MMD2013-00023 MMD2O13 00023
TESLA MOTORS,
INC.
NOTICE OF TYPE I DECISION
MINOR MODIFICATION (MMD) 2013 -00023 11/41 1151
TESLA MOTORS, INC. T i G A R D
•
120 DAYS = 7/09/2013
SECTION I. APPLICATION SUMMARY
FILE NAME: Tesla Motors. Inc.
CASE NO.: Minor Modification (MMD) MMD2013 -00023
PROPOSAL: The proposed minor modification is a change of use for a tenant space within
Oregon Business Park I. The space, 10,000 square feet in size, is changing from a
wholesale sales to a motor vehicle servicing /repairing.
APPLICANT: Tesla Motors, Inc.
Attn: Julianne Hayden
3500 Deer Creek Road
Palo Alto, CA 94304
OWNER: Pacific Realty Associates, LP
15350 SW Sequoia Parkway #300
Portland, OR 97224
LOCATIONS: 16436 SW 72n Avenue
WCTM 2S113AA, Tax Lot 00700
ZONING
DESIGNATION: I -L: Light Industrial District. The I -L zoning district provides appropriate locations
for general industrial uses including industrial service, manufacturing and
production, research and development, warehousing and freight movement, and
wholesale sales activities with few, if any, nuisance characteristics such as noise,
glare, odor, and vibration.
APPLICABLE
REVIEW
CRITERIA: Community Development Code Chapters 18.360.060.0
SECTION II. DECISION
Notice is hereby given that the City of Tigard Community Development Director's designee has
APPROVED the above request. The findings and conclusions on which the decision is based are noted
in Section IV.
THIS APPROVAL SHALL BE VALID FOR 18 MONTHS
FROM THE EFFECTIVE DATE OF THIS DECISION.
MMD2013 -00023 '17 ;SI,.A MOTORS, INC. Page 1 of 3
SECTION III. BACKGROUND INFORMATION
Site Information:
The project site is located at 163436 SW 72n Avenue, east of 72 "" Ave and west of Interstate -5 and is
approximately 1.68 acres in size. The tenant space is located within Building #5, which is part of a
development known as Oregon Business Park I. The site is developed with seventeen industrial and
commercial buildings, associated parking lot and landscaping. The site has approximately 940 parking
spaces.
Proposal Description:
The applicant intends to perform interior improvements to accommodate Tesla Motors, Inc, a motor
vehicle service and repair facility with sales as an accessory use. Even though the proposed use has a
higher parking requirement (2.0/1,000 square feet), than the previous wholesale sales use (0.8/1,000
square feet), there are 940 parking spaces on site and the development only requires 515 spaces.
Therefore, there is sufficient off - street parking and additional parking is not required.
SECTION IV. APPLICABLE REVIEW CRITERIA AND FINDINGS
MINOR MODIFICATION OF SITE DEVELOPMENT REVIEW:
The proposed change in use requires a Minor Modification to approved plans or existing
development. Section 18.360.060.0 states that a minor modification shall be approved,
approved with conditions or denied following the Director's review and as follows:
1. The proposed development is in compliance with all applicable requirements of this
title; and
FINDING: In accordance with TDC 18.765 O ff Street Parking 6 Loading Requirements and as
demonstrated above, the site has sufficient parking the proposed use does not
require additional parking. Upon review of the proposal's plans and narrative,
staff finds that all applicable requirements of this title are satisfied. This includes
but is not limited to building height, setbacks, and parking requirements.
This criterion is met.
2. The modification is not a major modification.
FINDING: Staff finds that the proposed change of use either does not trigger the
thresholds for a major modification as listed in TDC 18.360.050B.1 -11 or they
do not apply. Therefore, the proposed development is not a major modification.
This criterion is met.
CONCLUSION: The proposal is a minor modification of existing site development and is in
compliance with the applicable requirements of this title.
SECTION V. PROCEDURE AND APPEAL INFORMATION
Notice:
Notice was posted at City Hall and mailed to:
X The applicant and owners
X Affected government agencies
Final Decision:
MMD2013 -00023 TESL. MO'T'ORS, INC. Page 2 of 3
A Minor Modification is a Type I procedure. As such, the Director's decision is final on the date it is
mailed or otherwise provided to the applicant, whichever occurs first. The Director's decision may not
be appealed locally and is the final decision of the City.
THIS DECISION IS FINAL ON JUNE 18, 2013.
I.
AND BECOMES EFFECTIVE ON JUNE 19, 2013.
Ouestions:
If you have any questions, please call Agnes Kowacz at the City of Tigard Planning Division, Tigard
City Hall, 13125 SW Hall Boulevard, Tigard, Oregon at (503) 639 -4171.
4C June 18. 2013
APPROVED BY: A. nes Kowacz DATE
Associate Planner
503 - 718 -2427
agneskatigard- or.gov
NINID2013 -00023 7'f?til..A NI<Y1 ORS, INC. Page 3 of 3
APPLICANT
MATERIALS
_ .. .
RECEIVED
i s
'PI City of Tigard JUN 0 6 2013
Minor Modification — Type I A gZUING/ENWRING
T I G A R D
GENERAL INFORMATION nil
Property Address /Locations • In addition, the Director must find that the proposed
11 6"d' a12 °► change is in compliance ge p with all applicable requirements of
Tax Map & Tax Lot #(s): 2.5 11SA *, - col 00 Tide 18 of the Tigard Development Code. To complete
to r 1 l3_S a itfrTf this review, the Applicant's proposal must include a
Sitc Size: 1.Gs Ac2. I. or c 'n G417 discussion indicating how the site expansion /change will
continue to comply with the maximum setback, building
Applicant *: 11 ‘1 • height, parking, and landscaping standards. Other
Address: . . i MO W requirements of this title such as clear vision, solid waste
City/State: if it # 01 Zip: f ULM storage, non - conforming situations, signs, and tree
Primary Contact: JU 1 i a h l,%t ittAlliArt removal may also be applicable depending on the type and
Phone: o?)HO Fax: location of the proposed modifications.
E -Mail: , iV1u .rn uttyS.Cal'+
Property Owner /Deed Holder(s)*:
(Attach list if more than one)
rte g¢ ta.ny IN C 4 Ar 3 ` -F. REQUIRED SUBMITTAL ELEMENTS
Address: 15350 SW �rtr�yoiA ?one ear
C /State ��oRlrL/ylfl Zip: -1 (A will ma be accepted without the
i
ry 1 P Z9 following required submittal elements)
* When the owner and the applicant are different people, the NI Application Form
applicant must be the purchaser of record or a lessee in
possession with written authorization from the owner or an at Owner's Signature/Written Authorization
Title Transfer Instrument or Deed (2- agent of the owner. The owner(s) must sign this application
in the space provided on the back of this form or submit a Site Plan (4 Large Plans & One — Reduced to KW' x 11')
written authorization with this application. J � Applicant's Statement /Narrative (4 copies)
5l Filing Fee 5627.00
Nf'nor Modifications: -
Minor Modifications are processed for permitted uses and
conditional uses. To review a modification as a Minor
Modification, the Director must first find that the expansion
or change does not invoke one or more of the criteria
discussed within Section 18.360.050(B) — Site Development FOR STAFF USE ONLY
Review or Section 18.330.020(B)(2) — Conditional Use. If the '' 2 Q�4 _
modification exceeds the maximum allowed under any one or Case No.(a): ��
more of the criteria, a Major Modification review is required.
Major Modifications are processed in the same manner as a Other Case No (s):
new Site Development Review or Use Permit. Receipt /9/0/
Applicant's Statement; Date: b — 7 - 13
The applicant's statement must include a summary of the ,(„
proposed changes. Criteria in either 18.360.050(B) or Application Accepted By: /'
18.330.020(B)(2) must be addressed with a detailed response Date Determined Complete; tDiili 0
to each criterion. Failure to provide the information needed Revised: 11 /8/
to process the application would be reason to consider an \cusptn \marten \land use appl cat+ons \m+no, modification app Boca
application incomplete and delay review of the proposal. •
City of Tigard I 13125 SW Hall Blvd., Tigard, OR 97223 I 503 -718 -2421 I www.tigard- or.gov I Page 1 oft
To consider an application complete, you will need to submit ALL of the REQUIRED SUBMITTAL ELEMENTS as
described on the front of this application in the "Required Submittal Elements" box.
Detailed Submittal Requirement Information sheets can be obtained, upon request, for all types of Land Use Applications.)
THE APPLICANT(S) SHALL CERTIFY THAT:
• The above request does not violate any deed restrictions that may be attached to or imposed upon the subject
property.
• If the application is granted, the applic.uu wilt exercise the rights granted in accordance with the teens and subject to all the
conditions and limitations of the approval.
• All of the above statements and the statements in the site plan, attachments, and exhibits transmitted herewith, are true; and
the applicants so acknowledge that any permit issued, based on this application, and may be revoked if it is found that any such
statements are false.
• The applicant has read the enure contents of the application, including the policies and criteria, and understands the
requirements for approving or denying the application.
SIGNATURES of each owner of the subject property.
DATED this day of %.' ^' , 20 VS.
PAc t >= — ,o -� p•�oou ME • ? .
`
Own: 's Signature Owner's Signature •
3ot -\+-1 L. T0
Owner's Signature Owner's Signature
Owner's Signature Owner's Signature
City of "Tigard I 13125 SW Flail Blvd., 'Tigard, OR 97223 I 503 -639 -4171 I www.ugard- or.gov I Page 2 of
CITY OF TIGARD RECEIPT
- I 1
. 13125 SW Hall Blvd., Tigard OR 97223
503.639.4171
TIGARD
Receipt Number: 191691 - 06/06/2013
CASE NO. FEE DESCRIPTION REVENUE ACCOUNT NUMBER PAID
MMD2013 -00023 Minor Modification to an Approved Plan - 100 - 0000 -43117 $81.00
LRP
MMD2013 -00023 Minor Modification to an Approved Plan 100 - 0000 -43116 $546.00
Total: $627.00
PAYMENT METHOD CHECK # CC AUTH. CODE ACCT ID CASHIER ID RECEIPT DATE RECEIPT AMT
Check 090902 HWATKINS 06/06/2013 $627.00
Payor: Tesla Motors, Inc
Total Payments: $627.00
Balance Due: $0.00
•
Page 1 of 1
T 9 L r,
RECEIVED •
June 5, 2013
JUN 0 6 2013
Marissa Daniels CITY OF TIGARD
PLANNING /ENGINEERING
Associate Planner - Community Planning Division
City of Tigard
13125 SW Hall Blvd.
Tigard, OR 97223
Re: Tesla Motors — Minor Modification Application
Dear Marissa:
Please find attached Minor Modification — Type I Application for Tesla Motors' service, repair
and sales facility located at 16436 SW 72 Avenue Tigard, OR 97224.
Also attached are the following:
• Owner's signature on Type I Application
• Copy of lease and lease amendment to the property
• Four large site plans and one reduced site plan
• Four copies of Tesla's statement /narrative
• A filing fee check of $627 made out to the City of Tigard
Please let me know if anything else is needed in order to authorize proper zoning for this
building.
Thank you very much for your help.
Sincerely,
1 1714 \
Julianne Hayden
Tesla Motors Real Estate Specialist
(650) 681 -6239
TESLA MOTORS, INC
T E L rI
RECEIVED
JUN 06 2013
CITY OF TIGARD
J une 4, 2013 PLANNING /ENGINEERING
Tesla Motors Statement /Narrative
Tesla Motors is applying for a proposed use as Motor Vehicles Servicing/Repair /Sales at 16436
SW 72 " Avenue Tigard, OR 97224. The last known use of the space at 16436 SW 72 " Avenue
is Wholesale Sales. This proposed change of use requires a land use review and a Minor
Modification.
The pervious use requires .8 parking spaces for every 1,000 square feet of floor area; whereas
vehicle service /repair requires 2.0 per 1,000 square feet. Our use as vehicle
servicing/repair /sales will not trigger more parking spaces. Tesla occupies a total of 10,000
square feet and 30 parking spaces; therefore Tesla's use does not trigger more parking listed in
section 18.360.050.B - Major Modification(s) to Approved Plans or Existing Development, or
any other modifications in that section of the code.
TESLA MOTORS, INC
pib I In Spaces rr arc"-
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COMMON SHARED PARKING TESLA MOTORS
PARKING DIRECTLY IN
QI I FRONT OF SPACE
1 DEDICATED TO TESLA Z
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NOT TO SCALE
SITE PLAN DATE 6/12/13 .
A PJAL iUBT PROPERTY
1 /4 hOVISA IG
ACCENT AMID SONIC(/' fi
Li IMystndI Ihd shrial LIGHTING
MIRATRON GALLERIES, LLC TESLA MOTORS INC.
OCE IMAGISTICS 16420 SW 72nd Ave 16432 SW 72nd Ave 16436 SW 72nd Ave
16416 SW 72nd Ave 1,450 SF OFFICE 425 sf Office 1,169 SF OFFICE
1,462 SF OFFICE 5,000 SF TOTAL 2,500 sf Total 10,000 SF TOTAL
6,750 SF TOTAL
2 4 s S r :. 0 - 2 '3
16416 � 16418 16420 16432 16436 16444
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WAREHOUSING AND LIGHT MANUFACTURING TENANTS
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OREGON BUSINESS PARK I
BLDG. #5 (PTR #1 obp114)
SCALE 1" = 30' 16416 -44 SW 72ND AVE.
1. _: , -' , -1._1, .' ° 1,-„1__I.- "_ Portland, OR 97224
0' 1 2C1 30' °a 5 60'
A PACTRUST PROPERTY 6/12/13
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COMMON SHARED PARKING TESLA MOTORS
PARKING DIRECTLY IN
FRONT OF SPACE
DEDICATED TO TESLA Z
30 SPACES
NOT TO SCALE
SITE PLAN DATE 6/12/13
A AAd I1UBT PROPERTY
ACCENT *TEMPORARY*
LIGHTING TESLA MOTORS,
GALLERIES, LLC INC. (MO 2 MO THRU 10113/13)
16432 SW 72nd Ave 16436 SW 72nd Ave EXPRESS FURNITURE
425 si Office
346 SF OFFICE
OCE' IMAGISTICS MIRATRON 2,500 sI Total 2,500 SF TOTAL (PIEDMONT VACANCY)
16416 SW 72nd Ave 16420 SW 72nd Ave ,\ ,, 16444 SW 72nd Ave
1,462 SF OFFICE 1,450 SF OFFICE 843 SF OFFICE
8,750 SF TOTAL 5,000 SF TOTAL 7,500 SF TOTAL
________
2 7 i' ' (! J 1 1L 1 3
16416 16418 16420 16432 16436 16444
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OREGON BUSINESS PARK I
JUN 06 2013 BLDG. #5 (PTR #1 obp114)
SCALE 1 • = 30' CITY OF TIGARD 16416 -44 SW 72ND AVE.
