COMMERCIAL LEASE
Date: May ___, 2002
Between: Sulzer Pumps (US) Inc. ("Landlord")
2800 N.W. Front Avenue
Portland, Oregon 97210
Notices to:
[Need contact person listed]
And: City of Portland ("Tenant")
Westside CSO Project
1120 SW Fifth Avenue, Room 1000
Portland, Oregon 97204
Notices to:
Facilities Manager
Bureau of Environmental Services
1120 SW Fifth Ave., Room 1000
Portland, OR 97204
Landlord leases to Tenant and Tenant leases from Landlord on the terms and conditions stated below the property in Portland, Oregon (the "Premises"), as more particularly described on attached Exhibit A and incorporated into this lease by this reference. Tenant may apply for a separate postal address forthe Premises with the U.S. Post Office.
Section 1. Occupancy
1.1 Original Term. The term of this lease will commence June 1, 2002, and continue through December 31, 2006, unless sooner terminated as hereinafter provided.
1.2 Possession. Tenant's right to possession and obligations under the lease will commence on June 1, 2002, or on such later date as the Premises are available for possession by Tenant if possession is not given on the opening day of the term. Landlord will have no liability for delays in delivery of possession and Tenant will not have the right to terminate this lease because of delay in delivery of possession except as hereinafter provided.
Section 2. Rent
2.1 Base Rent. Tenant will pay to Landlord as base rent the sum of $16,773 per month in accordance with the following space and rate calculation:
Office Space 8,934 SF x $0.70 = $6,254
Shop Space 7,911 SF x $0.42 = $3,323
Warehouse 4,262 SF x $0.30 = $1,279
Yard Area 65,748 SF x $0.09 = $5,917
2.2 Rent will be payable on the first day of each month commencing June 1, 2002, in advance at such place as may be designated by Landlord except that rent for the first month has been paid upon the execution of this lease, and Landlord acknowledges receipt of this sum.
2.3 Additional Rent. All taxes, insurance costs, utility charges that Tenant is required to pay by this lease, and any other sum that Tenant is required to pay to Landlord, will be additional rent. All additional rent will be payable to Landlord with the base rent on the first day of each month. Landlord shall have the right to reasonably estimate the additional rent payable for insurance under Section 6 and, if applicable, taxes under Section 7 at the beginning of each lease year. Upon Landlord's notice to Tenant of such estimated amount of additional rent, Tenant shall pay an amount ("Estimated Additional Rent") equal to 1/12 of the estimate of Tenant's Proportionate Share of insurance and taxes. If the aggregate amount of Estimated Additional Rent paid by Tenant during any lease year is less than Tenant's actual liability for insurance and taxes, Tenant shall pay such deficiency within 30 days of Landlord's written demand therefore. If the aggregate amount of the Estimated Additional Rent paid by Tenant during any lease year exceeds Tenant's actual liability, the excess shall be credited against the Estimated Additional Rent next due from Tenant during the next lease year, except that if such excess is paid by Tenant during the final lease year, then Landlord shall pay Tenant the excess promptly after determination thereof.
2.4 Escalation. The base rent provided in Section 2.1 will be increased by 3 percent for each lease year after the base year. The base year is the 12-month period commencing with the first full month during which this lease is in effect. Lease years thereafter will be each corresponding 12-month period during the term of this lease.
Section 3. Use of the Premises
3.1 Permitted Use. The Premises will be used as business offices and for equipment repair and storage and for no other purpose without the consent of Landlord, which consent will not be withheld unreasonably.
3.2 Restrictions on Use. In connection with the use of the Premises, Tenant shall:
(a) Conform to all applicable laws and regulations of any public authority affecting the Premises and their use, and correct at Tenant's own expense any failure of compliance created through Tenant's fault or by reason of Tenant's use, but Tenant will not be required to make any structural changes to effect such compliance unless such changes are required because of Tenant's specific use.
(b) Refrain from any activity that would make it impossible to insure the Premises against casualty, would increase the insurance rate, or would prevent Landlord from taking advantage of any ruling of the Oregon Insurance Rating Bureau, or its successor, allowing Landlord to obtain reduced premium rates for long-term fire insurance policies, unless Tenant pays the additional cost of the insurance.
