PORT CENTER LEASE

PURCHASE PARCEL

EXHIBIT A OF CITY OF PORTLAND ORDINANCE

BETWEEN

THE PORT OF PORTLAND

AND

THE CITY OF PORTLAND

TABLE OF CONTENTS

PORT CENTER LEASE

This Port Center Lease (the "Lease"), dated effective October ____, 2002 ("Effective Date"), is between THE PORT OF PORTLAND, a port district of the State of Oregon (the "Port"), and THE CITY OF PORTLAND, a municipal corporation (the "Lessee").

RECITALS

A.  The Port is the owner of certain real property known as the Port Center site"" on Swan Island in the City of Portland, Multnomah County, Oregon, described in attached Exhibit A and shown as the "Lease/Purchase Parcel" in attached Exhibit B (the "Premises"). The Premises consists of 8.01 acres of land, of which 1.24 acres are designated as greenway trail and riverbank and 6.77 acres are useable (the "Useable Land").

B.  The Port and Lessee have entered into a Purchase and Sale Agreement dated the same date as this Lease (the "Sale Agreement"), pursuant to which the Port has agreed to sell, and Lessee has agreed to purchase, the Premises, subject to the completion of a Partition to create the Premises as a legal lot. Until Closing under the Sale Agreement, Lessee desires to lease the Premises from the Port for any activities associated with its Combined Sewer Overflow Project, and the Port is willing to lease the Premises to Lessee on the terms and conditions stated in this Lease.

C.  The Port and Lessee have also entered into a Lease dated the same date as this Lease for the 6.2-acre parcel lying adjacent to the Premises, described in attached Exhibit B as the "Adjacent Parcel."

NOW, THEREFORE, the parties, intending to be legally bound by the terms of this Lease and for good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, agree as follows:

1.  AGREEMENT TO LEASE PREMISES

The Port hereby leases the Premises to Lessee, and Lessee leases the Premises from the Port, for the Permitted Uses described below and on the terms and conditions stated in this Lease. The parties intend that this Lease shall terminate at such time as Lessee purchases the Premises from the Port pursuant to the Sale Agreement.

2.  USE OF THE PREMISES

2.1 Permitted Uses

Subject to the limitations set forth in this Section and elsewhere in this Lease, Lessee shall use the Premises only for activities associated with Lessee's Combined Sewer Overflow project, in accordance with applicable Laws ("Permitted Uses"). All development and use of the Premises shall be in accordance with the Port Center Development Standards (the "Standards"), attached hereto as Exhibit C, except as noted in Section 5.1.2.

2.2 Use of DSL Lands

If Lessee uses the submerged lands adjacent to the Premises for mooring barges or any other vessels as part of its operations, Lessee shall be responsible for obtaining a lease, if necessary, from the Oregon Division of State Lands ("DSL") for the use of its submerged lands. Lessee shall be responsible for payment of any rent under any DSL Lease.

2.3 Limits on Use

Lessee’s rights to use the Premises are subject to all easements or other matters of record affecting the Premises. The Premises may be used for no use, other than Permitted Uses, without the Port's prior written consent.

2.4 Compliance with Laws

Lessee’s activities on or use or possession of the Premises must comply at all times with all applicable laws, ordinances, codes, rules and regulations of state, federal, city, county, the Port or other public government authorities or agencies, including, without limitation, all Environmental Law, as defined in Section 7.1.1 (collectively, "Laws") that are applicable to this Lease and Lessee's use of the Premises. Lessee shall promptly provide the Port with copies of all communications from any government entity, agency or regulatory authority or body which relate to Lessee’s noncompliance or alleged noncompliance with any Laws relating to its operations on the Premises. Lessee shall correct, at Lessee’s own expense, any failure of compliance created through Lessee’s fault or by reason of Lessee’s use.

2.5 Common Areas

Lessee shall have a nonexclusive right to use Port Center Common Areas in common with the Port and with others to whom the Port has granted or may grant such right. The term "Common Areas" means existing parking areas, roadways, sidewalks, driveways, surrounding landscaping and grounds, and any other areas within Port Center not leased by any specific tenant but used in common by Port Center tenants and other Port authorized users, now or hereafter designated as Common Areas by the Port, and Lessee shall pay the Port Center Phase II Common Area Assessments as set forth in Section 4.4.

2.6 Other Tenants of Port Center

The Port shall not be liable for the actions or omissions of other tenants or users of Port Center. Lessee shall not interfere with the authorized activities of other tenants or users of Port Center in the Common Areas or portions of Port Center not included within the Premises (or the Adjacent Parcel).

3.  TERM

This Lease shall be binding upon the parties as of the Effective Date. The term of this Lease (the "Lease Term") shall commence on October ____, 2002 (the "Commencement Date"), and shall continue for a period of ninety-nine (99) years, unless sooner terminated under the provisions of this Lease, or until closing under the Sale Agreement (the "Expiration Date").

4.  RENT

4.1 Rent

Lessee shall pay to the Port monthly rent for the Useable Land. Rent is calculated as follows: $9.40 per square foot multiplied by the number of square feet of Useable Land in the Premises, multiplied by 8.5%, payable in twelve monthly installments. The monthly rent amount shall then be NINETEEN THOUSAND SIX HUNDRED THIRTY-FIVE AND 50/100 DOLLARS ($19,635.50). Said monthly rent shall be referred to as "Basic Rent." All other sums which become payable by Lessee to the Port shall be considered "Additional Rent" due under this Lease. "Rent" as used herein, shall mean all such Additional Rent together with Basic Rent.

4.2 Purchase of Premises; Rent Credit

Basic Rent paid under this Lease shall be credited to the Purchase Price for the Premises established by the Sale Agreement, which is TWO MILLION SEVEN HUNDRED SEVENTY-TWO THOUSAND SEVENTY-ONE AND 28/100 DOLLARS ($2,772,071.28). If the purchase of the Premises fails to close due to failure of the Partition Plat contingency set out in the Sale Agreement, Lessee shall be required to pay monthly Basic Rent under this Lease only until the total amount of Basic Rent paid to the Port equals $2,772,071.28. If the purchase of the Premises fails to close under the Sale Agreement for any other reason, this limitation on total Basic Rent shall not apply.

4.3 Taxes

The Port and Lessee understand that no real estate taxes should come due under this Lease by virtue of the tax-exempt status of both the Port and Lessee. Nonetheless, Lessee agrees to pay before due all taxes, which after the Effective Date and before the expiration of this Lease may become a lien or which may be levied or assessed by the state, county, city, district or any other body upon the Premises, or upon any interest of Lessee acquired pursuant to this Lease, or any possessory right which Lessee may have in or to the Premises or the improvements thereon by reason of its occupancy thereof, as well as all taxes, assessments, user fees or other charges on all property, real or personal, owned by Lessee in or about said Premises (collectively, "Taxes"), together with any other tax or charge levied wholly or partly in lieu thereof. Taxes are considered Additional Rent under this Lease. If available by law, rule or order of the taxing authority, Lessee may make payments in installments. To the extent that Lessee qualifies for tax-exempt status, Lessee may apply for such exemption; however, unless an exemption is obtained, Lessee shall promptly pay all Taxes due under this Section. Not later than ten (10) days after the date any Tax is due, Lessee shall give to the Port a copy of the receipts and vouchers showing payment has been made as required by this Section. In the event that Lessee fails to pay Taxes on or before their due date, then, in addition to all other remedies set forth in Section 10, the Port shall automatically have the right, but not the obligation, to pay the Taxes and any interest and penalties due thereon, with no notice to Lessee and Lessee shall immediately reimburse the Port for any sums so paid.

