Exhibit 10.57

SCHNITZER NORTH CREEK

LEASE AGREEMENT

S/I NORTH CREEK VII, LLC

(Landlord)

and

AVI BIOPHARMA, INC.

(Tenant)

Dated: October 20, 2010

SCHNITZER-STANDARD FORM OFFICE LEASE (TRIPLE NET)

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TABLE OF CONTENTS

 

ARTICLE I: DEFINITIONS

     1     

1.01

     Defined terms      1   

ARTICLE II: PREMISES AND COMMON AREAS LEASED

     3     

2.01

     Premises      3     

2.02

     Common Areas      4   

ARTICLE III: IMPROVEMENTS

     4     

3.01

     Construction of Building and Premises      4     

3.02

     Completion and Delivery      5   

ARTICLE IV: TERM

     5     

4.01

     Term      5     

4.02

     Notice of Commencement Date      5   

ARTICLE V: RENT

     7     

5.01

     Base Rent      7     

5.02

     Additional Rent      7     

5.03

     Late Payment      7     

5.04

     Security Deposit      8   

ARTICLE VI: ADDITIONAL RENT AND CHARGES

     8     

6.01

     Operating Expenses      8     

6.02

     Tenant’s Personal Property Taxes      13   

ARTICLE VII: INSURANCE

     13     

7.01

     Landlord’s Insurance      13     

7.02

     Tenant’s Public Liability      13     

7.03

     Tenant’s Property and Other Insurance      14     

7.04

     Form of Insurance/Certificates      14     

7.05

     Tenant’s Failure      14     

7.06

     Waiver of Subrogation      15     

7.07

     Tenant’s Properties and Fixtures      15     

7.08

     Indemnification      15     

7.09

     Damage to Tenant’s Property      17   

ARTICLE VIII: REPAIRS AND MAINTENANCE

     17     

8.01

     Landlord Repairs and Maintenance      17     

8.02

     Utilities and Services      18     

8.03

     Tenant Repairs and Maintenance      18     

8.04

     Non-liability of Landlord      19     

8.05

     Inspection of Premises      19   

 

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ARTICLE IX: FIXTURES, PERSONAL PROPERTY AND ALTERATIONS      19     

9.01

     Fixtures and Personal Property      19     

9.02

     Alterations      20     

9.03

     Liens      21   

ARTICLE X: USE AND COMPLIANCE WITH LAWS

     21     

10.01

     General Use and Compliance with Laws      21     

10.02

     Hazardous Materials      22     

10.03

     Signs      24   

ARTICLE XI: DAMAGE AND DESTRUCTION

     24     

11.01

     Reconstruction      24     

11.02

     Rent Abatement      25     

11.03

     Excessive Damage or Destruction      25     

11.04

     Uninsured Casualty      25     

11.05

     Waiver      25     

11.06

     Mortgagee’s Right      26     

11.07

     Damage Near End of Term      26   

ARTICLE XII: EMINENT DOMAIN

     26     

12.01

     Eminent Domain      26   

ARTICLE XIII: DEFAULT

     27     

13.01

     Events of Default      27     

13.02

     Remedies:      27     

13.03

     Landlord’s Default      29   

ARTICLE XIV: FILING OF PETITION

     29     

14.01

     Tenant’s Bankruptcy      29   

ARTICLE XV: ASSIGNMENT AND SUBLETTING

     31     

15.01

     Prohibition      31     

15.02

     Excess Rental      31     

15.03

     Scope      31     

15.04

     Waiver      32     

15.05

     Change in Control      32   

ARTICLE XVI: ESTOPPEL CERTIFICATE, ATTORNMENT AND SUBORDINATION

     33     

16.01

     Estoppel Certificates      33     

16.02

     Attornment      33     

16.03

     Subordination      33     

16.04

     Recording      33   

ARTICLE XVII: MISCELLANEOUS

     34     

17.01

     Notices      34     

17.02

     Successors Bound      34     

17.03

     Waiver      34   

 

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  17.04      Subdivision and Easements      34     

17.05

     Landlord’s Reserved Rights in Common Areas      35     

17.06

     Accord and Satisfaction      35     

17.07

     Limitation of Landlord’s Liability      35     

17.08

     Survival      35     

17.09

     Attorneys’ Fees      35     

17.10

     Captions and Article Numbers      36     

17.11

     Severability      36     

17.12

     Applicable Law      36     

17.13

     Submission of Lease      36     

17.14

     Holding Over      36     

17.15

     Rules and Regulations      37     

17.16

     Parking      37     

17.17

     No Nuisance      37     

17.18

     Broker; Agency Disclosure      37     

17.19

     Landlord’s Right to Perform      38     

17.20

     Assignment by Landlord      38     

17.21

     Entire Agreement      38     

17.22

     Financial Covenants      39     

17.23

     Conditions      39     

17.24

     Exhibits      39     

17.25

     Time      39     

17.26

     Prior Agreement or Amendment      39     

17.27

     Independently Provided Services      39     

17.28

     Authority to Bind Landlord      40     

17.29

     Authority to Bind Tenant      40     

17.30

     No Usury      40     

17.31

     Interpretation      40     

17.32

     Excused Delays      40     

17.33

     Patriot Act Compliance      41   

 

SCHNITZER-STANDARD FORM OFFICE LEASE       iii  

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THIS LEASE (“Lease”) is dated for reference purposes as of the 20th day of
October, 2010, by and between S/I North Creek VII LLC, a Washington limited
liability company (“Landlord”), and AVI BioPharma, Inc., an Oregon corporation
(“Tenant”).

ARTICLE I: DEFINITIONS

1.01 Defined terms. The following terms shall have the meanings specified in
this Section, unless otherwise specifically provided. Other terms may be defined
in other parts of the Lease.

 

(a)    Landlord:    S/I North Creek VII LLC (b)    Landlord’s Address:    c/o
Schnitzer West       818 Stewart Street, Suite 700       Seattle, Washington
98101       Telephone: (425) 452-3700       Facsimile: (425) 454-1505    With a
Copy to:    Jameson Babbitt Stites &      

Lombard, P.L.L.C.

      999 Third Avenue, Suite 1900       Seattle, Washington 98104       Attn:
Jennifer Cobb       Telephone: (206) 292-1994       Facsimile: (206) 292-1995
(c)    Tenant:    AVI BioPharma, Inc. (d)    Tenant’s Address:    3450 Monte
Villa Parkway       Bothell, WA 98021       Attn: Controller (e)    Tenant’s
Use:    General office and related uses (f)    Project:    Schnitzer North
Creek, including all buildings and Common Areas thereon and related thereto as
legally described in Exhibit “A-I” and depicted on the Project Site Plan
attached as Exhibit “B-1”.

 

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(g)    Property:    North Creek Technology Campus II, including all buildings
and Common Areas thereon and related thereto as legally described in Exhibit
“A-2” and depicted on the Property Site Plan attached as Exhibit “B-2”. (h)   
Building:    That certain building designated as Building Q on the Property Site
Plan attached hereto as Exhibit “B-2” and commonly known as 19909 120th Avenue
NE, Bothell, Washington 98011. (i)    Premises:    Approximately 8,398 rentable
square feet as depicted on the Floor Plan(s) attached as Exhibit “C”. (j)   
Term:    Commencing upon the Commencement Date (as defined in Section 4.01) and
expiring on December 31, 2012. (k)    Commencement Date:    November 8, 2010 (l)
   Base Rent:   

 

Months

   Rent PRSF (yr.)      Monthly Installments*  

11/8/10 – 4/30/11

   $ 0.00       $ 0.00   

5/1/11 – 10/31/11

   $ 16.00       $ 11,197.33   

11/1/11 – 10/31/12

   $ 16.50       $ 11,547.25   

11/1/12 – 12/31/12

   $ 17.00       $ 11,897.17   

 

(m)    Prepaid Rent:    $11,197.33 applicable to Month 7 (n)    Security
Deposit:    $11,897.17 (o)    Tenant’s Share of Building:    12.3% (p)   
Tenant’s Share of Property:    3.0% (q)    Tenant’s Share of Project:    0.8%
(r)    Parking Spaces:    29 uncovered, unreserved surface parking spaces in the
Project shall be provided for the non-exclusive use of Tenant, its employees and
visitors. (s)    Broker(s):    There is no Landlord’s Broker.

 

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      EDG Commercial Real Estate, representing Tenant (“Tenant’s Broker”) (t)   
Guarantor(s) and Address(es):    N/A

(u)    Exhibits:    Exhibit A-1:    Legal Description of Project      
Exhibit A-2:    Legal Description of Property       Exhibit B-1:    Project Site
Plan       Exhibit B-2:    Property Site Plan       Exhibit C:    Floor Plan   
   Exhibit D:    Intentionally deleted.       Exhibit E    Preliminary Plans and
Specifications for the Tenant Improvements       Exhibit F:    Intentionally
deleted.       Exhibit G:    Estoppel Certificate       Exhibit H:    Rules and
Regulations       Exhibit I:    Intentionally deleted.       Exhibit J:    Form
of SNDA

ARTICLE II: PREMISES AND COMMON AREAS LEASED

2.01 Premises.

(a) Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord,
subject to the provisions of this Lease, certain premises described in
Subsection 1.01(i) above (“Premises”) located within the building described in
Subsection 1.01(h) (the “Building”) owned by Landlord, and which is a portion of
the “Project” identified in Subsection 1.01(f). The Site Plan for the Project
attached hereto as Exhibit B-1 is attached for location reference purposes only
and shall not constitute a representation or warranty by Landlord to be the
final plan of the Project, or to require Landlord to build any improvements, or
to otherwise comply with the site plan or require Landlord to lease space to a
particular tenant or type of tenant.

(b) The term “Rentable Area,” “rentable square feet,” “actual square footage”
and words of similar import (whether or not spelled with initial capitals) as
used in this Lease will be determined using the “Standard Method of Measuring
Floor Area in Office Buildings” (reprinted June 7, 1996) by BOMA International.
Tenant acknowledges that, except as otherwise expressly set forth in this Lease,
neither Landlord nor any agent, property manager or broker of Landlord has made
any representation or warranty with respect to the Premises, the Building, the
Common Areas or the Project or their suitability for the conduct of Tenant’s
business and, that except only for any improvements that Landlord has expressly
agreed herein to construct and

 

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install, the Premises are leased in the “AS IS” condition existing at the time
of execution of this Lease.

2.02 Common Areas. In addition to the Premises, Tenant shall have the
non-exclusive right to use in common with other tenants and/or occupants of the
Property and Project, the following areas appurtenant to the Building: parking
areas and facilities, roadways, sidewalks, walkways, parkways, plazas, levees,
driveways and landscaped areas and similar areas and facilities situated within
the exterior areas of the Property and Project and not otherwise designated for
the exclusive or restricted use by Landlord and/or individual tenants of other
buildings located within the Project or other third parties (collectively,
“Common Areas”). Tenant acknowledges that Landlord shall have no obligation to
construct or complete any additional buildings within the Project or
improvements to the Common Areas. Tenant’s right to utilize the Common Areas
shall at all times be subject to Landlord’s reserved rights therein as described
in Section 17.05 hereof, the Rules and Regulations referred to in Section 17.15
hereof and all encumbrances, easements, ground leases, and covenants, conditions
and restrictions (“CC&Rs”) now or hereafter affecting or encumbering the
Project.

ARTICLE III: IMPROVEMENTS

3.01 Construction of Tenant Improvements.

(a) Completion Schedule. Landlord will complete the tenant improvements to be
constructed by Landlord at the Premises (“Tenant Improvements”) within thirty
(30) days after the Commencement Date.

(b) Description of Tenant Improvements. The Tenant Improvements to be completed
by Landlord are described on the outline plans and specifications for the Tenant
Improvements (the “Outline Plans and Specifications for the Tenant
Improvements”) attached hereto and made a part hereof as “Exhibit E.”

(c) Construction of Tenant Improvements. Landlord shall work with a general
contractor chosen by Landlord (the “Contractor”) for construction of the Tenant
Improvements. Landlord shall supervise the completion of such work and shall use
its good faith efforts to secure substantial completion of the Tenant
Improvements in accordance with the schedule described in Paragraph 3.01(a)
above. The cost of Tenant Improvements shall be paid as provided in Paragraph
3.01(d) below.

(d) Payment of Tenant Improvements Costs. Landlord shall provide the Tenant
Improvements at its sole cost and expense.

 

SCHNITZER-STANDARD FORM OFFICE LEASE   4  

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3.02 Completion. Tenant shall, within five (5) days after Landlord completes the
Tenant Improvements, provide Landlord with a list of incomplete and/or
corrective items present in the Tenant Improvements. Landlord shall diligently
complete, as soon as reasonably possible, any items of work and adjustment on
such list as are not completed upon substantial completion of the Tenant
Improvements.

ARTICLE IV: TERM

4.01 Term. The Term shall commence on the Commencement Date specified in
Section 1.01(k) (the “Commencement Date”). The Term shall expire upon the date
set forth in Section 1.01(j), unless sooner terminated as hereinafter provided.
So long as Tenant does not interfere with Landlord’s construction of the Tenant
Improvements, Tenant shall be permitted to access the Premises prior to the
Commencement Date for the purpose of preparing the Premises for Tenant’s
occupancy, and such early access shall be subject to all of the terms and
conditions of this Lease except for the payment of Rent.

4.02 Lease Confirmation. Intentionally deleted.

4.03 Option to Extend. Landlord hereby grants Tenant the right to extend the
term of the Lease for one (1) period of two (2) years (the “Extended Term”) on
the same terms and conditions contained in the Lease, except that (i) Base Rent
for the Extended Term shall be as set forth herein below, (ii) no additional
options to extend shall apply following the expiration of the Extended Term, and
(iii) Landlord shall not be obligated to install any improvements or provide
Tenant with any allowances with respect to the Extended Term. Written notice of
Tenant’s exercise of its option to extend (“Option to Extend”) the Term of this
Lease must be given to Landlord no less than nine (9) months nor more than
twelve (12) months prior to the date the Term of the Lease would otherwise
expire. Notwithstanding the above to the contrary, Tenant shall have no right to
extend the Term of this Lease if Tenant has been in default under this Lease or
occupies less than all of the Premises initially leased hereunder; provided,
however that the period of time within which said option may be exercised shall
not be extended or enlarged by reason of Tenant’s inability to exercise said
option because of the failure of any such conditions. In the event Tenant
validly exercises its Option to Extend the Term of this Lease as herein
provided, Base Rent shall be adjusted as of the commencement date of the
Extended Term as follows:

(a) Within thirty (30) days after exercise of its Option to Extend by Tenant,
Landlord shall provide Tenant with Landlord’s determination of the fair market
Base Rent for the Extended Term, including periodic increases as dictated by the
current market (“Landlord’s Determination of Base Rent for Extended Term”).
Tenant shall provide notice to Landlord within fifteen (15) business days after
receipt of such notice from Landlord as to whether Tenant accepts Landlord’s
Determination of Base Rent for Extended Term. In the event Tenant does not agree
to Landlord’s Determination of Base Rent for Extended Term, Landlord and Tenant
shall

 

SCHNITZER-STANDARD FORM OFFICE LEASE   5  

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attempt to agree upon Base Rent for the Premises for the Extended Term, such
rent to be the fair market rental value of the Premises for the Extended Term,
as defined in Subsection (c) below. If the parties are unable to agree upon the
Base Rent for the applicable Extended Term by the date three (3) months prior to
the commencement of the Extended Term, then within ten (10) days thereafter each
party, at its own cost and by giving notice to the other party, shall appoint a
real estate appraiser with at least ten (10) years full-time commercial real
estate appraisal experience in the area in which the Premises are located to
appraise and set Base Rent for the Extended Term. If a party does not appoint an
appraiser within ten (10) days after the other party has given notice of the
name of its appraiser, the single appraiser appointed shall be the sole
appraiser and shall set Base Rent for the Extended Term. If each party shall
have so appointed an appraiser, the two appraisers shall meet promptly and
attempt to set the Base Rent for the Extended Term. If the two appraisers are
unable to agree within thirty (30) days after the second appraiser has been
appointed, they shall attempt to select a third appraiser meeting the
qualifications herein stated within ten (10) days after the last day the two
appraisers are given to set Base Rent for the Extended Term. If the two
appraisers are unable to agree on the third appraiser within such ten (10) day
period, either of the parties to this Lease, by giving five (5) days notice to
the other party, may apply to the then presiding judge of the Superior Court of
King County for the selection of a third appraiser meeting the qualifications
stated in this paragraph. Each of the parties shall bear one-half (1/2) of the
cost of appointing the third appraiser and of paying the third appraiser’s fee.
The third appraiser, however selected, shall be a person who has not previously
acted in any capacity for either party.

