This Lease Agreement involves
Title: PARKING LOT LEASE
Governing Law: Oregon Date: 2/10/2010
Industry: Footwear Law Firm: Garvey Schubert;Stoel Rives Sector: Consumer Cyclical
PARKING LOT LEASE
THIS PARKING LOT LEASE (“ Parking Lot Lease ”) is entered into this 9th day of February, 2010, between DP PARTNERS PORTLAND I, LLC , a Delaware limited liability company (“ Landlord ”) and LACROSSE FOOTWEAR, INC. , a Wisconsin corporation, and DANNER, INC. , a Wisconsin corporation (collectively, “ Tenant ”).
A. Concurrent with the execution of this Parking Lot Lease, Landlord and Tenant are entering into that Multi-Tenant Industrial Lease dated as of the date hereof (the “ Building Lease ”) covering 58,788 rentable square feet within the LogistiCourt at Portal Way building located at 18201 NE Portal Way, Suite 101, Portland, Oregon 97230, as more particularly described in the Building Lease (the “ Building Premises ”). The Building Premises are located within that industrial development owned by Landlord and commonly known as LogistiCourt at Portal Way (the “ Project ”).
B. In order to provide additional parking for Tenant in connection with its business operations at the Building Premises, Landlord intends to acquire from the Portland Development Commission, the designated urban renewal agency of the City of Portland (the “ PDC ”), a perpetual, exclusive easement covering approximately 1.17 acres of land located adjacent to the Project as depicted on the attached Exhibit A (the “ Parking Premises ”), pursuant to that Parking Lot Easement Agreement substantially in the form attached hereto as Exhibit B (the “ Parking Lot Easement ”).
C. Upon the execution and recordation of the Parking Lot Easement, Landlord will design, permit and construct improvements to provide approximately 128 parking spaces (but not less than 120 parking spaces) on the Parking Premises for the exclusive use by Tenant and its employees, suppliers, shippers, customers, contractors and invitees, as provided in this Parking Lot Lease.
D. Therefore, in consideration of the mutual covenants contained herein and in the Building Lease, Landlord wishes to lease the Parking Premises to Tenant and Tenant wishes to lease the Parking Premises from Landlord, on the terms and conditions set forth in this Parking Lot Lease.
1. TERM; POSSESSION .
1.1 Demise . Landlord hereby leases the Parking Premises to Tenant, and Tenant hereby leases the Parking Premises from Landlord, on the term and conditions set forth in this Parking Lot Lease.
1.2 Term . The lease term shall commence on May 1, 2010 (the “ Commencement Date ”) and shall end on August 31, 2015, subject to extension or sooner termination as provided in this Parking Lot Lease. Notwithstanding the foregoing or any other provision herein, this Parking Lot Lease shall be coterminous with the Building Lease and, upon the expiration or termination of the Building Lease for any reason, this Parking Lot Lease shall likewise automatically terminate on the same date as the expiration or termination of the Building Lease. For purposes of this Parking Lot Lease, the “ Term ” shall mean the initial lease term and any renewals or extensions thereof, subject to sooner termination as provided in this Parking Lot Lease.
1.3 Initial Construction of the Parking Premises . Landlord shall, at its sole cost and expense, acquire rights to the Parking Premises pursuant to the Parking Lot Easement and design, permit and construct a paved parking lot on the Parking Premises with approximately 128 parking spaces (but in no event less than 120 parking spaces), including without limitation all landscaping, lighting, curbs, painting/striping, and stormwater facilities, and construct, at its sole cost and expense, the associated improvements to the Project and adjacent PDC land required by PDC or applicable laws, all substantially as shown on the Permit Plans (defined below) (such parking lot improvements, together with the associated improvements to the Project and adjacent PDC land, are collectively referred to herein as the “ Parking Lot Improvements ”). The “ Permit Plans ” means that Permit Set of drawings dated January 8, 2010 prepared by Group MacKenzie and identified in the Index of Drawings on page 1 of Exhibit A attached hereto, a copy of which Permit Plans has been provided to Tenant. On January 8, 2010, Landlord submitted the Permit Plans to the City of Portland in connection with its application for a construction permit for the Parking Lot Improvements. Landlord agrees that the Parking Lot Improvements shall be completed in a good and workmanlike manner substantially in
accordance with the Permit Plans, and in compliance with all laws, rules and regulations of governmental agencies and authorities and the provisions of the Parking Lot Easement. Subject to Force Majeure Delays (defined in Section 15.11 ), Landlord shall substantially complete the construction of the Parking Lot Improvements and obtain all governmental approvals necessary for Tenant’s use of the Parking Premises as a parking lot by the date of issuance of the certificate of occupancy by the City of Portland for Tenant’s occupancy of the Building Premises for the conduct of its manufacturing business (but not later than May 1, 2010). Once the initial construction of the Parking Lot Improvements are completed in a good and workmanlike manner and in accordance with this Lease and applicable laws, Landlord shall have no further obligation to perform any work or make any improvements, alterations, repairs or replacements on or to the same.