(c) Refrain from any use that would be reasonably offensive to other tenants or owners or users of neighboring premises or that would tend to create a nuisance or damage the reputation of the Premises.
(d) Refrain from loading the electrical system or floors beyond the point considered safe by a competent engineer or architect selected by Landlord.
(e) Refrain from making any marks on or attaching any sign (other than the project identification sign, more particularly described in Exhibit B attached hereto), insignia, antenna, aerial, or other device to the exterior or interior walls, windows, or roof of the Premises without the written consent of Landlord.
3.3 Access Corridor. Landlord hereby grants to Tenant the non-exclusive right to use the access corridor, delineated on Exhibit A, for vehicular traffic from Front Street; however, Landlord reserves the right in its sole discretion to terminate Tenant's right to use the access corridor provided that Landlord has designated an alternative means for trucks and vehicles to access the Premises 24 hours a day and has given 30 days prior written notice to the Tenant. If an alternate access route is provided, the monthly base rental applicable to the yard area will be reduced by $720 (400' x 40' = 1600SF x $0.09/SF = $1440
divided by 2 = $720) and the total monthly base rental will be $16,053.
3.4 Hazardous Substances. Tenant will not cause or permit any Hazardous Substance to be spilled, leaked, disposed of, or otherwise released on or under the Premises. Tenant may use or otherwise handle on the Premises only those Hazardous Substances typically used or sold in the prudent and safe operation of the business specified in Section 3.1. Tenant may store such Hazardous Substances on the Premises only in quantities necessary to satisfy Tenant's reasonably anticipated needs. Tenant will comply with all Environmental Laws and exercise the highest degree of care in the use, handling, and storage of Hazardous Substances and will take all practicable measures to minimize the quantity and toxicity of Hazardous Substances used, handled, or stored on the Premises. Upon the expiration or termination of this lease, Tenant will remove all Hazardous Substances from the Premises. The term Environmental Law will mean any federal, state, or local statute, regulation, or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term Hazardous Substance will mean any hazardous, toxic, infectious or radioactive substance, waste, and material as defined or listed by any Environmental Law and will include, without limitation, petroleum oil and its fractions.
3.5 Air Quality Testing. Tenant may complete a baseline air quality test. Landlord shall be responsible for completion of air quality improvements identified in the baseline test prior to occupancy.
Section 4. Repairs and Maintenance
4.1 Landlord's Obligations. The following will be the responsibility of Landlord:
(a) Repairs and maintenance of the roof and gutters, exterior walls (including painting), bearing walls, structural members, floor slabs, and foundation .
(b) Repair and maintenance of exterior water, sewage, gas, and electrical services up to the point of entry to the leased Premises.
(c) Repair of the heating and air conditioning system other than ordinary maintenance.
(d) In the event alternate access route is designated by Landlord under Section 3.3, repair of driveways used in common by Landlord and Tenant.
4.2 Tenant's Obligations. The following will be the responsibility of Tenant:
(a) Repair of interior walls, ceilings, doors, windows, and related hardware, light fixtures, switches, and wiring and plumbing from the point of entry to the Premises resulting from Tenant's activities or the activities of Tenant's contractors, employees, agents, invitees, or representatives.
(b) Any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees, except as provided in Section 6.2 dealing with waiver of subrogation, but including repairs that would otherwise be the responsibility of Landlord under Section 4.1.
(c) Ordinary maintenance of the heating and air conditioning system and any repairs necessary because of improper maintenance.
(d) Repair and maintenance of sidewalks, driveways (including the access corridor delineated on Exhibit A), curbs, parking areas, and landscaped areas within the Premises.
(e) Any repairs or alterations required under Tenant's obligation to comply with laws and regulations as set forth in Section 3.2(a).
(f) All other repairs to the Premises resulting from Tenant's activities or the activities of Tenant's contractors, employees, agents, invitees, or representatives.
4.3 Landlord's Interference with Tenant. In performing any repairs, replacements, alterations, or other work performed on or around the Premises, Landlord will not cause unreasonable interference with use of the Premises by Tenant. Tenant will have no right to an abatement of rent nor any claim against Landlord for any inconvenience or disturbance resulting from Landlord's activities performed in conformance with the requirement of this provision.