(b) Within thirty (30) days after the selection of the third appraiser, a
majority of the appraisers shall set Base Rent for the Extended Term. If a
majority of the appraisers are unable to set Base Rent within the stipulated
period of time, the three appraisals shall be added together and their total
divided by three (3). The resulting quotient shall be the Base Rent for the
Premises during the Extended Term. If, however, the low appraisal and/or the
high appraisal is/are more than ten percent (10%) lower and/or higher than the
middle appraisal, the low appraisal and/or the high appraisal shall be
disregarded. If only one (1) appraisal is disregarded, the remaining two
(2) appraisals shall be added together and their total divided by two (2), and
the resulting quotient shall be Base Rent for the Premises during the Extended
Term.

(c) For purposes of the appraisal, the term “-fair market Base Rent-” shall mean
the price that a ready and willing tenant would pay, as of the commencement date
of the Extended Term, as a base rent to a ready and willing landlord of space of
comparable size, quality and level of improvement, if such premises were exposed
for lease on the open market for a reasonable period of time in the
Bothell/Kirkland/Redmond/Bellevue market; including any rent increases over the
Extended Term to the extent normal under then current market conditions. There
shall be no adjustment to the fair market value related to tenant improvements,
downtime, free rent, brokerage commissions or other concessions provided in the
market at the time of renewal. In no event shall the fair market Base Rent
determined pursuant to this Section 4.03 be less than the Base Rent in effect
during the last month of the initial Lease Term.

 

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(d) The Option to Extend granted hereunder is personal to Tenant or a Permitted
Transferee (as hereafter defined) and shall be null and void in the event of an
assignment of this Lease to any party other than a Permitted Transferee. In
addition, this Option to Extend shall become null and void at Landlord’s option
and upon written notice to Tenant in the event Tenant becomes in material
default beyond any applicable notice and cure period at any time during the
initial Lease Term.

ARTICLE V: RENT

5.01 Base Rent. The Base Rent (“Base Rent”) shall be as set forth in
Section 1.01(1). The Base Rent shall be paid in advance on the first day of each
and every month during the Term to Landlord at the address set forth in
Section 1.01(b) hereof or at such other place as Landlord may direct in writing,
without any prior notice or demand therefor and without any abatement,
deduction, offset or setoff whatsoever. If the Term commences on any day other
than the first day of a calendar month and/or ends on any day other than the
last day of a calendar month, Base Rent for the fraction(s) of a month at the
commencement and/or upon the expiration of the Term shall be prorated based upon
the actual number of days in such fractional month(s). Simultaneously with
execution of this Lease, Tenant shall deposit with Landlord the Prepaid Rent
identified in Section 1. 01(m), which sum shall be applied by Landlord as
indicated in said Section 1.01(m).

5.02 Additional Rent. In addition to Base Rent, Tenant shall pay to Landlord all
sums of money or other charges required to be paid by the Tenant under this
Lease (other than Base Rent and the Prepaid Rent), including but not limited to
Tenant’s Share of Operating Expenses (as defined in Article VI hereof) (all such
sums being herein deemed “Additional Rent”), and whether or not the same are
designated “Additional Rent” the same shall be payable in lawful money of the
United States of America without deduction, set-off or abatement whatsoever. Any
Additional Rent provided for in this Lease shall become due with the next
monthly installment of Base Rent unless otherwise provided. The term “Rent”, as
used in this Lease, shall refer collectively to “Base Rent” and “Additional
Rent.”

5.03 Late Payment. If any payment of Rent is not received by Landlord within
five (5) days after the same is due, Tenant shall pay to Landlord a late payment
charge equal to five percent (5%) of the amount of such delinquent payment of
Rent in addition to the installment of Rent then owing, regardless of whether or
not a notice of default has been given by Landlord. Notwithstanding the
foregoing, no late payment charge shall be assessed for the first such late
payment in any twelve (12) month period if Tenant pays such overdue amount
within five (5) days of Landlord’s notice that such amount is past due. In
addition, Tenant shall pay interest on such late payment and late charge from
the due date of the late payment at an interest rate equal to the higher of:
(a) twelve percent (12%) or (b) the prevailing prime (reference) rate as
published by Bank of America (or any successor bank) at its Seattle main branch
office, or any successor rate of interest, plus three (3) percentage points, but
in no event higher than the maximum rate permitted by applicable law (hereafter
the “Default Rate”), until such amounts are paid. Landlord and Tenant recognize
that the damages which Landlord will suffer as a result of Tenant’s failure to
timely pay

 

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Rent are difficult or impracticable to ascertain, and agree that said interest
and late charge are a reasonable approximation of the damages which Landlord
will suffer in the event of Tenant’s late payment. This provision shall not
relieve Tenant from payment of Rent at the time and in the manner herein
specified. Acceptance by Landlord of any such interest and late charge shall not
constitute a waiver of Tenant’s default with respect to said overdue amount, nor
shall it prevent Landlord from exercising any other rights or remedies available
to Landlord.

5.04 Security Deposit. Tenant will simultaneously with execution of this Lease,
deposit with Landlord the sum specified in Section 1.01(n) of this Lease. This
sum shall belong to Landlord and shall constitute partial consideration for the
execution of this Lease. Landlord shall pay Tenant the remaining balance
thereof, without any liability for interest thereon, within thirty (30) days
after the expiration or prior termination of the Lease Term, or any extension
thereof, if and only if Tenant has fully performed all of its obligations under
the terms of this Lease. Landlord shall be entitled to withdraw from the deposit
the amount of any unpaid Base Rent, Additional Rent or other charges not paid to
Landlord when due, and Tenant shall immediately redeposit an amount equal to
that so withdrawn within three (3) days of demand.

ARTICLE VI: ADDITIONAL RENT AND CHARGES

6.01 Operating Expenses. In addition to Base Rent and other sums payable by
Tenant under this Lease, Tenant shall pay to Landlord, as Additional Rent,
Tenant’s Share of the Operating Expenses (as such term is defined below).

(a) Estimated Expenses; Annual Reconciliation.

(i) Upon the Commencement of the Lease Term, and thereafter prior to the
commencement of each calendar year occurring wholly or partially within the Term
or as soon thereafter as practical, Landlord shall estimate the annual Operating
Expenses payable by Tenant pursuant to this provision, and Tenant shall pay to
Landlord on the first day of each month in advance; one-twelfth (1/12th) of
Tenant’s Share of such estimated amount. In the event that during any calendar
year of the Term, Landlord determines that the actual Operating Expenses for
such year will exceed the estimated Operating Expenses, Landlord may revise such
estimate by written notice to Tenant, and Tenant shall pay to Landlord,
concurrently with the regular monthly rent payment next due following the
receipt of the revised estimate, an amount equal to the difference between the
initial monthly estimate and the revised monthly estimate multiplied by the
number of months expired during such calendar year and shall also pay an amount
equal to the revised monthly estimate for the month of such payment. Subsequent
installments shall be payable concurrently with the regular monthly Base Rent
due for the balance of the calendar year and shall continue until the next
calendar year’s estimate is rendered or Landlord next revises its estimate of
Operating Expenses, whichever occurs sooner.

 

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(ii) Within one hundred twenty (120) days following the end of each year or a
reasonable time thereafter, Landlord shall provide Tenant with a written
statement of the actual total Operating Expenses for such year and there shall
be an adjustment made to account for any difference between Tenant’s Share of
the actual and the estimated Operating Expenses for the previous year. If Tenant
has overpaid the amount of Operating Expenses owing pursuant to this provision,
Landlord shall, provided Tenant is not in default hereunder, credit such
overpayment to Tenant’s account. If Tenant has underpaid the amount of Operating
Expenses owing pursuant to this provision, Tenant shall pay the total amount of
such deficiency to Landlord as Additional Rent with the next payment of Base
Rent due under this Lease following delivery of written notice of said
deficiency from Landlord to Tenant.

(iii) In the event the average occupancy level of the Building, Property, or
Project, as the case may be, for any calendar year was or is not one hundred
percent (100%) of full occupancy, then the estimated Operating Expenses and
actual Operating Expenses for such year shall be proportionately adjusted by
Landlord to reflect those costs which have occurred had the Building, Property,
and/or Project, as the case may be, been one hundred percent (100%) occupied
during such year.

(iv) Landlord shall keep its books of account and records concerning Operating
Expenses in compliance with generally accepted accounting principles and retain
the same for two (2) years after the calendar year for which they were prepared.
Unless Tenant objects in writing regarding specific discrepancies in the
Operating Expense calculations for any calendar year within ninety (90) days
after receipt of Landlord’s final calculations for such calendar year, Tenant
shall be deemed to have approved the same and to have waived the right to object
to such calculations.

(b) Defined terms.

(i) Operating Expenses Inclusions. For purposes of this Lease, “Operating
Expenses” means an amount equivalent to the total of all expenses and costs
incurred in connection with the ownership, operation, management, maintenance,
repair and replacement of the Project, the Property, the Building, the Premises
and the Common Areas, including, but in no way limited to, the following:

A. The costs of operating, maintaining, repairing and replacing the Project, the
Property, the Building, the Premises and the Common Areas, including but not
limited to: janitorial services, gardening and landscaping; painting; lighting;
sanitary control; personal property taxes; public liability insurance and
property damage insurance; utilities for Common Areas; licenses and fees for
Common Area facilities; sweeping; removal of snow and ice, trash, rubbish,
garbage and other refuse; repairing, restriping and resurfacing of parking area;
and maintenance of and property taxes on personal property, machinery and
equipment used in Common Area maintenance.

 

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B. All Real Property Taxes (as defined below) assessed against the Project,
Property, the Building and/or the Common Areas, as applicable, including land,
building(s) (including the Building) and improvements thereon or thereto.

C. All premiums for liability, terrorism, fire, extended coverage and other
insurance the Landlord reasonably deems necessary and keeps in force on or with
respect to the Project, the Property, the Building of which the Premises are a
part and/or the Common Areas, as the case may be, and commercially reasonable
deductibles payable in connection therewith.

D. The cost of operating, maintaining, repairing and replacing any electrical,
mechanical, automatic fire sprinkler and other utilities systems serving the
Premises which serve the Premises in common with the entire Building.

E. The cost of maintenance, repair and replacement of the non-structural
portions of the roof, roof membrane, exterior walls, foundation, and other
exterior portions of the Project and Building.

F. Reasonable property management charges (not to exceed 5% of annual gross
receipts) together with the costs incurred in the operation of a management
office relating to the Project, including, but not limited to the cost of rent
and utilities with respect thereto.

G. Costs of replacements and improvements which are necessary to adequately
maintain or protect the Project, the Property, the Building and/or the Common
Areas, as the case may be, and/or which are required by law or governmental
regulation enacted after the date of this Lease, which are of a capital nature
(as determined by GAAP accounting) to the extent amortization over the useful
life thereof is applicable to the periods during the Lease Term, and reasonable
reserves for the same.

H. Any other costs levied, assessed or imposed by or at the direction of, or
resulting from statutes or regulations or interpretations thereof promulgated by
any federal or governmental authority in connection with the use or occupancy of
the Project.

I. Assessments made on or with respect to the Project made pursuant to any
CC&Rs, Public Utility District conditions, Local Improvement District conditions
and/or owner’s associations affecting the Project, or any portion thereof.

J. Intentionally omitted.

K. Compensation (including wages and employer paid benefits and taxes) of
employees and contractors to the extent engaged in the operation and maintenance
of the Project, Property and/or Building.

 

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(ii) Operating Expense Exclusions. Notwithstanding the foregoing, Operating
Expenses to be reimbursed by Tenant shall not include:

A. Expenses which are separately metered or calculated for the Premises or other
leased area of the Project or the Building, as the case may be, which expenses
shall be billed separately to Tenant or such other tenant(s), as applicable.

B. Costs incurred in connection with the initial construction or design of the
Building or to correct defects in the original construction or design of the
Building.

C. Depreciation.

D. Costs, fines or penalties incurred due to violation by Landlord of any
applicable law.

E. Expenses incurred by Landlord in respect of individual tenants and/or the
improvement or renovation of tenants’ leasehold improvements, including leasing
commissions, attorneys’ fees arising from lease disputes and other specific
costs incurred for the account of, separately billed to and paid by specific
tenants.

F. Repairs or replacements to the extent that the cost of the same is
recoverable by the Landlord pursuant to original construction warranties.

G. Interest on debt or capital retirement of debt, and costs of capital
improvements except as expressly provided above.

H. Legal fees and disbursements relating to legal matters other than such fees
and costs directly relating to Operating Expense issues in connection with the
Project, the Building, the Premises and/or the Common Areas.

I. Costs incurred due to the negligence of Landlord or breach by Landlord of its
obligations under any lease.

J. Costs occasioned by casualties (other than insurance deductibles) or by the
exercise of the power of eminent domain.

K. Costs of renovating, improving, painting or redecorating another tenant’s
space.

L. Intentionally deleted.

 

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M. Costs incurred in connection with the remediation of any Hazardous Material,
except to the extent caused by the release or emission of the Hazardous Material
in question by Tenant

N. Costs of structural repairs to the Building except as specifically allowed
under subsection 6.01(b)(i)(G) above.

Additional Rent payable by Tenant which would not otherwise be due until after
the date of the expiration or earlier termination of the Lease shall, if the
exact amount is uncertain at the time this Lease expires or terminates, be paid
by Tenant to Landlord upon such expiration or termination in an amount to be
determined by Landlord, with an adjustment to be made once the exact amount is
known.

(iii) Tenant’s Share. For purposes of this Lease, “Tenant’s Share” means the
percentage, as set forth in Section 1.01(o), Section 1.01(p), or
Section 1.01(q), as appropriate, and obtained by dividing the Rentable Area of
the Premises by the aggregate Rentable Area of all premises available for lease,
whether leased or not, in the Building, the Property, or the Project, as
applicable with respect to any specific Operating Expense, subject to adjustment
in the event of changes in Rentable Area of the Project, Property, Building
and/or Premises (including changes do to any transfer of a portion of the
Project or Property pursuant to Section 17.04 below). Notwithstanding the above,
Landlord shall have the right, but not the obligation, to equitably adjust
Tenant’s Share of any specific Operating Expense so as to render such expense
payable proportionately by those tenants benefited by the same or otherwise in
order to appropriately allocate such Operating Expense to cover the area covered
by such Operating Expense.

(iv) Real Property Taxes. For purposes of this Lease, “Real Property Taxes”
shall consist of all real estate taxes and all other taxes relating to the
Building, the Common Areas, the Property, and/or the Project, as applicable, all
other taxes which may be levied in lieu of real estate taxes, all assessments,
local improvement districts, assessment bonds, levies, fees and other
governmental charges, including, but not limited to, charges for traffic
facilities and improvements, water service studies, and improvements or amounts
necessary to be expended because of governmental orders, whether general or
special, ordinary or extraordinary, unforeseen as well as foreseen, of any kind
and nature for public improvements, services, benefits, or any other purpose,
which are assessed, levied, confirmed, imposed or become a lien upon the
Building or any portion of the Project, the Property and/or the Common Areas, or
become payable during the Term (or which become payable after the expiration or
earlier termination hereof and are attributable in whole or in part to any
period during the Term hereof), together with all costs and expenses incurred by
Landlord in successfully contesting, resisting or appealing any such taxes,
rates, duties, levies or assessments. “Real Property Taxes” shall exclude any
franchise, estate, inheritance or succession transfer tax of Landlord, or any
federal or state income, profits or revenue tax or charge upon the net income of
Landlord from all sources; provided, however, that if at any time during the
Term there is levied or assessed against Landlord a federal, state or local tax
or excise tax on rent, or any other tax however described on account of rent or
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portion thereof, Tenant shall pay one hundred percent (100%) of the Tenant’s
Share of any said tax or excise applicable to Tenant’s Rent as Additional Rent.
Landlord shall pay or recover all taxes and assessments over the longest
permitted term.

6.02 Tenant’s Personal Property Taxes. Tenant shall pay or cause to be paid,
prior to delinquency, any and all taxes and assessments levied upon all trade
fixtures, inventories and other real or personal property placed or installed in
and upon the Premises by Tenant. If any such taxes on Tenant’s personal property
or trade fixtures are levied against Landlord or Landlord’s property or if the
assessed value of the Building is increased by the inclusion therein of a value
placed upon such real or personal property or trade fixtures of Tenant, and if
Landlord pays the taxes based upon such increased assessment, Tenant shall, upon
demand, repay to Landlord the taxes so levied or the portion of such taxes
resulting from such increase in the assessment.