0, w 2a 30• as 5a 60,
PLANNING /ENGINEERING Portland, OR 97224
A PACTRUST PROPERTY 4/1 6/201 3
RECEIVED
JUN 0 6 2013
CITY OF TIGARD
PLANNING /ENGINEERING
OREGON BUSINESS PARK I
LEASE
BY AND BETWEEN
PACIFIC REALTY ASSOCIATES, L.P.
a Delaware limited partnership
AND
TESLA MOTORS, INC.,
a Delaware corporation
Table of Contents
1. Basic Lease Terms. 1
2. Delivery of Possession and Commencement. 3
3. Lease Term; Early Entry 3
4. Rent Payment. 4
5. Security Deposit 4
6. Use of the Premises; Hazardous Substances 5
7. Utility Charges; Building Maintenance and Repairs. 8
8. Taxes and Operating Expenses. 10
9. Parking and Storage Areas 11
10. Tenant's Indemnification 12
11. Insurance; Waiver of Subrogation. 12
12. Property Damage. 13
13. Condemnation. 14
14. Assignment, Subletting and Other Transfers. 14
15. Tenant Default. 15
16. Landlord Default 16
17. Surrender at Expiration or Termination 17
18. Mortgage or Sale by Landlord; Estoppel Certificates 17
19. Liens 18
20. Attorneys Fees; Waiver of Jury Trial 18
21. Limitation on Liability; Transfer by Landlord 18
22. Real Estate Brokers; Finders 19
23. Other. 19
24. Special Provisions 22
Exhibit A Site Plan Showing Park and Building
Exhibit B Site Plan Showing Premises and Reserved Parking
1 LEASE
2 For valuable consideration, Landlord and Tenant hereby covenant and agree as follows:
3 1. Basic Lease Terms.
4 1.1. Effective Date of Lease. Notwithstanding any provision to the contrary contained
s herein, the provisions of this Lease shall be effective on that date as of which both Landlord and
6 Tenant have executed this Lease as shown next to the respective signatures below (the "Effective
7 Date ").
8 1.2. Landlord Pacific Realty Associates L.P., a Delaware limited partnership
9 ( "Landlord ").
to Address for Payment of Rent: Pacific Realty Associates, L.P.
t 1 Unit 80 — lobp114 teslamot
12 P. O. Box 5000
13 Portland, OR 97208 -5000
14 (The unit number must be listed on a
15 separate line from the PO Box.)
16 Address For Notices: Pacific Realty Associates, L.P.
17 Attn: R/E Counsel — l obp 114 teslamot
18 15350 S.W. Sequoia Parkway, Suite 300
19 Portland, OR 97224
20 Additional Contact Information: Telephone: (503) 6244300
21 Facsimile: (503) 624 -7755
22 1.3. Tenant. Tesla Motors, Inc., a Delaware corporation ("Tenant ").
23 Trade Name: Tesla Motors, or such other name as Tenant
24 uses in its other service locations.
25 Address for Invoices: Testa Motors, Inc.
26 Attn: Accounts Payable
rr 3500 Deer Creek Road
28 Palo Alto, CA 94304
29 Address for Notices: Tesla Motors, Inc.
30 Attn: Real Estate Administration
31 3500 Deer Creek Road
32 Palo Alto, CA 94304
33 Taxpayer ID Number: 91- 2197729
34 1.4. Building. The approximately 30,000 square foot building shown on the attached
35 Exhibit A (the "Building "), also known as Building 5.
36 1.5. Premises: Premises Area. A portion of the Building located at the address
37 commonly known as 16436 S.W. 72 Avenue, Portland, Oregon 97224 as generally shown on
38 the attached Exhibit B (the "Premises "). The Premises shall consist of approximately
39 2,500 square feet of warehouse and office space (the "Premises Area "). The Premises shall
40 include the exclusive use of those parking areas adjacent to the Premises, as depicted on
41 Exhibit B.
42 1.6. Outside Area All areas and facilities within the Park (as defined below) not
43 appropriated to the exclusive occupancy of tenants, including all non - reserved vehicle parking
44 areas, traffic lanes, driveways, sidewalks, pedestrian walkways, landscaped areas, signs, service
45 delivery facilities, truck maneuvering areas, trash disposal facilities, common storage areas,
46 common utility facilities and all other areas for non - exclusive use (the "Outside Area ").
47 Landlord reserves the right to change, reconfigure or rearrange the Outside Area and to do such
. *pl "sWva A®smlieewrtb41•13t moms, iacle&. saws 1491 N nn M.1 eteto 106p114
6182012 teslamot
Page 1 Portland, OR
1 other acts in and to the Outside Area as Landlord deems reasonably necessary or desirable;
2 provided, however, any such work by Landlord in the Outside Area shall not unreasonably
3 interfere with access to or visibility of the Premises from the Outside Area of the public streets
4 adjacent to the Premises.
5 1.7. Park. The project in which the Premises and Building are located (and which
6 includes the Premises and Building) is commonly known as Oregon Business Park I (the "Park "),
7 as shown on the attached hEx ibis A
s 1.8. Permitted Use. Tenant shall have the exclusive use of the Premises, for itself and
9 its employees, only for electric vehicle service and parts/tooling storage and general office
to purposes and for such other lawful purpose that is compatible with the nature and character of
I 1 the Park or the businesses in the Park (the "Permitted Use ").
12 1.9. Lease Term.
13 1.9.1. Commencement Date. The date as of which Landlord delivers the
14 Premises to Tenant pursuant to Paramanh Z (the "Commencement Date "), which date is
15 estimated to be July 1, 2012.
16 1.9.2. Rent Commencement Date. Tenant shall commence payment of Base
17 Rent on that date which is two (2) full calendar months following the Commencement Date (the
is "Rent Commencement Date "). Tenant shall be responsible for payment of its proportionate
19 share of Taxes and Operating Expenses pursuant to Paragraph 8 during the period of time
20 commencing on the Commencement Date and continuing through and including the last day
21 immediately preceding the Rent Commencement Date.
2z 1.9.3. Expiration Date. The Lease Term shall expire approximately
23 thirty -eight (38) full calendar months following the Commencement Date (the "Expiration
24 Date "), which date is estimated to be August 31, 2015, subject to Paragraph(s) 1.10.2 and 24.1.
25 1.9.4. Initial Term. The "Initial Term" shall be for a period of thirty -eight (38)
26 full calendar months commencing on the Commencement Date and expiring on the Expiration
27 Date.
28 1.10. Base Rent. Subject to Paragraphs 1.10.1. 1.10.2 and 4.1, monthly payments of
29 base rent ( "Base Rent ") shall be according to the following schedule:
Monthly
Period of Time Base Rent
July 1, 2012 through August 31, 2012 $0.00
September 1, 2012 through August 31, 2013 $1,425.00
September 1, 2013 through August 31, 2014 $1,468.00
September 1, 2014 through August 31, 2015 $1,512.00
30
31 1.10.1. Ease Rent for First Partial Month. If the Rent Commencement Date does
32 not occur on the first day of a month, Base Rent for the first month in which Base Rent is
33 payable (the "First Partial Month ") shall be equal to One Thousand Four Hundred Twenty -Five
34 and No/100 Dollars ($1,425.00), prorated to reflect the number of days during the First Partial
35 Month.
36 1.10.2. Actual Dates and Monthly Base Rent Schedule. If the actual
37 Commencement Date is a date other than the estimated date set forth in Paragraph 1.9.1,
38 Landlord and Tenant shall execute and deliver a "Confirmation of Commencement Date Letter ".
39 Such Confirmation of Commencement Date Letter shall establish and confirm the actual
40 Commencement Date, Rent Commencement Date, Expiration Date and the dates for the monthly
41 Base Rent schedule set forth in Paragraphs 1.9 and 1.10, respectively, of this Lease. Tenant shall
42 execute and deliver the Confirmation of Commencement Date Letter to Landlord within fifteen
43 (15) days following receipt of written request from Landlord. The Confirmation of
44 Commencement Date Letter shall thereupon modify and be incorporated into this Lease.
45 Notwithstanding Paragraph 23.7 of this Lease, Landlord may deliver the Confirmation of
46 Commencement Date Letter to Tenant by regular U.S. Mail.
e:*K+t emkl,j decommtpooneMety nest. swan 1 = 4n b mien 1 4 1 , 1 1 4 ,a ,4 8.11 lobp114
61812012 tdamot
Page 2 Portland. OR
1.10.3. Intentionally Deleted.
2 1.11. Security Deposit. One Thousand Five Hundred Twelve and No/100 Dollars
3 ($1,512.00) (the "Security Deposit ").
4 1.12. Tenant's Pr000rtionate Shares. Subject to Paragraph 8.2, (i) Tenant's initial
5 proportionate share for Taxes (as defined in Paragraph 8.3) is 8.33%, and (ii) Tenant's initial
6 proportionate share for Operating Expenses (as defined in Paragraph 8.4) is 8.33%.
7 1.13. CC&Rs. None.
8 1.14. Landlord's Work. None.
9 1.15. Guarantor(sl. None.
to This lease (this "Lease ") is entered into by Landlord and Tenant as of the Effective Date set forth
it in the Basic Lease Terms.
12 2. Delivery of Possession and Commencement.
13 2.1. Delivery. Should Landlord be unable to deliver possession of the Premises on the
14 Commencement Date as estimated in the Basic Lease Terms (i) Tenant shall take possession of
15 the Premises when Landlord notifies Tenant that the Premises are ready for delivery to Tenant as
16 set forth in this Lease, (ii) the Commencement Date shall be deferred until Landlord delivers
17 notice tendering possession to Tenant if such delay is not caused by Tenant or Tenant's
Is employees, agents or contractors, and (iii) Tenant and Landlord shall execute the Confirmation
19 of Commencement Date Letter pursuant to Paragraph 1.10.2. Landlord shall have no liability to
20 Tenant for any delays in the delivery of possession; provided, however, that if the Premises has
21 not been delivered to Tenant on or before February 1, 2013, then Tenant may terminate this
22 Lease at any time thereafter upon five (5) days prior written notice to Landlord at which time this
23 Lease shall terminate and be of no further force or effect and the parties shall be released from
24 any and all obligations hereunder except that Landlord shall reimburse to Tenant any pre -paid
25 rents and the Security Deposit paid by Tenant hereunder. Further, either Landlord or Tenant
26 may cancel this Lease by notice to the other, without liability, if permission to construct the
27 Premises or use or furnish necessary utilities to the Premises is denied or revoked through no
28 fault of Landlord by any governmental agency or public utility with such authority.
29 2.2. As -ls. The Premises shall be delivered to Tenant as -is. Tenant hereby
30 acknowledges that Tenant has inspected the Premises and agrees to accept the same "AS IS" and
31 in their present condition, and without any representation or warranty by or from Landlord as to
32 the condition of the Premises, the habitability of the Premises, the fitness of the Premises for the
33 Permitted Use and/or the conduct of Tenant's business in the Premises, or the zoning of the
34 Premises.
35 3. Lease Term; Early Entry.
36 The term of this Lease shall commence on the Commencement Date and expire on the
37 Expiration Date (the "Lease Term"). Upon prior notification by Landlord, Tenant may enter the
38 Premises approximately ten (10) days prior to the Commencement Date as estimated in the Basic
39 Lease Terms to install furniture, fixtures and equipment and voice and data equipment ( "Early
40 ' Entry"), provided, however, such permission shall constitute a license only, conditioned upon
41 Tenant's furnishing Landlord with a copy of the certificate of insurance as required pursuant to
42 )'araaraph 11.2 prior to such Early Entry. Landlord shall not be liable in any way for any injury,
43 loss or damage which may occur to any of Tenant's property or installations in the Premises
44 during such Early Entry period, except to the extent caused by Landlord's negligence or willful
45 misconduct. Tenant shall be responsible for and shall promptly repair any damage to the
46 Premises therein arising out of Tenant's Early Entry onto the Premises hereunder. The
47 Expiration Date shall be unchanged by such Early Entry. All provisions of this Lease shall be in
48 effect from the date of Early Entry; however, Operating Expenses and Taxes shall be abated until
49 the Commencement Date and Base Rent shall be abated until the Rent Commencement Date.
so Tenant shall be responsible for the costs of all utilities from the date of such Early Entry.
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1 4. Rent Payment.
2 4.1. Base Rent: Additional Rent. During the Lease Term, Tenant shall pay to
3 Landlord the Base Rent for the Premises set forth in the Basic Lease Terms and all amounts
4 other than Base Rent that this Lease requires ( "Additional Rent ") without demand, deduction or
5 offset, except as may otherwise be expressly permitted in this Lease. Payment shall be made in
6 U.S. currency by checks payable to Landlord and mailed to the address for rent payments as set
7 forth above or as otherwise may be designated in writing by Landlord. Simultaneous with
s Tenant's execution and delivery of this Lease to Landlord, Tenant shall pay the Base Rent for the
9 first full month of the Lease Term for which Base Rent is due in the amount of One Thousand
to Four Hundred Twenty -Five and No /100 Dollars ($1,425.00). In the event of a First Partial
1 t Month, Tenant shall pay Base Rent for such First Partial Month, calculated pursuant to
12 Paragraph 1.10.1, immediately upon receipt of Landlord's invoice therefor. Thereafter, Base
13 Rent and Additional Rent shall be payable in advance on the first day of each month during the
14 Lease Term without demand. Base Rent and Additional Rent for any partial month during the
15 Lease Term shall be prorated to reflect the number of days during the relevant month. Payment
16 by Tenant or receipt by Landlord of any amount less than the full Base Rent or Additional Rent
17 due from Tenant, or any disbursement or statement on any check or letter accompanying any
18 check or rent payment, shall not in any event be deemed an accord and satisfaction. Landlord
19 may accept such check or payment without prejudice to Landlord's right to recover the balance
zo of such rental or pursue any other remedy provided in this Lease.
21 4.2. Lockbox Payments. If Landlord directs Tenant to pay Base Rent, Additional Rent
22 or other charges under this Lease to a " Ickbox" or other depository whereby checks issued in
23 payment of such items are initially cashed or deposited by a person or entity other than Landlord
24 (albeit on Landlord's authority) then, for any and all purposes under this Lease: (i) Landlord shall
25 not be deemed to have accepted such payment until the date on which such funds are received by
26 Landlord or the " lockbox" or other depository, (ii) Landlord shall be deemed to have accepted
27 such payment if (and only if) Landlord shall not have immediately refunded (or attempted to
28 immediately refund) such payment to Tenant and (iii) Landlord shall not be bound by any
29 endorsement or statement on any check or any letter accompanying any check or payment and no
30 such endorsement, statement or letter shall be deemed an accord and satisfaction. Nothing in this
31 Paragraph 4.2 shall require Tenant to pay Base Rent or Additional Rent prior to the first day of
32 the month as set forth in Paragraph 4.1 above and the date upon which the funds are received by
33 the " lockbox" shall be the date upon which the funds are delivered to the lockbox for the
34 purposes of determining whether Tenant is in default under Paragraph 15.1.1(i) or whether
35 interest or late fees are due pursuant to Paragraph 23.2 hereof. Landlord or Landlord's bank may
36 accept such check or payment without prejudice to Landlord's right to recover the balance of
37 such rent or pursue any other remedy provided in this Lease, at law or in equity. Landlord may
38 change the " lockbox" address at any time during the Lease Term by providing Tenant with
39 fifteen (15) days prior written notice.