1.4 Extension Option . Tenant is hereby granted three (3) successive options (each an “ Option ”; collectively, “ Options ”) to extend the Term for an additional term of five (5) years for each Option (each an “ Extension Term ”), beginning on the day after the expiration of the then-current Term and continuing for five (5) years (unless terminated sooner pursuant to any other terms or provisions of this Parking Lot Lease), on all of the same terms and conditions as set forth in this Parking Lot Lease, including without limitation the payment of Monthly Rent and, if applicable, Accelerated Rent (as such terms are defined in Section 2 below). Each Option may be exercised by Tenant only by delivery of written notice thereof to Landlord (“ Extension Notice ”), which notice must be received by Landlord at least six (6) full calendar months before the expiration of the then-current Term and, once given, shall be irrevocable and binding on both parties; provided, however, that Tenant shall be deemed to have automatically exercised an extension option under this Parking Lot Lease if Tenant timely exercises an extension option expressly set forth in the Building Lease covering the same period. If Tenant fails to timely deliver such written notice (and Tenant is not deemed to have automatically exercised an extension option as provided by the foregoing sentence), or if this Parking Lot Lease is terminated pursuant to any other terms or provision of this Parking Lot Lease prior to the expiration of the Term, the Options shall terminate, and Tenant shall have no right to renew or extend the Parking Lot Lease. Each Option shall be exercisable by Tenant on the express condition that at the time of delivery of Tenant’s notice of its election to exercise the Option, and at all times prior to the commencement of the Extension Term, Tenant shall not be in default under this Parking Lot Lease beyond any applicable notice and cure period.
2. RENTAL .
2.1 Initial Rent . By not later than three (3) business days after the date of recordation of the Parking Lot Easement, Tenant shall pay Landlord the sum of One Hundred Thousand and No/100 Dollars ($100,000.00), as its initial rent payment for the Parking Premises (“ Initial Rent ”). Tenant shall receive full credit towards the Initial Rent for all payments made by Tenant pursuant to that reimbursement letter dated December 1, 2009 between Landlord and Tenant (the “ Reimbursement Letter ”). Notwithstanding the foregoing or any other provision in this Parking Lot Lease to the contrary, in the event all of the conditions subsequent set forth in Exhibit C hereto are not satisfied and Landlord or Tenant terminates this Parking Lot Lease as a result thereof, Landlord shall refund the Initial Rent to Tenant, less any sums paid or payable to Landlord pursuant to the terms of the Reimbursement Letter. Notwithstanding anything in this Parking Lot Lease or the Reimbursement Letter to the contrary, Tenant shall only be obligated, in aggregating the payments under the Reimbursement Agreement and the payment of the Initial Rent under this Section 3.1 , to pay Landlord, in the aggregate, a maximum of $100,000.
2.2 Monthly Rent . During the Term (including any Extension Term), Tenant shall pay Landlord (or its designee), as monthly rent, a sum equal to the total monthly payments of principal and/or interest required to be paid by Landlord under the Parking Lot Loan (defined in Exhibit C hereto) (“ Monthly Rent ”) ( e.g. , if the original principal amount of the Parking Lot Loan is $650,000.00 and it is fully amortized over 20 years at 3% annual interest rate, the Monthly Rent shall be $3,604.88 per month). Each installment of Monthly Rent shall be due and payable to Landlord at least five (5) business days prior to the date that Landlord is required to make its monthly payment of principal and/or interest to PDC under the Parking Lot Loan, unless Landlord has directed that such payment be made directly to PDC in which case Tenant shall make such payment directly to PDC on or before the date due under the Parking Lot Loan. Landlord shall use commercially reasonable efforts to cause the monthly payments of principal and/or interest under the Parking Lot Loan to be payable on the first day of each month during the Term, commencing on May 1, 2010 and, following execution of the Parking Lot Loan documentation, Landlord will give Tenant notice of such payment due date. In addition to Monthly Rent and any other charges payable by Tenant hereunder, Tenant shall pay or reimburse Landlord for all costs, charges and expenses incurred by Landlord with respect to the Parking Lot Loan that are attributable to Tenant’s failure to pay such Monthly Rent or other charges when due.