ARTICLE VII: INSURANCE

7.01 Landlord’s Insurance. During the Term, Landlord shall procure and maintain
in full force and effect with respect to the Building (i) a policy or policies
of property insurance covering the full replacement value of the Building
(including, to the extent required, sprinkler leakage, vandalism and malicious
mischief coverage, and any other endorsements required by the holder of any fee
or leasehold mortgage and earthquake, flood and terrorism insurance to the
extent Landlord reasonably deems prudent and/or to the extent required by any
mortgagee); and (ii) a policy of commercial liability insurance, in the form and
content acceptable to Landlord, insuring Landlord’s activities with respect to
the Premises, the Common Areas and the Project for loss, damage or liability for
personal injury or death of any person or loss or damage to property occurring
in, upon or about the Premises, Common Areas or Project in an amount of not less
than Three Million Dollars ($3,000,000) combined single limit. If the annual
premiums charged Landlord for such casualty and/or liability insurance exceed
the standard premium rates because the nature of Tenant’s operations results in
increased exposure, then Tenant shall, upon receipt of appropriate premium
invoices, reimburse Landlord for such increased amount. Landlord shall have the
right, at its option, to keep and maintain in full force and effect during the
Term such other insurance in such amounts and on such terms as Landlord and/or
any mortgagees or the beneficiary of any trust deed against the Building, or all
or a portion of the Project, may reasonably require from time to time in form,
in amounts and for insurance risks against which a prudent Landlord would
protect itself, including but not limited to rental abatement, rental
interruption, earthquake, flood and terrorism insurance.

7.02 Tenant’s Public Liability. Tenant shall, at its own cost and expense, keep
and maintain in full force during the Term and any other period of occupancy of
the Premises by Tenant, a policy or policies of commercial liability insurance,
written by a reputable insurance company authorized to do business in the State
of Washington in form and content acceptable to Landlord insuring Tenant’s
activities with respect to the Premises, the Common Areas and the Project for
loss, damage or liability for personal injury or death of any person or loss or
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property occurring in, upon or about the Premises in an amount of not less than
Three Million Dollars ($3,000,000) combined single limit or such larger amounts
as may hereafter be reasonably requested by Landlord. The policy shall insure
the hazards of the Premises and Tenant’s operations therein, shall include
independent contractor and contractual liability coverage (covering the
indemnity contained in Section 7.08 hereof) and shall (a) name Landlord,
Landlord’s managing agent and the Landlord’s mortgagee under a mortgage or
beneficiary under a deed of trust either having a first lien against the
Building or Project (the “Lender”) as an additional insured; (b) contain a
cross-liability provision and; (c) contain a provision that the insurance
provided hereunder shall be primary and non-contributing with any other
insurance available to Landlord.

7.03 Tenant’s Property and Other Insurance. Tenant shall, at its own cost and
expense, keep and maintain in full force during the Term and any other period of
occupancy of the Premises, a policy or policies of standard form property
insurance insuring against the perils of fire, extended coverage, vandalism,
malicious mischief, special extended coverage and sprinkler leakage. This
insurance policy shall be upon all property owned by Tenant, for which Tenant is
legally liable or that was installed at Tenant’s expense, and which is located
in the Premises, including without limitation, furniture, fittings,
installations, cabling, fixtures (other than the improvements installed by
Landlord), and any other personal property, in the amount of not less than one
hundred percent (100%) of the full replacement costs thereof. This insurance
policy shall also insure direct or indirect loss of Tenant’s earning
attributable to Tenant’s inability to use fully or obtain access to the
Premises.

7.04 Form of Insurance/Certificates. All policies shall be written in a form
satisfactory to Landlord and shall be taken out with insurance companies
licensed in the state in which the Building is located and holding a General
Policy Holder’s Rating of “A” and a financial rating of “X” or better, as set
forth in the most current issues of Best’s Insurance Guide. Tenant shall furnish
to Landlord, prior to Tenant’s entry into the Premises and thereafter within ten
(10) days prior to the expiration of each such policy, a certificate of
insurance (or renewal thereof) issued by the insurance carrier of each policy of
insurance carried by Tenant pursuant hereto and, upon request by Landlord, a
copy of each such policy of insurance. Said certificates shall expressly provide
that such policies shall not be cancelable or subject to reduction of coverage
below the minimum amounts required by this Lease or required by any lender
having an interest in the Building or otherwise be subject to modification
except after thirty (30) days prior written notice to the parties named as
insured in this Section 7.04.

7.05 Tenant’s Failure. If Tenant fails to maintain any insurance required in the
Lease, Tenant shall be liable for any loss or cost resulting from said failure,
and Landlord shall have the right to obtain such insurance on Tenant’s behalf
and at Tenant’s sole expense. This Section 7.05 shall not be deemed to be a
waiver of any of Landlord’s rights and remedies under any other Section of this
Lease. If Landlord obtains any insurance which is the responsibility of Tenant
to obtain under this Article VII, Landlord shall deliver to Tenant a written
statement setting forth the cost of any such insurance and showing in reasonable
detail the manner in which it has been computed and Tenant shall promptly remit
said amount as Additional Rent to Landlord.

 

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7.06 Waiver of Subrogation. Any an risk policy or policies of fire, extended
coverage or similar casualty insurance which either party obtains in connection
with the Building, the Premises or Tenant’s personal property therein shall
include a clause or endorsement denying the insurer any rights of subrogation
against the other party to the extent rights have been waived by the insured
prior to the occurrence of injury or loss. Notwithstanding anything to the
contrary herein, Landlord and Tenant waive any rights of recovery against the
other for liability, injury or loss due to hazards covered by a standard
all-risk property insurance policy, or any property insurance required to be
carried hereunder, regardless of the negligence of either party.

7.07 Tenant’s Properties and Fixtures. Tenant assumes the risk of damage to any
furniture, equipment, machinery, goods, supplies or fixtures which are or remain
the property of Tenant or as to which Tenant retains the right of removal from
the Premises, except to the extent due to the negligent act or omission, or
willful misconduct of Landlord. Tenant shall not do or keep anything in or about
the Premises (except those things Tenant presently does and keeps in connection
with the uses set forth in Section 10.01) which will in any way tend to increase
insurance rates paid by Landlord and maintained with respect to the Premises
and/or the Project unless Tenant pays directly to Landlord the increase cost of
the premiums. In no event shall Tenant carry on any activities which would
invalidate any insurance coverage maintained by Landlord. If Tenant’s occupancy
or business in, or on, the Premises, whether or not Landlord has consented to
the same, results in any increase in premiums for the insurance carried by
Landlord with respect to the Building and/or the Project, Tenant shall pay any
such increase in premiums as Additional Rent within ten (10) days after being
billed therefore by Landlord. In determining whether increased premiums are a
result of Tenant’s use of the Building, a schedule issued by the organization
computing the insurance rate on the Building and/or the Project showing the
various components of such rate shall be conclusive evidence of the several
items and charges which make up such rate. Tenant shall promptly comply with all
reasonable requirements of the insurance underwriters and/or any governmental
authority having jurisdiction thereover, necessary for the maintenance of
reasonable fire and extended insurance for the Building and/or the Project.

7.08 Indemnification.

(a) (i) Tenant, as a material part of the consideration to be rendered to
Landlord, hereby indemnifies and agrees to defend and hold Landlord, Landlord’s
managing agent and Lender, the Premises and the Project harmless for, from and
against (i) any and all liability, penalties, losses, damages, costs and
expenses, demands, causes of action, claims, judgments or appeals arising from
any injury to any person or persons or any damage to any property to the extent
as a result of Tenant’s or Tenants’ officers, employees, agents, assignees,
subtenants, concessionaires, licensees, contractors or invitees’ acts or
omissions (including negligence or willful misconduct), or resulting from any
breach or default in the performance of any obligation to be performed by Tenant
hereunder or for which Tenant is responsible under the terms of the Lease, and
(ii) from and against all reasonable legal costs and charges, including
reasonable attorneys’ and other reasonable professional fees, incurred in and
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matters and the defense of any action arising out of the same or in discharging
the Project, the Property and/or Premises or any part thereof from any and all
liens, charges or judgments which may accrue or be placed thereon by reason of
any act or omission of the Tenant, except and to the extent as may arise out of
the negligence or willful misconduct of Landlord and/or its agents, employees or
contractors.

(ii) Landlord, as a material part of the consideration to be rendered to Tenant,
hereby indemnifies and agrees to defend and hold Tenant and the Premises
harmless from and against (i) any and all liability, penalties, losses, damages,
costs and expenses, demands, causes of action, claims, judgments or appeals
arising from any injury to any person or persons or any damage to any property
to the extent as a result of the negligence or willful misconduct of Landlord or
Landlord’s officers, employees, agents, or contractors, and (ii) from and
against all reasonable legal costs and charges, including reasonable attorneys’
and other reasonable professional fees, incurred in and about any of such
matters and the defense of any action arising out of the same or in discharging
Tenant and/or Premises or any part thereof from any and all liens, charges or
judgments which may accrue or be placed thereon by reason of any act or omission
of the Landlord, except and to the extent as may arise out of the negligence or
willful misconduct of Tenant and/or its officers, agents, employees, assignees,
subtenants, concessionaires, licensees, contractors, or invitees.

(b) In the event of the concurrent negligence of Tenant, its sublessees,
assignees, invitees, agents, employees, contractors, or licensees on the one
hand and the negligence of Landlord, its agents, employees or contractors on the
other hand, which concurrent negligence results in injury or damage to persons
or property of any nature and howsoever caused, and relates to the construction,
alteration, repair, addition to, subtraction from, improvement to or maintenance
of the Common Areas or Premises such that RCW 4.24.115 is applicable, then
(i) Tenant’s obligation to indemnify Landlord as set forth in this Section 7.08
shall be limited to the extent of Tenant’s negligence and that of Tenant’s
officers, sublessees, assignees, invitees, agents, employees, contractors or
licensees, including Tenant’s proportional share of costs, reasonable attorneys’
fees and expenses incurred in connection with any claim, action or proceeding
brought with respect to such injury or damage; and (ii) Landlord’s obligation to
indemnify Tenant as set forth in this Section 7.08 shall be limited to the
extent of Landlord’s negligence and that of Landlord’s officers, agents,
employees, contractors or licensees, including Landlord’s proportional share of
costs, reasonable attorneys’ fees and expenses incurred in connection with any
claim, action or proceeding brought with respect to such injury or damage.

(c) LANDLORD AND TENANT HEREBY WAIVE AND AGREE THAT IT WILL NOT ASSERT ITS
INDUSTRIAL INSURANCE IMMUNITY UNDER TITLE 51 RCW IF SUCH ASSERTION WOULD BE
INCONSISTENT WITH THE RIGHT OF THE OTHER PARTY TO INDEMNIFICATION PURSUANT TO
THIS ARTICLE 7. THE PARTIES AGREE THAT THIS PROVISION WAS MUTUALLY NEGOTIATED
AND RELATES ONLY TO A WAIVER OF IMMUNITY WITH RESPECT TO THE OTHER

 

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PARTY AND NO THIRD PARTY, INCLUDING BUT NOT LIMITED TO, ANY INJURED EMPLOYEE OF
EITHER PARTY, SHALL BE A THIRD PARTY BENEFICIARY OF THIS PROVISION.

(d) In no event shall Landlord, its agents, employees and/or contractors be
liable for any personal injury or death or property damage caused by other
lessees or persons in or about the Premises, the Project and/or the Building, as
the case may be, or caused by public or quasi-public work, or for consequential
damages arising out of any loss of the use of the Premises or any equipment or
facilities therein by Tenant or any person claiming through or under Tenant.

7.09 Damage to Tenant’s Property. Notwithstanding the provisions of Section 7.08
to the contrary, except to the extent due to the negligence or willful
misconduct of Landlord, Landlord, its agents, employees and/or contractors shall
not be liable for (i) any damage to property entrusted to employees or security
officers of the Project, Building or the Property, (ii) loss or damage to any
property by theft or otherwise, or (iii) any injury or damage to persons or
property resulting from fire, explosion, falling substances or materials, steam,
gas, electricity, water or rain which may leak from any part of the Building,
the Common Areas, Project or the Property or from the pipes, appliances or
plumbing work therein or from the roof, street, or subsurface or from any other
place or resulting from dampness or any other cause, except to the extent
Landlord receives consideration for such damage or injury from a third party.
Neither Landlord nor its agents, employees or contractors shall be liable for
interference with light. Tenant shall give prompt notice to Landlord and
appropriate emergency response officials if Tenant is or becomes aware of fire
or accidents in the Building, the Common Areas or any other portion of the
Project or of defects therein in the fixtures or equipment.

ARTICLE VIII: REPAIRS AND MAINTENANCE

8.01 Landlord Repairs and Maintenance. Subject to Landlord’s right to
reimbursement from Tenant pursuant to Sections 6.01 and 8.03, to the extent
applicable, Landlord shall at its expense maintain in good condition and repair
the structural portions of the Building including without limitation the
foundation, roof and membrane, elevators, heating, ventilation,
air-conditioning, and other utility and mechanical systems serving the Building,
and shall maintain in good condition the exterior of the Building, utilities to
their point of connection to the Premises and the Common Areas of the Project.
Landlord shall not be liable for any failure to make any repairs or to perform
any maintenance unless such failure shall persist for an unreasonable time after
written notice of the need for such repairs or maintenance is given to Landlord
by Tenant. There shall be no abatement of Rent and, except for the negligence or
willful misconduct of Landlord or its employees, no liability of Landlord by
reason of any injury to or interference with Tenant’s business arising from the
making of any repairs, alterations or improvement in or to any portion of the
Premises or in or to fixtures, appurtenances and equipment therein; provided,
that Landlord, its employees, agents and contractors use reasonable efforts not
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Tenant’s business in exercise of Landlord’s rights or obligations hereunder.
Except as may otherwise be expressly set forth herein, Tenant affirms that
(a) neither Landlord nor any agent, employee or officer of Landlord has made any
representation regarding the condition of the Premises, the Building, the Common
Areas or the Project, and (b) Landlord shall not be obligated to undertake any
repair, alteration, remodel, improvement, painting or decorating.

8.02 Utilities and Services. Subject to reimbursement pursuant to Sections 6.01
and 8.03 hereof, to the extent applicable, Landlord shall furnish or cause to be
furnished to the Premises lines for water, electricity, sewage and telephone.
Tenant shall pay before delinquency, at its sole cost and expense, all charges
for water, heat, electricity, power, telephone service, sewer service charges
and other utilities or services charged or attributable to the Premises;
provided, however, that if any such services or utilities shall be billed to
Landlord and are not separately billed to the Premises, Tenant shall pay to
Landlord as Additional Rent, an amount equal to that proportion of the total
charges therefor which the Rentable Area of the Premises bears to the rentable
area of leased area covered by such charges. Notwithstanding the above, in the
event Tenant uses any such services during non-standard building hours, Tenant
shall pay the actual cost of such after-hours services used by Tenant.
Notwithstanding the foregoing, if there occurs an interruption or failure of
services or utilities which is caused by Landlord and it is within Landlord’s
reasonable control to repair and such interruption or failure materially
interferes with Tenant’s ability to conduct business within the Premises and
continues for a period of more than seven (7) consecutive business days then,
from the first day of the existence of such condition, the Base Rent payable by
Tenant hereunder shall be abated for the portion of the Premises for which
normal and usual utilization by Tenant is made impractical, such abatement to be
effective for the full period such condition exists and until the repairs or
corrections are made or the services or utilities are restored.

8.03 Tenant Repairs and Maintenance. Except as otherwise set forth in Sections
8.01 and 8.02 above, Tenant shall, at Tenant’s sole cost and expense, keep,
maintain and, to the extent reasonably required, replace the entire Premises,
including but not by way of limitation, all interior walls, doors, ceiling,
fixtures, furnishings, drapes, specialty lamps, light bulbs, starters and
ballasts, subfloors, carpets and floor coverings, in good repair and in a clean
and safe condition; provided that Landlord shall have the right to perform such
work on behalf of Tenant in which event Tenant shall reimburse Landlord for the
cost thereof promptly upon demand therefor. In addition, if any repair or
maintenance is necessary or prudent under Sections 8.01 or 8.02 as a result of
an act or omission of Tenant or its agents, employees or contractors, Tenant
shall reimburse Landlord for the entire cost of any such repair or maintenance
immediately upon written demand therefor except to the extent such cost is
reimbursed through Landlord’s insurance. Upon expiration or earlier termination
of the Term, Tenant shall surrender the Premises to Landlord in the same
condition as when leased, reasonable wear and tear, damage by fire or other
casualty not required to be repaired by Tenant pursuant to this Lease, and
Alterations permitted to be surrendered with the Premises excepted.