4.4 Reimbursement for Repairs Assumed. If Tenant fails or refuses to make repairs that are required by this Section 4, Landlord may make the repairs and charge the actual costs of repairs to Tenant. Such expenditures by Landlord will be reimbursed by Tenant on demand together with interest at the rate of 12 percent per annum from the date of expenditure by Landlord. Except in an emergency creating an immediate risk of personal injury or property damage, neither party may perform repairs that are the obligation of the other party and charge the other party for the resulting expense unless at least 10 days before work is commenced, and the defaulting party is given notice in writing outlining with reasonable particularity the repairs required, and such party fails within that time to initiate such repairs in good faith.
4.5 Inspection of the Premises. Landlord will have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Whether or not such inspection is made, the duty of Landlord to make repairs will not mature until a reasonable time after Landlord has received from Tenant written notice of the repairs that are required.
Section 5. Alterations
5.1 Alterations Prohibited. Tenant will make no improvements or alterations on the Premises of any kind without first obtaining Landlord's written consent. If Landlord fails to respond to a request for consent within 30 days, such consent shall be deemed to have been granted. All alterations will be made in a good and workmanlike manner, and in compliance with applicable laws and building codes. As used herein, "alterations" includes the installation of computer and telecommunications wiring, cables, and conduit.
5.2 Alterations Required. The improvements and alterations specified in Exhibit B will be completed by the Landlord prior to the commencement date of the lease.
5.3 Ownership and Removal of Alterations. All improvements and alterations performed on the Premises by either Landlord or Tenant will be the property of Landlord when installed unless the applicable Landlord's consent or work sheet specifically provides otherwise. Improvements and alterations installed by Tenant shall, at Landlord's option, be removed by Tenant and the Premises restored unless the applicable Landlord's consent or work sheet specifically provides otherwise.
5.4 Waiver. Landlord may condition its consent to installation of a work of visual art in the Premises, as defined in the Visual Artists Rights Act of 1990 (VARA) at 17 USC § 101, on Tenant's delivery to Landlord of a written waiver of moral rights under VARA executed by the artist and to be executed by Landlord acknowledging that the work may be subject to destruction upon removal.
Section 6. Insurance
6.1 Insurance Required. Landlord will keep the Premises insured at Landlord's expense against fire and other risks covered by a standard fire insurance policy with an endorsement for extended coverage. Tenant will pay a proportionate share of the costs of this insurance. During the first lease year, Landlord estimates Tenant's proportionate share of the costs of such insurance will be $3,000 as outlined in the attached Exhibit XX, of which $250 is to be paid monthly from Tenant to Landlord as additional rent. In subsequent lease years, Landlord will determine and notify Tenant of its estimated proportionate share of the insurance. Tenant will carry similar insurance insuring the personal property of Tenant on the Premises against such risks.
6.2 Waiver of Subrogation. Neither party will be liable to the other (or to the other's successors or assigns) for any loss or damage caused by fire or any of the risks enumerated in a standard fire insurance policy with an extended coverage endorsement, and in the event of insured loss, neither party's insurance company will have a subrogated claim against the other. This waiver will be valid only if the insurance policy in question expressly permits waiver of subrogation or if the insurance company agrees in writing that such a waiver will not affect coverage under the policies. Each party agrees to use best efforts to obtain such an agreement from its insurer if the policy does not expressly permit a waiver of subrogation.
Section 7. Taxes; Utilities
7.1 Property Taxes. Tenant will pay as due all taxes on its personal property located on the Premises. Landlord will pay as due all real property taxes and special assessments levied against the Premises, and Tenant will reimburse Landlord for its proportionate share of such taxes. Notwithstanding the foregoing, at such time as Tenant delivers to Landlord formal notification from Multnomah County that the Premises shall be exempt from real property taxes, Tenant shall be relieved of the obligation to reimburse Landlord for a proportionate share of the real property taxes for the tax year(s) specified by Multnomah County in the final notification. As used herein, real property taxes include any fee or charge relating to the ownership, use, or rental of the Premises, other than taxes on the net income of Landlord or Tenant. Landlord will determine Tenant's estimated proportionate share of all real property taxes and special assessments, such proportional share to be based on the ratio of the "real market value" of the Premises as assessed by the Multnomah County Tax Assessor compared to the "real market value" of all the land and buildings that are included on the tax statement that includes the Premises. Tenant's estimated share of the real property taxes and special assessments during the first lease year is $20,256 as outlined on the attached Exhibit XX, of which $1,688 is to be paid monthly from Tenant to Landlord as additional rent.