4.4 Common Area Assessment

4.4.1 General

A Common Area fee ("Common Area Assessment") shall be paid by Lessee on an annual basis. The Common Area Assessment is considered Additional Rent under this Lease and is based on Lessee's proportionate share of costs associated with operating, maintaining and improving the Common Areas of Port Center, Phase II, which is depicted in the attached Exhibit E (the "Phase II Common Area"). Lessee's Proportionate Share of the Phase II Common Area costs shall be calculated by: (a) determining the percentage that the Premises represents of the total acreage sold by or leased from the Port within Port Center Phase II, which is outlined in Exhibit E; and (b) multiplying the total cost by this percentage, the product of which shall be the amount charged to the Premises. Lessee shall receive an annual billing for its share of the Common Area Assessment, which shall be payable within thirty (30) days of receipt. Lessee's Common Area Assessment for the first year the Common Area Assessment becomes effective shall be prorated based on the effective date.

4.5 Other Fees

Lessee shall be responsible for paying all other fees, assessments, charges and costs associated with the use, occupancy of and improvements to the Premises, including any local improvement district assessments. In addition, Lessee will be responsible for all improvements to the Premises necessary to accommodate its use, including payment of permit fees, system development charges and utility connection fees associated with such improvements. All conditions imposed by the City of Portland upon Lessee's improvements must be complied with at Lessee's sole cost and expense.

4.6 Time and Place of Basic Rent Payment

Lessee shall make payment of the Basic Rent, in advance, on or before the first day of each and every calendar month ("Due Date"), without notice, and without offset, abatement, or deduction to the Port to the following address or such other address as the Port may later designate as provided herein:

The Port of Portland
Unit 27
P.O. Box 4900
Portland, OR 97208-4900

4.7 Delinquency

All Rent not paid by Lessee within fifteen (15) days of the Due Date shall bear a "Delinquency Charge" of nine percent (9%) per year from the date of delinquency until paid. Imposition of the Delinquency Charge shall not constitute a waiver of any other remedies available for failure to timely pay Rent. Acceptance of any Delinquency Charge by the Port shall in no event constitute a waiver of Lessee’s Default.

4.8 Acceptance of Rent

The Port’s acceptance of a late or partial payment of Rent and/or any Delinquency Charge shall not constitute a waiver of any Event of Default (defined in Section 10) nor shall it prevent the Port from exercising any of its other rights and remedies granted to the Port under this Lease or by law. It is hereby agreed that any endorsements or statements appearing on checks of waiver, compromise, payment in full, or any other similar restrictive endorsement shall have no legal effect. Lessee shall remain in Default and obligated to pay all Rent due, even if the Port has accepted a partial or late payment of Rent.

5.  LESSEE’S OTHER OBLIGATIONS

5.1 Construction of Improvements

5.1.1 Port Approval

Lessee shall submit to the Port for review and approval for compliance with the Standards, with regard to any permanent improvements, the following: (i) the name of the proposed contractor; (ii) preliminary plans prior to commencement of construction and final plans and specifications as available; (iii) a site-use plan; (iv) architectural renderings; and (v) as-built drawings of the site plan and utilities after completion of work, as appropriate.

5.1.2 Variance from the Standards

The following variances from the Standards for Lessee's planned improvements are hereby approved: (a) the maximum height of any structure on the Premises, excluding roof-mounted objects, may be forty (40) feet; (b) within fifty (50) feet of the front property line, no structure shall exceed twenty (20) feet in height; and (c) structures associated with power supply and distribution are not subject to height limitations; provided that no such structures shall be located within one hundred fifty (150) feet of the most westerly boundary line of the Premises, Grantee shall locate, design and screen such structures to minimize their impact on views from the Adjacent Parcel and the location and design of such structures is subject to review and comment by the Port as part of its review for compliance with the Standards.

5.1.3 Landscaping Requirements

As part of Lessee’s obligation to meet the landscaping requirements set forth in the Standards, Lessee shall, install and maintain irrigated landscaping within the right-of-way of N. Port Center Way adjacent to the Premises. The landscaping shall be completed as a part of and not later than the completion of the construction of Lessee's improvements.

5.1.4 Greenway Requirements

Lessee shall install a Greenway trail and landscaping on the Premises as required by the City of Portland in conjunction with Lessee's development of the Premises. Lessee shall also install the Greenway trail and landscaping as required by the City of Portland on the Adjacent Parcel. Lessee agrees to construct the Greenway trail and landscaping on both the Premises and the Adjacent Parcel in accordance with the Willamette River Greenway Trail Easement recorded April 14, 1992, Book 2529, Page 1874, a copy of which is attached hereto as Exhibit D. Lessee shall be solely responsible, at its expense, for continued maintenance of the trail and landscaping on the Premises. Lessee shall also be responsible, at its expense, for continued maintenance of the trail and landscaping on the Adjacent Parcel, until the trail is open for public use or until termination of Lessee's lease of the Adjacent Parcel, whichever occurs first. So long as Lessee complies with the foregoing two sentences, Lessee will not incur any Common Area Assessments for any maintenance by the Port or other parties of the Greenway trail and landscaping on the Premises or the Adjacent Parcel. Lessee shall be responsible for any regrading of the river bank as may be required by the City of Portland in conjunction with the construction of the Greenway trail improvements on the Premises. If regrading is required by the City of Portland on the Adjacent Parcel, the Port agrees that such regrading is not the responsibility of Lessee.

5.1.5 Public Access Way

If, as part of its approval of Lessee's greenway trail, the City of Portland requires that a public access way be constructed to connect N. Port Center Way to the greenway trail, Lessee must construct such access way entirely on the Premises; provided, that, with notice to and consultation with the Port, said access way may be located half on the Adjacent Parcel and half on the Premises, but only if no other location on the Premises can meet the City of Portland's requirements. Lessee shall not agree to placement of such public access way entirely on the Adjacent Parcel, without the Port's express written consent.

5.1.6 Permits and Licenses

All conditions imposed by the City of Portland or other governmental agencies upon the construction of Lessee's improvements must be complied with at Lessee's sole cost and expense. Lessee shall provide copies of all permits required for activities conducted on the Premises to the Port, at the Port's request.

5.1.7 Grading Plan

Lessee's grading and soil management plan for the Premises includes the placement of approximately 21,500 cubic yards of material excavated from the Premises for the pump station as fill across both the Premises and the Adjacent Parcel. This is acceptable to the Port only if the grading plan meets all applicable regulatory requirements and if the excavated material meets the definition of “clean fill” under Oregon Administrative Rules 340-093. The Lessee must obtain Oregon Department of Environmental Quality ("DEQ") concurrence in writing that any excavated material to be placed on the Premises or the Adjacent Parcel constitutes "clean fill." The Port reserves the right to perform additional sampling of the clean fill to be placed on the Premises or the Adjacent Parcel by the Lessee. The final elevation of such fill may not exceed thirty-eight (38) feet in elevation.