2.3 Accelerated Rent . In the event of the expiration, termination, nonrenewal or nonextension of this Parking Lot Lease for any reason (other than solely as a result of a default by Landlord under this Parking Lot Lease) or if Tenant vacates the Building Premises for any reason (other than solely as a result of a default by Landlord under this Parking Lot Lease), in either case prior to the payment in full of the Parking Lot Loan, Tenant shall pay Landlord (or its designee) on the date of such event a sum equal to the total outstanding principal and accrued unpaid interest due on the Parking Lot Loan as of the date of such termination, expiration, nonextension or vacation (the “ Accelerated Rent ”), as additional rent, excluding any past due payments, penalties or interest charges attributable to Landlord’s failure to pay the Parking Lot Loan payments when due under the Parking Lot Loan documents (unless such failure is attributable to Tenant’s default under this Parking Lot Lease); provided, however, that Tenant shall receive a credit against such Accelerated Rent in an amount equal to the net condemnation proceeds received by Landlord (after deducting all costs and expenses incurred by Landlord in connection with such condemnation) in the case of termination of this Parking Lot Lease due to condemnation pursuant to Section 8 below.
2.4 Time and Place of Payment . The Monthly Rent and all additional rent and other charges payable to Landlord under this Parking Lot Lease will be paid on or before the specified due date at the address for Landlord set forth in this Parking Lot Lease, or such other address as Landlord may from time to time designate in writing to Tenant. Rent is uniformly apportionable day to day.
2.5 Interest . If any payment of Monthly Rent or any other amount payable by Tenant hereunder is not received by Landlord by the date when due, it shall bear interest at the Interest Rate from the date due until paid. All interest, and any late charges imposed pursuant to Section 2.6 below, shall be considered additional rent due from Tenant to Landlord under the terms of this Parking Lot Lease. As used in this Parking Lot Lease, the term “ Interest Rate ” shall mean the lesser of: (a) the prime rate announced from time to time by Wells Fargo Bank or, if Wells Fargo Bank ceases to exist or ceases to publish such rate, then the rate announced from time to time by the largest (as measured by deposits) chartered operating bank operating in Oregon, as its “prime rate” or “reference rate”, plus one percent (1%) per annum; or (b) the maximum rate permitted by law.
2.6 Late Charges . Tenant acknowledges that, in addition to interest costs, the late payments by Tenant to Landlord of any rent or other sums due under this Parking Lot Lease will cause Landlord to incur costs not contemplated by this Parking Lot Lease, the exact amount of such costs being extremely difficult and impractical to fix. Such other costs include, without limitation, processing, administrative and accounting charges and late charges that may be imposed on Landlord by the terms of any mortgage, deed of trust or related loan documents encumbering the Parking Premises. Accordingly, if any rent or any other amount payable by Tenant hereunder is not received by Landlord by the due date thereof, Tenant shall pay to Landlord an additional sum of five percent (5%) of the overdue amount as a late charge, but in no event more than the maximum late charge allowed by law. The parties agree that such late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of any late payment as hereinabove referred to by Tenant, and the payment of late charges and interest are distinct and separate in that the payment of interest is to compensate Landlord for the use of Landlord’s money by Tenant, while the payment of late charges is to compensate Landlord for Landlord’s processing, administrative and other costs incurred by Landlord as a result of Tenant’s delinquent payments. Acceptance of a late charge or interest shall not constitute a waiver of Tenant’s default with respect to the overdue amount or prevent Landlord from exercising any of the other rights and remedies available to Landlord under this Parking Lot Lease or at law and/or in equity now or hereafter in effect.
2.7 Triple Net Lease Provision . All payments required to be paid by Tenant under this Parking Lot Lease will constitute rent. This is intended to be a triple net lease, meaning, except as otherwise expressly provided in this Parking Lot Lease, that Tenant shall pay all taxes, assessments, utilities, insurance, maintenance, repairs and replacements (whether ordinary, extraordinary, capital or otherwise), and all other costs, charges and expenses of every type relating to the Parking Premises after Landlord’s completion of the initial Parking Lot Improvements and commencement of the Term (excluding any such expenses to the extent attributable to the negligence or willful misconduct of Landlord or its agents, employees or contractors, which shall be the responsibility of Landlord), in addition to the rent payable by Tenant under Section 2.1 , Section 2.2 and Section 2.3 . All rent and additional rent shall be received by Landlord without set-off, offset, abatement, or deduction of any kind.