 

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8.04 Non-liability of Landlord. Notwithstanding anything to the contrary
contained in Sections 8.01 or 8.02 above or elsewhere in this Lease, Landlord
shall not be in default hereunder or be liable for any damages directly or
indirectly resulting from, nor shall the Rent herein reserved be abated or
rebated by reason of (a) the interruption or curtailment of the use of the
Premises as a result of the installation of any equipment in connection with the
Building or Project; or (b) any failure to furnish or delay in furnishing any
services required to be provided by Landlord, unless and to the extent such
failure or delay is caused by accident or any condition created by Landlord’s
negligence; or (c) the limitation, curtailment, rationing or restriction of the
use of water or electricity, gas or any other form of energy or any other
service or utility whatsoever serving the Premises or Project.

8.05 Inspection of Premises. Landlord may enter the Premises to complete
construction undertaken by Landlord on the Premises, to inspect, clean, improve
or repair the same, to inspect the performance by Tenant of the terms and
conditions hereof, show the Premises to prospective purchasers, tenants (during
the last twelve (12) months of the Term) and lenders and for all other purposes
as Landlord shall reasonably deem necessary or appropriate; provided, that
Landlord shall provide prior notice of such entry (except in the case of
emergency) and shall use reasonable efforts not to interfere with Tenant’s
business in exercise of Landlord’s rights hereunder. Tenant hereby waives any
claim for damages for any injury or inconvenience to or interference with
Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises and
any other loss in, upon or about the Premises, arising from exercise by Landlord
of its rights hereunder except as otherwise provided in Article XI hereof.

ARTICLE IX: FIXTURES, PERSONAL PROPERTY AND ALTERATIONS

9.01 Fixtures and Personal Property. Tenant, at Tenant’s expense, may install
any necessary trade fixtures, equipment and furniture in the Premises, provided
that such items are installed and are removable without damage to the structure
of the Premises, including, but not limited to, damage to drywall, doors, door
frames and floors. Landlord reserves the right to approve or disapprove of any
interior improvements which are visible from outside the Premises or which
violate the CC&R’s on wholly aesthetic grounds. Such improvements must be
submitted for Landlord’s written approval prior to installation, or Landlord may
remove or replace such items at Tenant’s sole expense. Said trade fixtures,
equipment, furniture, cabling and personal property shall remain Tenant’s
property and shall be maintained in good condition while on the Premises and
removed by Tenant upon the expiration or earlier termination of the Lease. As a
covenant which shall survive the expiration or earlier termination of the Lease,
Tenant shall repair, at Tenant’s sole expense, or at Landlord’s election,
reimburse Landlord for the cost to repair all damage caused by the installation
or removal of said trade fixtures, equipment, cabling, furniture, personal
property or temporary improvements. If Tenant fails to remove the foregoing
items prior to or upon the expiration or earlier termination of this Lease,
Landlord, at its option and without liability to Tenant for loss thereof, may
keep and use them or remove any or all of them and cause them to be stored or
sold in accordance with applicable law, and Tenant shall, upon demand of

 

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Landlord, pay to Landlord as Additional Rent hereunder all costs and expenses
incurred by Landlord in so storing and/or selling said items. In the event any
such fixtures, equipment, and/or furniture of Tenant are sold by Landlord, the
proceeds of such sale shall be applied, first, to all expenses of Landlord
incurred in connection with storage and sale; second, to any amounts owed by
Tenant to Landlord under this Lease or otherwise, and, third, the remainder, if
any, shall be paid to Tenant.

9.02 Alterations. Tenant shall not make or allow to be made any material
alterations, additions or improvements to the Premises (defined as alterations,
additions or improvements costing in excess of $5,000.00 individually or in the
aggregate with respect to separate items relating to the same improvement or
alteration, or alterations, additions or improvements which affect the structure
or exterior of the Building or any building, mechanical, electrical or life
safety system), either at the inception of the Lease or subsequently during the
Term, without obtaining the prior written consent of Landlord, that consent may
be withheld in Landlord’s sole discretion with respect to any alteration,
addition or improvement that affects the structure or exterior of the Building
or any building, mechanical, electrical or life safety systems. Tenant shall
deliver to Landlord the contractor’s name, references and state license number,
a certificate of liability insurance naming Landlord and Landlord’s manager and
lender(s) as an additional insured, as well as full and complete plans and
specifications of all such alterations, additions or improvements, and any
subsequent modifications or additions to such plans and specifications, and no
proposed work shall be commenced or continued by Tenant until Landlord has
received and given its written approval of each of the foregoing. Landlord shall
either approve or disapprove any proposed alteration, addition or improvement on
or before thirty (30) days following receipt of all of the foregoing items.
Landlord does not expressly or implicitly covenant or warrant that any plans or
specifications submitted by Tenant are accurate, safe or sufficient or that the
same comply with any applicable laws, ordinances, building codes, or the like.
Further, Tenant shall indemnify, protect, defend and hold Landlord and
Landlord’s agents, employees and contractors and the Building harmless for, from
and against any loss, damage, liability, claims, cost or expense, including
attorneys’ fees and costs, incurred as a result of any defects in design,
materials or workmanship resulting from Tenant’s alterations, additions or
improvements to the Premises. All alterations, telephone or telecommunications
lines, cables, conduits and equipment and all other additions or improvements to
the Premises made by Tenant shall remain the property of Tenant until
termination of the Lease, at which time they shall, unless otherwise elected by
Landlord by written notice to Tenant, be and become the property of Landlord.
Landlord may, as a condition to approval of any such alterations, additions or
improvements, require Tenant to remove any partitions, counters, railings,
telephone and telecommunications lines, cables, conduits and equipment and/or
other improvements installed by Tenant during the Term, and Tenant shall repair
all damage resulting from such removal or, at Landlord’s option, shall pay to
Landlord all costs arising from such removal. All repairs, alterations,
additions and restorations by Tenant hereinafter required or permitted shall be
done in a good and workmanlike manner and in compliance with the plans and
specifications approved by Landlord and in compliance with all applicable laws
and ordinances, building codes, bylaws, regulations and orders of any federal,
state, county, municipal or other public authority and of the insurers of the
Premises and as-built plans and specifications

 

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shall be provided to Landlord by Tenant upon completion of the work. If required
by Landlord for projects costing in excess of $50,000, Tenant shall secure at
Tenant’s own cost and expense a completion and lien indemnity bond or other
adequate security, including without limitation an indemnity agreement from
Tenant’s parent in form and substance reasonably satisfactory to Landlord.
Tenant shall reimburse Landlord for Landlord’s reasonable charges (including any
professional fees incurred by Landlord and a reasonable administrative fee as
established by Landlord from time to time) for reviewing and approving or
disapproving plans and specifications for any proposed alterations, such fees
not to exceed $1,500 for review and approval (unless third party engineering
review is required, in which case such fees shall not exceed $3,000) or 3% of
the project cost for construction management.

9.03 Liens. Tenant shall promptly file and/or record, as applicable, all notices
of completion provided for by law, and shall pay and discharge all claims for
work or labor done, supplies furnished or services rendered at the request of
Tenant or at the request of Landlord on behalf of Tenant, and shall keep the
Premises, the Property and the Project free and clear of all mechanics’ and
materialmen’s liens in connection therewith. Landlord shall have the right, and
shall be given ten (10) business days written notice by Tenant prior to
commencement of the work, to post or keep posted on the Premises, or in the
immediate vicinity thereof, any notices of non-responsibility for any
construction, alteration, or repair of the Premises by Tenant. If any such lien
is filed, Tenant shall cause same to be discharged of record within ten
(10) days following written notice thereof, or if Tenant disputes the
correctness or validity of any claim of lien, Landlord may, in its reasonable
discretion, permit Tenant to post or provide security in a form and amount
acceptable to Landlord to insure that title to the Project remains free from the
lien claimed. If said lien is not timely discharged Landlord may, but shall not
be required to, take such action or pay such amount as may be necessary to
remove such lien and Tenant shall pay to Landlord as Additional Rent any such
amounts expended by Landlord, together with interest thereon at the Default Rate
(as defined in Section 5.03 hereof), within five (5) days after notice is
received from Landlord of the amount expended by Landlord.

ARTICLE X: USE AND COMPLIANCE WITH LAWS

10.01 General Use and Compliance with Laws. Tenant shall only use the Premises
for offices related to Tenant’s business described in Section 1.01(e) above, and
uses customarily incidental thereto and which are consistent with a Class A
office project, and for no other use without the prior written the consent of
Landlord. Tenant shall, at Tenant’s sole cost and expense, comply with
applicable requirements of municipal, county, state, federal and other
applicable governmental authorities now or hereafter in force pertaining to
Tenant’s business operations, alterations and/or specific use of the Premises
and/or the Project, and shall secure any necessary permits therefore and shall
faithfully observe in the use of the Premises and the Project, applicable
municipal, county, state, federal and other applicable governmental entities’
requirements which are now or which may hereafter be in force; provided,
however, that Tenant shall not be required to perform any Alterations as a
result of such compliance obligations unless such Alterations are

 

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required in connection with Tenant’s particular use of the Premises or other
Alterations already being constructed by Tenant. Tenant, in Tenant’s use and
occupancy of the Premises, shall not subject or permit the Premises and/or the
Project to be used in any manner which would tend to damage any portion thereof,
or which would increase the cost of any insurance paid by Landlord with respect
thereto, including without limitation exceeding maximum legal or customary
occupancy and density ratios. Tenant shall not do or permit anything to be done
in or about the Premises, the Common Areas and/or the Project which will in any
way obstruct or interfere with the rights of other tenants or occupants of the
Common Areas and/or the Project or use or allow the Premises or any portion of
the Project to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit a nuisance in, on or about
the Premises, the Common Areas and/or the Project. Tenant shall comply with all
covenants and obligations in the CC&R’s which affect the use and operation of
the Premises, the Common Areas and/or the Project

10.02 Hazardous Materials.

(a) Defined terms.

(i) “Hazardous Materials” means, among other things, any of the following, in
any amount: (a) any petroleum or petroleum derived or derivative product,
asbestos in any form, urea formaldehyde and polychlorinated biphenyls and
medical wastes; (b) any radioactive substance; (c) any toxic, infectious,
reactive, corrosive, ignitable or flammable chemical or chemical compound; and
(d) any chemicals, materials or substances, whether solid, liquid or gas,
defined as or included in the definitions of “hazardous substances,” “hazardous
wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted
hazardous wastes,” “toxic substances,” “toxic pollutants,” “solid waste,” or
words of similar import in any federal, state or local statute, law, ordinance
or regulation or court decisions now existing or hereafter existing as the same
may be interpreted by government offices and agencies.

(ii) “Hazardous Materials Laws” means any federal, state or local statutes,
laws, ordinances or regulations or court decisions now existing or hereafter
existing that control, classify, regulate, list or define Hazardous Materials or
require remediation of Hazardous Materials contamination.

(b) Compliance with Hazardous Materials Laws. Tenant will not cause any
Hazardous Material to be brought upon, kept, generated or used on the Project in
a manner or for a purpose prohibited by or that could result in liability under
any Hazardous Materials Law; provided, however, in no event shall Tenant allow
any Hazardous Material to be brought upon, kept, generated or used on the
Project other than those Hazardous Materials for which Tenant has received
Landlord’s prior written consent (other than small quantities of cleaning or
other/industrial supplies as are customarily used by a tenant in the ordinary
course in a general office facility). Tenant, at its sole cost and expense, will
comply with (and obtain all permits required under) all Hazardous Materials
Laws, groundwater wellhead protection laws, storm water

 

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management laws, fire protection provisions, and prudent industry practice
relating to the presence, storage, transportation, disposal, release or
management of Hazardous Materials in, on, under or about the Project that Tenant
brings upon, keeps, generates or uses on the Project (including, without
limitation, but subject to this Section 10.2, immediate remediation of any
Hazardous Materials in, on, under or about the Project that Tenant brings upon,
keeps, generates or uses on the Project in compliance with Hazardous Materials
Laws) and in no event shall Tenant allow any liens or encumbrances pertaining to
Tenant’s use of Hazardous Materials to attach to any portion of the Project. On
or before the expiration or earlier termination of this Lease, Tenant, at its
sole cost and expense, will completely remove from the Project (regardless
whether any Hazardous Materials Law requires removal), in compliance with all
Hazardous Materials Laws, all Hazardous Materials Tenant causes to be present
in, on, under or about the Project. Tenant will not take any remedial action in
response to the presence of any Hazardous Materials in on, under or about the
Project, nor enter into (or commence negotiations with respect to) any
settlement agreement, consent decree or other compromise with respect to any
claims relating to or in any way connected with Hazardous Materials in, on,
under or about the Project, without first notifying Landlord of Tenant’s
intention to do so and affording Landlord reasonable opportunity to investigate,
appear, intervene and otherwise assert and protect Landlord’s interest in the
Project. Landlord shall have the right from time to time to inspect the Premises
to determine if Tenant is in compliance with this Section 10.2.

(c) Notice of Actions. Tenant will notify Landlord of any of the following
actions affecting Landlord, Tenant or the Project that result from or in any way
relate to Tenant’s use of the Project immediately after receiving notice of the
same: (a) any enforcement, clean-up, removal or other governmental or regulatory
action instituted, completed or threatened under any Hazardous Materials Law;
(b) any claim made or threatened by any person relating to damage, contribution,
liability, cost recovery, compensation, loss or injury resulting from or claimed
to result from any Hazardous Material; and (c) any reports made by any person,
including Tenant, to any environmental agency relating to any Hazardous
Material, including any complaints, notices, warnings or asserted violations.
Tenant will also deliver to Landlord, as promptly as possible and in any event
within five (5) business days after Tenant first receives or sends the same,
copies of all claims, reports, complaints, notices, warnings or asserted
violations relating in any way to the Project or Tenant’s use of the Project.
Upon Landlord’s written request, Tenant will promptly deliver to Landlord
documentation acceptable to Landlord reflecting the legal and proper disposal of
all Hazardous Materials removed or to be removed from the Premises by Tenant.
All such documentation will list Tenant or its agent as a responsible party and
the generator of such Hazardous Materials and will not attribute responsibility
for any such Hazardous Materials to Landlord or Landlord’s property manager.

(d) Disclosure and Warning Obligations. Tenant acknowledges and agrees that all
reporting and warning obligations required under Hazardous Materials Laws
resulting from or in any way relating to Tenant’s use of the Premises or Project
are Tenant’s sole responsibility, regardless whether the Hazardous Materials
Laws permit or require Landlord to report or warn.

 

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(e) Indemnification. Tenant releases and will indemnify, defend (with counsel
reasonably acceptable to Landlord), protect and hold harmless the Landlord and
Landlord’s agents, employees and contractors for, from and against any and all
claims, liabilities, damages, losses, costs and expenses whatsoever arising or
resulting, in whole or in part, directly or indirectly, from the presence,
treatment, storage, transportation, disposal, release or management of Hazardous
Materials in, on, under, upon or from the Project (including water tables and
atmosphere) that Tenant brings upon, keeps, generates or uses on the Premises or
the Project. Tenant’s obligations under this Section include, without limitation
and whether foreseeable or unforeseeable, (a) the costs of any required or
necessary repair, clean-up, detoxification or decontamination of the Project
resulting from Tenant’s use of Hazardous Materials; (b) the costs of
implementing any closure, remediation or other required action in connection
therewith as stated above; (c) the value of any loss of use of the Project, and
(d) consultants’ fees, experts’ fees and response costs. The Tenant’s
obligations under this Section survive the expiration or earlier termination of
this Lease.

(f) Hazardous Materials Representation by Landlord. Landlord represents to
Tenant that, to its actual knowledge and except as Landlord has previously
disclosed to Tenant, Landlord has not caused the generation, storage or release
of Hazardous Materials upon the Premises, except in accordance with Hazardous
Materials Laws and prudent industry practices regarding construction of the
Premises, and has no actual knowledge of the presence of any Hazardous Materials
in or about the Premises.

(g) Environmental Site Assessments. In the event Landlord reasonably believes
that Tenant has violated the terms of this Section 10.02, then, upon request by
Landlord, Tenant will obtain and submit to Landlord an environmental site
assessment from an environmental consulting company reasonably acceptable to
Landlord.

10.03 Signs. The Tenant shall not paint, display, inscribe, place or affix any
sign, picture, advertisement, notice, lettering, or direction on any part of the
outside of the Building or the Project or visible from the outside of the
Premises, the Building or the Project, except as first approved by Landlord.
Landlord shall provide building standard identification of Tenant on the
Building directory, elevator lobby and suite location, as well as building
standard signage on Landlord’s exterior Building sign.