4o 5. Security Deposit.
41 Simultaneous with Tenant's execution and delivery of this Lease to Landlord, Tenant
42 shall pay the Security Deposit stated in the Basic Lease Terms. The Security Deposit shall be
43 held by Landlord to secure Tenant's obligations under this Lease; however, the Security Deposit
44 is not an advance rental deposit nor a measure of Landlord's damages for a default by Tenant
45 under this Lease. Landlord may commingle the Security Deposit with its funds and shall have
46 no obligation to pay any interest on the Security Deposit. Landlord shall have the right to offset
47 against the Security Deposit any sums owing from Tenant to Landlord and not paid when due,
48 any damages caused by Tenant's default, the cost of curing any default by Tenant should
49 Landlord elect to do so, and the cost of performing any repair, maintenance or cleanup that is the
so responsibility of Tenant under this Lease. Offset against the Security Deposit shall not be an
51 exclusive remedy in any of the above cases but may be invoked by Landlord, at its option, in
52 addition to any other remedy provided by law or this Lease for Tenant's nonperformance.
53 Landlord shall give notice to Tenant each time an offset is claimed against the Security Deposit,
54 and unless this Lease is terminated, Tenant shall within twenty (20) days after such notice
55 deposit with Landlord a sum equal to the amount of the offset so that the total deposit amount,
56 net of offset, shall remain constant throughout the Lease Term. Tenant's failure to make such
57 deposit after offset shall be a default under this Lease. Any remaining balance of the Security
58 Deposit (together with a reasonable accounting and supporting evidence of the amounts, if any,
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I withheld from the Security Deposit) shall be returned by Landlord to Tenant (or, at Landlord's
z option, to the last assignee of Tenant) when Tenant's obligations under this Lease have been
3 fulfilled.
4 6. Use of the Premises; Hazardous Substances.
5 6.1. Permitted Use. Subject to Tenant's acknowledgment set forth in paragraph 1.8,
6 the Premises shall be used for the Permitted Use set forth in the Basic Lease Terms and for no
7 other purpose without Landlord's prior written consent which may be withheld in Landlord's sole
s and absolute discretion.
9 6.2. Compliance with Applicable Laws and Requirements. In connection with its use,
to Tenant (i) shall at its expense comply with all applicable laws, ordinances, regulations, codes and
I I orders of any governmental or other public authority including without limitation, any and all
12 Environmental Laws as defined in paragraph 6.7.6 and the Americans with Disabilities Act of
13 1990 (collectively, together with any supplements or modifications thereto, "Applicable Laws "),
14 and also including, without limitation, those requiring alteration of the Premises because of
is Tenant's specific use or required pursuant to Paragraph 6,7; (ii) shall create no nuisance nor
16 allow any objectionable liquid, odor, or noise to be emitted from the Premises; (iii) shall store no
17 gasoline or other highly combustible materials on the Premises which would violate any
is applicable fire code or regulation nor conduct any operation that shall increase Landlord's fire
19 insurance rates for the Premises, the Building or the Park, provided, however, Tenant shall have
zo the right to maintain small quantities of such materials in the Premises (in accordance with
21 applicable code requirements) as are associated with Tenant's normal business operations; (iv)
22 shall not invalidate or impair any roof warranty; and (v) shall not overload the walls, ceilings
23 floors or electrical circuits of the Premises or Building. Tenant, at Tenant's sole cost and
24 expense, shall obtain and maintain any and all permits and licenses required in order for Tenant
25 to operate the Permitted Use in the Premises. Any power- driven machinery or equipment which
26 Tenant proposes to install shall be subject to Landlord's prior written consent, which consent
27 shall not be unreasonably withheld, delayed or conditioned; without limiting the foregoing, such
28 consent may be conditioned upon Tenant retaining at Tenant's sole cost and expense (i) a
29 qualified and competitively priced electrician reasonably selected by Landlord whose opinion
30 shall control regarding electrical circuits and (ii) a qualified and competitively priced engineer or
31 architect reasonably selected by Landlord whose opinion shall control regarding floor loads.
32 Allowable ground floor load shall not exceed five hundred (500) pounds per square foot.
33 6.3. Storage. Without limiting the foregoing and subject to Paragraph 6.5, Tenant, at
34 Tenant's sole cost and expense, shall make such alterations and additions to the Premises and the
35 Building required due to Tenant's racking configuration and storage of products within the
36 Premises. Such alterations and additions to the Premises may be required for compliance with
37 applicable building and fire codes, and may include, without limitation, installation of fire rated
38 separation walls, fire sprinkler system upgrades, racking sprinklers, smoke vents, curtain boards,
39 small hose stations and firefighter entrances.
40 6.4. Signage. Tenant, at Tenant's sole cost and expense, may erect a sign stating its
41 name after first securing Landlord's written approval of the size, color, design, wording and
42 location, which approval shall not be unreasonably withheld, delayed or conditioned. All
43 signage and the installation and maintenance thereof shall comply with all Applicable Laws and
44 Landlord's then current signage criteria for the Building and/or Park. No signs shall be painted
45 on the Building or exceed the height of the Building. All signs installed by Tenant shall be
46 removed, at Tenant's sole cost and expense, upon expiration or earlier termination of this Lease
47 with the sign location restored to its former state.
48 6.5. Alterations. Tenant shall make no alterations, additions or improvements to the
49 Premises without Landlords prior written consent as provided herein and without a valid
so building permit issued by the appropriate governmental agency. Notwithstanding anything to the
si contrary herein, Tenant may make non - structural Alterations to the interior of the Premises
52 costing less than Fifteen Thousand and No/100 Dollars ($15,000.00) per calendar year without
53 Landlord's consent but subject to all other applicable provisions of this Lease. To the extent that
54 any alterations, additions or improvements to the Premises constitute "Major Alterations" (as
5s defined below), Landlord may withhold its consent in Landlord's sole and absolute discretion;
56 otherwise, Landlord's consent to any alterations, additions or improvements to the Premises other
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1 than Major Alterations shall not be unreasonably withheld. As used herein, "Major Alterations"
2 shall mean any alterations, additions or improvements (i) which are visible from outside the
3 Premises and/or Building (including design and aesthetic changes), and/or (u) to the exterior of
4 the Building, the roof of the Building, the heating, ventilation and/or air conditioning systems
s serving the Premises, the fire sprinkler, plumbing, electrical, mechanical and/or any other
6 systems serving the Premises, any interior, load- bearing walls, the foundation and/or the slab of
7 the Building. Tenant shall notify Landlord in writing at least fifteen (15) days prior to
s commencement of any work to enable Landlord to post a Notice of Non - Responsibility or other
9 notice deemed proper before the commencement of work. Any and all such alterations, additions
to or improvements shall comply with all Applicable Laws including, without limitation, obtaining
11 any required permits or other governmental approvals. Upon termination of this Lease, any
12 alterations, additions and improvements (including without limitation all electrical, lighting,
13 plumbing, heating and air -conditioning equipment, doors, windows, partitions, drapery,
14 carpeting, shelving, counters, and physically attached fixtures) made by Tenant shall at once
15 become part of the realty and belong to Landlord unless the terms of the applicable consent
16 provide otherwise, or Landlord requests that part or all of the additions, alterations or
17 improvements be removed. In such case, Tenant, at its sole cost and expense, shall promptly
rs remove the specified additions, alterations or improvements and shall fully repair and restore the
19 relevant portion(s) of the Premises to the condition in which Tenant is otherwise required to
20 surrender the Premises under Paragraph 17.1.
21 6.6. C Tenant shall not install or cause to be installed any cabling or wiring
n (collectively, "Cabling ") without the prior written consent of Landlord as provided in
23 Paragraph 6.5. Landlord's approval shall not be unreasonably withheld, conditioned or delayed.
24 Any installation of Cabling shall be performed pursuant to Paragraph 6.5, shall meet the
zs requirements of the National Electrical Code (as may be amended from time to time), and shall
26 comply with all Applicable Laws. On or prior to the expiration or earlier termination of this
27 Lease, Tenant, at Tenant's sole cost and expense, shall remove all Cabling so installed by or on
28 behalf of Tenant unless Landlord, in its sole and absolute discretion, elects in writing to waive
29 this requirement. Any Cabling removed by Tenant shall be disposed of by Tenant, at Tenant's
3o sole cost and expense, in accordance with all Applicable Laws.
31 6.7. Hazardous Substances.
32 6.7.1. Use of Hazardous Substances. Tenant shall not cause or permit any
33 Hazardous Substances (as defined in Paragraph 6.7.7) to be spilled, leaked, disposed of or
34 otherwise released on, under or about the Premises, the Outside Area or any other portion of the
35 Park by Tenant, its employees, agents, contractors or invitees (each, a "Tenant Party "). Subject
36 to the provisions of this Paragraph 6.7, (i) Tenant may use on the Premises only those Hazardous
37 Substances typically used in the prudent and safe operation of the Permitted Use, and (ii) Tenant
38 may store such Hazardous Substances on the Premises, but only in quantities necessary to satisfy
39 Tenant's reasonably anticipated needs. Notwithstanding the foregoing, in no event shall Tenant
40 use any chlorinated solvents on or about the Premises, the Building, the Outside Area or the Park
41 without Landlord's prior written consent, which consent shall not be unreasonably withheld,
42 delayed or conditioned. In addition to complying with Paragph 6.2, Tenant shall exercise the
43 highest degree of care in the use, handling and storage of Hazardous Substances and shall take
as all practicable measures to minimize the quantity and toxicity of Hazardous Substances used,
45 handled or stored on the Premises.
46 6.7.2. Notice of Release. Tenant shall notify Landlord, including delivery of
47 notice by facsimile (in addition to delivery of notice as set forth in Paragraph 23.7), immediately
as upon becoming aware of the following: (i) any spill, leak, disposal or other release of any
49 Hazardous Substances on, under or about the Premises, the Outside Area or any other portion of
so the Park; (ii) any notice or communication from a governmental agency or any other person
51 relating to any Hazardous Substances on, under or about the Premises; or (iii) any violation of
52 any Environmental Laws with respect to the Premises or Tenant's activities on or in connection
53 with the Premises.
sa 6.7.3. Spills andReleases. In the event of a spill, leak, disposal or other release
55 of any Hazardous Substances on, under or about the Premises, the Outside Area or any other
56 portion of the Park caused by Tenant or a Tenant Party, or the threat of the same, Tenant shall
57 (i) immediately undertake all emergency response necessary to contain, cleanup and remove the
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i released Hazardous Substance(s), (ii) promptly undertake all investigatory, remedial, removal
2 and other response action necessary or appropriate to ensure that any Hazardous Substances
3 contamination is completely eliminated and all affected portions of the Premises, Outside Area
4 and Park are returned to the condition that existed prior to the spill, leak, disposal or other
s release, all to Landlord's reasonable satisfaction, and (iii) provide Landlord copies of all
6 information and reports related to the Hazardous Substances and this event (regardless of
7 whether Tenant deems the same privileged or confidential), including but not limited to all
s correspondence with any governmental agency regarding the release (or threatened release) or
9 the response action, a detailed report documenting all such response action, and a certification
to that any contamination has been eliminated. All such response action shall be performed, all
1 such reports shall be prepared and all such certifications shall be made by an environmental
12 consultant reasonably acceptable to Landlord.
13 6.7.4. Investigations. If Landlord at any time during the Lease Term (including
14 any holdover period) reasonably believes that Tenant or a Tenant Party is not complying with
15 any of the requirements of this Paragraph 6.7, Landlord may require Tenant to furnish to
16 Landlord, at Tenant's sole expense and within thirty (30) days following Landlord's request
17 therefor, an environmental audit or any environmental assessment with respect to the matters of
is concern to Landlord. Such audit or assessment shall be prepared by a qualified consultant
19 reasonably acceptable to Landlord.
zo 6.7.5. Tenant's Indemnification. Tenant shall indemnify, defend and hold
21 harmless Landlord, its employees and agents, any persons holding a security interest in the
22 Premises or any other portion of the Park, and the respective successors and assigns of each of
23 them, for, from, against and regarding any and all claims, demands, liabilities, damages, fines,
24 losses (including without limitation diminution in value and loss of use), costs (including without
25 limitation the cost of any investigation, remedial, removal or other response action required by
26 Environmental Laws) and expenses (including without limitation reasonable attorneys fees and
27 expert fees incurred in obtaining advice and incurred at and in preparation for discovery,
2s including depositions, arbitration, trial, appeal, petition for review, administrative proceeding
29 and any litigation or other proceedings in bankruptcy court including those involving issues
30 unique to bankruptcy law) arising out of or in any way relating to the use, treatment, storage,
31 generation, transport, release, leak, spill, disposal or other handling of Hazardous Substances on,
32 under or about the Premises or the Park by Tenant or any other Tenant Party. Landlord's rights
33 under this Paragraph 6.7.5 are in addition to and not in lieu of any other rights or remedies to
34 which Landlord may be entitled under this Lease or otherwise. In the event any action is brought
35 against Landlord by reason of any such claim, Tenant shall resist or defend such action or
36 proceeding by counsel reasonably satisfactory to Landlord upon Landlords demand. The
37 obligation to indemnify, defend and hold harmless shall include, without limitation,
38 (A) reasonable costs incurred in connection with investigation of site conditions, (B) reasonable
39 costs of any cleanup, remedial, removal or restoration work required by any federal, state or local
4o governmental agency or political subdivision with respect to Hazardous Substances,
41 (C) diminution in value of the Premises and/or any other portion of the Park, (D) damages
42 arising from any adverse impact on marketing of space in the Building and/or any other portion
43 of the Park, (E) reasonable sums paid in settlement of claims, attorneys fees, consultant and
44 laboratory fees and expert fees, and (F) the value of any loss of the use of the Premises or any
45 other portion of the Park or any part thereof. Tenant's obligations under this Paragraph 6.7.5
46 shall survive the expiration or termination of this Lease for any reason.