2.8 Prepayment of Monthly Rent or Accelerated Rent . Tenant shall have the right to prepay the Monthly Rent, or any Accelerated Rent, in whole or in part, at any time without premium or penalty, and Landlord shall promptly apply all such prepaid rent to the balance owing on the Parking Lot Loan. If Tenant
prepays an amount sufficient for Landlord to pay the Parking Lot Loan in full, then Tenant shall have no obligation to pay any further Monthly Rent to Landlord under this Parking Lot Lease.
3. USE OF PARKING PREMISES .
3.1 Permitted Use . Tenant may use the Parking Premises only for automobile, truck and trailer parking, and no other purpose without the prior written consent of Landlord, which consent will not be unreasonably withheld or delayed.
3.2 Compliance with Laws . In connection with its use, Tenant shall comply at its expense with all applicable zoning, laws, regulations, ordinances and requirements of any public authority governing and regulating the use and occupancy of the Parking Premises, and all conditions, covenants and restrictions of record now or hereafter in force.
3.3 Hazardous Substances .
(a) Landlord represents and warrants to Tenant that to the best of Landlord’s knowledge as of the date hereof, (i) there is no Hazardous Substance (defined below) on, in or under the Parking Premises in violation of any Environmental Law (defined below) as of the Commencement Date, (ii) the Parking Premises are not in violation of any Environmental Law, (iii) Landlord has not received any notice from any governmental authority alleging or threatening that any part of the Parking Premises is in violation of an Environmental Law, and (iv) there are no pending or threatened claims, suits, enforcement actions or other litigation related to the presence of Hazardous Materials in, under or about the Parking Premises. To the fullest extent permitted by law, Landlord agrees to promptly indemnify, protect, defend and hold harmless Tenant and Tenant’s members, partners, officers, directors, shareholders, employees, agents, successors and assigns for, from and against any and all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines, expenses and costs (including, without limitation, clean-up, removal, remediation and restoration costs, sums paid in settlement of claims, attorneys’ fees, consultant fees and expert fees and court costs) that arise or result from the presence or release of Hazardous Substances on, in, under or about the Parking Premises and that are attributable to (a) any act or omission of Landlord or any of Landlord’s agents, employees or contractors, or (b) any use, ownership or occupancy of the Parking Premises prior to the Commencement Date, including without limitation any violation of any Environmental Law attributable to the period prior to Commencement Date, or (c) that arise or result from any breach of the representations or warranties of Landlord contained in this Section 3.3(a) . For purposes of this Parking Lot Lease, the phrase “to Landlord’s knowledge” or similar phrase shall mean only the actual (not implied, imputed or constructive) knowledge of Kirk L. Olsen, John Atwell and Michael C. Dermody, each of which are officers of Landlord and are the only officers of Landlord involved in the acquisition of the Parking Lot Easement and development of the Parking Premises in any material respect. The provisions of this Section 3.3(a) will survive the expiration or earlier termination of this Parking Lot Lease.
(b) Tenant shall not cause or permit any Hazardous Substances to be brought upon, kept, generated, treated, stored, used or otherwise handled in or about or disposed of on the Parking Premises by Tenant, its agents, employees, contractors or invitees, except to the extent reasonably required for the uses permitted by Section 3.1 above and then only in strict compliance with all Environmental Laws. Tenant shall not cause or permit any Hazardous Substance to be spilled, leaked, disposed of or otherwise released in or on the Parking Premises. In the event of a leak, spill or release of a Hazardous Substance on the Parking Premises or the threat of or reasonable suspicion of the same, Tenant shall immediately undertake or cause to be undertaken all emergency response necessary to contain, clean up and remove the Hazardous Substance and shall undertake or cause to be undertaken within a reasonable time all investigatory, remedial and/or removal action necessary or appropriate to ensure that any contamination by the Hazardous Substances is eliminated as required by applicable Environmental Law. Within thirty (30) days following the completion of such investigatory, remedial and/or removal action, Tenant shall provide Landlord with a certification reasonably acceptable to Landlord signed by an independent registered professional engineer that such contamination has been so eliminated.
(c) Tenant shall immediately notify Landlord upon becoming aware of (i) any such spill, leak, disposal or release of any Hazardous Substance in or on the Parking Premises or (ii) any notice or communication from any governmental agency or other person directed to Tenant relating to any Hazardous Substance on, under or adjacent to the Parking Premises or any violation of any Environmental Law with respect to the Parking Premises or activities thereon. Tenant shall at all times comply with all Environmental Laws applicable to Tenant and its use and occupancy of the Parking Premises.