ARTICLE XI: DAMAGE AND DESTRUCTION

11.01 Reconstruction. If the Building is damaged or destroyed during the Term,
Landlord shall, except as hereinafter provided, diligently repair or rebuild it
to substantially the condition in which it existed immediately prior to such
damage or destruction. If Landlord is obligated or elects to repair or restore
as herein provided, Landlord shall be obligated to make repair or restoration of
only those portions of the Premises which were initially provided at

 

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Landlord’s expense or as part of the original installation by Landlord for
Tenant and the repair and/or restoration of other items within the Premises
shall be the obligation of the Tenant.

11.02 Rent Abatement. Rent due and payable hereunder shall be abated
proportionately during any period in which, by reason of any such damage or
destruction, there is substantial interference with the operation of Tenant’s
business in the Premises. Such abatement shall continue for the period
commencing with such damage or destruction and ending with a substantial
completion by Landlord of the work of repair or reconstruction which Landlord is
obligated or undertakes to do. If it be determined that continuation of business
is not practical pending reconstruction, and if Landlord does not elect to or is
unable to provide alternative temporary space for continuation of such business,
then Rent due and payable hereunder shall abate, until reconstruction is
substantially completed or until business is totally or partially resumed,
whichever is the earlier. Tenant shall not be entitled to any claim,
compensation or damages for loss in the use in the whole or any part of the
Premises (including loss of business) and/or any inconvenience or annoyance
occasioned by such damage, repair, reconstruction or restoration.

11.03 Excessive Damage or Destruction. If the Building or the Premises is
damaged or destroyed to the extent that it cannot within Landlord’s reasonable
discretion, with reasonable diligence, be fully repaired or restored by Landlord
within the earlier of (i) two hundred seventy (270) days after the date of the
damage or destruction, or (ii) the expiration of the Term hereof, Landlord may
terminate this Lease by written notice to Tenant within thirty (30) days of the
date of the damage or destruction. If Landlord does not terminate the Lease,
this Lease shall remain in full force and effect and Landlord shall diligently
repair and restore the damage as soon as reasonably possible. Notwithstanding
the foregoing, in the event Landlord determines that the Building or Premises
cannot be restored within two hundred seventy (270) days after the date of
damage or destruction, Tenant shall have the right to terminate this Lease upon
written notice to Landlord which notice must be given, if at all, within thirty
(30) days after Tenant receives Landlord’s determination of the estimated time
to restore the Building or Premises, as applicable.

11.04 Uninsured Casualty. Notwithstanding anything contained herein to the
contrary, in the event of damage to or destruction of all or any portion of the
Building, which damage or destruction is not fully covered by the insurance
proceeds received by Landlord under the insurance policies required under
Article 7.01 hereinabove, Landlord may terminate this Lease by written notice to
Tenant given within sixty (60) days after the date of notice to Landlord that
said damage or destruction is not so covered. If Landlord does not elect to
terminate this Lease, the Lease shall remain in full force and effect and the
Building shall be repaired and rebuilt in accordance with the provisions for
repair set forth in Section 11.01 hereinabove.

11.05 Waiver. With respect to any damage or destruction which Landlord is
obligated to repair or may elect to repair under the terms of this Article XI,
and to the extent permitted by law, Tenant hereby waives any rights to terminate
this Lease pursuant to rights otherwise accorded by law to tenants, except as
expressly otherwise provided herein.

 

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11.06 Mortgagee’s Right. Notwithstanding anything herein to the contrary, if the
holder of any indebtedness secured by a mortgage or deed of trust covering the
Property, the Building and/or the Project requires that the insurance proceeds
be applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to Tenant within fifteen
(15) days after such requirement is made. Upon any termination of this Lease
under the provisions hereof, the parties shall be released without further
obligation to the other from date possession of the Premises is surrendered to
Landlord, except for items which are theretofore accrued and are then unpaid.

11.07 Damage Near End of Term. Notwithstanding anything to the contrary
contained in this Article XI, in the event the Premises or the Building are
subject to excessive damage (as defined in Section 11.03) during the last twelve
(12) months of the Term or any applicable extension periods, Landlord may elect
to terminate this Lease by written notice to Tenant within thirty (30) days
after the date of such damage.

ARTICLE XII: EMINENT DOMAIN

12.01 Eminent Domain. In the event the whole of the Premises, Building, Project
and/or Common Areas, as the case may be, and/or such part thereof as shall
substantially interfere with Tenant’s use and occupation thereof, shall be taken
for any public or quasi-public purpose by any lawful power or authority by
exercise of the right of appropriation, condemnation or eminent domain, or is
sold in lieu of or to prevent such taking, then Tenant shall have the right to
terminate this Lease effective as of the date possession is required to be
surrendered to said authority. In the event the whole of the Premises, Building,
Project and/or Common Areas, as the case may be, or such part thereof as shall
substantially interfere with Landlord’s use and occupation thereof, or if any
access points to adjoining streets, shall be taken for any public or
quasi-public purpose by any lawful power or authority by exercise of the right
of appropriation, condemnation or eminent domain, or is sold in lieu of or to
prevent such taking, then Landlord shall have the right to terminate this Lease
effective as of the date possession is required to be surrendered to said
authority. Except as provided below, Tenant shall not assert any claim against
Landlord or the taking authority for any compensation because of such taking,
and Landlord shall be entitled to receive the entire amount of any award without
deduction for any estate or interest of Tenant in the Premises. Nothing
contained in this Article 12 shall be deemed to give Landlord any interest in
any separate award made to Tenant for the taking of personal property and
fixtures belonging to Tenant or for Tenant’s moving expenses. In the event the
amount of property or the type of estate taken shall not substantially interfere
with the conduct of Tenant’s business, Landlord shall be entitled to the entire
amount of the award without deduction for any estate or interest of Tenant,
Landlord shall promptly proceed to restore the Building to substantially their
same condition prior to such partial taking less the portion thereof lost in
such condemnation, and the Base Rent shall be proportionately reduced by the
time during which, and the portion of the Premises which, Tenant shall have been
deprived of possession on account of said taking and restoration.

 

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ARTICLE XIII: DEFAULT

13.01 Events of Default. The occurrence of any of the following events shall
constitute an “Event of Default” on the part of the Tenant with or without
notice from Landlord:

(a) Tenant shall fail to pay, within five (5) days following Landlord’s notice
that such payment is past due, any installment of Rent or other payment required
pursuant to this Lease;

(b) Intentionally omitted;

(c) Tenant shall fail to comply with any Term, provision, or covenant of this
Lease, other than the payment of Rent or other sums of money due hereunder, and
such failure is not cured within ten (10) days after written notice thereof to
Tenant (said notice being in lieu of, and not in addition to, any notice
required as a prerequisite to a forcible entry and detainer or similar action
for possession of the Premises); provided that if the nature of such cure is
such that a longer cure period is necessary, Tenant shall only be in default if
Tenant shall have failed to commence such cure within said ten (10) day period
and thereafter to have diligently prosecuted such cure to completion;

(d) Tenant shall file a petition or be adjudged a debtor or bankrupt or
insolvent under the United States Bankruptcy Code, as amended, or any similar
law or statute of the United States or any State; or a receiver or trustee shall
be appointed for all or substantially all of the assets of Tenant and such
appointment or petition, if involuntary, is not dismissed within sixty (60) days
of filing; or

(e) Tenant shall make an assignment for the benefit of creditors.

13.02 Remedies.

(a) Upon the occurrence of any Event of Default set forth in this Lease, in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the immediate option to terminate this Lease and all rights
of Tenant hereunder. Notwithstanding the foregoing, Landlord waives any right of
distraint, distress for rent or landlord’s lien with respect to Tenant’s
personal property that may arise at law. In the event that Landlord shall elect
to so terminate this Lease, then Landlord may recover from Tenant: (i) any
unpaid rent which has been earned at the time of such termination plus interest
at the rates contemplated by this Lease; plus (ii) the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided plus interest at the rates contemplated by this Lease; plus
(iii) the worth at the time of award of the amount by which the unpaid rent for
the balance of the Term after the time of award exceeds the amount of such
rental loss that Tenant proves could be reasonably avoided; plus

 

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(iv) the unamortized balance of the value of any free Rent, tenant improvement
costs, commissions and any other monetary concessions provided to Tenant
pursuant to this Lease, as amortized over the initial Term of this Lease; plus
(v) any other amount necessary to compensate Landlord for all the damage
proximately caused by Tenant’s failure to perform Tenant’s obligation under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including, but not limited to, costs to restore the Premises to good
condition, costs to remodel, renovate or otherwise prepare the Premises, or
portions thereof, for a new tenant, leasing commissions, marketing expenses,
reasonable attorneys’ fees, and free rent, moving allowances and other types of
leasing concessions. As used in Subsections 13.02(a) (iii) above, the “worth at
the time of award” is computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%).

(b) In the event of any such default by Tenant, Landlord shall also have the
right with or without terminating this Lease, to re-enter the Premises and
remove all persons and property from the Premises; such property may be removed
and stored in a public warehouse or elsewhere at the cost of and for the account
of the Tenant. No re-entry or taking possession of the Premises by Landlord
pursuant to this Section 13.02(b) shall be construed as an acceptance of a
surrender of the Premises or an election to terminate this Lease unless a
written notice of such intention is given to Tenant or unless the termination
thereof is decreed by a court of competent jurisdiction.

(c) In the event that Landlord shall elect to re-enter as provided above or
shall take possession of the Premises pursuant to legal proceedings or pursuant
to any notice provided by law, then if Landlord does not elect to terminate this
Lease as provided above, Landlord may from time to time, without terminating
this Lease, either recover all Rent as it becomes due or relet the Premises or
any part thereof for the Term of this Lease on terms and conditions as Landlord
at its sole discretion may deem advisable with the right to make alterations and
repairs to the Premises.

(d) In the event that Landlord shall elect to so relet, the rents received by
Landlord from such reletting shall be applied: first to the payment of any
indebtedness other than Rent due hereunder from Tenant to Landlord; second to
the payment of any costs of such reletting; third, to the payment of the cost of
any alterations and repairs to the Premises; fourth, to the payment of Rent due
and unpaid hereunder; and the residual, if any, shall be held by Landlord and
applied to payment of future Rent as the same shall become due and payable
hereunder. Should that portion of such rents received from such reletting during
the month which is applied to the payment of Rent be less than the Rent payable
during that month by Tenant hereunder, then Tenant shall pay any such deficiency
to Landlord immediately upon demand therefor by Landlord. Such deficiency shall
be calculated and paid monthly. Tenant shall also pay to Landlord, as soon as is
certain, any of the costs and expenses incurred by Landlord in such reletting or
in making such alterations and repairs not covered by the rents received from
such reletting.

 

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(e) All rights, options and remedies of Landlord contained in this Lease shall
be construed and held to be cumulative, and no one of them shall be exclusive of
the other, and Landlord shall have the right to pursue anyone or all of such
remedies or any other remedy or relief which may be provided by law, whether or
not stated in this Lease. No waiver of any default of Tenant hereunder shall be
implied from any acceptance by Landlord of any Rent or other payments due
hereunder or any omission by Landlord to take any action on account of such
default if such default persists or is repeated, and no express waiver shall
affect defaults other than as specified in said waiver. The consent or approval
of Landlord to or of any act by Tenant requiring Landlord’s consent or approval
shall not be deemed to waive or render unnecessary Landlord’s consent or
approval to or of any subsequent similar acts by Tenant.

(f) In the event that during the Term of this Lease, Tenant commits more than
two (2) acts or omissions of default for which default notices are given by
Landlord pursuant to this Article XIII (whether or not such defaults are cured
by Tenant), Landlord may, at its option, elect to terminate this Lease.
Landlord’s election to exercise its early termination rights shall be effective
only upon written notice delivered to Tenant specifying Landlord’s election to
cause an early termination of this Lease. Such early termination shall be in
effect when such written notice is provided to Tenant. Landlord’s right of early
termination shall be in addition to all other rights and remedies available to
Landlord at law or in equity.

13.03 Landlord’s Default. Landlord shall not be in default unless Landlord fails
to perform its obligations under this Lease within thirty (30) days after
written notice by Tenant, or if such failure is not reasonably capable of being
cured within such thirty (30) day period, Landlord shall not be in default
unless Landlord has failed to commence the cure and diligently pursue the cure
to completion. In no event shall Tenant have the remedy to terminate this Lease
except upon final adjudication of a court of competent jurisdiction authorizing
such termination. In no event shall Landlord be liable to Tenant or any person
claiming through or under Tenant for consequential, exemplary or punitive
damages.

ARTICLE XIV: FILING OF PETITION

14.01 Tenant’s Bankruptcy.

Landlord and Tenant (as either debtor or debtor-in-possession) agree that if a
petition (“Petition”) is filed by or against tenant under any chapter of Title
11 of the United States Code (the “Bankruptcy Code”), the following provisions
shall apply:

(a) Adequate protection for Tenant’s obligations accruing after filing of the
Petition and before this Lease is rejected or assumed shall be provided within
15 days after filing in the form of a security deposit equal to three months’
Base Rent and Additional Rent and other Lease charges, to be held by the court
or an escrow agent approved by Landlord and the court.

 

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(b) The sum of all amounts payable by Tenant to Landlord under this Lease
constitutes reasonable compensation for the occupancy of the Premises by Tenant.

(c) Tenant or Trustee shall give Landlord at least 30 days written notice of any
abandonment of the Premises or any proceeding relating to administrative claims.
If Tenant abandons without notice, Tenant or Trustee shall stipulate to entry of
an order for relief from stay to permit Landlord to reenter and relet the
Premises.

(d) If Tenant failed to timely and fully perform any of its obligations under
this Lease before the filing of the Petition, whether or not Landlord has given
Tenant written notice of that failure and whether or not any time period for
cure expired before the filing of the Petition, Tenant shall be deemed to have
been in default on the date the Petition was filed for all purposes under the
Bankruptcy Code.

(e) For the purposes of Section 365(b)(1) of the Bankruptcy Code, prompt cure of
defaults shall mean cure within 30 days after assumption.

(f) For the purposes of Section 365(b)(1) and 365(f)(2) of the Bankruptcy Code,
adequate assurance of future performance of this Lease by Tenant, Trustee or any
proposed assignee will require that Tenant, Trustee or the proposed assignee
deposit three months of Base Rent and Additional Rent into an escrow fund (to be
held by the court or an escrow agent approved by Landlord and the court) as
security for such future performance. In addition, if this Lease is to be
assigned, adequate assurance of future performance by the proposed assignee
shall require that: (i) the assignee have a tangible net worth not less than the
net worth of Tenant as of the Commencement Date or that such assignee’s
performance be unconditionally guaranteed by a person or entity that has a
tangible net worth not less than the net worth of Tenant as of the Commencement
Date; (ii) the assignee demonstrate that it possesses a history of success in
operating a business of similar size and complexity in a similar market as
Tenant’s business; and (iii) assignee assume in writing all of Tenant’s
obligations relating to the Premises or this Lease.

(g) If Tenant or Trustee intends to assume and/or assign this Lease, Tenant or
Trustee shall provide Landlord with 30 days written notice of the proposed
action, separate from and in addition to any notice provided to all creditors.
Notice of a proposed assumption shall state the assurance of prompt cure,
compensation for loss and assurance of future performance to be provided to
Landlord. Notice of a proposed assignment shall state: (i) the name, address,
and federal tax identification and registration numbers of the proposed
assignee; (ii) all of the terms and conditions of the proposed assignment, and
(iii) the assignee’s proposed adequate assurance of future performance to be
provided to Landlord.

(h) If Tenant is in default under this Lease when the Petition is filed,
Landlord shall not be required to provide Tenant or Trustee with services or
supplies under this Lease or otherwise before Tenant assumes this Lease, unless
Tenant compensates Landlord for such services and supplies in advance.

