AMENDMENT NO. 2 TO YEON BUSINESS
CENTER LEASE AGREEMENT
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DATED:
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____________,
2005
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BETWEEN:
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SCHNITZER
INVESTMENT CORP.,
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an Oregon
corporation
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(“Landlord”)
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AND:
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SCHNITZER STEEL
INDUSTRIES, INC.,
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an Oregon
corporation
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(“Tenant”)
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A. Landlord
and Tenant are parties to a Yeon Business Center (3200 NW Yeon)
Lease Agreement dated August 7, 2003 (the “ Lease
Agreement ”), as amended by an Amendment No. 1 to Lease
dated February 1, 2004 (the “ First Amendment
”). The Lease Agreement and the First Amendment are
collectively referred to as the “Lease” in this
Amendment No. 2 to Yeon Business Center Lease Agreement (the
“ Amendment ”).
B. Landlord
and Tenant have agreed to expand the Premises by adding to the
Premises approximately 10,572 rentable square feet in the Building
(the “ Expansion Space ”), on the terms and
conditions set forth in this Amendment. After such expansion,
Tenant will be the sole tenant in the Building.
C. Capitalized
terms which are used in this Amendment and which are defined in the
Lease shall have the meanings given to them in the Lease, unless
expressly amended by this Amendment.
NOW, THEREFORE, in consideration of the mutual
promises of the parties set forth in this Amendment, the receipt
and sufficiency of which are acknowledged, the parties agree as
follows:
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1.
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Design of
Expansion Space Tenant Improvements
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1.1
General . Tenant has retained Yost Grube Hall (the “
Architect ”) to design its improvements to the
Expansion Space (the “ Expansion Space Tenant
Improvements ”). Tenant shall cause the Architect to
prepare the necessary drawings, including without limitation, Basic
Plans and Working Plans as described below for the Expansion Space
Tenant Improvements (the “ Plans ”). The Plans
are subject to Landlord’s written approval, which shall not
be unreasonably withheld. Throughout the process of design and
construction of the Expansion Space Tenant Improvements, Kelly Lang
(“ Tenant’s Construction Representative ”)
shall be available, or shall make his representative available, for
onsite and telephone
consultations
and decisions as necessary. Tenant’s Construction
Representative shall have the authority to bind Tenant as to all
matters relating to the Expansion Space Tenant
Improvements.
1.2
Basic Plans . Tenant shall deliver the Basic Plans to
Landlord by October 12, 2005. The Basic Plans shall clearly
identify and locate on the Basic Plans (i) any equipment
requiring special plumbing or mechanical systems, areas subject to
above normal loads, special openings in the floor, ceiling, or
walls, and other major or special features; and (ii) locations
of telephone and electrical receptacles, outlets, and other items
requiring electrical power (for special conditions and equipment,
power requirements, and manufacturer’s model numbers must be
included). Landlord shall review the Basic Plans and shall, in
writing within five business days after receipt, either approve the
Basic Plans (which approval shall not be unreasonably withheld,
conditioned or delayed) or reject them, in which case Landlord
shall specify in reasonable detail the deficiencies in the Basic
Plans as submitted. If the Basic Plans are rejected, Tenant shall
resubmit required changes to the Basic Plans within five business
days after Landlord’s rejection until Landlord’s
reasonable approval has been obtained.
1.3
Working Plans . On or before the date that is the later of
(a) five business days after Landlord’s approval of the
Basic Plans or (b) November 1, 2005, Tenant shall cause
the Architect to produce and deliver to Landlord full working
drawings for construction sufficient to obtain all necessary
permits and with sufficient detail to construct the Expansion Space
Tenant Improvements in compliance with the approved Basic Plans,
including specifications for every item included on the Basic Plan
(the “ Working Plans ”).
1.4
Construction of Expansion Space Tenant Improvements . Upon
completion of the Working Plans, and subject to Tenant’s
prior, written approval of the original budgeted cost (the
“Initial Budget”), Landlord shall construct the
Expansion Space Tenant Improvements. Tenant agrees to respond to
Landlord’s request for approval of the Initial Budget within
five business days of Landlord’s written request therefor. No
changes to the Plans or Initial Budget shall be made except with
the approval of both Landlord and Tenant. The parties acknowledge
that the total cost and of, and Initial Budget for, planning,
designing, permitting, installing and constructing (including labor
and materials) the Expansion Space Tenant Improvements may exceed
the “TI Allowance” (defined below). Landlord shall
cause the Expansion Space Tenant Improvements to be completed in a
good and workmanlike manner and in compliance with the building
permit issued therefor (if any) by the City of Portland. Landlord
shall use commercially reasonable efforts to minimize disruption of
the conduct of Tenant’s business in the Building during the
construction of the Expansion Space Tenant Improvements. Tenant
acknowledges that all overtime costs incurred to comply with this
requirement shall be included in the total costs of the Expansion
Space Tenant Improvements. However, Landlord and Tenant shall work
collaboratively to determine whether Tenant would prefer business
disruption rather than overtime costs. Tenant shall cooperate and
coordinate with Landlord to minimize disruption of the conduct of
Tenant’s business in the Building during the
construction.
1.5
Payment of Tenant Improvements Costs . Landlord shall pay up
to $105,720.00 (the “ TI Allowance ”) towards
the costs of designing and constructing the Expansion Space Tenant
Improvements which costs shall include all costs, fees, and
expenses incurred by Landlord in connection with the planning,
design, permitting, installation, labor, materials and construction
of the Expansion Space Tenant Improvements, which costs, fees and
expenses shall
include
construction supervision fees paid to Landlord’s property
manager, Schnitzer Northwest, LLC. Construction supervision fees
paid to Schnitzer Northwest, LLC, inclusive of Landlord’s
overhead charges and overhead costs of Schnitzer Northwest, LLC (if
any), shall not exceed five percent (5%) of the total cost of
designing and constructing the Expansion Space Tenant Improvements.
Landlord shall apply the total amount of the TI Allowance toward
payment of costs of designing and constructing the Expansion Space
Tenant Improvements as those charges become due and payable, and
thereafter, Landlord shall pay, as due, the costs of designing and
constructing the Expansion Space Tenant Improvements, up to the
amounts included in the Initial Budget. Within seven (7) business
days after Tenant’s receipt of an invoice including an
itemization of the expenditures and all documentation (e.g.
contractor & sub-contractor invoices, and material invoices)
supporting the expenditures or such additional documentation
reasonably requested by Tenant to support the invoiced amount,
Tenant shall reimburse Landlord the payments made by Landlord and
included in the Initial Budget (and any Change Orders approved by
Tenant) that exceed the TI Allowance.
1.6
Change Orders. Prior to incurring any costs, fees or
expenses including, without limitation, governmental fees and
assessments in connection with the design, permitting,
installation, labor, materials, and construction of the Expansion
Space Tenant Improvements that exceed the Initial Budget, and prior
to making any modifications to the Plans and/or the materials,
finishes, specifications or ti
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