(d) To the fullest extent permitted by law, Tenant agrees to promptly indemnify, protect, defend and hold harmless Landlord and Landlord’s members, partners, officers, directors, shareholders, employees, agents, successors and assigns for, from and against any and all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines, expenses and costs (including, without limitation, clean-up, removal, remediation and restoration costs, sums paid in settlement of claims, attorneys’ fees, consultant fees and expert fees and court costs) that arise or result from the presence or release of Hazardous Substances on, in, under or about the Parking Premises and that are caused or permitted by Tenant or its agents, employees, contractors, licensees, invitees, successors or assigns during the Term of this Parking Lot Lease, including arising from or caused in whole or in part, directly or indirectly, by (i) the presence or release in, on, under or about the Parking Premises of any Hazardous Substances; (ii) Tenant’s or other user’s actual, proposed or threatened use, treatment, storage, transportation, holding, existence, disposition, manufacturing, control, management, abatement, removal, handling, transfer, generation or release (past, present or threatened) of Hazardous Substances to, in, on, under, about or from the Parking Premises; (iii) any past, present or threatened non-compliance or violations of any Environmental Laws in connection with Tenant and/or the Parking Premises, (iv) personal injury claims (v) the payment of any environmental liens, or the disposition, recording, or filing or threatened disposition, recording or filing of any environmental lien encumbering or otherwise affecting the Parking Premises, (vi) diminution in the value of the Parking Premises, (vii) damages for the loss or restriction of use of the Parking Premises, including prospective rent, lost profits and business opportunities, (viii) sums paid in settlement of claims, (ix) reasonable attorneys’ fees, consulting fees and expert fees, (x) the cost of any investigation of site conditions, and (xi) the cost of any repair, clean-up or remediation ordered by any governmental or quasi-governmental agency or body or otherwise deemed necessary in Landlord’s reasonable judgment. Tenant’s obligations hereunder shall include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary repair, cleanup or detoxification or decontamination of the Parking Premises, or the preparation and implementation of any closure, remedial action or other required plans in connection therewith. For purposes of the indemnity provisions in this Section 3.3(d) , any acts or omissions of Tenant and/or Tenant’s employees, agents, assignees, contractors or subcontractors of Tenant or others acting for or on behalf of Tenant (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to Tenant. The provisions of this Section 3.3(d) will survive the expiration or earlier termination of this Parking Lot Lease.
(e) For purposes of this Parking Lot Lease, the term “ Hazardous Substance ” means any substance, material or waste which because of its quantity, concentration or physical, chemical or infectious characteristics may cause or pose a present or potential hazard to human health or the environment when improperly handled, treated, stored, transported, disposed of or otherwise managed, including asbestos, oil, gas and other hydrocarbons, and all hazardous or toxic substances, materials and wastes listed, designated or regulated under any Environmental Law. For purposes of this Parking Lot Lease, “ Environmental Law ” means any past, present or future federal, state or local statutory or common law, or any regulation, ordinance, code, plan, order, permit, grant, franchise, concession, restriction or agreement issued, entered, promulgated or approved thereunder, relating to (a) the environment, human health or safety, including, without limitation, emissions, discharges, releases or threatened releases of any Hazardous Substance into the environment (including, without limitation, air, surface water, groundwater or land), or (b) the manufacture, generation, refining, processing, distribution, use, sale, treatment, receipt, storage, disposal, transport, arranging for transport, or handling of any Hazardous Substance.
3.4 Unlawful Activities . Tenant shall not use or allow the Parking Premises to be used (a) in violation of the Parking Lot Easement, any recorded covenants, conditions and restrictions affecting the Parking Premises, any applicable law or governmental rule or regulation, or of any certificate of occupancy issued for the Parking Premises, or (b) for any improper, immoral, unlawful or reasonably objectionable purpose. Tenant shall not do or permit to be done anything which will obstruct or interfere with the rights of owners of adjacent property or other tenants or occupants of the Project, or injure or annoy them. Tenant shall not cause, maintain or permit any nuisance in, on or about the Parking Premises, nor commit or suffer to be committed any waste in, on or about the Parking Premises.
3.5 Insurance Coverage . Tenant shall refrain from any use of the Parking Premises that would invalidate or impair the coverages afforded by any insurance maintained with respect to the Parking Premises and shall not allow the condition of the Parking Premises to decline to a degree that would result in any insurance required under this Parking Lot Lease to be maintained by Tenant to no longer be available.