47 6.7.6. landlord's Indemnification. Subject to the other provisions of this Lease,
48 Landlord shall indemnify, defend and hold harmless Tenant and its employees and agents and
49 the respective successors and assigns of each of them, for, from, against and regarding any and
so all claims, demands, liabilities, damages, fines, losses, costs (including without limitation the
51 cost of any investigation, remedial, removal or other response action required by Environmental
52 Laws) and expenses (including without limitation attorneys fees and expert fees incurred in
53 obtaining advice and incurred at and in preparation for discovery, including depositions,
54 arbitration, any trial, appeal, petition for review or administrative proceeding and any litigation
5s or other proceeding in bankruptcy court including those involving issues unique to bankruptcy
56 law) arising out of or in any way relating to the actual or alleged use, treatment, storage,
57 generation, transport, release, leak, spill, disposal or other handling of Hazardous Substances on
5s the Premises by Landlord, or any of its contractors, agents or employees. In the event any action
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1 is brought against Tenant by reason of any such claim, Landlord shall resist or defend such
2 action or proceeding by counsel satisfactory to Tenant upon Tenant's demand. The obligation to
3 indemnify, defend and hold harmless shall include, without limitation, reasonable sums paid in
4 settlement of claims, attorneys fees, consultant and laboratory fees and expert fees. Landlord's
5 obligations under this Paragraph 6.7.6 shall survive the expiration or termination of this Lease
6 for any reason.
z 6.7.7. Definitions. The term "Environmental Laws" shall mean any and all
8 federal, state, or local laws, statutes, rules, regulations, ordinances, or judicial or administrative
9 decrees or orders relating to: (i) health, safety or environmental protection; (ii) the emissions,
io discharges, releases or threatened releases of pollutants, contaminants or toxic or hazardous
11 materials into the environment (including, without limitation, ambient air, surface water, ground
12 water or subsurface strata); or (iii) the use, storage, treatment, transportation, manufacture,
13 refinement, handling, production or disposal of. or exposure to pollutants, contaminants or toxic
14 or hazardous materials, including, without limitation, the Comprehensive Environmental
is Response, Compensation and Liability Act, 42 USC §9601 e Seq. ( "CERCLA "), as amended
16 and judicially and administratively interpreted through the date hereof, and all regulations
17 promulgated thereunder as of such date. The term "Hazardous Substance" (collectively,
is "Hazardous Substances ") shall mean: (A) any products, materials, solvents, elements,
19 compounds, chemical mixtures, contaminants, pollutants, or other substances identified as toxic
20 or hazardous under CERCLA or any other Environmental Laws; and (B) the following
21 substances: PCBs, gasoline, kerosene or other petroleum products, toxic pesticides and
n herbicides, volatile and/or chlorinated solvents, materials containing asbestos or formaldehyde
23 and radioactive materials.
24 7. Utility Charges; Building Maintenance and Repairs.
25 7.1. Utility Charges. Tenant shall pay when due all charges for electricity, natural gas,
26 water, garbage collection, janitorial service, sewer, and all other utilities of any kind furnished to
27 the Premises during the Lease Term. If charges are not separately metered or stated, Landlord
28 shall apportion the utility charges on an equitable basis and Tenant shall pay such charges to
29 Landlord within thirty (30) days following receipt by Tenant of Landlord's statement for such
30 charges. Landlord shall have no liability resulting from any interruption of utility services,
31 except to the extent caused by Landlord's negligence or willful misconduct. Without limiting the
32 generality of the foregoing, Landlord shall have no liability for any interruption of utility
33 services caused by fire or other casualty, strike, riot, vandalism, the making of necessary repairs
34 or improvements, or any other cause beyond Landlord's reasonable control. Tenant shall control
35 the temperature in the Premises to prevent freezing of any sprinkler system.
36 7.2. Landlord's Maintenance and Repairs.
37 7.2.1. Costs Not Included In Operating Expenses. Landlord's maintenance,
38 repair and replacement obligations which are paid by Landlord and not reimbursed by Tenant are
39 set forth in this Paragraph 7.2.1. Landlord, at its own cost and expense, shall be responsible only
40 for (i) roof replacement, (ii) repair and replacement of the foundation of the Building and
41 (iii) repair and replacement of the structural elements of the Building. The terms "roof' and
42 "walls" as used herein shall not include windows, glass or plate glass, doors, special store fronts
43 or office entries.
44 7.2.2. Costs included In Operating Expenses. Landlord is responsible for
45 performing maintenance, repairs and replacements of (i) the exterior paved areas and curbs of the
46 Building and Outside Area, (ii) all landscaping of the Building and Outside Area, (iii) the
47 exterior walls of the Building (including painting), gutters, downspouts and roof repairs,
48 (iv) sprinkler systems and main sewage line(s) and (v) any other maintenance, repair or
49 replacement items normally associated with the foregoing. The foregoing reasonable costs and
so expenses of such repair, replacement, maintenance and other such items shall be included as part
sl of Operating Expenses and Tenant shall be responsible for paying its proportionate share thereof.
52 7.2.3. Notice to Landlord; Tenant's Waiver. Tenant shall promptly give
53 Landlord written notice of defect or need for repairs required pursuant to the terms of this Lease,
54 following the receipt of which Landlord shall promptly repair same or cure such defect.
55 Landlords liability with respect to any defects, repairs, replacement or maintenance for which
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1 Landlord is responsible hereunder shall be limited to the cost of such repairs or maintenance or
2 the curing of such defect, except to the extent Landlord's failure to repair or cure the relevant
3 item results in a default by Landlord under Paragraph 16 of this Lease. Tenant waives any right
4 now or hereafter granted by law to make any repairs which are the responsibility of Landlord
s upon Landlord's failure to make such repairs.
6 7.3. Tenant's Maintenance and Repairs. Tenant, at its own cost and expense, shall
7 keep all parts of the Premises (except for those for which Landlord is expressly responsible
s hereunder) neatly maintained and in good condition and repair, ordinary wear and tear, casualty
9 and condemnation excepted, and promptly make all necessary repairs and replacements (as
to provided herein except for replacements by Landlord pursuant to Paragraph 7.2) to the Premises.
11 Without limiting the generality of the foregoing. Tenant's responsibility shall include
12 (i) maintenance and repair of any portion of the electrical system which exclusively serves the
13 Premises, above -slab plumbing, and all drainpipes and sewer line(s) exclusively serving the
14 Premises, (ii) maintenance and repair of overhead and personnel doors (provided that, should an
Is overhead or personnel door require replacement due to damage by Tenant, its employees, agents,
16 contractors and invitees, replacement of such overhead or personnel door shall be at Tenant's
17 own cost and expense) , (iii) replacement of all broken or cracked glass within or on the exterior
Is of the Premises with glass of the same quality and type, and (iv) pest control and janitorial
19 service. Tenant shall refrain from any discharge that will damage the septic tank or sewers
zo serving the Premises. Tenant, at its own cost and expense, shall maintain and repair all hot
21 water, heating, ventilation and air conditioning systems and equipment within the Premises (the
22 "HVAC System ") pursuant to manufacturer's guidelines. As of the Commencement Date,
23 Tenant shall, at its sole cost and expense, contract with a reputable HVAC service contractor (the
24 "HVAC Contractor "), to perform not less than quarterly inspections and to perform routine
25 maintenance and repairs of the HVAC System (the "HVAC Maintenance Contract "). At all
26 times throughout the Lease Term, Tenant shall be solely responsible for all costs for the quarterly
27 inspections and routine maintenance associated with the HVAC Maintenance Contract and all
23 maintenance and repairs performed on the HVAC System, but not the replacement of all or any
29 portion thereof. If the Premises have a separate entrance, Tenant shall keep the sidewalks
30 abutting the Premises or the separate entrance free and clear of snow, ice, debris, and
31 obstructions of every kind.
32 7.4. Security. Tenant acknowledges and agrees that Tenant is responsible for securing
33 the Premises and that Landlord does not, and shall not be obligated to, provide any police
34 personnel or other security services or systems for any portion of the Premises, Building, Outside
35 Area and/or Park.
36 7.5. Access to Premises: Interference. Provided that Landlord gives Tenant
37 reasonable notice (but in no event less than seventy -two (72) hours, except in case of emergency
38 (as defined below), in which case no prior notice shall be required), Landlord shall have access
39 to the Premises at reasonable times during business hours throughout the Lease Term to perform
40 repairs and maintenance required under this Lease and to perform any other alterations or
41 improvements which Landlord deems necessary in its reasonable discretion ( "Landlord's Future
42 Work "). Landlord and Tenant agree to communicate and reasonably cooperate with each other
43 with respect to the performance of Landlord's Future Work such that Landlord is able to perform
44 Landlord's Future Work economically and efficiently without unreasonable disruption to
45 Tenant's continuing operations in the Premises. However, Tenant understands that Landlord
46 may be performing Landlord's Future Work during business hours and that Landlord's Future
47 Work may be performed in and around the exterior of the Premises and in the Premises.
48 Accordingly, notwithstanding any provision to the contrary contained in this Lease and provided
49 that Landlord's Future Work is performed in a reasonable manner, Landlord and Landlord's
so contractors, agents and employees shall have all access and other rights reasonably required in
sr order to perform and complete Landlord's Future Work. Such performance and completion of
52 Landlord's Future Work shall in no way constitute constructive eviction of Tenant from any
53 portion of the Premises nor shall Tenant be entitled to abatement or reduction of Base Rent,
34 Additional Rent or other charges payable by Tenant under this Lease as a result thereof.
55 Landlord shall have no liability for interference with Tenant's use when making alterations,
56 improvements or repairs to the Premises, Building, Outside Area or the Park. For purposes of
57 this Section 7.5, an "emergency" shall mean the threat of immediate injury or damage to persons
58 or property or the immediate imposition of a civil or criminal fine or penalty.
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i 8. Taxes and Operating Expenses.
2 8.1. faympas. Commencing on the Commencement Date (subject to Paragra 3)
3 and thereafter in advance on the first day of each month during the Lease Term, Tenant shall pay
4 a monthly sum as Additional Rent representing Tenant's proportionate share of Taxes and
5 Operating Expenses for the Premises. Such amount shall annually be estimated by Landlord in
6 good faith to reflect actual or anticipated costs. Upon termination of this Lease or at periodic
7 intervals during the Lease Term, Landlord shall compute its actual costs for such items during
s the relevant period and shall furnish Tenant with a statement in reasonable detail showing such
9 items. Any overpayment by Tenant shall be credited against payments of Additional Rent to be
to made by Tenant under this Lease, and any deficiency shall be paid by Tenant within fifteen (15)
t t days after receipt of Landlord's statement. Landlord's records of expenses for Taxes and
12 Operating Expenses may be inspected by Tenant not more than one (1) time per annum at
13 reasonable times upon thirty (30) days prior written notice to Landlord; provided, however, that
14 Tenant shall not retain any third party auditor on a contingency fee basis to perform any such
is audit or inspection.
16 8.2. Tenant's Proportionate Share. Tenant's proportionate share of Taxes shall mean
l� that percentage which the Premises Area set forth in the Basic Lease Terms bears to the total
is rentable square footage of all buildings covered by the tax statement for the Taxes. Tenant's
19 proportionate share of Operating Expenses for the Building shall be computed by dividing the
20 Premises Area by the total rentable area of the Building. If in Landlord's reasonable judgment
21 either of these methods of allocation results in an inappropriate allocation to Tenant, Landlord
22 shall select some other reasonable method of determining Tenant's proportionate share.
23 8.3. Taxes Charged. As used herein, "Taxes" means all taxes, assessments and/or
24 governmental charges of any kind and nature assessed against the Premises, the Building or the
25 Park during the Lease Term and shall include all general real property taxes, all general and
26 special assessments payable in installments, and any rent tax, tax on Landlord's interest under
27 this Lease, or any tax in lieu of the foregoing, whether or not any such tax is now in effect.
28 Landlord shall have the right to employ a tax consulting firm to attempt to assure a fair tax
29 burden on the Building and grounds within the applicable taxing jurisdiction, and Tenant agrees
30 to pay its proportionate share (calculated in the same manner as Tenant's proportionate share of
31 Taxes) of the cost of such consultant. Tenant shall not, however, be obligated to pay any tax
32 based upon Landlord's net income or any franchise or business tax of Landlord. In addition,
33 Tenant shall be liable for all taxes levied or assessed against any personal property or fixtures
34 placed in the Premises. If any such taxes are levied or assessed against Landlord or Landlord's
35 property and (i) Landlord pays the same or (ii) the assessed value of Landlord's property is
36 increased by inclusion of such personal property and fixtures and Landlord pays the increased
37 taxes, then, within thirty (30) days following receipt by Tenant of a copy of the applicable tax
38 bill with Landlord's written request for payment thereof, Tenant shall pay to Landlord such taxes
39 as part of Tenant's payment of Taxes.
4o 8.4. Operating Expenses. "Operating Expenses" charged to Tenant hereunder shall
41 mean all costs incurred by Landlord in connection with owning, operating, insuring, maintaining,
42 repairing and replacing the Premises, Building, and all other portions of the Park or Outside Area
43 including, without limitation, the cost of all utilities or services not paid directly by Tenant,
44 property insurance, liability insurance, property management, maintenance, repair and
45 replacement of landscaping, parking areas, and any other common facilities, and performing
46 Landlord's obligations under Paraeraph 7.2.2. Operating Expenses shall include without
47 limitation, the following: (i) reserves for roof repair, exterior painting and other appropriate
4s reserves; (ii) the cost, including interest at ten percent (10%) per annum, amortized over its
49 useful life, of any capital improvement made to any portion of the Park by Landlord after the
so Effective Date of this Lease which is required under any Applicable Laws that were not
51 applicable to the relevant portion of the Park at the time the relevant portion of the Park was
52 constructed; (iii) the cost, including interest at ten percent (10%) per annum, amortized over its
53 useful life, of installation of any device or other equipment which improves the operating
54 efficiency of any system within the Park and thereby reduces Operating Expenses; and
55 (iv) maintenance, repair and replacement items which have a reasonable life expectancy in
56 excess of five (5) years and which, if charged to Operating Expenses in one (1) year, would
57 unreasonably distort total Operating Expenses for that year and therefore the cost thereof is being
ss spread over the reasonable life expectancy of the work performed. Operating Expenses shall not
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I include roof replacement, correction of the Building foundation and/or correction of deficiencies
2 in structural elements of the Building.
3 8.4.1. Statements. Each calendar year following the year in which the
4 Commencement Date occurs, Landlord shall send Tenant a statement ( "Landlord's Statement "), setting
5 forth: (i) the actual amount of the Operating Expenses incurred during the preceding calendar year, or
6 portion thereof; (ii) Tenant's Proportionate Share of the amount by which such actual Operating Expenses
7 exceeds the Operating Expense Allowance; (iii) the total amount of any payments of Tenant's
8 Proportionate Share of such Operating Expenses made during such calendar year (iv) any overage or
9 deficiency, as the case may be, in the payment of Tenant's Proportionate Share of such Operating
to Expenses made during such previous calendar year; (v) Landlord's estimate of the amount of the
1 t Operating Expenses for the then current calendar year in which the Landlord's Statement is being given;
12 and (v) the monthly installment of Tenant's Proportionate Share thereof for such current calendar year.
13 8.4.2. Tenant Audit. Upon not less than ten (10) days prior written notice to
14 Landlord, and not more frequently than once per calendar year, Tenant shall have the right, at its
15 expense, to cause an audit to be made of Landlord's computation of the Operating Expenses for
16 the immediately preceding calendar year, which audit shall be conducted at Landlord's offices.
rr Unless Tenant object to any Operating Expenses reconciliation statement by written notice given
is to Landlord within one hundred fifty (150) days after its receipt of such statement, such
19 reconciliation statement shall be considered final and binding on Tenant. Any third party
20 retained by Tenant to audit Landlord's computation of Operation Expenses shall be compensated
21 by Tenant (except as provided below) and strictly on a non -contingency fee basis. If such audit
22 shows that Landlord's calculation of the Operating Expenses for any calendar year was
23 overstated by more than five percent (5%), then Landlord shall reimburse Tenant for the
24 reasonable cost of such audit as paid to third parties. Tenant shall not be entitled to withhold or
2s deduct any portion of Base Rent or Additional Rent during the pendency of any such audit. Any
26 errors disclosed by such audit shall be promptly corrected, provided that Landlord shall have the
n right to cause another independent audit to be made of such computations, and in the event of a
2s disagreement between the auditors, the audit disclosing the least amount of deviation from
29 Landlord's original computations shall be conclusively deemed to be correct. In the event that
30 the Operating Expenses are changed as a result of any audit as set forth in this Section, Landlord
31 shall re- compute Tenant's Proportionate Share of the Operating Expenses for the calendar year in
32 question, and based on such computation, Landlord shall refund any amount determined to be
33 due Tenant (unless Tenant is in default under this Lease beyond any applicable notice and cure
34 period) or Tenant shall pay any amount determined to be due Landlord, as the case may be, such
35 payment to be made within thirty (30) days following such determination.