 

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ARTICLE XV; ASSIGNMENT AND SUBLETTING

15.01 Prohibition. Tenant shall not assign, mortgage, pledge or otherwise
transfer or encumber this Lease, in whole or in part, nor sublet, assign, or
permit occupancy by any party other than Tenant of all or any part of the
Premises, without the prior written consent of Landlord, which may be withheld
or conditioned by Landlord in its sole discretion. Tenant shall at the time the
Tenant requests the consent of Landlord, deliver to Landlord such information in
writing as Landlord may reasonably require respecting the proposed assignee or
subtenant including, without limitation, the name, address, nature of business,
ownership, financial responsibility and standing of such proposed assignee or
subtenant and Landlord shall have not less than twenty (20) business days after
receipt of all required information to elect one of the following; (a) consent
to such proposed assignment, encumbrance or sublease, or (b) refuse such
consent, or (c) elect to terminate this Lease, in the case of a proposed
assignment, or elect to terminate the Lease with respect to the portion of the
Premises proposed to be subleased, as applicable. In addition, as a condition to
Landlord’s consent to any assignment, sublease or encumbrance of this Lease
shall be the delivery to Landlord of a true copy of the fully executed
instrument of assignment, transfer or encumbrance and an agreement executed by
the assignee, sublessee or other transferee in form and substance satisfactory
to Landlord and expressly enforceable by Landlord, whereby the assignee assumes
and agrees to be bound by the terms and provisions of this Lease and perform all
the obligations of Tenant hereunder with respect to the assigned or subleased
portion of the Premises. No assignment or subletting by Tenant shall relieve
Tenant of any obligation under this Lease, including Tenant’s obligation to pay
Base Rent and Additional Rent hereunder. Any purported assignment or subletting
contrary to the provisions hereof without consent shall be void. The consent by
Landlord to any assignment or subletting shall not constitute a waiver of the
necessity for such consent to any subsequent assignment of subletting. Tenant
shall pay Landlord’s reasonable processing costs and attorneys’ fees incurred in
reviewing any proposed Assignment or sublease, not to exceed $1500 per request.

15.02 Excess Rental. If pursuant to any assignment or sublease, Tenant receives
rent, either initially or over the Term of the assignment or sublease, in excess
of the Rent called for hereunder, or in the case of the sublease of a portion of
the Premises in excess of such Rent fairly allocable to such portion, after
appropriate adjustments to assure that all other payments called for hereunder
are appropriately taken into account, and after deductions made for Tenant’s
reasonable subletting or assignment costs (including attorneys fees, brokerage
commissions, and tenant improvement costs), Tenant shall pay to Landlord, as
Additional Rent hereunder, fifty percent (50%) of the excess of each such
payment of rent received by Tenant after its receipt.

15.03 Scope. The prohibition against assigning or subletting contained in this
Article XV shall be construed to include a prohibition against any assignment or
subletting by operation of law. If this Lease be assigned, or if the underlying
beneficial interest of Tenant is transferred, or if the Premises or any part
thereof be sublet or occupied by anybody other than Tenant, Landlord

 

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may collect rent from the assignee, subtenant or occupant and apply the net
amount collected to the Rent herein reserved and apportion any excess rent so
collected in accordance with the terms of the immediately preceding paragraph,
but no such assignment, subletting, occupancy or collection shall be deemed a
waiver of this covenant, or the acceptance of the assignee, subtenant or
occupant as tenant, or a release of Tenant from the further performance by
Tenant of covenants on the part of Tenant herein contained. No assignment or
subletting shall affect the continuing primary liability of Tenant (which,
following assignment, shall be joint and several with the assignee), and Tenant
shall not be released from performing any of the terms, covenants and conditions
of this Lease.

15.04 Waiver. Notwithstanding any assignment or sublease, or any indulgences,
waivers or extensions of time granted by Landlord to any assignee or sublessee
or failure of Landlord to take action against any assignee or sublease, Tenant
hereby agrees that Landlord may, at its option, and upon not less than ten
(10) days’ notice to Tenant, proceed against Tenant without having taken action
against or joined such assignee or sublessee, except that Tenant shall have the
benefit of any indulgences, waivers and extensions of time granted to any such
assignee or sublessee.

15.05 Change in Control. If Tenant is a partnership or limited liability
company, a withdrawal of or change in general partners or members, in one or
more transfers, owning more than a fifty percent (50%) interest in the
partnership, shall constitute a voluntary assignment and shall be subject to the
provisions of this Article XV. If the Tenant is a corporation whose stock is not
publicly traded on a national stock exchange, a transfer of fifty percent
(50%) or more of the corporation’s stock or assets in one or more transfers to a
single party and/or its affiliates, or a change in the control of such company
pursuant to a merger, consolidation, sale of assets or otherwise, shall be
deemed for the purposes hereof to be an assignment of this Lease, and shall be
subject to the provisions of this Article XV.

15.06 Permitted Transfers. Notwithstanding the above to the contrary, Tenant may
assign this Lease or sublet the Premises without Landlord’s consent (i) to any
corporation or other entity that controls, is controlled by or is under common
control with Tenant; (ii) to any corporation or other entity resulting from a
merger, acquisition, consolidation or reorganization of or with Tenant; (iii) in
connection with the sale of all or substantially all of the assets of Tenant
(collectively, a “Permitted Transferee”) provided that (a) Tenant provides
evidence to Landlord in writing that such assignment or sublease complies with
the criteria set forth in (i), (ii) or (iii) above, (b) such assignee, subtenant
or successor-in-interest expressly assumes Tenants’ obligations and liabilities;
and (c) the tangible net worth, debt/tangible net worth ratio, and cash flow
from operations of said assignee and Tenant after the transfer are equal to or
better than that of Tenant as of the date of the proposed transfer.

 

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ARTICLE XVI: ESTOPPEL CERTIFICATE, ATTORNMENT AND SUBORDINATION

16.01 Estoppel Certificates. Within ten (10) business days after request
therefor by Landlord, or if on any sale, assignment or hypothecation by Landlord
of Landlord’s interest in the Property, the Project and/or the Premises, or any
part thereof, an estoppel certificate shall be required from Tenant, Tenant
shall deliver a certificate in the form attached hereto as Exhibit G, or in such
other form as requested by Landlord, to any proposed mortgagee or purchaser, and
to Landlord, certifying (if such be the case) that this Lease is in full force
and effect, the date of Tenant’s most recent payment of Rent, and that Tenant
has no defenses or offsets outstanding, or stating those claimed by Tenant, and
any other information contained in such Exhibit G or reasonably requested by
Landlord or such proposed mortgagee or purchaser. Tenant’s failure to deliver
said statement within said period shall, at Landlord’s option be an Event of
Default hereunder and shall in any event be conclusive upon Tenant that:
(i) this Lease is in full force and effect, without modification except as may
be represented by Landlord; (ii) there are no uncured defaults in Landlord’s
performance and Tenant has no right to offset, counterclaim or deduction against
Rent hereunder; and (iii) no more than one period’s Base Rent has been paid in
advance.

16.02 Attornment. Tenant shall, in the event any proceedings are brought for the
foreclosure of, or in the event of exercise of the power of sale under, any
mortgage or deed of trust made by Landlord, its successors or assigns,
encumbering the Building, or any part thereof or in the event of termination of
a ground lease, if any, and if so requested, attorn to the purchaser upon such
foreclosure or sale or upon any grant of a deed in lieu of foreclosure and
recognize such purchaser as Landlord under this Lease; provided, that such
purchaser recognizes Tenant’s rights under this Lease and agrees not to disturb
Tenant’s quiet possession of the Premises for so long as Tenant is not in
default hereunder.

16.03 Subordination. The rights of Tenant hereunder are and shall be, at the
election of any mortgagee or the beneficiary of a deed of trust encumbering the
Project (or the portion thereof on which the Building is located) and/or
Building, subject and subordinate to the lien of such mortgage or deed of trust,
or the lien resulting from any other method of financing or refinancing, now or
hereafter in force against the Project (or the portion thereof on which the
Building is located) and/or the Building, and to all advances made or hereafter
to be made upon the security thereof. If requested, Tenant agrees to execute
such documentation as may be required by Landlord or its lender to further
effect the provisions of this Article in the form attached hereto as Exhibit J
or in such other form as reasonably requested by Landlord or its Lender.

16.04 Recording. Tenant covenants and agrees with Landlord that Tenant shall not
record this Lease or any memorandum thereof without Landlord’s prior written
consent. Notwithstanding the provisions of Section 16.03, in the event that
Landlord or its lender requires this Lease or a memorandum thereof to be
recorded in priority to any mortgage, deed of trust or other encumbrance which
may now or at any time hereafter affect in whole or in part the Building, the
Project (or the portion thereof on which the Building is located), and whether
or not any such mortgage, deed of trust or other encumbrance shall affect only
the Building, the Project (or the

 

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portion thereof on which the Building is located), or shall be a blanket
mortgage, deed of trust or encumbrance affecting other premises as well, the
Tenant covenants and agrees with Landlord that the Tenant shall execute promptly
upon request from Landlord any certificate, priority agreement or other
instrument which may from time to time be requested to give effect thereto.

ARTICLE XVII: MISCELLANEOUS

17.01 Notices. All notices required to be given hereunder shall be in writing
and mailed postage prepaid by certified or registered mail, return receipt
requested, or by personal delivery or nationally recognized courier service, to
the appropriate address indicated in Section 1.01(b) or Section 1.01(d), as
appropriate, at such street address or street addresses (but not more than three
such addresses) as either Landlord or Tenant may, from time to time,
respectively, designate in a written notice given to the other. Notices shall be
deemed sufficiently served upon the earlier of actual receipt or the expiration
of three (3) days after the date of mailing thereof.

17.02 Successors Bound. This Lease and each of its covenants and conditions
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective assignees, subject to the provisions hereof. Whenever in this
Lease a reference is made to Landlord, such reference shall be deemed to refer
to the person in whom the interest of Landlord shall be vested, and Landlord
shall have no obligation hereunder as to any claim arising after the transfer of
its interest in the Building. Any successor or assignee of the Tenant who
accepts an assignment of the benefit of this Lease and enters into possession or
enjoyment hereunder shall thereby assume and agree to perform and be bound by
the covenants and conditions thereof. Nothing herein contained shall be deemed
in any manner to give a right of assignment without the prior written consent of
Landlord pursuant to, or otherwise as provided in, Article XV hereof.

17.03 Waiver. No waiver of any default or breach of any covenant by either party
hereunder shall be implied from any omission by either party to take action on
account of such default if such default persists or is repeated, and no express
waiver shall affect any default other than the default specified in the waiver
and said waiver shall be operative only for the time and to the extent therein
stated. Waivers of any covenant, term or condition contained herein by either
party shall not be construed as a waiver of any subsequent breach of the same
covenant, term or condition. The consent or approval by either party to or of
any act by either party requiring further consent or approval shall not be
deemed to waive or render unnecessary their consent or approval to or of any
subsequent similar acts.

17.04 Subdivision and Easements. Landlord reserves the right to: (a) subdivide
the Project or the Property and transfer any portion thereof (and, upon such
transfer, the portion transferred shall be removed from the definition of
Project and/or Property, as applicable); (b) alter the boundaries of the Project
or the Property; and (c) grant easements on the Project or Property and dedicate
for public use portions thereof; provided, however, that no such grant or
dedication shall materially interfere with Tenant’s use of the Premises. Tenant
hereby consents to such

 

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subdivision, boundary revision, and/or grant or dedication of easements and
agrees from time to time, at Landlord’s request, to execute, acknowledge and
deliver to Landlord, in accordance with Landlord’s instructions, any and all
documents, instruments, maps or plats necessary to effectuate Tenant’s consent
thereto.

17.05 Landlord’s Reserved Rights in Common Areas. Landlord reserves the right
from time to time, provided that Tenant’s use and enjoyment of the Premises is
not materially and adversely affected thereby, to: (a) install, use, maintain,
repair and replace pipes, ducts, conduits, wires and appurtenant meters and
equipment for service to other parts of the Building above the ceiling surfaces,
below the floor surfaces, within the walls and in the central core areas, and to
relocate any pipes, ducts, conduit, wires and appurtenant meters in the Building
which are so located or located elsewhere outside the Building; (b) make changes
to the Common Areas and/or the parking facilities located thereon, including,
without limitation, changes in the location, size, shape and number of
driveways, entrances, parking spaces, parking areas, loading and unloading
areas, ingress, egress, direction of traffic, landscaped areas and walkways; (c)
close temporarily all or any portion of the Common Areas and/or the Building in
order to perform any of the foregoing or any of Landlord’s obligations under
this Lease, so long as reasonable access to the Building remains available
during normal business hours; and (d) alter, relocate or expand, and/or to add
additional structures and improvements to, or remove same from, all or any
portion of the Common Areas or other portions of the Project.

17.06 Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a
lesser amount than the Rent herein stipulated shall be deemed to be other than
on account of the Rent, nor shall any endorsement or statement on any check or
any letter accompanying any check or payment as Rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord’s right to recover the balance of such Rent or pursue any other remedy
provided in this Lease.

17.07 Limitation of Landlord’s Liability. The obligations of Landlord under this
Lease do not constitute personal obligations of the individual partners,
directors, officers, members, employees or shareholders of Landlord or its
partners, and Tenant shall look solely to the Building, and the rents and
profits therefrom, for satisfaction of any liability in respect of this Lease
and will not seek recourse against the individual partners, directors, officers,
members, employees or shareholders of Landlord or its partners or any of their
personal assets for such satisfaction.

17.08 Survival. The obligations and liabilities of each party which are incurred
or accrue prior to the expiration of this Lease or the termination of this Lease
or of Tenant’s right of possession shall survive such expiration or termination,
as shall all provisions by which a party is to provide defense and indemnity to
the other party, all provisions waiving or limiting the liability of Landlord,
and all attorneys’ fees provisions.

17.09 Attorneys’ Fees. In the event of any litigation or other proceeding,
declaratory or otherwise, arising out of this Lease, including an action to
collect or enforce a judgment or order

 

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entered in any such litigation or proceeding, the prevailing party will recover
its attorneys’ fees from the nonprevailing party, in an amount which will be
fixed by the court. If Landlord engages counsel to enforce the terms of this
Lease (including, but not limited to, for the purpose of preparing a delinquency
notice), Tenant will reimburse Landlord for all attorneys’ fees incurred before
the subject default is considered cured. Tenant will also indemnify, defend
(with counsel reasonably acceptable to Landlord), protect and hold harmless
Landlord, its employees, representatives, agents or successors (“Landlord
Parties”) from and against all claims Landlord or any of the other Landlord
Parties incurs if Landlord or any of the other Landlord Parties becomes or is
made a party to any claim or action (a) instituted by Tenant against, or
instituted against Tenant by, any person holding any interest in the Premises
by, under or through Tenant; (b) for foreclosure of any lien for labor or
material furnished to or for Tenant or such other person; or (c) otherwise
arising out of or resulting from any act or omission of Tenant or such other
person. As used in this Lease, “attorneys’ fees” means all costs, damages and
expenses, including attorneys’, paralegals’, clerical and consultants’
respective fees and charges actually expended or incurred in connection
therewith, including for appeals.

17.1 0 Captions and Article Numbers. The captions, article, paragraph and
Section numbers and table of contents appearing in this Lease are inserted only
as a matter of convenience and in no way define, limit, construe or describe the
scope or intent or such Sections or articles of this Lease nor in any way affect
this Lease.

17.11 Severability. If any Term, covenant, condition or provision of this Lease,
or the application thereof to any person or circumstance, shall to any extent be
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, covenants, conditions or provisions of this Lease,
or the application thereof to any person or circumstance, shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.

17.12 Applicable Law. This Lease, and the rights and obligations of the parties
hereto, shall be construed and enforced in accordance with the laws of the state
in which the Building is located.

17.13 Submission of Lease. The submission of this document for examination and
negotiation does not constitute an offer to lease, or a reservation of or option
for leasing the Premises. This document shall become effective and binding only
upon execution and delivery hereof by Landlord and Tenant. No act or omission of
any officer, employee or agent of Landlord or Tenant shall alter, change or
modify any of the provisions hereof.

17.14 Holding Over. This Lease shall terminate without further notice at the
expiration of the Lease Term. Any holding over by Tenant without the express
written consent of Landlord shall not constitute the renewal or extension of
this Lease or give Tenant any rights in or to the Premises. In the event of such
a holding over by Tenant without the express written consent of Landlord, the
monthly Base Rent payments to be paid by Tenant shall automatically deemed to be
in an amount equal to one hundred fifty percent (150%) of the then applicable
Base Rent rate;

 

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provided, however, no payment of such increased Rent by Tenant shall be deemed
to extend or renew the Term of this Lease, and such Rent payments shall be fixed
by Landlord only to establish the amount of liability for payment of Rent on the
part of Tenant during such period of holding over. In the event Landlord shall
give its express written consent to Tenant to occupy the Premises beyond the
expiration of the Term, that occupancy shall be construed to be a month-to-month
tenancy upon all the same terms and conditions as set forth herein unless
modified by Landlord in such written consent; provided that Rent charged during
any period of holding over shall be as stated above. The foregoing provisions of
this Section 17.14 are in addition to and do not affect Landlord’s right of
re-entry or any other rights of Landlord hereunder or as otherwise provided by
law. If Tenant fails to surrender the Premises on the expiration of this Lease
and/or to remove all Tenant’s fixture and/or personal property pursuant to
Section 9.01 hereof, Tenant shall indemnify and hold Landlord harmless for, from
and against all claims, damages, loss or liability, including without
limitation, any claim made by any succeeding tenant resulting from such failure
to surrender by Tenant and any attorneys’ fees and costs incurred by Landlord
with respect to any such claim.