3.6 Rules . The use of the Parking Premises shall be subject to the Parking Rules and Regulations contained in Exhibit “C” attached to the Building Lease, together with any other reasonable, non-discriminatory rules and regulations adopted by Landlord from time to time, and furnished to Tenant.
3.7 Signs . All signage on the Parking Premises shall comply with the requirements of applicable law. Tenant shall obtain Landlord’s prior approval of the location, design, size, color, materials, and other details of any signs to be located on the Parking Premises, which approval shall not be unreasonably be withheld or delayed.
4. MAINTENANCE AND ALTERATIONS .
4.1 Maintenance . Tenant, at its expense, shall keep and maintain the Parking Premises and Parking Lot Improvements (including without limitation, the land, parking areas, driveways, sidewalks, lighting and landscaping) in good condition, repair and appearance and consistent with the parking areas of the Project, and Tenant shall make all repairs and replacements necessary to that end. Except for the initial Parking Lot Improvements to be made by Landlord as provided herein, Landlord shall have no obligation whatsoever to make any repairs, alterations, replacements or improvements or to perform any maintenance on or to the Parking Premises or Parking Lot Improvements, except to the extent necessitated by the negligence or wilful misconduct of Landlord or its agents, employees or contractors.
4.2 Alterations . Tenant shall not make any alterations, additions or improvements to the Parking Premises without Landlord’s prior written consent, which consent will not be unreasonably withheld or delayed. Any such consent will be subject to the following conditions:
(a) Any alteration, addition or improvement shall be done in a good and workman like manner and in compliance with applicable laws and building codes, and in accordance with the orders, rules and regulations of the National Board of Fire Underwriters or any other body exercising similar functions.
(b) The cost of any such alteration, addition or improvement shall be paid by Tenant in cash, or its equivalent, so that the Parking Premises and all portions thereof shall at all times be free of liens for labor and materials supplied or claimed to have been supplied to the Parking Premises. At least fifteen (15) days before commencing any work or delivery of any materials relating to any alterations, improvements, or additions to the Parking Premises, Tenant shall notify Landlord of the expected date of commencement of such work or the delivery of any such materials. Landlord shall have the right at any time and from time to time to post and maintain on the Parking Premises such notices as Landlord reasonably deems necessary to protect the Parking Premises from construction liens, materialmen’s liens, and any other liens.
(c) Tenant shall maintain, at Tenant’s sole cost and expense, such insurance as Landlord may reasonably require in connection with such alterations, additions or improvements, including Workers Compensation Insurance covering all persons employed in connection with the work, with respect to whom death or bodily injury claims could be asserted against Landlord or its successors in interest when any work is in process in connection with any such alteration or addition. Such insurance shall be in a form and by an insurance company reasonably approved by Landlord.
(d) All alterations, additions, improvements, and fixtures installed by Tenant (other than trade fixtures and equipment) shall become a part of the Parking Premises at the expiration of the term of this Parking Lot Lease and belong to Landlord.
5. TAXES; UTILITIES .
5.1 Personal Property Taxes . Tenant shall pay when due all personal property taxes assessed against its personal property or equipment on the Parking Premises.
5.2 Taxes and Assessments .
(a) Tenant shall pay directly to the taxing authority on or before the date due all real property taxes, assessments and public charges levied or assessed against the Parking Premises, except that Tenant’s liability for such taxes, assessments and public charges shall be prorated for any partial tax year in which the Term begins or ends. To the maximum extent possible, such tax bills shall be mailed directly from the taxing authority to Tenant and Tenant shall pay all such taxes, assessments and public charges directly to the taxing authority.
(b) Landlord intends for the Parking Premises to become a separate tax parcel. Landlord shall, as provided by Section 6 of the Parking Lot Easement, promptly submit, in conjunction with PDC, an application, and make commercially reasonable efforts, to cause the Parking Premises to become a
separate tax parcel on or before June 30, 2010 so that it is assessed and billed independently from the balance of the Grantor Property (as such term is defined in the Parking Lot Easement). To the extent Landlord is unsuccessful in making the Parking Premises a separate tax parcel, the taxes and assessments shall, as provided in Section 6 of the Parking Lot Easement, be allocated between the Parking Premises and the balance of the Grantor Property proportionately based on the respective real market values of the land and improvements on each such property as reflected in the records of the Multnomah County Division of Assessment and Taxation, except that the assessments of the Multnomah County Drainage District shall be allocated based on the respective square footage of land area of each property.