7.2 Special Assessments. If an assessment for a public improvement is made against the Premises, Landlord may elect to cause a proportionate share of such assessment to be paid in installments, taking into account the lease term and the long-term value of such public improvement, in which case all of the installments payable with respect to the lease term will be treated the same as general real property taxes for purposes of Section 7.1.
7.3 Proration of Taxes. Tenant's share of real property taxes and assessments for the years in which this lease commences or terminates will be prorated based on the portion of the tax year that this lease is in effect.
7.4 New Charges or Fees. If a new charge or fee relating to the ownership or use of the Premises or the receipt of rental therefrom or in lieu of property taxes is assessed or imposed, then, to the extent permitted by law, Tenant will pay such charge or fee. Tenant, however, will have no obligation to pay any income, profit, or franchise tax levied on the net income derived by Landlord from this lease.
7.5 Payment of Utilities Charges. Tenant will pay when due all charges for services and utilities incurred in connection with the use, occupancy, operation, and maintenance of the Premises, including (but not limited to) charges for fuel, water, gas, electricity, sewage disposal, power, refrigeration, air conditioning, telephone, and janitorial services. If any utility services are provided by or through Landlord, charges to Tenant will be comparable with prevailing rates for comparable services. If the charges are not separately metered or stated, Landlord will apportion the charges on an equitable basis, and Tenant will pay its apportioned share on demand.
Section 8. Damage and Destruction
8.1 Partial Damage. If the Premises are partly damaged and Section 8.2 does not apply, the Premises will be repaired by Landlord at Landlord's expense. Repairs will be accomplished with all reasonable dispatch subject to interruptions and delays from labor disputes and matters beyond the control of Landlord and will be performed in accordance with the provisions of Section 4.2.
8.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds 25 percent of the value of the structure before the damage, either party may elect to terminate the lease as of the date of the damage or destruction by notice given to the other in writing not more than 45 days following the date of damage. In such event all rights and obligations of the parties will cease as of the date of termination, and Tenant will be entitled to the reimbursement of any prepaid amounts paid by Tenant and attributable to the anticipated term. If neither party elects to terminate, Landlord will proceed to restore the Premises to substantially the same form as prior to the damage or destruction. Work will be commenced as soon as reasonably possible and thereafter will proceed without interruption except for work stoppages on account of labor disputes and matters beyond Landlord's reasonable control.
8.3 Rent Abatement. Rent will be abated during the repair of any damage to the extent the Premises are untenantable, except that there will be no rent abatement where the damage occurred as the result of the fault of Tenant.
8.4 Damage Late in Term. If damage or destruction to which Section 8.1 would apply occurs within one year before the end of the then-current lease term, Tenant may elect to terminate the lease by written notice to Landlord given within 30 days after the date of the damage. Such termination will have the same effect as termination by Landlord under Section 8.2.
Section 9. Eminent Domain
9.1 Partial Taking. If a portion of the Premises is condemned and Section 9.2 does not apply, the lease will continue on the following terms:
(a) Landlord will be entitled to all of the proceeds of condemnation, and Tenant will have no claim against Landlord as a result of the condemnation.
(b) Landlord will proceed as soon as reasonably possible to make such repairs and alterations to the Premises as are necessary to restore the remaining Premises to a condition as comparable as reasonably practicable to that existing at the time of the condemnation.
(c) After the date on which title vests in the condemning authority or an earlier date on which alterations or repairs are commenced by Landlord to restore the balance of the Premises in anticipation of taking, the rent will be reduced in proportion to the reduction in value of the Premises as an economic unit on account of the partial taking. If the parties are unable to agree on the amount of the reduction of rent, the amount will be determined by arbitration in the manner provided in Section 18.
(d) If a portion of Landlord's property not included in the Premises is taken, and severance damages are awarded on account of the Premises, or an award is made for detriment to the Premises as a result of activity by a public body not involving a physical taking of any portion of the Premises, this will be regarded as a partial condemnation to which Sections 9.1(a) and 9.1(c) apply, and the rent will be reduced to the extent of reduction in rental value of the Premises as though a portion had been physically taken.