36 9. Parking and Storage Areas.
37 9.1. Parking. Subject to the provisions of this Paragraph 9.1, Tenant, its employees,
38 agents, contractors and invitees shall have the non - exclusive right to use the common driveways
39 and truck court areas located in the Outside Area, subject to the parking rights and rights of
40 ingress and egress of other occupants. In addition, Tenant, its employees, agents, contractors and
41 invitees shall have the non -exclusive right to use any private parking spaces immediately
42 adjacent to the Premises. In addition, Tenant, its employees, agents, contractors and invitees
43 shall have the exclusive right to use those two (2) parking spaces as shown on the attached
44 Exhibit B. Tenant's parking shall not be reserved and shall be limited to vehicles no larger than
45 standard size automobiles, or standard size pickups or sport utility vehicles. Under no
46 circumstances shall trucks, trailers or other large vehicles serving the Premises (i) be used for
47 any purpose other than for the loading and unloading of goods and materials or (ii) be permitted
48 to block streets and/or ingress and egress to and from the Park. Temporary parking of large
49 delivery vehicles in the Park may be permitted only with Landlord's prior written consent.
50 Vehicles shall be parked only in striped parking spaces and not in driveways, loading areas or
51 other locations not specifically designated for parking. Handicapped spaces shall only be used
52 by those legally permitted to use them. Pursuant to Paragraph 1.6 of this Lease, Landlord
s3 reserves the right to grant parking rights (exclusive and otherwise) within the relevant portions of
54 the Outside Area to occupants of the Park.
55 9.1.1. Landlord shall use its best efforts to provide additional vehicle storage for
56 Tenant within vacant warehouse space within the Park on a periodic basis. Upon Tenant's
57 request for vehicle storage, Landlord shall inform Tenant of the location of the available space
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and Tenant may store vehicles in such space temporarily at a cost of $10.00 per vehicle per day
2 of storage. Landlord shall have no liability for any damage to any stored vehicles, makes no
3 representation or warranty of the availability or suitability of such storage space, and Tenant
4 shall be responsible for and shall promptly repair any damage to the storage space arising out of
5 Tenant's storage of said vehicles.
6 9.2. Storage Areas. Tenant shall not store any materials, supplies or equipment
7 outside the Premises in any unapproved or unscreened area. If Tenant erects any visual barriers
a for storage areas, Landlord shall have the right to approve the design and location, which
9 approval may be withheld or conditioned in Landlord's sole and absolute discretion and all of
io which shall be removed upon the expiration or earlier termination of this Lease as and if required
1 i by Landlord. Trash and garbage receptacles shall be kept covered at all times.
12 10. Tenant's Indemnification.
13 Except to the extent waived by Paragraph 113, Tenant shall indemnify, defend and hold
14 harmless Landlord for, from, against and regarding any claim, loss or liability arising in the
is Premises or arising out of or related to any action or inaction of Tenant or a Tenant Party
16 (including, without limitation, any failure by Tenant to perform any obligation under this Lease).
iT In the event any action is brought against Landlord by reason of any such claim, Tenant shall
13 resist or defend such action or proceeding by counsel satisfactory to Landlord upon Landlord's
19 demand. Landlord shall have no liability to Tenant for any injury, loss or damage caused by
20 third parties, or by any condition of the Premises. The obligations under this Paragraph 10 shall
21 survive termination of this Lease.
22 11. Insurance; Waiver of Subrogation.
23 11.1. Landlord. Landlord shall keep the Premises insured against fire and other risks
24 covered by a "Causes of Loss - Special Form" property insurance policy and against such other
25 losses (including, without limitation earthquake, earth movement and flood) as Landlord may
26 deem reasonable.
27 11.2. Tenant. Tenant shall keep all of Tenant's property on the Premises, and all
2s improvements, alterations and other betterments installed by Tenant, insured against fire and
29 other risks covered by a "Causes of Loss - Special Form" property insurance policy in an amount
30 equal to the replacement cost of such property, the proceeds of which shall, so long as this Lease
31 is in effect, be used for the repair or replacement of the property so insured. Tenant shall also
32 carry commercial general liability insurance written on an occurrence basis with policy limits of
33 not less than Two Million and No /100 Dollars ($2,000,000.00) each occurrence, which initial
34 amount shall be subject to periodic increase based upon inflation, increased liability awards,
35 recommendation of Landlord's professional insurance advisers and other relevant factors. In
36 addition, if Tenant's use of the Premises includes any activity or matter that would be excluded
37 from coverage under a commercial general liability policy, Tenant shall obtain such
38 endorsements to the commercial general liability policy or otherwise obtain insurance to insure
39 all liability arising from such activity or matter in such amounts as Landlord may reasonably
40 require. Such commercial general liability insurance shall be (i) provided by an insurer or
41 insurers who are approved to issue insurance policies in the State in which the Premises are
42 located and have an A.M. Best financial strength rating of A- or better and financial size
43 category of VII or larger, and (ii) shall be evidenced by a certificate delivered to Landlord on or
44 prior to the Commencement Date and annually thereafter stating that the coverage shall not be
45 cancelled or materially altered without thirty (30) days advance written notice to Landlord.
46 Landlord shall be named as an additional insured on such policy together with, upon written
47 request from Landlord, Landlord's mortgagee and Landlord's managing agent.
• as 11.3. Waiver of Subrogation. Landlord and Tenant each hereby releases the other, and
49 the other's partners, officers, directors, members, agents and employees, from any and all
50 liability and responsibility to the releasing party and to anyone claiming by or through it or under
51 it, by way of subrogation or otherwise, for all claims, or demands whatsoever which arise out of
52 damage or destruction of property occasioned by perils which can be insured by a "Causes of
53 Loss - Special Form" and/or "special coverage" insurance form, including endorsements
54 extending coverage to the perils of earthquake, earth movement and flood. Landlord and Tenant
5s grant this release on behalf of themselves and their respective insurance companies and each
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represents and warrants to the other that it is authorized by its respective insurance company to
2 grant the waiver of subrogation contained in this Paragraph 11.3. This release and waiver shall
3 be binding upon the parties whether or not insurance coverage is in force at the time of the loss
4 or destruction of property referred to in this Paragraph Jil.
s 12. Property Damage.
6 12.1. Notice: Total Destruction. Tenant shall promptly give written notice to Landlord
7 if the Premises or the Building are damaged or destroyed. If the Premises or the Building should
8 be totally destroyed or so damaged by an insured peril in an amount exceeding thirty percent
9 (30 %) of the full construction replacement cost of the Building or Premises, respectively (as used
to herein, the "Landlord Damage Threshold "), Landlord may elect to terminate this Lease as of the
11 date of the damage by notice of termination in writing to Tenant within thirty (30) days after
12 such date, in which event all unaccrued rights and obligations of the parties under this Lease
13 shall cease and terminate except to the extent such obligations specifically survive termination of
14 this Lease. If the Premises should be totally destroyed or so damaged by an insured peril in an
Is amount exceeding thirty percent (30'.) of the full construction replacement cost of the Premises
16 (as used herein, the "Tenant Damage Threshold "), Tenant may elect to terminate this Lease as of
17 the date of the damage by notice of termination in writing to Landlord within thirty (30) days
Is after such date, in which event all unaccrued rights and obligations of the parties under this
19 Lease shall cease and terminate except to the extent such obligations specifically survive
zo termination of this Lease.
21 12.2. Partial Destruction. . If the Building or the Premises should be damaged by an
n insured peril which does not meet either the Landlord Damage 'Threshold or the Tenant Damage
23 Threshold, or if damage or destruction meeting the Landlord Damage Threshold and/or the
24 Tenant Damage Threshold occurs but neither Landlord nor Tenant elects to terminate this Lease,
25 this Lease shall not terminate and Landlord shall restore the Premises to substantially its previous
26 condition, except that Landlord shall not be required to rebuild, repair or replace any par of the
n partitions, fixtures, alterations, additions and other improvements required to be covered by
28 Tenant's insurance pursuant to Paragraph 11.2. If the Premises are untenantable in whole or part
29 during the.period commencing upon the date of the occurrence of such damage and ending upon
30 substantial completion of Landlord's required repairs or rebuilding, Base Rent shall be reduced
31 during such period to the extent the Premises are not reasonably usable by Tenant for the
32 Permitted Use.
33 12.3. Damage Near End of Lease Terra. If the damage to the Premises or Building
34 occurs during the last twelve (12) months of the Lease Term in an amount exceeding twenty -five
35 percent (25%) of the full construction replacement cost of the Building or Premises, respectively,
36 either Landlord or Tenant may elect to terminate this Lease as of the date the damage occurred,
37 regardless of the sufficiency of any insurance proceeds. The party electing to terminate this
38 Lease shall give written notification to the other party of such election within thirty (30) days
39 after Tenant's notice to Landlord of the occurrence of the damage, in which event all unaccrued
4o rights and obligations of the 'parties under this Lease shall cease and terminate except to the
41 extent such obligations specifically survive termination of this Lease.
42 12.4. Repair of Damage. All repairs made by Landlord pursuant to this Paragraph 12
43 shall be accomplished as soon as is reasonably possible, subject to force majeure as described in
44 Paragraph 23.1. Landlord's good faith estimate of the cost of repairs of any damage, or of the
45 replacement cost of the Premises or the Building, shall be conclusive as between Landlord and
46 Tenant. The repair and restoration of the Premises shall be made pursuant to plans and
47 specifications developed by Landlord in Landlord's sole and absolute discretion and judgment,
as and such plans and specifications shall exclude all equipment, fixtures, improvements and
49 alterations installed by Tenant. All insurance proceeds for repairs shall be payable solely to
so Landlord, and Tenant shall have no interest therein. Nothing herein shall be construed to
s obligate Landlord to expend monies in excess of the insurance proceeds received by Landlord.
sz Landlord shall be responsible for the insurance deductible, unless the loss is caused by Tenant or
33 Tenant's agents, employees, officers or representatives, in which case, and notwithstanding the
54 provisions of Paragraph 11.3, Tenant shall be responsible for the amount of the deductible.
55 12.5. Other Damage. If the Premises or the Building is substantially or totally
56 destroyed by any cause whatsoever which is not covered by the foregoing provisions of this
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► Paragraph 12, this Lease shall terminate as of the date the destruction occurred; provided,
2 however, that if the damage does not exceed thirty percent (30%) of the full construction
3 replacement cost of the Building or Premises respectively, Landlord may elect (but will not be
4 required) to rebuild the Premises at Landlord's own expense, in which case this Lease shall
5 remain in full force and effect. Landlord shall notify Tenant of such election within thirty (30)
6 days after the casualty.
7 13. Condemnation.
8 13.1. Partial Taking. If a portion of the Premises is condemned and Paragraph 13.2
9 does not apply, this Lease shall continue on the following terms:
to 13.1.1. Landlord shall be entitled to all of the proceeds of condemnation, and
► ► Tenant shall have no claim against Landlord as a result of the condemnation.
12 13.1.2. Landlord shall proceed as soon as reasonably possible to make such
13 repairs and alterations to the Premises as are necessary to restore the remaining Premises to a
14 condition as comparable as reasonably practicable to that existing at the time of condemnation.
1s Landlord need not incur expenses for restoration in excess of the amount of condemnation
16 proceeds received by Landlord after payment of all reasonable costs, expenses and attorneys fees
17 incurred by Landlord in connection therewith.
18 13.1.3. Base Rent and Operating Expenses shall be abated during the period of
. 19 restoration to the extent the Premises are not reasonably usable by Tenant for the Permitted Use
20 pursuant to Paragraph 6.1, and Base Rent shall be reduced (and Operating Expenses
21 appropriately adjusted) for the remainder of the Lease Term in an amount equal to the reduction
22 in rental value of the Premises caused by the taking.
23 13.2. Total Taking. If a condemning authority takes the entire Premises or a portion
24 sufficient to render the remainder unsuitable for Tenant's use, then either party may elect to
2s terminate this Lease effective on the date that title passes to the condemning authority. Landlord
26 shall be entitled to all of the proceeds of condemnation, and Tenant shall have no claim against
n Landlord as a result of such condemnation.
28 14. Assignment, Subletting and Other Transfers.
29 14.1. General. Neither this Lease nor any part of the Premises may be assigned,
30 mortgaged, subleased or otherwise transferred, nor may a right of use of any portion of the
31 Premises be conferred on any person or entity by any other means, without the prior written
32 consent of Landlord which shall not be unreasonably withheld or delayed so long as there is no
33 existing default under this Lease but which may be issued subject to reasonable conditions. A
34 change of ownership of fifty percent (50 %) or more of ownership interests in Tenant shall be
35 deemed an assignment. Prior to effectuating any assignment, sublease or other transfer, Tenant
36 shall notify Landlord in writing of the name and address of the proposed transferee, and deliver
37 to Landlord with such notice a true and complete copy of the proposed assignment agreement,
38 sublease or other occupancy agreement, current financial statements of such proposed transferee,
39 a statement of the use of the Premises by such proposed transferee and such other information or
40 documents as may be necessary or appropriate to enable Landlord to determine the qualifications
41 of the proposed transferee together with a request that Landlord consent thereto ("Tenant's
42 Notice "). Without limiting Landlord's ability to deny or condition consent for any other reason,
43 it shall not be considered unreasonable if Landlord's consent to a proposed sublease, assignment
44 or other transfer is denied based on the following: (i) the business of the proposed transferee
45 (A) is not compatible with the nature and character of the Park or the businesses in the Park
46 and/or (B) will conflict with any exclusive uses or use restrictions that Landlord has granted to
47 other occupants of the Park, (ii) the financial strength of the proposed transferee is not at least
48 equal to the financial strength of Tenant either at the time Tenant entered into this Lease or at the
49 time of the proposed transfer (whichever is greater), (iii) the proposed transferee will excessively
so overpark the Building and/or the Park with automobiles or trucks (excessively overpark shall
51 mean that the proposed transferee's parking will violate local parking restrictions or will interfere
52 with other tenants occupying the Building or the Park), (iv) the proposed transferee cannot
53 demonstrate to Landlord's reasonable satisfaction the management skills or experience necessary,
54 in Landlord's reasonable opinion, to be successful in the Premises, (v) the proposed transferee
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t has a record of environmental contamination or their anticipated use of the Premises involves the
2 generation, storage, use, sale, treatment, release or disposal of any Hazardous Substances, or
3 (vi) the proposed form of sublease, assignment or other occupancy agreement is unacceptable
4 (unacceptable form of sublease, assignment or other occupancy agreement shall mean that the
5 content and format of the form are not consistent with the terms of this Lease or are not
6 consistent with the terms and requirements of Landlord's loan documents for the Building). Any
7 attempted assignment, subletting, transfer or encumbrance by Tenant in violation of the terms
s and covenants of this Paragraph 14.1 shall be void.