5.2 No Liens

Lessee agrees to pay, when due, all sums for labor, services, materials, supplies, utilities (subject to the provisions of Section 5.3), furnishings, machinery, or equipment which have been provided or ordered with Lessee’s consent to the Premises. If any lien related to Permitted Uses is filed against the Premises, Lessee shall cause the lien to be discharged of record within 30 days. If Lessee fails to discharge a lien for which it is responsible within 30 days after its filing, the Port may pay the lien and request reimbursement from Lessee. Lessee shall not encumber the Premises or any improvements thereon without prior written approval of the Port.

5.3 Utilities

Lessee shall promptly pay any charges for sanitary sewer, storm sewer, water, gas, electricity, telephone, and all other charges for utilities which may be furnished to the Premises. Lessee shall also be responsible to pay any and all installation, connection and impervious surface fees and all costs of bringing utilities to the Premises. The Port shall not be responsible to provide utility services to the Premises nor to verify the location of existing utility lines and/or connections. As required by Section 5.1.1, within ninety (90) days of receipt from the City of Portland of the certificate of occupancy for the Facility, Lessee shall deliver to the Port complete and fully detailed "as-built" drawings of the completed lines or facilities prepared by an architect or engineer licensed by the State of Oregon. Lessee shall be responsible for the cost of maintenance and repair of all existing and newly-installed utility lines.

5.4 Fire Safety

Lessee shall exercise due and reasonable care and caution to prevent and control fire on the Premises and to that end shall provide and maintain such fire suppression and other fire protection equipment as may be required or appropriate for Lessee’s use of the Premises pursuant to applicable Laws.

5.5 Port Access to Premises

The Port and its representatives shall have the right to enter upon the Premises during the term of this Lease for the purposes of: (i) confirming the performance by Lessee of all obligations under this Lease; (ii) doing any other act which the Port may be obligated or have the right to perform under this Lease; (iii) inspecting and copying books and records of Lessee related to Lessee’s performance of its obligations under this Lease; (iv) to implement any remedial investigation, source control or other remedial activities that may be required by DEQ or the United States Environmental Protection Agency; and (v) for any other lawful purpose. Such entry shall be made with forty-eight (48) hours advance notice and during normal business hours, when practical, except in cases of emergency or a suspected violation of this Lease or applicable law. For non-emergency access, Lessee may require that the Port representative be accompanied by a representative of Lessee. Lessee waives any claim against the Port for damages for any injury or interference with Lessee’s business, any loss of occupancy or quiet enjoyment of the Premises, or any other loss occasioned by such entry, except to the extent caused by the negligence or willful misconduct of the Port. The Port shall be given keys with which to gain access to the Premises during the Lease term and to unlock all gates located on the Premises. The Port shall have the right to use any and all reasonable means to open such gates or doors in an emergency in order to obtain entry to the Premises, and Lessee releases the Port from any liability or damages, except to the extent cause by the negligence or willful misconduct of the Port, resulting from such action.

6.  PORT AUTHORITY AND OBLIGATIONS

6.1 Delivery of Premises

Lessee shall have the right to possession of the Premises under this Lease after completion of its title review under Section 6.1 of the Sale Agreement.

6.2 Quiet Enjoyment

Subject to Lessee performing all of Lessee’s obligations under this Lease and subject to the Port’s rights under this Lease, Lessee’s possession of the Premises will not be disturbed by the Port.

6.3 Condition of Premises

The Port makes no warranties or representations regarding the condition of the Premises, including, without limitation, the environmental condition of the Premises, the suitability of the Premises for Lessee’s intended uses, or the availability of utilities needed for Lessee’s intended purposes. The Port acknowledges that after reasonable inquiry and to the best of its knowledge it has provided to Lessee copies of all reports and information regarding the condition of the Premises, except for such reports and information that may be exempt from public disclosure based on attorney-client or attorney work product privilege. For purposes of the foregoing sentence, (a) "reasonable inquiry" shall mean inquiry of the Port’s managers with property management or environmental management responsibility of the Premises and review of Port’s records and (b) "knowledge" shall mean the current actual knowledge of such managers.

6.4 Security Services

The Port provides no security services for the Premises or the Port Center Phase II Common Areas.

7.  ENVIRONMENTAL OBLIGATIONS OF TENANT

7.1 Definitions

For the purposes of this Lease, the following definitions shall apply.

7.1.1 Environmental Law

"Environmental Law" shall mean applicable federal, State of Oregon and local laws, regulations, rules, permit terms, codes and ordinances now or hereafter in effect, as the same may be amended from time to time, and applicable decisional law, which in any way govern materials, substances, regulated wastes, emissions, pollutants, animals or plants, noise, or products and/or relate to the protection of health, natural resources, safety or the environment.

7.1.2 Hazardous Substance

"Hazardous Substance" includes any and all substances defined or designated as hazardous, toxic, radioactive, dangerous, or regulated wastes or materials, or any other similar term in or under any Environmental Law. Hazardous Substance shall also include, but not be limited to, fuels, petroleum, and petroleum-derived products.

7.1.3 Environmental Cost

"Environmental Cost" includes, but is not limited to, costs and damages arising from or relating to: (i) any actual violation of or noncompliance with any applicable Environmental Law; (ii) claims for damages, response costs, natural resources restoration or damages, regulatory oversight costs or fees, audit costs, fines, fees, or other relief relating to matters addressed in any applicable Environmental Law; (iii) Hazardous Substance Releases as defined in Section 7.1.4; and (iv) violations of any environmental provisions of this Lease. Costs and damages, as used in this Section, shall include, but not be limited to: (a) costs of evaluation, testing, analysis, remediation, removal, disposal, monitoring, and maintenance; (b) Port internal staff time and fees of attorneys, engineers, consultants and experts, whether or not taxable as costs, incurred at, before, or after trial, appeal, on petition for review or administrative proceedings; (c) lost revenue and natural resources damages; and (d) diminution of value, loss, or restriction on use of property; and (e) the cost of decommissioning and removing any underground, mobile or aboveground storage tank and related facilities.

7.1.4 Hazardous Substance Release

"Hazardous Substance Release" shall mean the spilling, discharge, deposit, injection, dumping, emitting, releasing, leaking, or placing of any Hazardous Substance into the air or into or on any land or waters, except as authorized by a then-current and valid permit issued under applicable Environmental Law.

7.2 General Environmental Obligations of Lessee

Lessee shall manage and conduct all of its activities on or relating to the Premises: (i) in compliance with applicable Environmental Law and the environmental provisions of this Lease; (ii) in cooperation with the Port in the Port’s efforts to comply with applicable Environmental Law; and (iii) in adherence with best management practices applicable to Lessee’s use of the Premises. Lessee shall manage and, as appropriate, secure the Premises and its occupation or use of the Premises so as to prevent any violation of laws or regulations by any party on or relating to the Premises.

7.3 Use of Hazardous Substances

Lessee may use, handle or store on the Premises, in accordance with manufacturers’ instructions and applicable laws, only those Hazardous Substances reasonably and necessarily used in the course of Lessee’s Permitted Uses of the Premises. Lessee shall manage and dispose of Hazardous Substances in compliance with applicable laws. If Lessee knows or has reasonable cause to believe that any release of a Hazardous Substance has taken place or has come to be located on or beneath the Premises, Lessee must immediately give written notice of that condition to the Port.

7.4 Tank Facility

Lessee shall comply with the provisions of the attached Above Ground and Mobile Storage Tank Use Provisions form (Exhibit F), the terms of which are expressly incorporated into this Lease by reference.