9.2 Total Taking. If a condemning authority takes all of the Premises or a portion sufficient to render the remaining Premises reasonably unsuitable for the use that Tenant was then making of the Premises, the lease will terminate as of the date the title vests in the condemning authorities. Such termination will have the same effect as a termination by Landlord under Section 8.2. Landlord will be entitled to all of the proceeds of condemnation, and Tenant will have no claim against Landlord as a result of the condemnation.
9.3 Sale in Lieu of Condemnation. Sale of all or part of the Premises to a purchaser with the power of eminent domain in the face of a threat or probability of the exercise of the power will be treated for the purposes of this Section 9 as a taking by condemnation.
Section 10. Sale of the Premises.
10.1 Premises For Sale. Tenant acknowledges that the Landlord is trying to sell a 7.0 +/- acre parcel (idnetified on Exhibit X) containing the Premises. In order to facilitate such sale, Tenant agrees to relocate if necessary, to a substantially equivalent space within the proposed property boundaries of this parcel. For the purposes of this paragraph, “substantially equivalent” shall mean a space with substantially equivalent usable square footage, utilities, access to Terminal 1 project site, space for office, shop, and warehouse, and parking. Landlord, or any successor in title, shall give Tenant a minimum of twelve months prior written notice of its intent to relocate Tenant in other facilities on the 7.0+/- parcel. All terms and conditions of this Lease shall apply to the occupancy of the new Premises. Landlord or any successor in title to Landlord shall compensate Tenant for its reasonable relocation costs.
10.2 Viewing of the Premises by Prospective Purchasers. Landlord or its agent will have the right to enter upon the Premises at any time after giving reasonable notice to Tenant to show the Premises to any prospective purchaser. Reasonable notice for the purpose of this Section 10.2 shall mean oral telephonic notice two hours prior to the entry of the Premises. Such notice shall be deemed to be given if a message, on behalf of the Landlord, is left with any person answering Tenant's telephone.
10.3 For Sale Signs. Landlord will have the right at any time during this lease to place and maintain upon the Premises notices for the selling of the Premises.
Section 11. Liability and Indemnity
11.1 Indemnification. To the extent not prohibited under Oregon law, Tenant will indemnify and defend Landlord from any claim, loss, or liability arising out of or related to any activity of Tenant or any of its contractors on the Premises or any condition of the Premises for which Tenant is responsible or which is under the control of Tenant or one of Tenant's contractors. Landlord will have no liability to Tenant for any injury, loss, or damage caused by third parties.
11.2 Liens
(a) Except with respect to activities for which Landlord is responsible, Tenant will pay as due all claims for work done on and for services rendered or material furnished to the Premises, and will keep the Premises free from any liens. If Tenant fails to pay any such claims or to discharge any lien, Landlord may do so and collect the cost as additional rent. Any amount so added will bear interest at the rate of 12 percent per annum from the date expended by Landlord and will be payable on demand. Such action by Landlord will not constitute a waiver of any right or remedy that Landlord may have on account of Tenant's default.
(b) Tenant may withhold payment of any claim in connection with a good-faith dispute over the obligation to pay, as long as Landlord's property interests are not jeopardized. If a lien is filed as a result of nonpayment, Tenant will, within 30 days after knowledge of the filing, secure the discharge of the lien or deposit with Landlord cash or sufficient corporate surety bond or other surety satisfactory to Landlord in an amount sufficient to discharge the lien plus any costs, attorney fees, and other charges that could accrue as a result of a foreclosure or sale under the lien.
11.3 Liability Insurance.
(a) Before going into possession of the Premises, Tenant and Tenant’'s contractors shall procure and maintain at their cost the following insurance issued by a responsible company: (a) comprehensive general liability insurance with limits of not less than $1,000,000 for injury to one person, $3,000,000 for injury to two or more persons in one occurrence, and $500,000 for damage to property; or (b) commercial general liability insurance (occurrence version) with coverage for bodily injury and property damage liability, personal and advertising injury liability, and medical payment with a general aggregate limit of not less than $5,000,000 and a per occurrence limit of not less than $3,000,000. Such insurance will cover all risks arising directly or indirectly out of Tenant's or Tenant's contractors' activities on or any condition of the Premises. Such insurance will protect Tenant against the claims of Landlord on account of the obligations assumed by Tenant under Section 11.1, and will name Landlord as an additional insured. Certificates evidencing such insurance and bearing endorsements requiring 10 days' written notice to Landlord prior to any material change or cancellation will be furnished to Landlord prior to Tenant's or Tenant's contractors' occupancy of the Premises.