9 14.2. No Release; Excess Rent. No assignment, subletting or other transfer, whether
to consented to by Landlord or not, or permitted hereunder, shall relieve Tenant of its liability
11 under this Lease. If an event of default occurs while the Premises or any part thereof are
12 assigned, sublet or otherwise transferred, then Landlord, in addition to any other remedies herein
13 provided, or provided by law, may collect directly from such assignee, sublessee or transferee all
14 rents payable to Tenant and apply such rent against any sums due Landlord hereunder. No such
Is collection shall be construed to constitute a novation or a release of Tenant from the further
16 performance of Tenant's obligations hereunder. If Tenant assigns or otherwise transfers this
17 Lease or sublets the Premises for an amount in excess of the rent called for by this Lease, such
is excess shall be paid to Landlord promptly following receipt by Tenant.
19 14.3. Permitted Transfer. Notwithstanding the foregoing, but subject to paragraphs 6.1
20 and 6.7.1, of this Lease, Tenant may sublet all or any part of the Premises or otherwise transfer
21 Tenant's interest in and to this Lease while Tenant is not in default without Landlord's consent to
n (i) any other entity which is an Affiliate (as defined below) of Tenant or (ii) any entity which
23 merges or consolidates with, or acquires substantially all of the assets of Tenant (as used herein,
24 a "Permitted Transfer "). Tenant shall provide a Tenant's Notice with respect to any Permitted
25 Transfer within twenty (20) days prior to the effective date thereof. No Permitted Transfer shall
26 be deemed to constitute a release of Tenant from its obligations under this Lease. As used
27 herein, "Affiliate" shall mean (A) a wholly -owned subsidiary of Tenant, (B) the parent entity of
28 Tenant (the "Parent Entity "), or (C) an entity who has the same Parent Entity as Tenant.
29 15. Tenant Default.
30 15.1. pefault. Any of the following shall constitute a default by Tenant under this
31 Lease:
32 15.1.1. Tenant's failure to (i) pay rent or any other charge under this Lease within
33 five (5) days after it is due, provided that the first time (and only the first time) in any twelve
34 (12) consecutive month period during the Lease Term that Tenant fails to pay rent or any other
35 charge due hereunder (the "First Time Failure") shall not constitute a default by Tenant under
36 this Lease unless such First Time Failure continues for a period of five (5) days after receipt by
37 Tenant of notice from Landlord that such amount is due and payable or (ii) immediately cure or
38 remove any lien pursuant to Paragraph 19 or (iii) except as provided in Paragraphs 15.1.2
39 through 15.1.4, comply with any other term or condition within thirty (30) days following
40 Tenant's receipt of written notice from Landlord specifying the noncompliance. If any failure
41 described in clause (iii) of the immediately preceding sentence cannot be cured within the thirty
42 (30) -day period, this provision shall be deemed complied with so long as Tenant commences
43 correction within such period and thereafter proceeds in good faith and with reasonable diligence
44 to effect the remedy as soon as practicable.
45 15.1.2. Tenant's insolvency; assignment for the benefit of its creditors; Tenant's
46 voluntary petition in bankruptcy or adjudication as bankrupt; attachment of or the levying of
47 execution on the leasehold interest and failure of Tenant to secure discharge of the attachment or
4s release of the levy of execution within ten (10) days; or the appointment of a receiver for
49 Tenant's properties.
50 15.1.3. Abandonment of the Premises by Tenant.
51 15.1.4. Failure of Tenant to deliver the documents or agreements required under
52 Paragraph 18.1 within the relevant time period specified therein.
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15.2. Remedies for Default. For any default as described in Paragraph 15.1, Landlord
2 shall have the right to pursue any one (1) or more of the following remedies in addition to all
3 other rights or remedies provided herein or at law or in equity, without any notice or demand,
4 except as set forth below, of any kind or nature whatsoever to Tenant or to any other party liable,
5 in whole or in part, for the performance of Tenant's obligations under this Lease:
6 15.2.1.Terminate this Lease and/or Tenant's right to possession of the Premises
7 and Tenant's other rights under this Lease by written notice to Tenant without relieving Tenant
s from its obligation to pay damages.
9 15.2.2. Re -enter and take possession of the Premises and remove any persons or
to property by legal action or by self -help with the use of reasonable force and without liability for
11 damages and without having accepted a surrender. Tenant's liability to Landlord for damages
12 shall survive the tenancy. Landlord may, after such retaking of possession, relet the Premises
13 upon any reasonable terms. No such reletting shall be construed as an acceptance of a surrender
14 of Tenant's leasehold interest.
15 15.2.3. In the event of termination or retaking of possession following default,
16 Landlord shall be entitled to recover immediately, without waiting until the due date of any
17 future rent or until the date fixed for expiration of the Lease Term, the following amounts as
18 damages:
19 (i) The loss of rental from the date of default until a new tenant is
20 secured and paying rent.
21 (ii) The reasonable costs of reentry and reletting including without
22 limitation the cost of any cleanup, refurbishing, removal and disposal of Tenant's property and
23 fixtures, or any other expense occasioned by Tenant's default including but not limited to
24 remodeling or repair costs, attorney fees, court costs, broker commissions, and marketing costs.
25 (iii) Any excess of the value of the rent and all of Tenant's other
26 obligations under this Lease over the reasonable expected return from the Premises for the period
27 commencing on the earlier of the date of trial or the date the Premises are relet, and continuing
28 through the end of the Lease Term. The present value of future amounts shall be computed using
29 a discount rate equal to the prime loan rate in effect on the date of trial of major national banks
30 who are members of the Federal Reserve System, insured by the Federal Deposit Insurance
31 Corporation and are located in the State in which the Premises are located.
32 15.3. No Bar of Action(sl. Landlord may sue periodically to recover damages during
33 the period corresponding to the remainder of the Lease Term, and no action for damages shall
34 bar a later action for damages subsequently accruing.
35 15.4. Landlord Performance. If Tenant fails to perform any obligation under this Lease,
36 Landlord shall have the option to do so after five (5) days written notice to Tenant or upon
37 shorter notice in an emergency situation. All of Landlord's expenditures incurred in connection
38 with such performance shall be reimbursed by Tenant on demand together with interest at the
39 rate specified in Paragraph 23.2 from the date of expenditure until repaid. Such action by
40 Landlord and any reimbursement by Tenant shall not waive any default nor any other remedies
41 available to Landlord because of the default.
42 15.5. No Exclusion. The foregoing remedies shall be in addition to and shall not
43 exclude any other remedy available to Landlord at law or in equity.
44 16. Landlord Default.
45 Landlord shall be in default under this Lease if it shall fail to comply with any term,
46 provision or covenant of this Lease and shall not cure such failure within thirty (30) days after
47 written notice thereof to Landlord unless such cure cannot reasonably be accomplished within
48 such thirty (30) -day period. Landlord shall have such additional time as is reasonably necessary
49 to accomplish such cure provided Landlord promptly commences and diligently prosecutes such
so cure to completion.
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r 17. Surrender at Expiration or Termination.
2 17.1. Surrender. On expiration or early termination of this Lease, Tenant shall deliver
3 all keys to Landlord, have final utility readings made and pay all utility accounts current on the
4 date of move out, and surrender the Premises clean and free of debris inside and out, with all
s mechanical, electrical, and plumbing systems in good operating condition, all signage removed
6 and defacement corrected, and all repairs called for under this Lease completed. The Premises
7 shall be delivered in the same condition as at the Commencement Date, subject only to damage
s by casualty, the provisions of Paragraphs 6.5. 6.6. 9.2 and 17.2 and depreciation and wear from
9 ordinary use. Tenant shall remove all of its furnishings and trade fixtures that remain its
10 property and restore all damage resulting from such removal. Failure to remove said property
11 shall be an abandonment of same, and Landlord shall have the absolute right to deem the same to
12 be without value and to remove and/or dispose of it in any manner whatsoever without liability,
13 and Tenant shall be liable to Landlord for any costs of removal, restoration, transportation to
14 storage, storage and/or disposal, with interest on all such expenses as provided in Paragraph 23.2.
is The provisions of this paragraph 17.1 (including, without limitation, all provisions referenced
16 herein) shall survive the expiration or earlier termination of this Lease.
17 17.2. Removal of Hazardous Substances. Upon expiration of this Lease or sooner
18 termination of this Lease for any reason, Tenant shall remove all Hazardous Substances and
19 facilities used for the storage or handling of Hazardous Substances from the Premises and restore
20 the affected areas by repairing any damage caused by the installation or removal of the facilities.
21 Following such removal, Tenant shall certify in writing to Landlord that all such removal is
22 complete. Until such time as Tenant has fulfilled all the requirements of this Paragraph 17.2 (in
23 addition to any other requirements), Landlord may treat Tenant as a holdover Tenant as provided
24 below; provided, however, that any such continuation of this Lease shall not relieve Tenant of its
2s obligations under this Paragraph 17.2.
26 17.3. Failure to Vacate. If Tenant fails to vacate the Premises when required and holds
27 over without Landlord's prior written consent, Landlord may elect either (i) to treat Tenant as a
28 tenant from month to month, subject to all provisions of this Lease except the provision for
29 Lease Term and at a rental rate equal to one hundred fifty percent (150%) of the Base Rent
30 payable by Tenant immediately preceding the scheduled expiration of the Lease Term plus
31 Additional Rent, or (ii) to treat Tenant as a tenant at sufferance, eject Tenant from the Premises
32 and recover damages caused by wrongful holdover including, without limitation, as set forth in
33 Paragraph 17.4. Failure of Tenant to remove furniture, furnishings, cabling or other
34 telecommunications equipment, or trade fixtures which Tenant is required to remove under this
3s Lease shall constitute a failure to vacate to which this Paragraph 17.3 shall apply if such property
36 not removed substantially interferes with occupancy of the Premises by another tenant or with
37 occupancy by Landlord for any purpose including preparation for a new tenant. If a month -to-
38 month tenancy results from a holdover by Tenant under this Paragraph 17.3, the tenancy shall be
39 terminable upon thirty (30) days written notice from Landlord. Tenant waives any notice that
40 would otherwise be provided by law with respect to a month -to -month tenancy.
41 17.4. Indemnification. If Tenant holds over without landlord's consent as provided
42 above, then, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall
43 protect, defend, indemnify and hold Landlord harmless from any and all obligations, losses,
44 claims, actions, causes of action, liabilities, penalties, damages (including consequential and
45 punitive damages), costs and expenses (including reasonable attorneys and consultants fees and
46 expense) resulting from such hold over, including any claims made by any succeeding tenant
47 founded upon such failure to surrender, provided Tenant was notified of the new lease with the
48 succeeding tenant prior to expiration or other termination of the Lease. Tenant's obligations
49 under this paragraph 17.4 shall survive the expiration or earlier termination of this Lease.
so 18. Mortgage or Sale by Landlord; Estoppel Certificates.
51 18.1. Priority. This Lease is and shall be prior to any mortgage or deed of trust
52 ( "Encumbrance ") recorded after the Effective Date of this Lease and affecting the Building and
53 the land upon which the Building is located. However, if any lender holding an Encumbrance
54 secured by the Building and the land underlying the Building requires that this Lease be
ss subordinate to the Encumbrance, then Tenant agrees that this Lease shall be subordinate to the
56 Encumbrance if the holder thereof agrees in writing with Tenant that no foreclosure, deed given
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t in lieu of the foreclosure, or sale pursuant to the terms of the Encumbrance, or other steps or
2 procedures taken under the Encumbrance shall affect Tenant's right to quiet possession of the
3 Premises so long as Tenant pays rent and timely observes and performs all of the provisions of
4 this Lease. If the foregoing condition is met, Tenant shall execute the written agreement and any
5 other documents reasonably required by the holder of the Encumbrance (and reasonably
6 approved by Tenant) to accomplish the purposes of this Paragraph 18.1 within thirty (30) days
7 following receipt thereof.
s 18.2. Attomment. if the Building is sold as a result of foreclosure of any Encumbrance
9 thereon or otherwise transferred by Landlord or any successor, Tenant shall attorn to the
to purchaser or transferee, and the transferor shall have no further liability hereunder.
11 18.3. Estoppel Certificate. Tenant shall within thirty (30) days after notice from
12 Landlord execute and deliver to Landlord a certificate stating whether or not this Lease has been
13 modified and is in full force and effect and specifying any modifications or alleged breaches by
14 the other party. The certificate shall also state the amount of Base Rent and Additional Rent, the
Is amount of the Security Deposit (if any), the amount of any prepaid Base Rent and Additional
16 Rent and any other factual information reasonably requested by Landlord. Failure to deliver the
17 certificate within the specified time shall be conclusive upon Tenant that this Lease is in full
18 force and effect and has not been modified except as may be represented by Landlord.
19 19. Liens.
20 Tenant shall keep the Premises free from any liens arising out of any work performed,
21 materials furnished or obligations incurred by or on behalf of Tenant and shall indemnify, defend
22 and hold Landlord harmless for, from, against and regarding all claims, costs and liabilities,
23 including reasonable attorneys fees and costs, in connection with or arising out of any such lien
24 or claim of lien.
25 20. Attorneys Fees; Waiver of Jury Trial.
26 In the event that any party shall bring an action to enforce its rights under this Lease, the
27 prevailing party in any such proceeding shall be entitled to recover its reasonable attorneys,
28 witness and expert fees and costs of the proceeding incurred at and in preparation for discovery
29 (including depositions), arbitration, trial, appeal and review, and also any litigation or other
30 proceedings in bankruptcy including those involving issues unique to bankruptcy law. For
31 purposes hereof, the reasonable fees of Landlord's in -house attorneys or Tenant's in -house
32 attorneys, as the case may be, who perform services in connection with any such enforcement
33 action are recoverable, and shall be based on the fees regularly charged by private attorneys with
34 the equivalent number of years of experience in the relevant subject matter area of the law, in
35 law firms in the City of Portland, Oregon with approximately the same number of attorneys as
36 are employed by Landlord's Law Department or Tenant's Law Department, as the case may be.
37 The provisions of this Paragraph 20 are separate and severable and shall survive a judgment on
38 this Lease. Disputes between the parties which are to be litigated shall be tried before a judge
39 without a jury.