(c) If available by law, rule, or order of the taxing authority, Tenant may make tax payments owing under this Section 5.2 in installments. Tenant may contest the validity of an assessment against the Parking Premises as long as (i) Tenant deposits with an escrow agent approved by Landlord, irrevocable instructions to pay to the taxing authority upon written instruction from Landlord, sufficient funds to satisfy any amount determined to be owing at the conclusion of the proceeding to contest the assessment, and (ii) Landlord’s interest in the Parking Premises or Parking Lot Easement is not jeopardized.
(d) Upon request, Tenant shall provide to Landlord reasonable evidence of the payment of all taxes, assessments and public charges required to be paid by Tenant under this Section 5.2 .
5.3 Taxes in Lieu of Ad Valorem Tax . If a tax is assessed upon Landlord’s interest under this Parking Lot Lease which is in lieu of the ad valorem real property tax, then to the extent permitted by law, Tenant shall pay such tax. Tenant, however, shall have no obligation to pay any income, profits, or franchise tax levied upon the net income derived by Landlord from this Parking Lot Lease.
5.4 Payment of Utilities Charges . Tenant shall pay when due all charges for services and utilities incurred in connection with the use, occupancy, operation, and maintenance of the Parking Premises and Parking Lot Improvements, including without limitation charges for electricity. To the maximum extent possible, Tenant shall arrange for direct billing from and payment to the utility and service providers. If any such utilities are not separately metered or invoiced to Tenant, Landlord will equitably apportion such charges between Tenant and the other occupants of the Grantor Property based on approximate actual usage.
6. LIABILITY TO THIRD PERSONS .
6.1 Liens . Except for the Parking Lot Improvements made by Landlord as provided herein, Tenant shall pay as due all claims for work done on or for services rendered or material furnished to or for Tenant to the Parking Premises after the Commencement Date, and shall keep the Parking Premises free from any liens other than liens created by Landlord. If Tenant fails to pay such claim or to discharge any lien, Landlord may do so and collect such amount as additional rent upon demand. Amounts paid by Landlord hereunder shall bear interest and be repaid by Tenant as provided in Section 2.5 and Section 2.6 . Such payment by Landlord shall not constitute a waiver of any right or remedy Landlord may have because of Tenant’s default.
6.2 Tenant’s Assumption of Risk and Waiver . Except to the extent such matter is caused by the negligence or willful misconduct of Landlord or Landlord’s employees, agents, or contractors, Landlord shall not be liable to Tenant, Tenant’s employees, agents or invitees for: (i) any damage to property of Tenant, or of others, located in, on or about the Parking Premises, (ii) the loss of or damage to any property of Tenant or of others by theft or otherwise, (iii) any injury or damage to persons or property resulting from fire, explosion, steam, gas, electricity, water, rain or leaks from any part of the Parking Premises or from the street or subsurface or from any other places or by any other cause of whatsoever nature, or (iv) any such damage caused by other tenants or persons in the Project or occupants of adjacent property of the Parking Premises or Project, or the public, or caused by operations in construction of any private, public or quasi-public work. Neither party shall, in any event, be liable to the other for any consequential damages or loss of business or profits and each party hereby waives any and all claims for any such damages. All property of Tenant kept or stored on the Parking Premises shall be so kept or stored at the sole risk of Tenant and Tenant shall hold Landlord harmless from any claims arising out of damage to the same, including subrogation claims by Tenant’s insurance carriers, except to the extent such damage is caused by the negligence or willful misconduct of Landlord or Landlord’s employees, agents, or contractors, subject to Section 7.2 below.
6.3 Tenant’s Indemnification of Landlord . Subject to Section 7.2 below, Tenant shall be liable for, and shall indemnify, defend, protect and hold Landlord and Landlord’s members, partners, officers, directors, shareholders, employees, agents, successors and assigns, harmless for, from and against, any and
all claims, damages, judgments, suits, causes of action, losses, liens, liabilities and expenses, including attorneys’ fees and court costs (collectively, “ Indemnified Claims ”), arising or resulting from (a) any occurrence at the Parking Premises, unless caused by the negligence or willful misconduct of Landlord or its agents, employees or contractors and not covered by insurance carried or required to be carried by Tenant hereunder, (b) any act or omission of Tenant or any of Tenant’s agents, employees, contractors, subtenants, assignees, licensees or invitees (collectively, “ Tenant Parties ”); (c) the use of the Parking Premises and conduct of Tenant’s business by Tenant or any Tenant Parties, or any other activity, work or thing done, permitted or suffered by Tenant or any Tenant Parties, in or about the Parking Premises; and/or (d) any default by Tenant of any obligations on Tenant’s part to be performed under the terms of this Parking Lot Lease or the terms of any contract or agreement to which Tenant is a party or by which it is bound, affecting this Parking Lot Lease or the Parking Premises. In case any action or proceeding is brought against Landlord or Landlord’s members, partners, officers, directors, shareholders, employees, agents, successors and assigns by reason of any such Indemnified Claims, Tenant, upon notice from Landlord, shall defend the same at Tenant’s expense by counsel approved in writing by Landlord, which approval shall not be unreasonably withheld or delayed.