7.5 Storm Water Management

7.5.1 Erosion Control

Lessee shall implement appropriate measures for erosion control and management of storm water at the Premises consistent with the City of Portland’s Erosion Control Manual, and any specifications for construction of Lessee's West Side Combined Sewer Overflow Project facilities to the extent consistent with Environmental Law.

7.5.2 Individual Permit

If Lessee's activity is such that an individual or separate National Pollution Discharge Elimination System ("NPDES") storm water permit is required, then Lessee shall obtain an appropriate permit from DEQ. If Lessee is required to obtain an individual NPDES permit, Lessee shall provide to the Port, by October 1 of each year this Lease is in effect, copies of documentation reflecting its individual permittee status. Such documentation shall include any notices of intent, acknowledgments from DEQ, permits, monitoring reports, and storm water pollution control plans associated with Lessee's storm water discharge activities at or from the Premises.

7.6 Contaminated or Treated Media

Lessee shall not store, treat, deposit, place or dispose of treated or contaminated media, including soil, rock, slurry, industrial by-products, liquid waste or waste ("Contaminated Media") on the Premises, except in accordance with the Lessee's Contaminated Media Management Plan for the West Side CSO Tunnel, Shafts, Pump Station, & Pipelines #6680, as reviewed and approved by DEQ, a copy of which shall be provided to the Port. Lessee shall bring no Contaminated Media, soil, rock, slag, debris, recycled concrete, recycled asphalt, dredged material, organic material or other material to be used as permanent fill onto the Premises without first demonstrating pursuant to Section 5.1.7 that such material constitutes “clean fill” and obtaining the written consent of the Port, which shall not be unreasonably withheld, conditioned or delayed. Furthermore, the Port shall respond to any request for consent within five (5) business days after the Port receives written request therefor. Lessee assumes ownership of and all risks of liability associated with, any excavation, removal, post-removal treatment or transportation of Contaminated Media on, to or from the Premises in connection with the construction of its Combined Sewer Overflow Project facilities on-site and the Port shall have no obligation to incur Environmental Cost associated with such Contaminated Media. Lessee shall have no obligation to incur Environmental Costs associated with any such Contaminated Media outside the excavations for any improvements Lessee constructs on the Premises and shall have no obligation to incur Environmental Costs for any preexisting Hazardous Substance contamination located outside such improvements.

7.7 Environmental Audits

7.7.1 Initial Audit

The initial audit of the Premises shall consist of the Port's environmental audit based on ASTM Standard E 1527-00, conducted by Hart Crowser, Inc., entitled Environmental Site Assessment Port Center Parcels, Swan Island, Portland, Oregon and dated September 3, 2002 ("Initial Audit"). The Initial Audit shall serve as a baseline for determination of future environmental liability, as described in more detail in Section 7.9.

7.7.2 Special Audit

If the Port, at any time during the Lease Term or any extension thereof, has reason to suspect that Hazardous Substances are being or have been used, handled, stored, generated, disposed, placed and/or transported contrary to the requirements of this Lease, in violation of applicable Environmental Laws, or in any manner that has resulted, or is likely to result, in a Hazardous Substance Release, then the Port may, after written communication of those reasons to Lessee, without limiting its other rights and remedies, conduct a special audit ("Special Audit") of the Premises and submerged lands in the vicinity of the Premises with respect to the environmental matters of concern to the Port, consistent with ASTM Standards for environmental site assessment and environmental compliance auditing or any equivalent successor standard promulgated by the United States Environmental Protection Agency. If a violation is found, Lessee will be required to reimburse the Port for the cost of the Special Audit. If no violation is found, the Port will pay for the Special Audit.

7.7.3 Exit Audit

At the expiration or termination of this Lease for any reason other than Lessee’s purchase of the Premises under the Sale Agreement, the Port and Lessee shall conduct, at Lessee’s sole expense, an Environmental Audit ("Exit Audit") of the Premises to determine: (i) the environmental condition of the Premises; (ii) whether any Hazardous Substance Release has occurred on or about the Premises during Lessee’s tenancy; and (iii) whether there is evidence of any violation of applicable Environmental Laws or the environmental provisions of this Lease. The scope of the Exit Audit shall be consistent with ASTM Standards E 1527 and E 1528 for environmental site assessment, or any equivalent successor standard promulgated by the United States Environmental Protection Agency. The Exit Audit shall be performed not more than sixty (60) days prior to the scheduled Expiration Date of this Lease or, in the event this Lease is terminated prior to the Expiration Date for any reason, the Exit Audit shall be completed within sixty (60) days of such actual termination date.

7.8 Environmental Inspection

The Port reserves the right at any time after reasonable notice to Lessee, to inspect the Premises, Lessee’s operations on and use of the Premises, and Lessee’s environmental records.

7.9 Lessee’s Liability

7.9.1 Hazardous Substance Releases

Lessee shall be responsible for, to the extent allowed by law, any Hazardous Substance Release on or from the Premises and the Environmental Cost arising therefrom, on other properties, in the air or in adjacent or nearby waterways (including groundwater) which results from or occurs in connection with Lessee’s occupancy or use of the Premises occurring at any time during the Lease Term or continuing after the Lease Term.

7.9.2 Conditions Not Associated With the Lessee and Undiscovered at the Time of Initial Audit

The Initial Audit shall be used as a baseline for determination of future Lessee liability. If the presence of a Hazardous Substance, a Hazardous Substance Release, violation of applicable Environmental Laws or violation of an environmental provision of this Lease is discovered or disclosed, that was not discovered or disclosed in the Initial Audit and it is not associated with the Lessee, its contractors or employees activities or omissions on the Premises, then Lessee and the Port shall perform an equally funded investigation to determine the cause of and responsibility for such matter. In the event the parties agree that the Port or the Lessee is responsible for such matter, the responsible party shall reimburse the other its Environmental Cost associated with the investigation and shall promptly perform corrective actions regarding such matter pursuant to the terms of this Lease.

7.9.3 Exception for Contaminated Media

The foregoing Section 7.9.2 is subject to the provisions of Section 7.6 above.

7.10 Port’s Liability for Hazardous Substance Releases

Subject to the provisions of Section 7.6, the Port shall only be responsible, to the extent required by law, for any Hazardous Substance Releases on or from the Property and the Environmental Cost arising therefrom, on other properties, in the air or in adjacent or nearby waterways (including groundwater) which results from or occurs in connection with Port’s acts or omissions or ownership or use of the Premises prior to Lessee’s occupancy or use of the Premises.

7.11 Environmental Remediation

7.11.1 Immediate Response

In the event of a violation of applicable Environmental Laws, a violation of an environmental provision of this Lease, a Hazardous Substance Release, or the threat of or reasonable suspicion of the same for which Lessee is responsible under this Lease, Lessee shall immediately undertake and diligently pursue all acts necessary or appropriate to correct the violation or investigate, contain, and stop, the Hazardous Substance Release and remove the Hazardous Substance.

7.11.2 Remediation

Lessee shall promptly undertake all actions necessary or appropriate to ensure that any Hazardous Substance Release on or from the Premises is remediated and that any violation of any applicable Environmental Laws or environmental provisions of this Lease are corrected. Lessee shall remediate, at Lessee’s sole expense, all Hazardous Substances for which Lessee is responsible under this Lease or under any applicable Environmental Laws, and shall restore the Premises or other affected property or water to its baseline condition, as established in the Initial Audit or to other condition acceptable to the Port. Rent shall not be reduced during any such remediation period.

