in the possession and use of the Premises unless at
the time of foreclosure Tenant is in material default under the Lease or this
Agreement beyond any applicable grace or cure periods, and Bank so notifies
Tenant in writing at or prior to the time of the foreclosure sale that the Lease
will be terminated by foreclosure because of such default. The nondisturbance
herein granted is subject to Section 5 below. This nondisturbance applies to any
option to extend or renew the Lease term which is set forth in the Lease as of
the date of this Agreement.
4. Attornment. Subject to Section 3 above, if any Transfer of the Property
should occur, Tenant shall and hereby does attorn to Purchaser, including Bank
if it should be the Purchaser, as the landlord under the Lease, and Tenant shall
be bound to Purchaser under all of the terms, covenants and conditions of the
Lease for the balance of the Lease term and any extensions or renewals of it
which may then or later be in effect under any validly exercised extension or
renewal option contained in the Lease, all with the same force and effect as if
Purchaser had been the original landlord under the Lease. This attornment shall
be effective and self-operative without the execution of any further instruments
upon Purchaser's succeeding to the interest of the landlord under the Lease.
5. Subordination of Options and Rights of First Refusal. The Loan Documents
and all supplements, amendments, modifications, renewals, replacements and
extensions of and to them shall unconditionally be and remain at all times a
lien on the Property prior and superior to any existing or future right of
Tenant, whether arising out of the Lease or otherwise, to exercise any option or
right of first refusal to:
(a) purchase the Premises or the Property or any interest or portion
in or of either of them; or
(b) expand into other space in the Improvements.
Tenant specifically agrees and acknowledges that upon any Transfer of the
Property, any such purchase or expansion option or right of first refusal,
whether now existing or in the future arising, shall terminate and be
inapplicable to the Property notwithstanding the nondisturbance granted to
Tenant in Section 3 above. If any option or right of first refusal to purchase
is exercised prior to a Transfer of the Property, any title so acquired to all
or any part of the Property shall be subject to the lien of the Loan Documents,
which lien shall in no way be impaired by the exercise of such option or right
of first refusal. Bank specifically reserves all of its rights to enforce any
accelerating transfer, due on sale, due on encumbrance or similar provision in
the Deed of Trust or any other Loan Document.
EXHIBIT I
-2-
6. Notices of Default; Material Notices; Bank's Rights to Cure Default.
Tenant shall send a copy of any notice of default or similar statement with
respect to the Lease to Bank at the same time such notice or statement is sent
to Borrower. In the event of any act or omission by Borrower which would give
Tenant the right to terminate the Lease or to claim a partial or total eviction,
Tenant shall not exercise any such right or make any such claim until it has
given Bank written notice of such act or omission and has given Bank either
thirty (30) days to cure the default if the default is monetary or a reasonable
time for Bank to cure the default if the default is nonmonetary. Nothing in
this Agreement, however, shall be construed as a promise or undertaking by Bank
to cure any default of Borrower.
7. Limitation on Bank's Performance. Nothing in this Agreement shall be
deemed or construed to be an agreement by Bank to perform any covenant of
Borrower as landlord under the Lease. Tenant agrees that if Bank becomes
Purchaser then, upon subsequent transfer of the Property by Bank to a new owner,
Bank shall have no further liability under the Lease after said transfer.
8. Limitation on Liability. No Purchaser who acquires title to the Property
shall have any obligation or liability beyond its interest in the Property.
9. Tenant's Covenants. Tenant agrees that during the term of the Lease,
without Bank's prior written consent, Tenant shall not:
(a) pay any rent or additional rent more than one month in advance to
any landlord including Borrower; or
(b) cancel, terminate or surrender the Lease, except at the normal
expiration of the Lease term or as provided in Section 6 above; or
(c) enter into any material amendment, modification or other agreement
relating to the Lease; or
(d) assign or sublet any portion of the Lease or the Premises, except
as expressly permitted in the Lease.
10. Bank Not Obligated. Bank, if it becomes the Purchaser or if it takes
possession under the Deed of Trust, and any other Purchaser shall not (a) be
liable for any damages or other relief attributable to any act or omission of
any prior Landlord under the Lease including Borrower; or (b) be subject to any
offset or defense not specifically provided for in the Lease which Tenant may
have against any prior landlord under the Lease; or (c) be bound by any
prepayment by Tenant of more than one month's installment of rent; or (d) be
obligated for any security deposit not actually delivered to Purchaser; or (e)
be bound by any modification or amendment of or to the Lease unless the
amendment or modification shall have been approved in writing by Bank. Borrower
agrees to deliver to Purchaser any security deposits in its possession at the
time Purchaser takes possession of the Property.