4o 21. Limitation on Liability; Transfer by Landlord.
a1 21.1. Property and Assets. Tenant shall look solely to the property and assets of
42 Landlord for the payment of any claim against Landlord or for the performance of any obligation
43 of Landlord; neither the joint venturers, general partners, limited partners, members, employees,
44 nor agents (as the case may be) of Landlord shall have any personal liability for obligations
43 entered into on behalf of Landlord (or its predecessors in interest) and their respective properties
46 shall not be subject to the claims of any person in respect of any such liability or obligation. As
47 used herein, the words "property and assets of Landlord" means only Landlord's interest in the
48 Building and excludes all other assets of Landlord and any rights of Landlord for the payment of
49 capital contributions or other obligations to it by any joint venturer, general partner, limited
50 partner or member (as the case may be) in such capacity. The limitation of this Paragraph shall
sl not apply to or limit any injunctive or other equitable, declaratory or other forms of relief to
52 which Tenant may be entitled, or any other remedy or action against Landlord which does not
53 involve the personal liability of Landlord for monetary damages from property other than
sa Landlord's interest in the Building as aforesaid.
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1 21.2. Transfer by Landlord. All obligations of Landlord hereunder will be binding
2 upon Landlord only during the period of its possession of the Premises and not thereafter. The
3 term "Landlord" shall mean only the owner of the Premises for the time being, and if such owner
4 transfers its interest in the Premises, such owner shall thereupon be released and discharged from
5 all covenants and obligations of the Landlord thereafter accruing, but such covenants and
6 obligations shall be binding during the Lease Term upon each new owner for the duration of
7 each owner's ownership.
a 21.3. Other Occuoants. Landlord shall have no liability to Tenant for loss or damages
9 arising out of the acts or inaction of other tenants or occupants.
to 22. Real Estate Brokers; Finders.
I; The parties acknowledge that Ron Dowhaniuk of SRS Real Estate Partners has
12 represented Tenant in the negotiation of this Lease and that a real estate commission shall be
13 paid to SRS Real Estate Partners (Ron Dowhaniuk) by Landlord pursuant to a separate
14 agreement. Each party shall indemnify, defend, protect and hold the other party harmless for,
is from, against and regarding all claims, costs, demands, actions, liabilities, losses and expenses
16 (including the reasonable attorneys' fees of counsel chosen by the other party) arising out of or
17 resulting from any claims that may be asserted against such other party, by any other broker,
r8 finder or other person with whom the party bearing the indemnity obligation has or purportedly
19 has dealt. Each party's respective obligations pursuant to the foregoing indemnity shall survive
zo the expiration or sooner termination of this Lease.
21 23. Other.
22 23.1. Force Majeure. The occurrence of any of the following events shall excuse the
23 performance of such obligations of Landlord or Tenant to the extent thereby rendered impossible
24 or not reasonably practicable for so long as such event continues so long as the party under this
25 Lease required to perform gives prompt notice of such delay to the other party: strikes; lockouts;
26 labor disputes; acts of God; inability to obtain labor, materials or reasonable substitutes therefor;
27 governmental restrictions, regulations, or controls; judicial orders; enemy or hostile government
28 action; terrorism; civil commotion; fire or other casualty; condemnation and other causes beyond
29 the reasonable control of the party obligated to perform; provided, however, that in no event will
30 the occurrence of any of said events or causes excuse the failure to pay rent or any other payment
31 to be made by Tenant hereunder strictly as and when required under this Lease.
32 23.2. interest: Late Charges. Rent not paid within ten (10) days of when due shall bear
33 interest from the date due until paid at the rate of the lesser of (i) ten percent (10%) per annum or
34 (ii) the maximum rate permitted by Applicable Law. Landlord may at its option impose a late
35 charge of $.05 for each $1.00 of rent for rent payments made more than ten (10) days after
36 Tenant receives written notice from Landlord that same is late in addition to interest and other
37 remedies available for default; provided, however, Landlord shall have no obligation to provide
38 any such notice more than twice in any calendar year. Any such late charge and interest shall be
39 payable by Tenant as Additional Rent hereunder, and shall be payable within thirty (30) days of
4o Landlord's written demand therefor. Tenant acknowledges and agrees that any such late payment
41 by Tenant will cause Landlord to incur costs and expenses not contemplated by this Lease, the
42 exact amounts of which will be extremely difficult to ascertain, and that such late charge
43 represents a fair estimate of the costs and expenses which Landlord would incur by reason of
44 Tenant's late payment. Tenant further agrees that such late charge shall neither constitute a
45 waiver of Tenant's default with respect to such overdue amount nor prevent Landlord from
46 exercising any other right or remedy available to Landlord.
47 23.3. Captions: Paragraph Headings. The captions and headings used in this Lease are
48 for the purpose of convenience only and shall not be construed to limit or extend the meaning of
49 any part of this Lease. Reference to a "Paragraph" shall mean reference to either a specified
so numbered paragraph or subparagraph of this Lease.
51 23.4. Plonwaiver. Waiver by either party of strict performance of any provision of this
52 Lease shall not be a waiver of or prejudice the party's right to require strict performance of the
53 same provision in the future or of any other provision.
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235. Succession. Subject to the limitations on transfer of Tenant's interest, this Lease
2 shall bind and inure to the benefit of the parties, their respective heirs, successors, and assigns.
3 23.6. Entry for Inspection. Landlord and its authorized representatives shall have the
4 right to enter upon the Premises with reasonable notice (but in no event shall more than
5 twenty -four (24) hours notice be required) to determine Tenant's compliance with this Lease, to
6 make necessary repairs to the Building or the Premises, or to show the Premises or the Building
7 to any prospective tenant or purchasers. Landlord may place and maintain upon the Building
s and/or Premises notices for leasing or sale of the Building and/or the Premises. Landlord may
9 enter upon the Premises without notice by any means necessary in the case of an emergency.
to 23.7. Notices. Any notice permitted or required to be given hereunder shall be in
11 writing and shall be given by personal delivery or certified United States mail (return receipt
12 requested), U.S. Express Mail or a reputable, national overnight air courier (such as FedEx or
13 UPS), in each case postage or equivalent prepaid, addressed to the address fornotices set forth in
14 the Basic Lease Terms. The person to whom and the place to which notices are to be given may
is be changed from time to time by either party by written notice given to the other party. If any
16 notice is given by mail, it shall be effective upon receipt or refusal to receive by the addressee as
17 shown by the return receipt or by the records maintained by such reputable, national overnight
is air courier and, if given by personal delivery, when delivered.
19 23.8. Entire Agreement. This Lease is the entire agreement between the patties, and
20 there are no agreements or representations between the parties except as expressed herein.
21 23.9. Warranties of Landlord. The person executing this Lease on behalf of Landlord
22 warrants to Tenant that Landlord is a valid and existing corporation or other relevant entity, that
23 Landlord has all right and authority to enter into this Lease, and that the person executing on
24 behalf of Landlord is authorized to do so.
2s 23.10. Warranties of Tenant.
26 23.10.1. Authority. The person(s) executing this Lease on behalf of Tenant
27 warrant(s) to Landlord that Tenant has all right and authority to enter into this Lease, and that
28 each and every person executing on behalf of Tenant is authorized to do so.
29 23.10.2. Incorporation; Formation. Tenant represents and warrants to Landlord
30 that (i) Tenant is duly organized, and validly existing under the laws of the State of Delaware as
31 of the Effective Date and that Tenant shall remain so throughout the Lease Term, and (ii) Tenant
32 is qualified to do business in, and is in good standing under, the laws of the State of Oregon as of
33 the Effective Date and that Tenant shall remain so throughout the Lease Term.
34 23.10.3. Evidence. Upon Landlord's request, Tenant shall provide evidence
35 satisfactory to Landlord confirming the warranties set forth in this Paraaraoh 23.10.
36 23.11. Time of Essence. Time is of the essence of the performance of each of Tenant's
37 obligations under this Lease.
38 23.12. Modifications. This Lease may not be modified except by written endorsement
39 attached to this Lease, dated and signed by the parties.
4o 23.13. No Appurtenances. This Lease does not create any rights to light and air by
41 means of openings in the walls of the Building, any rights or interests in parking facilities, or any
42 other rights, easements or licenses, by implication or otherwise, except as expressly set forth in
43 this Lease or its exhibits.
44 23.14. Financial Statements. Upon written request of Landlord, Tenant shall furnish to
45 Landlord, within thirty (30) days following receipt of Landlord's written request, Tenant's current
46 financial statements (including balance sheet and income statement for the year most recently
47 ended); Tenant agrees that these financial statements must be accurate and be prepared in the
4s ordinary course of Tenant's business. Landlord may make such financial statement available to
• 49 any prospective lender or purchaser of the Park or any portion thereof. Landlord shall otherwise
so keep such financial statement confidential and shall require any such prospective lender or
51 purchaser to do the same. Notwithstanding anything to the contrary herein, for so long as Tenant
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i is a publically traded company, a copy of Tenant's most recent publically distributed annual, or
2 quarterly report shall be sufficient to satisfy this requirement.
3 23.15. Rules and Regulations. Landlord shall have the right to make and enforce
4 reasonable and uniformly enforced rules, regulations and criteria consistent with this Lease for
s the purpose of promoting safety, order, cleanliness and good service to the tenants and other
6 occupants of the Park. Copies of all such rules and regulations, if any, shall be furnished to
z Tenant and shall be complied with as if part of this Lease.
8 23.16. Applicable Law; Severability. This Lease shall be construed, applied and
9 enforced in accordance with the laws of the State in which the Premises are located. If a court of
io competent jurisdiction holds any portion of this Lease to be illegal, invalid or unenforceable as
11 written, it is the intention of the parties that (i) such portion of this Lease be enforced to the
12 extent permitted by law and (ii) the balance of this Lease remain in full force and effect. It is
13 also the intention of the parties that in lieu of each clause or provision of this Lease that is illegal,
14 invalid or unenforceable there be added, as a part of this Lease, a clause or provision as similar in
is terms to such illegal, invalid or unenforceable clause or provision as may be possible and be
16 legal, valid and enforceable.
n 23.17. Landlord's Consent. Whenever Landlords consent or approval is required under
is this Lease, except as otherwise expressly provided in this Lease, Landlord may grant or withhold
19 such consent or approval in Landlord's sole and absolute discretion.
20 23.18. Joint and Several Liability. In the event Tenant now or hereafter consists of more
21 than one person, firm or corporation, then all such persons, firms or corporations shall be jointly
n and severally liable as Tenant under this Lease.
23 23.19. Construction and Interpretation. All provisions of this Lease have been
24 negotiated by Landlord and Tenant at arm's length and neither party shall be deemed the author
2s of this Lease. This Lease shall not be construed for or against either party by reason of the
26 authorship or alleged authorship of any provision hereof or by reason of the status of the
27 respective parties as Landlord or Tenant.
zs 23.20. No Recordation. Neither this Lease, nor any short form or memorandum thereof,
29 shall be recorded in any manner against the real property of which the Premises comprises a
30 portion.
31 23.21. No Partnership Created. Neither this Lease nor the calculation and payment of
32 Base Rent, Additional Rent or any other sums hereunder, is intended to create a partnership or
33 joint venture between Landlord and Tenant, or to create a principal- and -agent relationship
34 between the parties.
35 23.22. OFAC.
36 23.22.1. Tenant's Representation. Tenant represents and warrants to Landlord
37 that Tenant is not and shall not become a person or entity with whom Landlord is restricted from
38 doing business under any current or future regulations of the Office of Foreign Asset Control
39 ( "OFAC ") of the Department of the Treasury (including, but not limited to, those named on
4o OFAC's Specially Designated and Blocked Persons list) or under any current or future statute,
41 executive order (including, but not limited to, the September 24, 2001, Executive Order Blocking
42 Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
43 Support Terrorism), or other governmental action and is not and shall not engage in any dealings
44 or transaction or be otherwise associated with such persons or entities.
45 23.22.2. Landlord's Representation. Landlord represents and warrants to Tenant
46 that Landlord is not and shall not become a person or entity with whom Tenant is restricted from
47 doing business under any current or future regulations of the Office of Foreign Asset Control
4s ( "OFAC ") of the Department of the Treasury (including, but not limited to, those named on
49 OFAC's Specially Designated and Blocked Persons list) or under any current or future statute,
so executive order (including, but not limited to, the September 24, 2001, Executive Order Blocking
s Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
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t Support Terrorism), or other governmental action and is not and shall not engage in any dealings
2 or transaction or be otherwise associated with such persons or entities.
3 23.23. Confidentiality. Tenant shall not disclose to any third party the terms or
a provisions of this Lease, nor any communications or information sent to Tenant from Landlord
5 under or pursuant to this Lease, except only as may be required by law.
6 23.24. Counterparts; Delivery by Facsimile or Electronic Mail. This Agreement may be
7 executed in counterparts, each of which will be considered an original and all of which together
8 will constitute one and the same agreement. This Agreement or any counterpart may be
9 executed and delivered by facsimile or by electronic mail in pdf format and such signatures shall
to be binding upon the party delivering the same as if they were originals, with an executed original
11 hard copy to follow via overnight courier or U.S. mail at the request of any party hereto.
12 23.25. Exhibits. The following exhibits are attached hereto and incorporated herein by
13 this reference:
14 Exhibit A Site Plan Showing Park and Building
i5 Exhibit B Site Plan Showing Premises and Reserved Parking
16 24. Spedal Provisions.
17 24.1. Option to Renew. Subject to the condition that Tenant shall not, at the time
is Landlord receives the Option Notice hereunder or at the time of commencement of the Renewal
19 Term hereunder, be in default of any of the terms of this Lease beyond applicable notice and cure
20 periods (if any), Tenant is hereby granted an option to renew the Lease Term for one (1) period
21 of thirty -six (36) months (the "Renewal Term ") to commence on the day following the expiration
n of the Initial Term of this Lease. Tenant must exercise this option, if at all, by delivering
2s irrevocable written notice of such election (the "Option Notice") to Landlord at least one hundred
24 eighty (180) days prior to the expiration of the Initial Term. If Tenant does not validly deliver an
25 Option Notice to renew the Lease Term for the Renewal Term, the provisions of this
26 Paragraph 24.1 shall be null and void and of no further force or effect. Any such renewal of this
27 Lease shall be upon the same terms and conditions as this Lease except that Base Rent during the
28 Renewal Term shall be determined as provided in Paragraph 24.1.1 and Landlord shall have no
29 obligation to perform any tenant improvements or other work in connection with any such
30 renewal of this Lease. Except to the extent specifically provided in this Paragraph 24.1, Tenant
31 has no rights to renew the Lease Term.
32 24.1.1. Market Base Rent. Base Rent during the Renewal Term shall be
33 determined based upon the "Market Base Rent" defined as the average (mean) of the annual base
34 rental rates then being charged for space located in the Portland metropolitan area and
35 comparable to the Premises, taking into consideration all relevant factors including, without
36 limitation, use, location, floor level within the applicable building, size and parking rights (to the
37 extent that parking rights are a factor in determining bast rental rates in the then current
38 marketplace). It is agreed that bona fide written offers to lease the Premises or similar premises
39 in the Building made to Landlord by third parties (at arms Length) may be used by Landlord as an
40 indication of Market Base Rent. Notwithstanding any provision to the contrary set forth herein,
41 in no event shall the Market Base Rent for the Renewal Term be less than the Base Rent then
az currently payable by Tenant immediately prior to the commencement of the Renewal Term.