7.11.3 Report to the Port

Within thirty (30) days following completion of any investigatory, containment, remediation and/or removal action required by this Lease, Lessee shall provide the Port with a written report outlining, in detail, what has been done and the results thereof.

7.11.4 Port’s Approval Rights

Except in the case of an emergency or an agency order requiring immediate action, Lessee shall give the Port advance notice before beginning any investigatory, remediation or removal procedures. The Port shall have the right to (i) review, comment on, and approve such procedures and (ii) require revisions to any procedures not in compliance with Environmental Laws. The Port will have the right to require Lessee to seek a statement from DEQ of "No Further Action."

7.12 Notice

Lessee shall promptly notify the Port upon becoming aware of: (i) a violation or alleged violation of any applicable Environmental Laws related to the Premises or to Lessee’s occupation or use of the Premises or any environmental provision of this Lease; and (ii) any Hazardous Substance Release on, under or adjacent to the Premises or threat of or reasonable suspicion of any of the same. If notice must be given on the weekend or after 5:00 p.m. on any business day, Lessee shall notify the Port by calling the Port’s emergency telephone number. That number is: (503) 335-1111.

7.13 Port’s Right to Perform on Behalf of Lessee

Except in the event of an emergency or an agency order requiring immediate action, the Port shall have the right, upon giving Lessee fifteen (15) days’ written notice, to perform its obligations arising under this Lease and charge Lessee the resulting Environmental Cost, plus a Delinquency Charge thereon from the date any funds were expended by the Port. The Port may not commence performance on behalf of Lessee under this Section if, within the fifteen (15) day notice period, Lessee promptly begins and diligently pursues to completion the performance of the obligations set forth in the Port’s notice.

8.  INDEMNITY, INSURANCE

8.1 General Indemnity; Reimbursement for Damages

To the extent allowed under Oregon law, Lessee agrees to defend, indemnify, and hold harmless the Port from and against, and reimburse the Port for all claims, actions, damages, injuries, costs, loss, or expenses incidental to the investigation and defense thereof, arising out of the acts or omissions of, or use or occupancy of the Premises by Lessee, its agents, contractors, employees or assignee(s). To the extent allowed under Oregon law, the Port agrees to indemnify, hold harmless and defend Lessee, its commissioners, officers and employees from and against and to reimburse Lessee for all claims, actions, damages, injuries, costs, loss or expenses incidental to the investigation and defense thereof, arising out of the acts or omissions of, or the use or occupancy of the Premises by the Port, its agents, contractors or employees.

8.2 Insurance Requirements

8.2.1 Statement of Self Insurance

The Port understands that Lessee is now and historically has been covered for property and liability exposures through major worldwide insurance programs with large self-insured retentions. Losses that fall within retained levels are paid through the financial resources of the Lessee and are administered under Lessee's "Self Administration Claims Program." The Port's ordinary and usual contractual insurance requirements fall within the level of such retention. The Port accepts Lessee's said program in lieu of and in complete fulfillment of the Port's insurance requirements so long as such self-insurance program is in effect. Lessee will furnish to the Port a certificate evidencing that such a program is in effect, and Lessee will notify the Port in writing if at any time during the term of this Lease or any extension thereof if such program is discontinued.

8.2.2 Certificates; Notice of Cancellation

On or before the Effective Date and thereafter during the Lease Term, Lessee shall provide the Port with current certificates of insurance, executed by a duly authorized representative of each insurer, as evidence of all insurance policies required under this Section. No insurance policy may be canceled, materially reduced, or non-renewed without at least thirty (30) days’ prior written notice being given to the Port. Insurance must be maintained without any lapse in coverage during the Lease Term. Insurance allowed to lapse without Port consent shall be deemed an immediate Event of Default under this Lease; provided that, if Lessee should complete its Combined Sewer Overflow Project early and terminate this Lease, the obligation to maintain insurance and provide notification to the Port shall expire with termination. The Port shall also be given certified copies of Lessee’s policies of insurance, upon request.

8.2.3 Additional Insured; Separation of Insureds

The Port shall be named as an additional insured in each general liability policy. Such insurance shall provide cross-liability coverage equivalent to the standard Separation of Insureds clause published by the Insurance Services Office ("ISO"), or its successor organization. Lessee shall require each contractor entering onto the Premises for construction purposes to name the Port as an additional insured on any policy of liability insurance related to the construction.

8.2.4 Primary Coverage

The required policies shall provide that the coverage is primary and will not seek any contribution from any insurance or self-insurance carried by the Port.

8.2.5 Company Ratings

All policies of insurance must be written by companies having an A.M. best rating of "A-" or better, or equivalent. The Port may, upon thirty (30) days’ written notice to Lessee, require Lessee to change any carrier whose rating drops below an "A-" rating.

8.3 Required Insurance

At all times during this Lease, Lessee shall provide and maintain the following types of coverage.

8.3.1 General Liability Insurance

Lessee and Lessee’s contractor(s) shall maintain an occurrence form commercial general liability policy or policies insuring against liability arising from the Premises (including loss of use thereof), operations, independent contractors, mobile equipment, products-completed operations, personal injury and advertising injury, and liability insured under an insured contract (including the tort liability of another assumed in a business contract) occurring on or in any way related to the Premises or occasioned by reason of the operations of Lessee. Such coverage shall include coverage for explosion, collapse, and underground ("xcu" excavation) hazards. Such coverage shall be written on an ISO form CG 00 01 01 96 (or a substitute form providing equivalent coverage) in an amount of not less than TWO MILLION DOLLARS ($2,000,000.00) per occurrence.

8.3.2 Automobile Liability Insurance

Lessee shall provide a certificate of self-insurance and Lessee’s contractor(s) shall maintain an automobile liability policy or policies insuring against liability for bodily injury, death, or damage to property, including loss of use thereof, and relating in any way to the use, loading, or unloading of any of Lessee’s automobiles (including owned, hired, and non-owned vehicles) on and around the Premises. Coverage shall be in an amount of not less than ONE MILLION DOLLARS ($1,000,000.00) each accident. Because mobile storage tanks may be considered automobiles when driven to and from the Premises, such coverage shall include liability for mobile equipment.

8.3.3 Workers’ Compensation/Employer’s Liability Insurance

Lessee and Lessee’s contractor(s) shall maintain in force workers compensation insurance for all of Lessee’s and Lessee’s contractor’s employees subject to the requirements of Oregon law.

8.3.4 Vessel Insurance

If vessels are used in connection with this Lease, Lessee or Lessee’s contractor shall maintain in force coverage for protection and indemnity insurance in an amount not less than $1,000,000 per occurrence and shall name the Port as an additional insured. Vessels shall be insured for water pollution liability losses in an amount not less than the greater of Oil Pollution Act statutory limit, $1,000,000 or the limits required by other state and federal environmental laws, if applicable. The master and crew of the vessel shall be covered for compensation under Jones Act. The Lessee or its contractor(s), whichever is applicable, shall provide evidence of the required coverage; if the vessel owner (if different) is required to carry the insurance, a copy of the owner’s certificate(s) of insurance shall be provided to the Port. If the work included work in or over water from vessels, any exclusion of such operations in the contractor’s or Lessee’s commercial general liability policy shall be removed by endorsement and a copy shall be provided to the Port.