17.15 Rules and Regulations. At all times during the Term, Tenant shall comply
with Rules and Regulations for the Building and the Project, as set forth in
Exhibit H attached hereto, together with such amendments thereto as Landlord may
from time to time reasonably adopt and enforce in a non-discriminatory fashion.

17.16 Parking. Tenant shall be entitled to the number of unreserved vehicle
parking spaces designated in Section 1.01(r) hereof for the non-exclusive use of
Tenant, its employees, visitors and customers. All such parking spaces provided
to Tenant hereunder shall be available for the common use of the tenants,
subtenants and invitees of the Project on a non-exclusive basis, subject to any
reasonable restrictions from time to time imposed by Landlord. Tenant shall not
use or permit its officers, employees or invitees to use more than the number of
spaces designated in Section 1.01(r) or any spaces which have been specifically
reserved by Landlord to other tenants or for such other uses as have been
designated by appropriate governmental entities as being restricted to certain
uses. Tenant shall at all times comply and cause its officers, employees and
invitees to comply with any parking Rules and Regulations as Landlord may from
time to time reasonably adopt.

17.17 No Nuisance. Tenant shall conduct its business and control its agents,
employees, invitees and visitors in such a manner as not to create any nuisance,
or interfere with, annoy or disrupt any other tenant or Landlord in its
operation of the Building or Project.

17.18 Broker; Agency Disclosure.

(a) Each of Tenant and Landlord warrant that it has had no discussions,
negotiations and/or other dealings with any real estate broker or agent in
connection with the negotiation of this Lease other than the Broker(s)
identified in Section 1.01(r) (“Brokers”), and that it knows of no other real
estate broker or agent who is or may be entitled to any commission or

 

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finder’s fee in connection with this Lease. Landlord shall pay Brokers a
commission pursuant to separate agreements. Brokers shall be obligated to pay
any co-brokers a portion of the commission received by such Broker. Each Tenant
and Landlord agrees to indemnify the other and hold the other harmless from and
against any and all claims, demands, losses, liabilities, lawsuits, judgments,
costs and expenses (including without limitation, attorneys’ fees and costs)
with respect to any leasing commission or equivalent compensation alleged to be
owing on account of such party’s discussions, negotiations and/or dealings with
any real estate broker or agent. This Section 17.18 is not intended to benefit
any third parties and shall not be deemed to give any rights to brokers or
finders. No commission(s) or finders fee(s) shall be paid to Tenant, employee(s)
of Tenant or any unlicensed representative of Tenant.

17.19 Landlord’s Right to Perform. Upon Tenant’s failure to perform any
obligation of Tenant hereunder after notice from Landlord pursuant to
Section 13.01 above (if notice is required pursuant to Section 13.01 above),
including without limitation, the Tenant’s failure to pay Tenant’s insurance
premiums, charges of contractors who have supplied materials or labor to the
Premises, etc., Landlord shall have the right to perform such obligation of
Tenant on behalf of Tenant and/or to make payment on behalf of Tenant to such
parties. Tenant shall reimburse Landlord the reasonable cost of Landlord’s
performing such obligation on Tenant’s behalf, including reimbursement of any
amounts that may be expended by Landlord, plus interest at the Default Rate, as
Additional Rent.

17.20 Assignment by Landlord. In the event of a sale, conveyance, or other
transfer by Landlord of the Building, the Project, or portion thereof on which
the Building is located, or the Project or in the event of an assignment of this
Lease by Landlord, the same shall operate to release Landlord from any further
liability upon any of the covenants or conditions, express or implied, herein
contained on the part of Landlord, and from any and all further liability,
obligations, costs and expenses, demands, causes of action, claims or judgments
arising out of this Lease from and after the effective date of said release. In
such event, Tenant agrees to look solely to the successor in interest of
transferor. If any Security Deposit is given by Tenant to secure performance of
Tenant’s covenants hereunder, Landlord may transfer such Security Deposit to any
purchaser and thereupon Landlord shall be discharged from any further liability
in reference thereto. Notwithstanding anything in this Lease to the contrary,
however, (i) in no event shall Landlord’s lender, who may have succeeded to the
interest of Landlord by foreclosure, deed in lieu of foreclosure, or any other
means, have any liability for any obligation of Landlord to protect, defend,
indemnify or hold harmless Tenant or any other person or entity except for those
matters arising from the lender’s breach of the terms of this Lease after the
date of such foreclosure, deed in lieu of foreclosure or any other means, and
(ii) such succeeding lender shall have no liability for any representations or
warranties of the Landlord contained herein except for those matters arising
from the lender’s breach of the terms of this Lease after the date of such
foreclosure, deed in lieu of foreclosure or any other means.

17.21 Entire Agreement. This Lease sets forth all covenants, promises,
agreements, conditions and understandings between Landlord and Tenant concerning
the Building and the

 

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Project, and there are no covenants, promises, agreements, conditions or
understandings, either oral or written, between Landlord and Tenant other than
as are herein set forth. No subsequent alteration, amendment, change or addition
to the Lease shall be binding upon Landlord or Tenant unless reduced to writing
and signed by Landlord and Tenant.

17.22 Financial Covenants. At Landlord’s request, Tenant shall provide Landlord
with current annual audited financial statements and quarterly unaudited
financial statements (all such statements shall be prepared in compliance with
GAAP standards) setting forth Tenant’s financial condition. As an additional
covenant under this Lease, Tenant agrees that it shall not, at any time during
the Term of this Lease or any extensions hereof, allow, authorize or cause asset
or cash distributions to shareholders and/or affiliates so as to result in
Tenant’s tangible net worth to be reduced below that set forth in the financial
information provided to Landlord in connection with this Lease. Landlord agrees
that Tenant’s annual SEC filings shall be sufficient for such purposes.

17.23 Conditions. Intentionally omitted

17.24 Exhibits. Exhibits A through J are attached to this Lease after the
signatures and by this reference incorporated herein.

17.25 Time. Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.

17.26 Prior Agreement or Amendment. This Lease contains all of the agreements of
the parties hereto with respect to any matter covered or mentioned in the Lease,
and no prior agreement or understanding pertaining to any such matter shall be
effective for any purpose. No provisions of this Lease may be amended or added
to except by an agreement in writing signed by the parties hereto or their
respective successors-in-interest.

17.27 Independently Provided Services.

(a) This Lease is entirely separate and distinct from and independent of any and
all agreements that Tenant may at any time enter into with any third party for
the provision of services, which include, but are not limited to,
telecommunications, office automation, repair, maintenance services, computer,
and photocopying (“Independent Services”). Tenant acknowledges that Landlord has
no obligation of any type concerning the provision of Independent Services, and
agrees that any cessation or interruption of Independent Services or any other
act or neglect by the third party providing the Independent Services shall not
constitute a default or constructive eviction by Landlord.

(b) Tenant agrees, except to the extent of the negligence of Landlord, its
partners, employees, agents and/or assigns, to hold harmless and defend
Landlord, its partners, employees, agents and assigns from any claim Tenant may
have arising in any way out of the

 

SCHNITZER-STANDARD FORM OFFICE LEASE   39  

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provision (or lack thereof) of the Independent Services which Tenant has
contracted to receive from the third parties.

17.28 Authority to Bind Landlord. The individuals signing this Lease on behalf
of Landlord hereby represent and warrant that they are empowered and duly
authorized to bind Landlord to this Lease.

17.29 Authority to Bind Tenant. Tenant represents and warrants that the
individuals signing this Lease on behalf of Tenant are empowered and duly
authorized to bind Tenant to this Lease. If Tenant is a corporation, limited
liability company or limited or general partnership, Tenant represents and
warrants that such person(s) is(are) duly authorized to execute and deliver this
Lease on behalf of Tenant, in accordance with a duly adopted resolution or
consents of all appropriate persons or entities required therefor and in
accordance with the formation documents of tenant, and that this Lease is
binding upon Tenant in accordance with its terms. Upon request from Landlord,
Tenant shall deliver to Landlord a copy of the appropriate resolution or
consent, certified by an appropriate officer, partner or manager of Tenant,
authorizing or ratifying the execution of this Lease.

17.30 No Usury. No interest charged, or chargeable by Landlord under this Lease
(including but not limited to the interest chargeable under Section 5.03 and/or
any late charge, fee or other sum charged or withheld by Landlord and which is
deemed to be interest) shall exceed the maximum amount of interest permitted by
any applicable law. If any such interest, fee or charge would exceed such
maximum, then such interest, fee or charge shall be automatically reduced to the
maximum amount allowed by law and any sums already collected in excess of such
maximum amount shall be refunded by Landlord in cash or by granting Tenant a
credit in the applicable amount which credit shall be applied against the next
Base Rent coming due.

17.31 Interpretation. The parties hereto specifically acknowledge and agree that
the terms of this Lease have been mutually negotiated and the parties hereby
specifically waive the rule or principle of contract construction which provides
that any ambiguity in any term or provision of a contract will be interpreted or
resolved against the party which drafted such term or provision.

17.32 Excused Delays. Except as otherwise set forth in this Section 17.32,
neither party shall have liability to the other on account of the following acts
(each of which is an “Excused Delay” and jointly all of which are “Excused
Delays”)” which shall include: (a) the inability to fulfill, or delay in
fulfilling, any obligations under this Lease by reason of strike, lockout, other
labor trouble, dispute or disturbance; (b) governmental regulation, moratorium,
action, preemption or priorities or other controls; (c) shortages of fuel,
supplies or labor; (d) any failure or defect in the supply, quantity or
character of electricity or water furnished to the Premises by reason of any
requirement, act or omission of the public utility or others furnishing the
Building with electricity or water; (e) inclement weather (defined as unusual or
unseasonable weather, including without limitation precipitation, temperature
and wind, varying by more than 5% over the applicable daily average over the
prior twenty (20) year period as reported by the National

 

SCHNITZER-STANDARD FORM OFFICE LEASE   40  

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Weather Service for the Seattle metropolitan area) which delays critical path
activities of construction of the improvements, or (f) for any other reason,
whether similar or dissimilar to the above, beyond a party’s reasonable control
including without limitation acts of God. If this Lease specifies a time period
for performance of an obligation of a party, that time period shall be extended
by the period of any delay in the party’s performance caused by any of the
events of Excused Delay described herein; provided, that notwithstanding
anything to the contrary above, no payment of money (whether as Base Rent,
Tenant’s Share of Operating Expenses, or any other payment due under this Lease)
shall be postponed, delayed or forgiven by reason of any of the foregoing events
of Excused Delay.

17.33 Patriot Act Compliance.

(a) Tenant represents and warrants to, and covenants with Landlord that neither
Tenant nor any of its respective constituent owners or affiliates currently are,
or shall be at any time during the Term hereof, in violation of any laws
relating to terrorism or money laundering (collectively, the “Anti-Terrorism
Laws”), including without limitation, Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, and relating to Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (the “Executive Order”) and/or the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (Public Law 107-56) (the “USA Patriot Act”).

(b) Tenant covenants with Landlord that neither Tenant nor any of its respective
constituent owners or affiliates is or shall be during the Term hereof a
“Prohibited Person,” which is defined as follows: (i) a person or entity that is
listed in the Annex to, or is otherwise subject to, the provisions of the
Executive Order; (ii) a person or entity owned or controlled by, or acting for
or on behalf of, any person or entity that is listed in the Annex to, or is
otherwise subject to the provisions of, the Executive Order; (iii) a person or
entity with whom Landlord is prohibited from dealing with or otherwise engaging
in any transaction by any Anti-Terrorism Law, including without limitation the
Executive Order and the USA Patriot Act; (iv) a person or entity who commits,
threatens or conspires to commit or support “terrorism” as defined in
Section 3(d) of the Executive Order; (v) a person or entity that is named as a
“specially designated national and blocked person” on the then-most current list
published by the U.S. Treasury Department Office of Foreign Assets Control at
its official website, http://www.treas.gov/offices/eotffc/ofac/sdn/t11sdn.pdf,
or at any replacement website or other replacement official publication of such
list; and (vi) a person or entity who is affiliated with a person or entity
listed in items (i) through (v), above.

(c) At any time and from time-to-time during the Term, Tenant shall deliver to
Landlord, within ten (10) days after receipt of a written request therefor, a
written certification or such other evidence reasonably acceptable to Landlord
evidencing and confirming Tenant’s compliance with this Section 17.33.

 

SCHNITZER-STANDARD FORM OFFICE LEASE   41  

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(d) Notwithstanding anything to the contrary in this Section 17.33, in the event
Tenant is an entity whose stock is traded on a national stock exchange, the
representations and warranties set forth herein shall not apply to the owners of
Tenant’s capital stock.

IN WITNESS WHEREOF, the parties have executed this Lease as of the date first
above written.

 

“Landlord”     “Tenant” S/I North Creek VII, LLC     AVI BioPharma, Inc. By:  

LOGO [g147324exrp46a.jpg]

    By:  

LOGO [g147324exrp46b.jpg]

Its:  

Senior Investment Manager

    Its:  

Interim President & CEO

 

SCHNITZER-STANDARD FORM OFFICE LEASE   42  

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STATE OF WASHINGTON   )   ) ss. COUNTY OF KING   )

I certify that I know or have satisfactory evidence that the person appearing
before me and making this acknowledgment is the person whose true signature
appears on this document.

On this 20 day of October, 2010, before me personally appeared J. David Boyle
II, to me known to be the Interim President & CEO of AVI BioPharma, Inc., the
corporation that executed the within and foregoing instrument, and acknowledged
the said instrument to be the free and voluntary act and deed of said
corporation, for the uses and purposes therein mentioned, and on oath stated
that they were authorized to execute said instrument.

WITNESS my hand and official seal hereto affixed the day and year first above
written.

 

 

LOGO [g147324exrp47a.jpg]        Wendy M. Cort

    Notary Public in and for the State of Washington, County of Snohomish  
residing at 3450 Monte Villa Pkwy Ste 101 Bothell WA 98021     My commission
expires: 10/16/13  

LOGO [g147324exrp47b.jpg]

 

 

SCHNITZER-STANDARD FORM OFFICE LEASE   43  

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STATE OF WASHINGTON   )   ) ss. COUNTY OF KING   )

I certify that I know or have satisfactory evidence that the person appearing
before me and making this acknowledgment is the person whose true signature
appears on this document.

On this 22nd day of October, 2010, before me personally appeared Alan Cantlin,
to me known to be the Sr. Inv. Mngr of S/I North Creek VII, LLC, the company
that executed the within and foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said company, for the
uses and purposes therein mentioned, and on oath stated that they were
authorized to execute said instrument.

WITNESS my hand and official seal hereto affixed the day and year first above
written.

 

 

LOGO [g147324exrp48a.jpg]

   

Notary Public in and for the State of Washington,

  residing at Bothell, WA    

My commission expires: Nov 4, 2012

 

LOGO [g147324exrp48b.jpg]

 

SCHNITZER-STANDARD FORM OFFICE LEASE   44  

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EXHIBIT A-1

LEGAL DESCRIPTION OF PROJECT

Lot 3 of City of Bothell Boundary Line Adjustment No. 0010-98, recorded under
Recording No. 9809169004, Records of King County, Washington.

Lot 30, Koll Center North Creek, according to Plat recorded in Volume 32 of
Plats, Pages 29 through 35 inclusive, Records of King County, Washington.

Lot 9 and 10 of City of Bothell Boundary, Line Adjustment No. 0009-98, recorded
under Recording No. 9809169003, Records of King County, Washington.

Lot 12 of City of Bothell Lot Line Adjustment No. SPL0005-91, recorded under
Recording No. 9207290890, Records of King County, Washington.

Tracts A, B, C, D, E and F, of Koll Center North Creek, according to Plat
recorded in Volume 132 of Plats, Pages 29 through 35, inclusive, Records of King
County, Washington.

Lots 16A, 17A, 18A, 19A and 20A, of City of Bothell Boundary Adjustment
No. 0004-98, recorded under Recording No. 9808039016, Records of King County,
Washington.

Lot 2 of City of Bothell Boundary Line Adjustment No. 0010-98, recorded under
Recording No. 9809169004, Records of King County, Washington.

Lot 13, 15 and 21, of City of Bothell Boundary Line Adjustment no. 1999-003,
recorded under Recording No. 20000405900006.

Lot 11 of City of Bothell Boundary Line Adjustment No. 0009-98, recorded under
Recording No. 9809169003, being a portion of Lots 9 and 10 of Koll Center North
Creek, according to Plat recorded in Volume 132 of Plats, Page 29 through 35,
inclusive, Records of King County, Washington.