(b) Tenant shall have the right to self-insure the risks that would otherwise be covered by the liability insurance policy required to be maintained by Tenant by the terms of Section 11.3(a) above. Landlord acknowledges that Tenant has elected to exercise its right to self-insure. Tenant hereby assumes the risks of and shall pay from its assets the costs, expenses, damages, claims, losses, and liabilities relating to injury or death to persons or damage to property, if and to the same extent that a third party insurance company would have paid those amounts if the insurance company were insuring those risks under the policy described in Section 11.3(a) above. Notwithstanding anything contained in this Lease to the contrary, the terms of this Section 11.3(b) permitting Tenant to self-insure shall only be applicable to the City of Portland and shall not apply to any subtenant or assignee. Upon the request of Landlord, Tenant shall furnish Landlord with such information as Landlord may reasonably request to substantiate that Tenant maintains a regular program of self-insurance. Tenant shall promptly notify Landlord in writing if Tenant is required to or elects to terminate its program of self-insurance for any reason whatsoever. That notice shall be accompanied by a certificate of insurance from a third party insurance company which evidences the existence of the insurance coverage required to be maintained pursuant to the terms of Section 11.3(a) hereof.
Section 12. Quiet Enjoyment
12.1 Landlord's Warranty. Landlord warrants that it is the owner of the Premises and has the right to lease them. Landlord will defend Tenant's right to quiet enjoyment of the Premises from the lawful claims of all persons during the lease term claiming by or through Landlord.
12.2 Subordination. This lease will be subject and subordinate at all times to any and all mortgages or deeds of trust that now or may hereafter encumber the Premises and to any renewal, modification, consolidation, replacement, and extension of any such mortgage or deed of trust. While no instrument or act by Tenant shall be necessary to effectuate subordination, either to existing or future mortgages or deeds of trust, Tenant will, nevertheless, execute and deliver such further instruments subordinating the interest of Tenant under this lease to any such mortgage or deed of trust as may be desired by Landlord or by the mortgagee or the trustee. Tenant hereby appoints Landlord to execute and deliver any such instrument for Tenant.
12.3 Estoppels Certificate. Tenant will, within 20 days after notice from Landlord, execute and deliver to Landlord a certificate stating whether or not this lease has been modified and is in full force and effect and specifying any modifications or alleged breaches by Landlord. The certificate will also state the amount of monthly base rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time will be conclusive upon Tenant that the lease is in full force and effect and has not been modified except as represented in the notice requesting the certificate.
Section 13. Assignment and Subletting
No part of the Premises may be assigned, mortgaged, or subleased, nor may a right of use of any portion of the property be conferred on any third person by any other means, without the prior written consent of Landlord, except as otherwise noted in this Section. This provision will apply to all transfers by operation of law. No consent in one instance will prevent the provision from applying to a subsequent instance. Tenant's contractor, Impregilo/S.A. Healy, is hereby approved by Landlord to use the Premises as provided in Section 3 herein. Prior to taking possession, such contractor shall provide evidence of the insurance required by Section 11.3(a) hereof.
Section 14. Default
The following will be events of default:
14.1 Default in Rent. Failure of Tenant to pay any rent or other charge within 10 days after it is due.
14.2 Default in Other Covenants. Failure of Tenant to comply with any material term or condition or fulfill any obligation of the lease (other than the payment of rent or other charges) within 30 days after written notice by Landlord specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the 30-day period, this provision will be complied with if Tenant begins correction of the default within the 30-day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable.
14.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is bankrupt or the appointment of a receiver of the properties of Tenant; the filing of any involuntary petition of bankruptcy and failure of Tenant to secure a dismissal of the petition within 30 days after filing; attachment of or the levying of execution on the leasehold interest and failure of Tenant to secure discharge of the attachment or release of the levy of execution within 10 days will constitute a default.
14.4 Abandonment. Failure of Tenant for 20 days or more to occupy the Premises for one or more of the purposes permitted under this lease, unless such failure is excused under other provisions of this lease.