8.3.5 Pollution Legal Liability

Lessee and Lessee’s contractor(s) shall maintain a separate policy or policies that extend coverage for claims arising out of environmental impairment liability for gradual, sudden and accidental discharge or spill of pollutants on land and on water, including first party clean up and remediation of the Premises. Such coverage shall specifically address the loading and unloading of fuel to and from the above ground storage tanks and mobile storage tanks, if applicable. Such coverage shall be extended to include the wrongful delivery or misdelivery of fuel. Coverage shall be in an amount of not less than FIVE MILLION DOLLARS ($5,000,000) per claim. Coverage may be a combination of endorsements to Lessee’s commercial general liability and automobile liability policies, stand-alone insurance and self-insurance, subject to approval by the Port.

8.3.6 Lessee’s Risks

Lessee shall be responsible for obtaining any insurance it deems necessary to cover its own risks.

8.4 Waiver of Subrogation

Lessee waives any right of action that it and/or its insurance carrier(s) might have against the Port (including the Port’s commissioners, officers, employees and agents) for any loss, cost, damage, or expense (for purposes of this paragraph, collectively "Loss") covered by any property insurance policy or policies or any self-insurance maintained or required to be maintained pursuant to this Lease. The Port waives any right of action that it and/or its insurance carrier(s) might have against Lessee (including Lessee’s commissioners, officers, employees and agents) for any loss, cost, damage or expense covered by any property insurance policy or policies maintained by the Port.

8.5 Survival of Indemnities

The indemnity agreements set forth in Section 8 shall survive the expiration or earlier termination of the Lease and be fully enforceable thereafter.

9.  TERMINATION

9.1 Duties on Termination

Upon termination of the Lease for any reason other than purchase of the Premises under the Sale Agreement, Lessee shall deliver all keys to the Port and surrender the Premises to the Port in the condition in which the Premises were received, subject to reasonable wear and tear, or to other condition acceptable to the Port.

9.2 Lessee’s Personal Property

9.2.1 Removal Requirement

Personal property shall remain the property of Lessee if placed on the Premises by Lessee. At or before the termination of this Lease, if Lessee does not purchase the Premises, Lessee, at Lessee’s expense, shall remove from the Premises any and all of Lessee’s removable Personal Property and shall repair any damage to the Premises resulting from the installation or removal of such Personal Property. Title to any items of Lessee’s Personal Property which remain on the Premises after the termination date of this Lease may, after reasonable notice to Lessee, be taken by the Port, and the Port shall have the option, in its sole discretion, of: (i) retaining any or all of such Personal Property without any requirement to account to Lessee therefor; or (ii) removing and disposing of any or all of such Personal Property and recovering the cost thereof, plus interest from the date of expenditure at the Port’s then-current interest rate, from Lessee upon demand.

9.2.2 Holding Over

If Lessee does not purchase the Premises and holds over after this Lease terminates, Lessee shall be deemed a month-to-month holdover tenant or a tenant at sufferance. In the event the Port deems Lessee as a month-to-month holdover tenant, Lessee shall remain bound by this Lease, except that the tenancy shall be from month-to-month, subject to the payment of all Rent in advance. Such holdover tenancy may be terminated at any time upon one month’s written notice from the Port to Lessee. In the event the Port deems Lessee as a tenant at sufferance, the Port shall be entitled to take immediate action to evict Lessee. Nothing contained herein shall be construed as consent by the Port for Lessee to hold over. In the event that Lessee is a holdover tenant or a tenant at sufferance beyond June 30 of any year, Lessee shall be responsible for payment of any assessed property taxes for the entire following tax year without proration.

10.  DEFAULT

10.1 Event of Default

The occurrence of any of the following shall constitute an Event of Default (also referred to as a "Default").

10.1.1 Default in Rent

Failure of Lessee to pay any Rent or other amount payable to the Port as provided herein within fifteen (15) days of the date due. Notice by the Port that Rent or such other amount is past due shall be required. The Port shall provide fifteen (15) days notice to Lessee of non-receipt of rent and Lessee shall have fifteen (15) days after receipt of notice to pay any past due rent.

10.1.2 Default in Other Covenants

Failure to substantially comply with a material provision of this Lease may be considered a Default. Lessee shall have thirty (30) days after receipt of written notice by the Port describing the nature of the Default to cure the Default. If the Default is of such a nature that it cannot be completely remedied within the thirty (30)-day period, this provision shall be complied with if Lessee begins correction of the Default within the thirty (30)-day period and thereafter proceeds in good faith and with all reasonable diligence to effect the cure as soon as practical and to the reasonable satisfaction of the Port.

10.1.3 Abandonment

Failure of Lessee for sixty (60) or more continuous days to use and occupy the Premises for the purposes permitted under this Lease, unless such failure is excused under other provisions of this Lease. In the case of abandonment, reasonable notice that an Event of Default has occurred shall be required from the Port.

10.2 Remedies on Default

Immediately following an uncured Event of Default or an Event of Default for which there is no cure period, the Port may exercise any or all of the following remedies, in addition to any other rights and remedies provided elsewhere in this Lease or otherwise at law or in equity.

10.2.1 Re-entry

Without accepting surrender, the Port may re-enter the Premises, or any part thereof, by suitable action or proceeding at law, or by force or otherwise, without being liable for indictment, prosecution, or damages therefor and may repossess the Premises and remove any person or property therefrom, to the end that the Port may have, hold, and enjoy the Premises.

10.2.2 Reletting

Following re-entry, the Port may relet the whole or any part of the Premises from time to time, either in the name of the Port or otherwise, to such tenants, for such terms ending before, on or after the Expiration Date of this Lease, at such rentals and upon such conditions (including concessions and free rent periods) as the Port may determine to be appropriate. To the extent allowed under Oregon law, the Port shall not be liable for refusal to relet the Premises, or, in the event of any such reletting, for failure to collect any rent due upon such reletting; and no such failure shall operate to relieve Lessee of any liability under this Lease or otherwise affect any such liability. The Port may make such physical changes to the Premises as the Port considers advisable or necessary in connection with any such reletting or proposed reletting, without relieving Lessee of any liability under this Lease or otherwise affecting Lessee’s liability. If the Port has other unleased space, the Port shall have no obligation to attempt to relet the Premises prior to leasing such other unleased space. To the extent allowed under Oregon law, the Port shall have no obligation to mitigate Lessee’s damages and shall not be required to attempt to relet the Premises to a potential lessee with whom the Port has been negotiating a lease for other space owned by the Port or to whom the Port has shown other space owned by the Port. If the Port has relet all or any part of the Premises for the period which otherwise would have constituted all or any part of the unexpired portion of the Lease Term, the amount of Rent reserved on such reletting shall be deemed, prima facie, to be the fair and reasonable rental value for the part or the whole of the Premises so relet during the term of the reletting. Acts of maintenance or preservation or efforts to relet the Premises or the appointment of a receiver upon initiative of the Port to protect the Port’s interest under this Lease shall not constitute a termination of the Lease or an acceptance of surrender of the Lease.