11. Tenant's Estoppel Certificate.
(a) True and Complete Lease. Tenant represents and warrants to Bank
that Schedule 2 accurately identifies the Lease and all amendments,
supplements, side letters and other agreements and memoranda pertaining to
the Lease, the leasehold and/or the Premises.
(b) Tenant's Option Rights. Tenant has no right or option of any
nature whatsoever, whether arising out of the Lease or otherwise, to
purchase the Premises or the Property, or any interest or portion in or of
either of them, to expand into other space in the Improvements or to extend
or renew the term of the Lease, except as described in the attached
Schedule 3.
(c) No Default. As of the date of this Agreement, Tenant represents
and warrants that to the best of Tenant's knowledge there exist no events
of default or events that with notice or the passage of time or both would
be events of default under the Lease on either the Tenant's part or the
Borrower's, nor is there
EXHIBIT I
-3-
any right of offset against any of Tenant's obligations under the Lease,
except as described in the attached Schedule 4. Tenant represents and
warrants that the Lease is in full force and effect as of the date of this
Agreement.
(d) Hazardous Substances. Tenant represents and warrants that it has
not used, generated, released, discharged, stored or disposed of any
Hazardous Substances on, under, in or about the Property other than
Hazardous Substances used in the ordinary and commercially reasonable
course of Tenant's business in compliance with all applicable laws. Except
for such legal and commercially reasonable use by Tenant, Tenant has no
actual knowledge that any Hazardous Substance is present or has been used,
generated, released, discharged, stored or disposed of by any party on,
under, in or about the Property. As used herein "Hazardous Substance" means
any substance, material or waste (including petroleum and petroleum
products), which is designated, classified or regulated as being "toxic" or
"hazardous" or a "pollutant" or which is similarly designated, classified
or regulated under any federal, state or local law, regulation or
ordinance.
12. Integration; Etc. This Agreement integrates all of the terms and
conditions of the parties' agreement regarding the subordination of the Lease to
the Loan Documents, attornment, nondisturbance and the other matters contained
herein. This Agreement supersedes and cancels all oral negotiations and prior
and other writings with respect to (a) such subordination (only to such extent,
however, as would affect the priority between the Lease and the Loan Documents),
including any provisions of the Lease which provide for the subordination of the
Lease to a deed of trust or to a mortgage and (b) such attornment,
non-disturbance and other matters contained herein. If there is any conflict
between the terms, conditions and provisions of this Agreement and those of any
other agreement or instrument, including the Lease, the terms, conditions and
provisions of this Agreement shall prevail. This Agreement may not be modified,
or amended except by a written agreement signed by the parties or their
respective successors in interest. This Agreement may be executed in
counterparts, each of which is an original but all of which shall constitute one
and the same instrument.
13. Notices. All notices given under this Agreement shall be in writing and
shall be given by personal delivery, overnight receipted courier or by
registered or certified United States mail, postage prepaid, sent to the party
at its address appearing below. Notices shall be effective upon receipt (or on
the date when proper delivery is refused). Addresses for notices may be changed
by any party by notice to all other parties in accordance with this Section.
Service of any notice on any one Borrower shall be effective service on Borrower
for all purposes.
To Bank: Bank of America N.A.
San Francisco Structured Debt Group #9105
600 Montgomery Street, 22nd Floor
San Francisco, California 94111
Attn: Donald H. Moses
To Borrower: Catellus Development Corporation
201 Mission Street
San Francisco, California 94105
Attn: Asset Management
To Tenant: Synetics Solutions Inc.
7440 S.W. Bonita Avenue
Tigard, Oregon 97224
Attn: Koki Nakamura
14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration
is commenced which arises out of or relates to this Agreement, the prevailing
party shall be entitled to recover from each other party such sums as the court,
referee or arbitrator may adjudge to be reasonable attorneys' fees, including
the costs for any legal services by in-house counsel, in addition to costs and
expenses otherwise allowed by law.
15. Miscellaneous Provisions. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
This Agreement is governed by the laws of the State of
EXHIBIT I
-4-
California without regard to the choice of law rules of that State. This
Agreement satisfies any condition or requirement in the Lease relating to the
granting of a nondisturbance agreement by Bank. As used herein, the word
"include(s)" means "include(s) without limitation," and the word "including"
means "including but not limited to." Bank, at its sole discretion, may but
shall not be obligated to record this Agreement.
16. Arbitration; Judicial Reference. Bank and Borrower have agreed in the
Loan Agreement that any dispute shall be resolved by arbitration or judicial
reference. Therefore any controversy or claim between or among the parties
hereto (including Tenant) which arises out of or relates to this Agreement,
including any claim based on or arising from an alleged tort, shall also be
determined by arbitration or judicial reference as set forth below.