Section 15. Remedies on Default
15.1 Termination. In the event of a default, the lease may be terminated at the option of Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of Landlord or otherwise, Landlord will be entitled to recover damages from Tenant for the default, and Landlord may reenter, take possession of the Premises, and remove any persons or property by legal action or by self-help with the use of reasonable force and without liability for damages and without having accepted a surrender.
15.2 Reletting. Following reentry or abandonment, Landlord may relet the Premises and in that connection may make any suitable alterations or refurbish the Premises, or both, or change the character or use of the Premises, but Landlord will not be required to relet for any use or purpose other than that specified in the lease or which Landlord may reasonably consider injurious to the Premises, or to any tenant that Landlord may reasonably consider objectionable. Landlord may relet all or part of the Premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this lease, upon any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession.
15.3 Damages. In the event of termination or retaking of possession following default, Landlord will be entitled to recover immediately, without waiting until the due date of any future rent or until the date fixed for expiration of the lease term, the following amounts as damages:
(a) The loss of rental from the date of default until a new tenant is, or with the exercise of reasonable efforts could have been, secured and paying rent.
(b) The reasonable costs of reentry and reletting including without limitation the cost of any cleanup, refurbishing, removal of Tenant's property and fixtures, costs incurred under Section 15.5, or any other expense occasioned by Tenant's default including but not limited to, any repair costs, attorney fees, court costs, broker commissions, and advertising costs.
(c) Any excess of the present value of the rent and all of Tenant's other obligations under this lease over the reasonable expected return from the Premises for the period commencing on the earlier of the date of trial or the date the Premises are relet, and continuing through the end of the term. The present value of future amounts will be computed using a discount rate equal to the prime loan rate of major Oregon banks in effect on the date of trial.
15.4 Right to Sue More than Once. Landlord may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages will bar a later action for damages subsequently accruing.
15.5 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation under this lease, Landlord will have the option to do so after 30 days' written notice to Tenant. All of Landlord's reasonable expenditures to correct the default will be reimbursed by Tenant on demand with interest at the rate of 12 percent per annum from the date of expenditure by Landlord. Such action by Landlord will not waive any other remedies available to Landlord because of the default.
15.6 Remedies Cumulative. The foregoing remedies will be in addition to and will not exclude any other remedy available to Landlord under applicable law.
Section 16. Surrender at Expiration
16.1 Condition of the Premises. Upon expiration of the lease term or earlier termination on account of default, Tenant will deliver all keys to Landlord and surrender the Premises broom- clean and in as good or better condition as at the beginning of the lease term.. Alterations constructed by Tenant with permission from Landlord will not be removed or restored to the original condition unless the terms of permission for the alteration so require. Tenant's obligations under this Section will be subordinate to the provisions of Section 8 relating to destruction.
16.2 Fixtures
(a) All fixtures placed upon the Premises during the term, other than Tenant's trade fixtures, shall, at Landlord's option, become the property of Landlord. If Landlord so elects, Tenant will remove any or all fixtures that would otherwise remain the property of Landlord, and will repair any physical damage resulting from the removal. If Tenant fails to remove such fixtures, Landlord may do so and charge the cost to Tenant with interest at the legal rate from the date of expenditure.
(b) Prior to expiration or other termination of the lease term, Tenant will remove all furnishings, furniture, and trade fixtures that remain its property. If Tenant fails to do so, this will be an abandonment of the property, and Landlord may retain the property and all rights of Tenant with respect to it will cease or, by notice in writing given to Tenant within 20 days after removal was required, Landlord may elect to hold Tenant to its obligation of removal. If Landlord elects to require Tenant to remove, Landlord may effect a removal and place the property in public storage for Tenant's account. Tenant will be liable to Landlord for the cost of removal, transportation to storage, and storage, with interest at the legal rate on all such expenses from the date of expenditure by Landlord.
16.3 Holdover
(a) If Tenant does not vacate the Premises at the time required, Landlord will have the option to treat Tenant as a tenant from month to month, subject to all of the provisions of this lease except the provisions for term and renewal, and at a rental rate equal to 150 percent of the rent last paid by Tenant during the original term, or to eject Tenant from the Premises and recover damages caused by wrongful holdover. Failure of Tenant to remove fixtures, furniture, furnishings, or trade fixtures that Tenant is required to remove under this lease will constitute a failure to vacate to which this Section will apply if the property not removed will substantially interfere with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant.