10.2.3 Rent Recovery

Whether or not the Port retakes possession or relets the Premises, the Port shall have the right to recover unpaid Rents and all damages caused by the Default. Damages shall include, without limitation: (i) all Rents otherwise owed under this Lease (subject only to Oregon laws concerning mitigation of damages); (ii) all legal expenses and other related costs incurred by the Port as a result of Lessee’s Default; (iii) that portion of any leasing commission paid by the Port as a result of this Lease which can be attributed to the unexpired portion of this Lease; (iv) all costs incurred by the Port in restoring the Premises to good order and condition or in remodeling, renovating or otherwise preparing the Premises for reletting; and (v) all costs incurred by the Port in reletting the Premises, including, without limitation, any brokerage commissions and the value of the Port’s staff time expended as a result of the Default.

10.2.4 Recovery of Damages

The Port may sue periodically for damages as they accrue without barring a later action for further damages. Nothing in this Lease will be deemed to require the Port to await the date on which the Lease Term expires to bring or maintain any suit or action respecting this Lease. The Port may, in one action, recover accrued damages, plus damages attributable to the remaining Lease Term, including, but not limited to, all Rent due and payment for damages to the Premises. If the Port has relet all or any part of the Premises for all or any part of the period remaining on the Lease Term, this amount will be credited to Lessee, less all expenses incurred in reletting.

10.3 Termination of Lease

The Port may terminate this Lease upon the occurrence of an uncured Event of Default by giving Lessee written notice that this Lease is terminated. However, even if Lessee breaches this Lease, this Lease shall continue for so long as the Port does not terminate Lessee’s right to possession, and the Port may enforce all of its rights and remedies under this Lease, including the right to recover the Rents as they become due under this Lease. Acts of maintenance or preservation or efforts to relet the Premises or the appointment of a receiver upon initiative of the Port to protect the Port’s interest under this Lease shall not constitute a termination of Lessee’s rights to possession unless written notice of termination is given by the Port to Lessee. Any notice to terminate may be given before or within the cure period for Default and may be included in a notice of failure of compliance. No such termination shall prejudice the Port’s right to claims for damages for such breach or any other rights and remedies of the Port.

10.4 Remedies Cumulative and Nonexclusive

Each right and remedy in this Lease will be cumulative and will be in addition to every other right or remedy in this Lease or existing at law or in equity, including, without limitation, suits for injunctive relief and specific performance. The exercise by the Port of any such rights or remedies will not preclude the simultaneous or later exercise by the Port of any other such rights or remedies. All such rights and remedies are nonexclusive.

10.5 Port Curing of Lessee’s Defaults

If Lessee shall Default in the performance of any of Lessee’s obligations under this Lease, the Port, without waiving such Default, may (but shall not be obligated to) perform the same for the account of and at the expense of Lessee, without notice in a case of emergency and in any other cases after giving a notice of Default if and as required by Section 10.1. The Port shall not be liable to Lessee for any claim for damages resulting from such action by the Port. Lessee agrees to reimburse the Port upon demand, as additional Rent, for any undisputed amounts the Port may spend in complying with the terms of this Lease on behalf of Lessee. Any sums to be so reimbursed shall bear interest from the date of expenditure at the Delinquency Rate until paid.

10.6 Default by Port

In the event of any default by the Port, Lessee’s exclusive remedy shall be an action for damages but not for consequential or punitive damages. Prior to being entitled to maintain any such action, Lessee shall give the Port written notice specifying such default with particularity, and the Port shall have thirty (30) days within which to cure any such default, or if such default cannot reasonably be cured within thirty (30) days, the Port shall then have thirty (30) days to commence cure and shall diligently prosecute cure to completion. Unless and until the Port fails to so cure such default after such notice, Lessee shall not have any remedy or cause of action by reason thereof.

11.  ASSIGNMENT, SUBLEASE, MORTGAGE, AND TRANSFER

11.1 General Prohibition

This Lease is personal to Lessee. Therefore, except as provided in Section 11.2, no part of the Premises and no interest in this Lease may be assigned, pledged, transferred, mortgaged, or subleased by Lessee nor may a right-of-use of any portion of the Premises be conveyed or conferred on any third party by Lessee by any other means. Except as expressly allowed by Section 11.2, any attempted assignment or sublease by Lessee shall be void and shall be an immediate Lessee Default.

11.2 Right to Sublet to Lessee’s Contractor

Lessee shall have the right to assign or sublet all or a portion of the Premises to Lessee’s general contractor performing the Permitted Uses so long as: (a) after such assignment, Lessee (i.e., the City of Portland) shall not be released from, and shall remain directly liable under, this Lease; (b) Lessee shall provide the Port with at least thirty (30) days prior written notice of Lessee’s intent to assign its interest under this Lease, together with the documentation necessary to show that the proposed assignee is Lessee’s general contractor for the Permitted Uses; and (c) within thirty (30) days after the transfer has occurred, Lessee shall deliver to the Port a copy of the written assignment and assumption executed by Lessee and the Lessee’s contractor documenting the assignment by Lessee and the assumption by the contractor of all of Lessee’s obligations arising under this Lease after the date of transfer.

11.3 Transfer by the Port

At any time after the Commencement Date of this Lease, the Port shall have the right to transfer its interest in this Lease or in the Premises, subject to Lessee’s rights under the Sale Agreement to purchase the Premises. In the event of such a transfer, Lessee shall recognize the transferee as the new Lessor under the Lease. Thereafter, the Port shall be relieved, upon notification to Lessee of the name and address of the Port’s successor, of any obligations accruing from and after the date of the transfer, so long as the transferee has agreed with the Port to assume all obligations of the Port under this Lease.

11.4 Estoppel Certificates

Lessee agrees to execute and deliver to the Port, at any time and within thirty (30) days after written request, a statement certifying, among other things: (i) that this Lease is unmodified and is in full force and effect (or if there have been modifications, stating the modifications, including any amendments to the Lease); (ii) the dates to which Rent has been paid; (iii) whether or not the Port is in violation in performance of any of its obligations under this Lease and, if so, specifying the nature of each such violation; and (iv) whether or not any event has occurred which, with the giving of notice, the passage of time, or both, would constitute such a violation by the Port and, if so, specifying the nature of each such event. Lessee shall also include in any such statement such other information concerning this Lease as the Port reasonably requests. The parties agree that any statement delivered pursuant to this Section shall be deemed a representation and warranty by Lessee which may be relied upon by the Port and by potential or actual purchasers and lenders with whom the Port may be dealing, regardless of independent investigation.

12.  GENERAL PROVISIONS

12.1 Covenants, Conditions, and Restrictions

This Lease is subject and subordinate to the effect of any covenants, conditions, restrictions, easements, mortgages, deeds of trust, ground leases, rights of way, and any other matters of record now imposed upon the Premises and to any applicable land use or zoning laws or regulations.

12.2 Governing Law

This Lease shall be governed and construed according to the laws of the State of Oregon. Venue shall be in Multnomah County, Oregon.

12.3 Mediation

If any dispute should arise between the Port and Lessee 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.

12.4 Port and Lessee

References to the Port and to Lessee herein are intended to include the commissioners, directors, officers, employees, and agents of both when acting in the course and scope of their employment or as an agent thereof.

12.5 No Benefit to Third Parties

The Port and Lessee are the only parties to this Lease and, as such, are the only parties entitled to enforce its terms. Unless specifically provided otherwise in this Lease, nothing in this Lease gives or shall be construed to give or provide any benefit, direct, indirect, or otherwise, to third parties unless third persons are expressly described as intended to be beneficiaries of its terms.