(a) Judicial Reference. In any judicial action between or among the
parties, including any action or cause of action arising out of or relating
to this Agreement or based on or arising from an alleged tort, all
decisions of fact and law shall at the request of any party be referred to
a referee in accordance with. California Code of Civil Procedure Sections
638 et seq. The parties shall designate to the court a referee or referees
selected under the auspices of the American Arbitration Association ("AAA")
in the same manner as arbitrators are selected in AAA-sponsored
proceedings. The presiding referee of the panel, or the referee if there is
a single referee, shall be an active attorney or retired judge. Judgment
upon the award rendered by such referee or referees shall be entered in the
court in which such proceeding was commenced in accordance with California
Code of Civil Procedure Sections 644 and 645.
(b) Mandatory Arbitration. After the Bank's Deed of Trust has been
released, fully reconveyed or extinguished, any controversy or claim
between or among the parties, including those arising out of or relating to
this Agreement or any claim based on or arising from an alleged tort, shall
at the request of any party be determined by arbitration. The arbitration
shall be conducted in accordance with the United States Arbitration Act
(Title 9, U.S. Code), notwithstanding any choice of law provision in this
Agreement, and under the Commercial Rules of the AAA. The arbitrator(s)
shall give effect to statutes of limitation in determining any claim. Any
controversy concerning whether an issue is arbitrable shall be determined
by the arbitrator(s). Judgment upon the arbitration award may be entered in
any court having jurisdiction. The institution and maintenance of an
action for judicial relief or pursuit of a provisional or ancillary remedy
shall not constitute a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to arbitration if any other
party contests such action for judicial relief.
(c) Real Property Collateral. Notwithstanding the provisions of
Subsection (b), no controversy or claim shall be submitted to arbitration
without the consent of all parties if, at the time of the proposed
submission, any obligation of Borrower to Bank is secured by real property
collateral. If all parties do not consent to submission of such a
controversy or claim to arbitration, the controversy or claim shall be
determined by judicial reference as provided in Subsection (a).
(d) Provisional Remedies, Self-Help and Foreclosure. No provision of
this Section shall limit the right of any party to this Agreement to
exercise self-help remedies such as setoff, foreclosure against or sale of
any real or personal property collateral or security, or to obtain
provisional or ancillary remedies from a court of competent jurisdiction
before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of a party to
resort to arbitration or reference. At Bank's option, foreclosure under a
deed of trust or mortgage may be accomplished either by exercise of power
of sale under the deed of trust or mortgage or by judicial foreclosure.
(e) The parties agree that this arbitration and judicial reference
provision shall not prohibit or limit summary proceedings to obtain
possession of real property pursuant to Chapter 4 of the California Code of
Civil Procedure (Section 1159 et, seq.) as amended from time to time, or
any similar law, statute or ordinance now or hereafter in effect.
EXHIBIT I
-5-
NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON
OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR
PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.
"TENANT" SYNETICS SOLUTIONS INC.,
an Oregon corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"BORROWER" CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
By: Catellus Commercial Group, LLC,
a Delaware limited liability company
Its: Duly Authorized Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"BANK" BANK OF AMERICA N.A.,
a national banking association
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT I
-6-
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
___________________________________
Notary Public in and for said State
(SEAL)
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
___________________________________
Notary Public in and for said State
(SEAL)
EXHIBIT I
-7-
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
___________________________________
Notary Public in and for said State
(SEAL)
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary
Public in and for said State, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
___________________________________
Notary Public in and for said State
(SEAL)
EXHIBIT I
-8-
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
___________________________________
Notary Public in and for said State
(SEAL)
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
___________________________________
Notary Public in and for said State
(SEAL)
EXHIBIT I
-9-
SCHEDULE 1
PROPERTY DESCRIPTION
Lot 2, Southshore Corporate Park, in the City of Gresham, County of
Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.
SCHEDULE 1 to EXHIBIT I
-1-
SCHEDULE 2
IDENTIFY LEASE AND LIST ALL AMENDMENTS,
SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY
1. Multi-Tenant Industrial Triple Net Lease dated ________, 2000 between
Borrower and Tenant.
SCHEDULE 2 to EXHIBIT I
-1-
SCHEDULE 3
LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
EXTENSION AND RENEWAL OPTIONS
One (1) five (5) year option to extend the term of the Lease pursuant to
Section 19 of the Addendum to Lease.
SCHEDULE 3 to EXHIBIT I
-1-
SCHEDULE 4
LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE
None.
SCHEDULE 4 to EXHIBIT I
-1-
SCHEDULE 5
MODIFIED LEASE TERMS
None.