43 24.1.2. Determination. Landlord shall submit its opinion of Market Base Rent to
44 Tenant within fifteen (15) days after Landlord's receipt of the Option Notice and Tenant shall
45 respond thereto within ten (10) days thereafter by either (i) accepting Landlord's opinion of
46 Market Base Rent (in which case, such Market Base Rent shall be used to determine Base Rent
47 during the Renewal Term) or (ii) submitting Tenant's opinion of Market Base Rent. If Landlord
48 and Tenant cannot agree upon the Market Base Rent of the Premises within fifteen (15) days
49 thereafter, then Landlord and Tenant within five (5) days shall each submit to each other their
so final written statement of Market Base Rent ( "Final Statement "). If the Market Base Rent set
51 forth in Landlord's Final Statement ( "Landlord's Market Base Rent ") and the Market Base Rent
52 set forth in Tenant's Final Statement ( "Tenant's Market Base Rent ") differ by five percent (5%)
53 or less of the lesser of the respective Market Base Rent submittals, the Market Base Rent for the
54 Renewal Term shall be the average of Landlord's Market Base Rent and Tenant's Market Base
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Rent. If Landlord's Market Base Rent and Tenant's Market Base Rent differ by more than five
2 percent (5%) of the lesser of the respective Market Base Rent submittals, within ten (10) days
3 after submitting their respective Final Statement, Landlord and Tenant shall together appoint one
4 real estate appraiser who shall be a Member of the American Institute of Real Estate Appraisers
5 and be disinterested (the "Appraiser "). If Landlord and Tenant cannot mutually agree upon an
6 Appraiser within said ten (10) day period, the parties shall jointly apply to the Presiding Judge of
7 the Superior or Circuit Court for the County in which the Premises are located (the "Judge "),
s requesting said Judge to appoint the Appraiser; if either Landlord or Tenant does not so apply to
9 the Judge within five (5) days following the expiration of the ten (10) day period, the real estate
to appraiser initially suggested by the party who timely applied to the Judge shall be deemed the
1 I Appraiser for purposes of the arbitration. The parties shall share equally any costs of such
12 application to the Judge. Within ten (10) days following selection or appointment of the
13 Appraiser, the Appraiser shall determine whether Landlord's or Tenant's Final Statement of
14 Market Base Rent is the closest to the actual (in such Appraiser's opinion) Market Base Rent of
IS the Premises and shall select either Landlord's or Tenant's Final Statement of Market Base Rent
16 as the closest to the actual (in such Appraiser's opinion) Market Base Rent of the Premises,
17 without any compromising or averaging. The fees and expenses of said Appraiser shall be borne
Is equally by Landlord and Tenant.
19 24.1.3. Base Rent During Determination. If, for any reason, the Market Base
20 Rent hereunder is not determined prior to the beginning of the Renewal Term, then Tenant shall
21 continue to pay the Base Rent amount in effect immediately preceding the commencement of the
22 Renewal Term and, upon final determination of the Market Base Rent for the Renewal Term,
23 Tenant shall pay to Landlord a cash payment equal to the sum of such amounts as may be
24 necessary to adjust each monthly Base Rent payment which has been made hereunder to the
25 Market Base Rent effective as of the Renewal Term.
26 IN WITNESS WHEREOF, the parties hereto have executed this Lease on the respective
27 dates set opposite their signatures below, but this Lease, on behalf of such party, shall be deemed
28 to have been dated as of the Effective Date.
29 LANDLORD:
30 PACIFIC REALTY ASSOCIATES, L.P.,
31 a Delaware limited partnership
32 By: PacTrust Realty, Inc.,
33 a Delaware corporation,
34 its General Partner
35 Date: E' , 2012 By: # — mot -- -
36 vid G. Hicks, Vice President
37 TENANT:
38 TESLA MOTORS, INC.,
39 a Delaware corporation
40 Date: V IJ , 2012 By:
41 Printe name: I(X ) 1 ''�► �1
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41131' MOTORS, INC. INC 16436 SW 72ND AVE.
EXHIBIT Portland, OR 97224
5/10/12
RECEIVED
FIRST LEASE MODIFICATION AGREEMENT
JUN 0 6 2013
2 THIS FIRST LEASE MODIFICATION AGREEMENT (this "Agreement ") is made • • ' • TY OF TIGARD
3 entered into as of the Effective Date (as defined below), by and between PACIFIC ,.•
4 ASSOCIATES, L.P., a Delaware limited partnership ( "Landlord "), and TESLA MOTO , , t r, /ENGINEERING
5 a Delaware corporation ( "Tenant ").
6 RECITALS
7 A. Landlord and Tenant are parties to that certain Lease dated as of June 26, 2012 (the
8 "Lease ") for certain premises consisting of approximately 2,500 square feet of warehouse and
9 office space located in Building S of Oregon Business Park I at the address commonly known as
to 16436 S.W. 72 Avenue, Portland, Oregon 97224, which premises are more particularly
11 described in the Lease and referred to herein as the "Original Premises."
12 B. Landlord and Tenant desire to expand the Original Premises to include an additional
13 7,500 square feet of warehouse and office space in the Building as more particularly depicted on
14 Exhibit B attached hereto and incorporated herein (the "First Additional Space ").
15 C. in addition, Landlord and Tenant desire to extend the Lease Term as set forth below
16 in this Agreement.
n D. Accordingly, Landlord and Tenant desire to modify the Lease as more particularly
la set forth below.
19 AGREEMENT
20 NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
21 which is hereby acknowledged, and of the mutual agreement of the parties hereto to the terms
22 and conditions hereinafter contained, Landlord and Tenant agree as follows:
23 1. Effective Date; Incorporation; Capitalized Terms.
24 Notwithstanding any provisions to the contrary contained herein, the provisions of this
25 Agreement shall be effective on that date as of which both Landlord and Tenant have executed
26 this Agreement as shown next to the respective signatures below (the "Effective Date "). The
27 provisions of the Recitals set forth above are hereby incorporated into the body of this
28 Agreement. Capitalized terms used in this Agreement and not defined shall be deemed to have
29 the same meaning ascribed to them in the Lease.
30 2. First Additional Space.
31 2.1. First Additional Space Commencement Date. Commencing on May 1, 2013 (the
32 "First Additional Space Commencement Date "), Tenant shall lease the First Additional Space
33 from Landlord on the same terms and conditions set forth in the Lease, as modified by this
34 Agreement. As of the First Additional Space Commencement Date, (i) the First Additional
35 Space shall be considered part of the Premises for all purposes under the Lease; (ii) the
36 "Premises ", as defined in the Lease, shall comprise approximately 10,0(X) square feet of
37 warehouse and office space; and (iii) Exhibit B to the Lease shall he replaced in its entirety with
38 Exhibit B attached hereto and incorporated herein.
39 2.2. As -is. Tenant hereby accepts the First Additional Space in its current, "AS IS"
40 condition, and acknowledges and agrees that (i) Landlord makes no representations or
41 warranties regarding the condition of the First Additional Space, the habitability of the First
42 Additional Space, the fitness of the First Additional Space for the Permitted Use and /or the
43 conduct of Tenant's business in the First Additional Space or the zoning of the First Additional
44 Space, and (ii) except as set forth in Section 2.3 below, Landlord has no obligations to perform
45 any work in connection with Tenant's expansion into the First Additional Space.
46 2.3. Landlord's Additional Work. Landlord, at its sole cost and expense, shall
47 construct two (2) openings between the Original Premises and the First Additional Space at
48 locations to be mutually agreed upon ( "Landlord's Additional Work "). Landlord may perform
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1 such work during Building standard business hours. Landlord shall use reasonable efforts to
2 minimize disruption to Tenant's use of the Premises and the First Additional Space. Tenant
3 acknowledges that Landlord's Additional Work may cause some disruption to Tenant's Permitted
4 Use of the Premises and the First Additional Space and Landlord shall not he liable for any such
5 disruptions. Tenant agrees to comply with the reasonable directives of Landlord and its
6 contractors regarding Landlord's Additional Work. Landlord agrees that it will complete
7 Landlord's Work on or before July 31, 2013.
8 3. Permitted Use.
9 Paragraph 1.8 of the Lease is hereby replaced in its entirety with the following:
to "Permitted Use. Tenant shall have the exclusive use of the Premises, for itself
11 and its employees, only for electric vehicle sales and service and parts /tooling
12 storage and general office purposes and for any other lawful purpose (the
13 "Permitted Use ")."
14 4. Extension of Lease Term.
15 The Lease Term is hereby extended through and including July 31, 2016 on the same
16 terms and conditions as the Lease, as modified by this Agreement. As so extended, the Lease
17 Term shall expire on July 31, 2016 (the "Expiration Date ").
Is 5. Base Rent; Proportionate Share.
19 5.1. Base Rent. Commencing on May I, 2013 and continuing through and including
20 July 31, 2016 Base Rent shall be according to the following schedule:
Monthly Base Rent
First
Original Additional
Period of Time Premises Space Total
May I, 2013 through July 31, 2013 $1,200.00 $0.00 $1,200.00
August 1, 2013 through July 31, 2014 $1,200.00 $3,600.00 $4,800.00
August 1, 2014 through July 31, 2015 $1,236.00 $3,708.00 $4,944.00
August 1, 2015 through July 31, 2016 $1,273.00 $3,819.00 $5,092.00
21
22 5.2. Proportionate Share. Effective as of First Additional Space Commencement
23 Date, Paragraph 1.12 of the Lease shall he modified to reflect that (i) Tenant's initial
24 proportionate share for Taxes is 33.33 %, and (ii) Tenant's initial share for Operating Expenses is
25 33.33 %.
26 6. Option to Renew.
27 Notwithstanding the extension of the Lease Term set forth herein, Tenant shall continue
28 to have the right to renew the Lease Term for one (1) period of thirty -six (36) months pursuant to
29 Paragraph 24.1 of the Lease.
30 7. Parking.
31 Paragraph] 9.1 and 9.1.1 of the Lease are hereby replaced in their entirety with the
32 following:
33 "9.1. Parking. Subject to the provisions of this Paragraph 9.1, Tenant, its
34 employees, agents, contractors and invitees shall have the non - exclusive right to
35 use the common driveways and truck court areas located in the Outside Area,
36 subject to the parking rights and rights of ingress and egress of other occupants.
37 In addition, Tenant, its employees, agents, contractors and invitees shall have the
38 non - exclusive right to use any private parking spaces immediately adjacent to the
39 Premises. In addition, Tenant, its employees, agents, contractors and invitees
40 shall have the exclusive right to use those two (2) parking spaces in locations as
41 mutually agreed upon by Landlord and Tenant, and shall have the non - exclusive
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1 right to use six (6) parking spaces located in the parking areas of the Park.
2 Tenant's parking shall not be reserved and shall be limited to vehicles no larger
3 than standard size automobiles, or standard size pickups or sport utility vehicles.
4 Under no circumstances shall trucks, trailers or other large vehicles serving the
5 Premises (i) be used for any purpose other than for the loading and unloading of
6 goods and materials or (ii) he permitted to block streets and/or ingress and egress
7 to and from the Park. Temporary parking of large delivery vehicles in the Park
8 may be permitted only with Landlord's prior written consent. Vehicles shall be
9 parked only in striped parking spaces and not in driveways, loading areas or other
10 locations not specifically designated for parking. Handicapped spaces shall only
1I be used by those legally permitted to use them. Pursuant to Paragraph 1.6 of this
12 Lease, Landlord reserves the right to grant parking rights (exclusive and
13 otherwise) within the relevant portions of the Outside Area to occupants of the
14 Park.
15 9.1.1. Landlord shall use its best efforts to provide additional vehicle
16 storage for Tenant within vacant warehouse space within the Park on a periodic
17 basis. Upon Tenant's request for vehicle storage, Landlord shall inform Tenant of
is the location of the available space and Tenant may store vehicles•in such space
19 temporarily at a cost of $8.00 per vehicle per day of storage. Landlord shall have
20 no liability for any damage to any stored vehicles, makes no representation or
21 warranty of the availability or suitability of such storage space, and Tenant shall
22 be responsible for and shall promptly repair any damage to the storage space
23. arising out of Tenant's storage of said vehicles."
24 8. Real Estate Brokers; Finders.
25 Each party represents that it has not had dealings with any real estate broker, finder or
26 other person with respect to this Agreement in any manner. Each party shall indemnify, defend,
27 protect and hold the other party harmless for, from against and regarding all claims, costs,
28 demands, actions, liabilities, losses and expenses (including the reasonable attorneys' fees of
29 counsel chosen by the other party) arising out of or resulting from any claims that may be
30 asserted against such other party by any broker, finder or other person with whom the party
31 bearing the indemnity obligation has or purportedly has dealt. Each party's respective
32 obligations pursuant to the foregoing indemnity shall survive the expiration or earlier termination
33 of the Lease.
34 9. Warranty of Authority.
35 The person(s) executing this Agreement on behalf of Tenant warrant(s) to Landlord that
36 Tenant is a valid and existing corporation or other relevant entity, that Tenant has all right and
37 authority to enter into this Agreement, and that each and every person signing on behalf of
38 Tenant is authorized to do so. The person executing this Agreement on behalf of Landlord
39 warrants to Tenant that Landlord is a valid and existing corporation or other relevant entity, that
40 Landlord has all right and authority to enter into this Agreement, and that the person signing on
41 behalf of Landlord is authorized to do so.
42 10. Ratification.
43 Except as otherwise modified by this Agreement, the Lease is hereby ratified and
44 affirmed and remains in full force and effect.
45 11. Counterparts; Delivery by Facsimile or Electronic Mail.
46 This Agreement may he executed in counterparts, each of which will he considered an
47 original and all of which together will constitute one and the same agreement. This Agreement
48 or any counterpart may he executed and delivered by facsimile or by electronic mail in pdf
49 format and such signatures shall be binding upon the party delivering the same as if they were
5o originals, with an executed original hard copy to follow via overnight courier or U.S. mail at the
51 request of any party hereto.
52 [signatures on following page]
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Page 3 Portland. OR
i IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
2 respective dates set opposite their signatures below, but this Agreement on behalf of such party
3 shall be deemed to have been dated as of the Effective Date.
4 LANDLORD:
s PACIFIC REALTY ASSOCIATES, L.P.,
6 a Delaware limited partnership
7 By: PacTrust Realty, Inc.,
8 a Delaware corporation, its General Partner
9 Date: , 2013 By:
to David G. Hicks, Vice President
1 I TENANT:
12 TESLA MOTORS, INC.,
13 a Delaware corporation
14 Date: , 2013 By:
is Printed Name:
16
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THE FIRST I
I I ADDITIONAL SPACE
843 SF OFFICE
• 7,500 SF TOTAL
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THE PREMISES J
346 SF OFFICE / r"--..,...
2,500 SF TOTAL
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TOTAL LEASED AREA
1,189 SF OFFICE
Z 10,000 SF TOTAL
OREGON BUSINESS PARK I
sca LE i - 30' 1
TESLA MOTORS, INC. O(PTR #114)
6436 SW 72ND AVE.
3° • .; I
A PALM EXHIBIT B
ILJBT PgDPEATI( 5/1/13
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