6.4 Landlord’s Indemnification of Tenant . Subject to Section 7.2 below, Landlord shall be liable for, and shall indemnify, defend, protect and hold the Tenant and Tenant’s officers, directors, shareholders, employees, agents, successors and assigns harmless for, from and against, any and all claims, damages, judgments, suits, causes of action, losses, liens, liabilities and expenses, including attorneys’ fees and court costs (collectively, “ Indemnified Claims ”), arising or resulting from (a) any occurrence at the Premises caused by the negligence or willful misconduct of Landlord or its agents, employees or contractors and not covered by insurance carried or required to be carried by Tenant hereunder, and/or (b) any default by Landlord of any obligations on Landlord’s part to be performed under the terms of this Parking Lot Lease or the terms of any contract or agreement to which Landlord is a party or by which it is bound, materially and adversely affecting Tenant’s rights under this Parking Lot Lease or in the Parking Premises. In case any action or proceeding is brought against Tenant or Tenant’s officers, directors, shareholders, employees, agents, successors and assigns by reason of any such Indemnified Claims, Landlord, upon notice from Tenant, shall defend the same at Landlord’s expense by counsel approved in writing by Tenant, which approval shall not be unreasonably withheld or delayed.
6.5 Survival; No Release of Insurers . Tenant’s indemnification obligation under Section 6.3 , and Landlord’s indemnification obligation under Section 6.4 , shall survive the expiration or earlier termination of this Parking Lot Lease. Tenant’s covenants, agreements and indemnification in Sections 6.2 and 6.3 above, and Landlord’s covenants, agreements and indemnification in Section 6.4 , are not intended to and shall not relieve any insurance carrier of its obligations under policies required to be carried by Tenant pursuant to the provisions of this Parking Lot Lease.
6.6 Security . Tenant acknowledges that the rental payable to Landlord under this Parking Lot Lease does not include the cost of guard service or other security measures, and that Landlord shall have no obligation whatsoever to provide such services or security measures. Tenant assumes all responsibility for the protection of Tenant, its officers, employees, agents and invitees, from the acts of third parties.
7. INSURANCE AND DAMAGE .
7.1 Tenant’s Insurance . Tenant shall at its sole expense maintain in full force and effect during the Term all of the same insurance coverages required of Tenant under Section 20 of the Building Lease with respect to the Parking Premises and all property, improvements, persons and activities thereon. Upon Landlord’s request from time to time, Tenant shall provide certificates of insurance and other evidence reasonably acceptable to Landlord of such insurance coverages.
7.2 Waiver of Subrogation . Each party (for itself and its successors and assigns and insurance carriers) waives all rights of recovery from the other party with respect to any damage that would have been covered by a “special form” or “all risks” coverage property insurance policy with extended coverage endorsements, or that is actually covered under any additional insurance coverages maintained by the party, and there shall be no rights of subrogation by the parties’ insurance carriers against the other party.
7.3 Damage or Destruction . In case of damage or destruction to the Parking Premises or any part thereof by any cause (other than due to the negligence or willful misconduct of Landlord or its agents, employees or contractors, in which case Landlord shall restore the same at its expense), Tenant shall at its expense restore the Parking Premises to a condition equivalent to that existing prior to the damage.
8. CONDEMNATION . If the entire Parking Premises is condemned, or if a portion is taken which causes the remainder to be unsuited to the use permitted under this Parking Lot Lease (as reasonably determined by Landlord or Tenant), then this Parking Lot Lease shall terminate as of the date upon which possession of the Parking Premises is taken by the condemning authority. Otherwise, Landlord shall proceed to make necessary repairs and alterations to the Parking Premises to permit Tenant to continue its use thereof. Rent shall be abated during the period of restoration and shall be reduced for the remainder of the Term to the extent and in the same proportion that the reduction in the number of parking spaces no longer available for Tenant’s use due to the condemnation are less than 120 parking spaces; provided, however, tha