SCHEDULE 5 to EXHIBIT I
-1-
EXHIBIT J
ARBITRATION PROCEDURES
1.1 In the event of any dispute or disagreement between the parties
concerning a Repair Action and any reimbursement obligation of Landlord to
Tenant pursuant to Section 9.3 of the Lease (hereinafter an "Arbitration
Matter"), the parties shall meet and confer in an effort to resolve such
dispute.
1.2 Any Arbitration Matter which is not settled between the parties in
accordance with Paragraph 1.1 above shall be decided, at either party's
election, by neutral, binding arbitration and not by court action, except as
provided by law for judicial review of arbitration proceedings, as follows.
(a) Governing Rules. The arbitration shall be conducted in accordance
with the rules of either the American Arbitration Association ("AAA"). The
parties to an arbitration may agree in writing to use different rules
and/or arbitrator(s).
(b) Enforcement. The decision of the Arbitrator shall be final and
binding upon the parties. Judgment upon the award rendered may be entered
in any competent court having jurisdiction thereof.
(c) Discovery. The parties shall have the right to propound a demand
for exchange of documents prior to the arbitration.
(d) Waiver. The filing of a judicial action to enable the recording of
a notice of pending action, to comply with mechanic's lien foreclosure
requirements, for order of attachment, receivership, injunction, or other
provisional remedies, shall not constitute a waiver of the right to
arbitrate under this provision.
(e) Scope of Issue of Decided. The Arbitrator shall be the sole judge
of whether a dispute is arbitrable under the terms of this Lease.
(f) Accordance With Law. In rendering its decision and award, the
Arbitrator shall have no power to modify any of the provisions of this
Lease. The findings of the Arbitrator shall be in accord with the laws of
the State of Oregon.
(g) Venue. The arbitration shall be filed with the office of AAA that
is located in Portland, Oregon or if no such office exists, then in the
office of AAA that is geographically nearest to the Premises.
(h) Attorney's Fees. The Arbitrator shall award reasonable attorneys'
fees, expert fees, court reporter transcription fees (if any), filing fees
and arbitrator fees to the prevailing party, if any, as a part of the
decision.
(i) Confidentiality. In the event of filing of an arbitration
proceeding, the parties agree that all documents produced in the proceeding
shall be returned to the party from whom the documents were obtained. Any
decision or settlement reached between the parties arising from or
connected to the resolution of any dispute shall, in the absence of a court
order, the express written agreement of the parties or as otherwise
required by law, be considered strictly confidential.
EXHIBIT J
-1-
EXHIBIT K
[TO BE PRINTED ON BANK'S LETTERHEAD]
Irrevocable Standby
Letter of Credit No. ___
APPLICANT/ACCOUNT PARTY: BENEFICIARY:
____________, a _______________ Catellus Development Corporation,
[insert Tenant's address] a Delaware corporation
201 Mission Street
San Francisco, California 94105
Attention: Asset Management
AMOUNT: EXPIRATION DATE:
U.S. Dollars _____________, 200_
Ninety Eight Thousand Three Hundred Ninety Four
Dollars ($98,394.00)
Gentlemen:
We hereby establish and issue our Irrevocable Standby Letter of Credit No.____
(the "Credit") in your favor. This Credit is available upon draft or demand
presented to us on sight over our counters at any of our offices in the State of
_________ located at _____________. We hereby irrevocably authorize you to draw
upon us in one or more sight drafts up to the aggregate amount of Ninety Eight
Thousand Three Hundred Ninety Four Dollars ($98,340.00).
Your draft must be accompanied by a written certificate stating that:
"Synthetic Solutions, Inc., a Oregon corporation, or its successors or
assigns (collectively, "Tenant"), has failed to pay rent or perform
one or more of its obligations under that certain Multi-Tenant
Industrial Triple Net Lease (the "Lease") executed by and between
Tenant and Catellus Development Corporation, a Delaware corporation,
or Tenant has failed to replace this Letter of Credit as required
under the terms of the Lease. The amount of the sight draft represents
monies due and owing by Tenant under the Lease."
Partial drawings will be permitted under this Credit and all drafts hereon must
bear the date and number of this Credit. This Credit is effective immediately
and we hereby engage with you that so long as such drafts are presented on or
before 5:00 P.M. (Pacific time) on the Expiration Date stated on the face of
this Credit (subject to the automatic extensions provided below) and in
conformity with the terms of this Credit, such drafts will be duly honored upon
presentation.
You shall not be required to give notice or make any prior demand or presentment
to Tenant with respect to the payment of any sum as to which a draw is made
hereunder.
EXHIBIT K
-1-