12.6 Notices

All notices required under this Lease shall be in writing and shall be deemed properly served if hand delivered (including by reputable overnight courier) or sent by certified mail, return receipt requested, to the last address previously furnished by the parties hereto. Until hereafter changed by the parties by notice in writing, notices shall be sent to the parties at the addresses set forth below:

If by mail or by hand delivery to Lessee:

Westside CSO Project Manager

Bureau of Environmental Services

1120 SW Fifth Ave., Room 1000
Portland, OR 97204

       Property Manager

       Bureau of Environmental Services

       1120 SW Fifth Ave., Room 1000

       Portland, OR 97204

If by mail to the Port:

The Port of Portland
P.O. Box 3529
Portland, OR 97208
Attention: Manager, Property & Development Services

With a copy to:

The Port of Portland
P.O. Box 3529
Portland, OR 97208
Attention: Legal Department

If by hand delivery to the Port:

The Port of Portland
121 NW Everett
Portland, OR 97209
Attention: Manager, Property & Development Services

With a copy to:

The Port of Portland
121 NW Everett
Portland, OR 97209
Attention: Legal Department

If mailed, the notice shall be deemed received five (5) days after the date such notice is deposited in a post office of the United States Postal Service, postage prepaid, return receipt requested, certified mail. If delivered by hand, the notice shall be deemed received as of the date of delivery or refusal of delivery. The addresses to which notices are to be delivered may be changed by giving notice of such change in accordance with this notice provision. In order for notice to be deemed effectively given to the Port, notice must be sent to both Port addresses listed above.

12.7 Time is of the Essence

Time is of the essence in the performance of and adherence to each and every covenant and condition of this Lease.

12.8 Nonwaiver

Waiver by the Port of strict performance of any provision of this Lease shall not be deemed a waiver of or prejudice the Port’s right to require strict performance of the same provision in the future or of any other provision of this Lease.

12.9 Survival

Any covenant or condition (including, but not limited to, indemnification agreements) set forth in this Lease, the full performance of which is not specifically required prior to the expiration or earlier termination of this Lease, and any covenant or condition which by its terms is to survive the termination of this Lease shall survive the expiration or earlier termination of this Lease and shall remain fully enforceable thereafter.

12.10 Partial Invalidity

If any provision of this Lease is held to be invalid or unenforceable, the remainder of this Lease or the application of such provision to persons or circumstances other than those to which it is held invalid or unenforceable shall not be affected thereby, and each provision of this Lease shall be valid and enforceable to the fullest extent permitted by law.

12.11 No Light or Air Easement

The reduction or elimination of Lessee’s light, air, or view will not affect Lessee’s obligations under this Lease, nor will it create any liability of the Port to Lessee.

12.12 Lease Subject to Bonds and Ordinances

This Lease shall be subject and subordinate to the bonds and ordinances which create liens and encumbrances as are now on the land which constitutes the Premises herein.

12.13 Calculation of Time

Unless referred to as Business Days, all periods of time referred to in this Lease shall include Saturdays, Sundays, and Legal Holidays. However, if the last day of any period falls on a Saturday, Sunday, or Legal Holiday, then the period shall be extended to include the next day which is not a Saturday, Sunday or Legal Holiday. "Legal Holiday" shall mean any holiday observed by the Federal Government. "Business Days" shall mean Monday through Friday and shall exclude Saturday, Sunday, and Legal Holidays.

12.14 Headings

The article and section headings, table of contents and table of definitions contained herein are for convenience in reference and are not intended to define or limit the scope of any provisions of this Lease.

12.15 Exhibits Incorporated by Reference

All exhibits attached to this Lease are incorporated by reference herein for all purposes.

12.16 Modification

This Lease may not be modified except by a writing signed by the parties hereto.

12.17 No Brokers

Lessee and the Port each represent to one another that they have not dealt with any leasing agent or broker in connection with this Lease and each agrees to indemnify and hold harmless the other from and against all damages, costs, and expenses (including attorney, accountant and paralegal fees) arising in connection with any claim of an agent or broker alleging to have been retained by the other in connection with this Lease.

12.18 Attorney Fees

If a suit, action, or other proceeding of any nature whatsoever (including any administrative proceeding or any proceeding under the U.S. Bankruptcy Code including, but not limited to, any proceeding involving assumption or rejection of this Lease) is instituted in connection with any controversy arising out of this Lease or to interpret or enforce any rights or obligations hereunder, the prevailing party shall be entitled to recover attorney, paralegal, accountant, and other expert fees and all other fees, costs, and expenses actually incurred and reasonably necessary in connection therewith, as determined by the court at trial or on any appeal or petition for review, in addition to all other amounts provided by law.

12.19 Entire Agreement

This Lease represents the entire agreement between the Port and Lessee relating to Lessee’s leasing of the Premises and shall supersede all previous communications, representations, or agreements, whether oral or written, between the parties hereto with respect to such leasing. It is understood and agreed by Lessee that neither the Port nor the Port’s agents or employees have made any representations or promises with respect to this Lease or the making or entry into this Lease, except as expressly set forth in this Lease. No claim for liability or cause for termination shall be asserted by Lessee against the Port for, and the Port shall not be liable by reason of, any claimed breach of any representations or promises not expressly set forth in this Lease.

12.20 Provisions Applicable to Others

All provisions of this Lease governing Lessee’s use of the Premises and Lessee’s activities and conduct on, about or from the Premises shall apply to Lessee’s officers, agents, employees, invitees, and contractors.

12.21 Successors

The rights, liabilities, and remedies provided for herein shall extend to the heirs, legal representatives, and, so far as the terms of this Lease permit, successors and assigns of the parties hereto. The words ‘Port’ and ‘Lessee’ and their accompanying verbs or pronouns, wherever used in this Lease, shall apply equally to all persons, firms, or corporations which may be or become such parties hereto. As used in this Lease, the term ‘Port’ shall encompass all officers, directors, commissioners, employees, and agents of the Port when acting on behalf of the Port.

12.22 Joint and Several Obligations

If Lessee consists of more than one individual or entity, the obligations of all such individuals and entities shall be joint and several.

12.23 Execution of Multiple Counterparts

This Lease may be executed in two or more counterparts, each of which shall be an original, but all of which shall constitute one instrument.

12.24 Defined Terms

Capitalized terms shall have the meanings given them in the text of this Lease.

12.25 No Limit on Port’s Powers

Nothing in this Lease shall limit, in any way, the power and right of the Port to exercise its governmental rights and powers, including its powers of eminent domain.

12.26 No Limits on Lessee’s Powers

Nothing in this Lease shall limit, in any way, the power and right of the Lessee to exercise its governmental rights and powers, including its powers of eminent domain.

12.27 Non-Remonstrance

Lessee agrees to waive any rights it may have for the Premises to remonstrate against any proposed local improvement districts or similar public-shared funding mechanisms to fund future roadway improvements pertaining to Swan Island Industrial Park, including Port Center and Mocks Landing Industrial Park, including, but not limited to, widening and seismic improvements to the existing N. Going Street overpass bridge at the entrance to Swan Island Industrial Park and the widening of the roadway and installation of traffic light improvements to the intersection of N. Port Center Way and N. Going Street.

IN WITNESS HEREOF, the parties have subscribed their names hereto effective as of the year and date first written above.