(b) If a month-to-month tenancy results from a holdover by Tenant under this Section 16.3, the tenancy will be terminable at the end of any monthly rental period on written notice from Landlord given not less than 10 days prior to the termination date, which will be specified in the notice. Tenant waives any notice that would otherwise be provided by law with respect to a month-to-month tenancy.
Section 17. Miscellaneous
17.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease will not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision.
17.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out of this lease, the prevailing party will be entitled to recover in addition to costs such sum as the court may adjudge reasonable as attorney fees at trial, on petition for review, and on appeal.
17.3 Notices. Any notice required or permitted under this lease will be given when actually delivered or 48 hours after deposited in United States mail as certified mail addressed to the address first given in this lease or to such other address as may be specified from time to time by either of the parties in writing.
17.4 Succession. Subject to the above-stated limitations on transfer of Tenant's interest, this lease will be binding on and inure to the benefit of the parties and their respective successors and assigns.
17.5 Recordation. A Memorandum of this Lease may be recorded by Tenant in a form approved by Landlord. Tenant shall pay the recording fee. Upon termination or execution of this Lease, Tenant shall execute upon request an instrument in recordable form evidencing the termination or expiration of this Lease.
17.6 Entry for Inspection. Landlord will have the right to enter upon the Premises at any time after reasonable notice to determine Tenant's compliance with this lease, to make necessary repairs to the building or to the Premises. Reasonable notice for the purpose of this Section 17.6 shall mean oral notice two hours prior to the entry of the Premises. Such notice shall be deemed to be given if a message, on behalf of the Landlord, is left with any person answering Tenant's telephone.
17.7 Interest on Rent and Other Charges. Any rent or other payment required of Tenant by this lease will, if not paid within 15 days after it is due, bear interest at the rate of 12 percent per annum (but not in any event at a rate greater than the maximum rate of interest permitted by law) from the due date until paid. In addition, if Tenant fails to make any rent or other payment required by this lease to be paid to Landlord within five days after it is due, Landlord may elect to impose a late charge of five cents per dollar of the overdue payment to reimburse Landlord for the costs of collecting the overdue payment. Tenant will pay the late charge upon demand by Landlord. Landlord may levy and collect a late charge in addition to all other remedies available for Tenant's default, and collection of a late charge will not waive the breach caused by the late payment.
17.8 Proration of Rent. In the event of commencement or termination of this lease at a time other than the beginning or end of one of the specified rental periods, then the rent will be prorated as of the date of commencement or termination and in the event of termination for reasons other than default, all prepaid rent will be refunded to Tenant or paid on its account.
17.9 Time of Essence. Time is of the essence of the performance of each of Tenant's obligations under this lease.
Section 18. Arbitration
18.1 Disputes to Be Mediated. If any dispute arises between the parties concerning this lease or the parties' obligations or activities hereunder, the dispute shall be submitted to mediation before a mediator agreed to and compensated equally by both parties prior to commencement of arbitration or litigation. If the parties fail to agree on a mediator, a mediator shall be appointed by the presiding judge of the Multnomah County Circuit Court.
18.2 Procedure for Arbitration. If resolution of any dispute between the parties cannot be resolved by mediation, the parties shall each choose an arbitrator, and the two arbitrators will choose a third. If the choice of the second or third arbitrator is not made within 10 days of choosing of the prior arbitrator, then either party may apply to the presiding judge of the Multnomah County Circuit Court to appoint an arbitrator. The arbitrator will proceed according to the Oregon statutes governing arbitration, and the award of the arbitrators will have the effect therein provided. The arbitration will take place in the county where the leased Premises are located. Costs of the arbitration will be shared equally by the parties, but each party will pay its own attorney fees incurred in connection with the arbitration.
Landlord: Tenant:
SULZER PUMPS (US) INC. CITY OF PORTLAND
By: By:
Title: Title:
EXHIBIT A
(Plan of the Premises)
(See hard copy if diagram does not display)
EXHIBIT BLANDLORD'S IMPROVEMENTS
Prior to the commencement of the lease, Landlord will:
1. Remove control panel wall and cabinets.
2. Paint lower office area.
3. Clean or replace, as needed, carpet in lower office area.