Lot 23A of City of Bothell Boundary Line Adjustment No. 1999-003, recorded under
Recording No. 20000405900006, Records of King County, Washington.

Lots 27 through 29 of Koll Center North Creek, as per plat recorded in volume
132 of plats, pages 29 through 35, records of King County, Washington, and as
corrected under Recording No. 8511080398, recorded November 8, 1985 of Official
Records.

Situate in the City of Bothell, County of King, State of Washington.

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT A   1  

[Continuation of Standard Form Office Lease #234831]

(Revised 12/16/03)

   

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EXHIBIT A-2

LEGAL DESCRIPTION OF PROPERTY

Lots 13, 15, 21 and 23A of City of Bothell Boundary Line Adjustment
No. 1999-003, recorded under Recording No. 20000405900006, Records of King
County, Washington.

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT A   2  

[Continuation of Standard Form Office Lease #234831]

(Revised 12/16/03)

   

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EXHIBIT B-1

SITE PLAN OF PROJECT

LOGO [g147324exrp51.jpg]

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT B   1  

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EXHIBIT B-2

SITE PLAN OF PROPERTY

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SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT B   2  

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EXHIBIT C

PREMISES FLOOR PLAN(S)

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SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT C   1  

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EXHIBIT D

Intentionally deleted.

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT D   1  

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EXHIBIT E

PLANS AND SPECIFICATIONS FOR THE TENANT IMPROVEMENTS

1. Landlord shall furnish and install fourteen (14) Building Standard blinds on
interior office relites.

2. Landlord shall relocate six (6) electrical outlets in the kitchen.

3. No other work shall be completed by Landlord and, except for items 1 and 2
above, Tenant is leasing the space in its “as is” condition.

4. The existing condition of the Premises is shown on Page 2 of this Exhibit E.

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT E   1  

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SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT E   2  

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EXHIBIT F

Intentionally deleted.

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT F   1  

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EXHIBIT G

ESTOPPEL CERTIFICATE

 

 

 

 

Re:    Lease dated                     , 2      (“Lease”) by and between      
                                                              (“Landlord”), and
                                                                    (“Tenant”)
  

Ladies and Gentlemen:

Reference is made to the above-described Lease in which the undersigned is the
Tenant. We understand that you are accepting an assignment of Landlord’s rights
under the Lease as                                          
                   , and we hereby, as a material inducement for you to
consummate the transaction, represent that:

1. There are no modifications amendments, supplements, arrangements, side
letters or understandings, oral or written, of any sort, modifying, amending,
altering, supplementing or changing the terms of the Lease, except for those
attached to this Certificate.

2. The Lease is in full force and effect, and the Lease has been duly executed
and delivered by, and is a binding obligation of, the Tenant as set forth
therein.

3. The undersigned acknowledges (a) that rent on the Lease has been paid up to
and including                     , 2      (b) that monthly rent during the
                             (            ) years of the Term of the Lease is $
             per month, and (c) that rent has not been paid for any period after
                    , 2      and shall not, except for any Prepaid Rent as
specified in the Lease, be paid for a period in excess of one (1) month in
advance.

4. To the current knowledge of the undersigned, the improvements on the Building
are free from defects in design, materials and workmanship and the improvements
meet all governmental requirements, including, but not limited to, zoning and
environmental requirements.

5. To the current knowledge of the undersigned, the Lease is not in default, and
Landlord has performed the obligations required to be performed by Landlord
under the terms thereof through the date hereof

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT G   1  

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6. The Lease shall be subordinate to a Deed of Trust on the Building and an
assignment of Landlord’s interest in the Lease given by Landlord to
                                                             ; provided, that
notwithstanding such subordination, so long as Tenant is not in default under
any of the terms, covenants and conditions of this Lease, neither the Lease nor
any rights of Tenant thereunder shall be terminated or subject to termination by
any trustee’s sale, any action to enforce the security, or by any proceeding or
action in foreclosure. In the event of a merger of Landlord and Tenant in any
manner, the interest of Tenant and Landlord shall not merge.

7. Tenant agrees not to modify, amend, terminate or otherwise change the Lease
without ten (10) days’ prior written notice to you.

8. In the event of a default by Landlord under any of the terms or provisions of
the Lease, Tenant shall give you adequate notice and reasonable time to cure
each default.

Dated:                     , 2     .

 

Very truly yours, “Tenant”

 

 

By:  

 

Its:  

 

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT G   2  

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EXHIBIT H

RULES AND REGULATIONS

1. Sign. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed, printed or affixed on or to any part of the outside or
inside of the Building, the Premises or the surrounding area without the written
consent of the Landlord being first obtained. If such consent is given by
Landlord, Landlord may regulate the manner of display of the sign, placard,
picture, advertisement, name or notice. Landlord shall have the right to remove
any sign, placard, picture, advertisement, name or notice which has not been
approved by Landlord or is being displayed in a non-approved manner without
notice to and at the expense of the Tenant. Tenant shall not place anything or
allow anything to be placed near the glass of any window, door, partition or
wall which may appear unsightly from outside of the Premises.

2. Directory. The bulletin board or directory of the Building will be provided
exclusively for the display of the name and location of tenants and Landlord
reserves the right to exclude any other names therefrom.

3. Access. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by any of the tenants or used by them for any
purpose other than for ingress to and egress from their respective Premises. The
halls, passages, entrances, exits, elevators, stairways, balconies and roof are
not for the use of the general public and the Landlord shall in all cases retain
the right to control thereof and prevent access thereto by all persons whose
presence in the judgment of the Landlord shall be prejudicial to the safety,
character, reputation and interests of the Building or its tenants; provided,
however, that nothing herein contained shall be construed to prevent access by
persons with whom the Tenant normally deals in the ordinary course of Tenant’s
business unless such persons are engaged in illegal activities. No Tenant and no
employees or invitees of any Tenant shall go upon the roof of the Building.

4. Locks. Tenant shall not alter any lock or install any new additional locks or
any bolts on any door of the Premises without the written consent of Landlord .

5. Restrooms. The toilet rooms, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were constructed and
no foreign substance of any kind whatsoever shall be thrown therein. The expense
of any breakage, stoppage or damage resulting from a violation of this rule
shall be borne by the Tenant who, or whose employees, sublessees, assignees,
agents, licensees, or invitees shall have caused it.

6. No Defacing Premises. Tenant shall not overload the floor of the Premises,
shall not mark on or drive nails, screw or drill into the partitions, woodwork
or plaster (except as may be incidental to the hanging of wall decorations), and
shall not in any way deface the Premises or any part thereof.

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT H   1  

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7. Safes and Heavy Equipment. No furniture, freight or equipment of any kind
shall be brought into the Building without the consent of Landlord and all
moving of the same into or out of the Building shall be done at such time and in
such manner as Landlord shall designate. Landlord shall have the right to
prescribe the times and manner of moving all heavy equipment in and out of the
Building. Landlord will not be responsible for loss of or damage to any such
safe or property from any cause and all damage done to the Building by moving or
maintaining any such safe or other property shall be repaired at the expense of
Tenant. There shall not be used in any Premises or in the public halls of the
Building, either by any tenant or others, any hand trucks except those equipped
with rubber tires and side guards. Elevators must be padded while moving freight
via the elevators. All such heavy equipment shall be subject to the requirements
of Rule 25 below.

8. Nuisance. Tenant shall not use, keep or permit to be used or kept any food or
noxious gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to the Landlord or other
occupants of the Building by reason of excessive noise, odors and/or vibrations,
or unreasonably interfere in any way with other tenants or those having business
in the Building. No animals or birds shall be brought in or kept in or about the
Premises or the Building. No Tenant shall make or permit to be made any
unreasonably disturbing noises or unreasonably disturb or interfere with
occupants of this or neighboring Buildings or Premises, or with those having
business with such occupants by the use of any musical instrument, radio,
phonograph, unusual noise, or in any other way. No Tenant shall throw anything
out of doors or down the passageways.

9. Permitted Use. The Premises shall not be used for manufacturing or for the
storage of merchandise except as such storage may be incidental to the use of
the Premises for general office purposes. No Tenant shall occupy or permit any
portion of its Premises to be occupied for the manufacture or sale of liquor,
narcotics, or tobacco in any form, or as a medical office, or as a barber shop
or manicure shop except with prior written consent of Landlord. No Tenant shall
advertise for laborers giving an address at the Premises. The Premises shall not
be used for lodging or sleeping or for illegal purposes.

10. Hazardous Substances. Tenant shall not use or keep in the Premises or the
Building any kerosene, gasoline or inflammable or combustible fluid or material
or any Hazardous Materials as defined in Section 10.02 of the Lease or use any
method of heating or air conditioning other than that supplied by Landlord.

11. Telephones. Landlord will direct electricians as to where and how telephone
and telegraph wires are to be introduced. No boring or cutting for or stringing
of wires will be allowed without the consent of Landlord. The location of
telephones, call boxes and other office equipment affixed to the Premises shall
be subject to the approval of Landlord.

12. Keys. All keys to the Building, Premises, rooms and toilet rooms shall be
obtained from Landlord’s office and Tenant shall not from any other source
duplicate or obtain keys or have

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT H   2  

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keys made. The Tenant, upon termination of the tenancy, shall deliver to the
Landlord the keys to the Building, Premises, rooms and toilet rooms which shall
have been furnished and shall pay the Landlord the cost of replacing any lost
key or of changing the lock or locks opened by such lost key if Landlord deems
it necessary to make such change.

13. Floor Covering. No Tenant shall lay linoleum, tile, carpet or other similar
floor coverings so that the same shall be affixed to the floor or the Premises
in any manner except as approved by the Landlord. The expense of repairing any
damage resulting from a violation of this rule or removal of any floor covering
shall be borne by the Tenant by whom, or by whose contractors, agents,
sublessees, licensees, employees or invitees, the floor covering shall have been
laid.

14. Building Closure. During all hours on Saturdays, Sundays, legal holidays and
such other times as reasonably determined by Landlord from time to time, access
to the Building or to the halls, corridors, or stairways in the Building, or to
the Premises may be refused unless the person seeking access is known to any
person or employee of the Building in charge and has a pass or is properly
identified. The Landlord shall in no case be liable for damages for any error
with regard to the admission to or exclusion from the Building of any person. In
case of invasion, mob, riot, public excitement, or other commotion, the Landlord
reserves the right to prevent access to the Building during the continuance of
the same, by closing the doors or otherwise, for the safety of the tenants and
protection of the Building and property located therein. Anything to the
foregoing notwithstanding, Landlord shall have no duty to provide security
protection for the Building at any time or to monitor access thereto.

15. Premises Closure. Tenant shall see that the doors of the Premises are closed
and securely locked before leaving the Building and that all water faucets,
water apparatus and electricity are entirely shut off before Tenant or Tenant’s
employees leave the Building. Tenant shall be responsible for any damage to the
Building or other tenants caused by a failure to comply with this rule. Tenant
shall at all times keep the perimeter doors and windows to the Premises closed.

16. Disorderly Conduct. Landlord reserves the right to exclude or expel from the
Building any person who, in the judgment of Landlord, is intoxicated or under
the influence of liquor or drugs, or who shall in any manner do any act in
violation of any of the rules and regulations of the Building.

17. Tenant Requests. Any requests of Tenant will be considered only upon
application at the office of the Landlord. Employees of Landlord shall not be
requested to perform any work or do anything outside of their regular duties
unless under special instructions from the Landlord.

18. Vending Machines. No vending machine shall be installed, maintained or
operated upon the Premises without the written consent of the Landlord.

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT H   3  

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19. Building Name and Address. Landlord shall have the right, exercisable
without notice and without liability to Tenant, to change the name and the
street address of the Building of which the Premises are a part.

20. Emergency Regulations. Tenant agrees that it shall comply with all emergency
regulations that may be issued from time to time by Landlord and Tenant also
shall provide Landlord with the names of a designated responsible employee to
represent Tenant in all matters pertaining to emergency regulations.

21. Tenant Advertising. Without the written consent of Landlord, Tenant shall
not use the name of the Building in connection with or in promotion or
advertising the business of Tenant except as Tenant’s address.

22. Emergency Information. Tenant must provide Landlord with names and telephone
numbers to contact in case of emergency. Tenant must fill out a tenant emergency
information sheet and return it to Landlord’s office within three (3) days of
occupancy.

23. Installation of Burglar and Informational Services. If Tenant requires
telegraphic, telephonic, burglar alarm or similar services, it shall first
obtain, and comply with, Landlord’s instructions in their installation.

24. Deliveries. The Building freight elevator shall be available for use by all
tenants in the Building, subject to such reasonable scheduling as Landlord, in
its discretion, shall deem appropriate. No equipment, materials, furniture,
packages, supplies, merchandise or other property will be received in the
Building or carried in the elevators except between such hours and in such
elevators as may be designated by Landlord. Tenant’s initial move in and
subsequent deliveries of bulky items, such as furniture, safes and similar items
shall, unless otherwise agreed in writing by Landlord, be made during the hours
of 6:00 p.m. to 6:00 a.m. or on Saturday or Sunday. Deliveries shall be limited
as set forth in the Lease. No deliveries shall be made which impede or interfere
with other tenants or the operation of the Building.

25. Floor Loads. Tenant shall not place a load upon any floor of the Premises
which exceeds the load per square foot, which such floor was designed to carry
and which is allowed by law. Landlord shall have the right to prescribe the
weight, size and position of all equipment, materials, furniture or other
property brought into the Building. Heavy objects shall, if considered necessary
by Landlord, stand on such platforms as determined by Landlord to be necessary
to properly distribute the weight, which platforms shall be provided at Tenant’s
expense. Business machines and mechanical equipment belonging to Tenant, which
cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenants in the Building, shall be placed and maintained by
Tenant, at Tenant’s expense, on vibration eliminators or other devices
sufficient to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord. Landlord
will not be responsible for loss of, or damage to, any such

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT H   4  

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equipment or other property from any cause, and all damage done to the Building
by maintaining or moving such equipment or other property shall be repaired at
the expense of Tenant

26. Energy Conservation. Tenant shall not waste electricity, water or air
conditioning and agrees to cooperate fully with Landlord to assure the most
effective operation of the Building’s heating and air-conditioning and to comply
with any governmental energy-saving rules, laws or regulations of which Tenant
has actual notice, and shall refrain from attempting to adjust controls. Tenant
shall keep corridor doors closed.

27. No Antennas. Tenant shall not install any radio or television antenna,
loudspeaker or other devices on the roof or exterior walls of the Building.
Tenant shall not interfere with radio or television broadcasting or reception
from or in the Building or elsewhere.

28. No Soliciting. Canvassing, soliciting and distribution of handbills or any
other written material, and peddling in the Building are prohibited, and Tenant
shall cooperate to prevent such activities.

29. Prohibited Uses. The Premises shall not be used for any improper, immoral or
objectionable purpose. No cooking shall be done or permitted on the Premises
without Landlord’s consent, except that use by Tenant of Underwriters Laboratory
approved equipment for brewing coffee, tea, hot chocolate and similar beverages
or use of microwave ovens for employee use shall be permitted, provided that
such equipment and use is in accordance with all applicable federal, state,
county and city laws, codes, ordinances, rules and regulations.

30. Enforcement of Rules. Landlord may waive any one or more of these Rules and
Regulations for the benefit of Tenant or any other Tenant but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in favor
of Tenant, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Building.

31. Lease. These Rules and Regulations are in addition to, and are made a part
of, the terms, covenants, agreements and conditions of Tenants Lease of its
Premises in the Building.

32. Additional Rules. Landlord reserves the right to make such other Rules and
Regulations or amendments hereto as, in its reasonable judgment, may from time
to time be needed for safety and security, for care and cleanliness of the
Building and for the preservation of good order therein. Tenant agrees to abide
by all such Rules and Regulations hereinabove stated and any additional rules
and regulations which are adopted.

33. Observance of Rules. Tenant shall be responsible for the observance of all
of the foregoing rules by Tenant’s employees, agents, licensees, sublessees,
assigns, and invitees.

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT H   5  

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34. Maintenance of Fire Extinguishers. Tenant shall maintain in the Premises
during the entire Lease Term, not less than the minimum number of fire
extinguishers required by law and Tenant shall inspect all such fire
extinguishers not less frequently than once each month to assure that the same
are fully charged and in good operational condition. Annually the Tenant shall
have all fire extinguishers inspected by an authorized and qualified inspector
who shall certify that each such fire extinguisher complies with all applicable
requirements of the NFPA. If any such fire extinguishers fail to obtain such
certification, then within three (3) business days after such failure such fire
extinguishers shall be replaced, or repaired, and reinspected and a
certification shall be issued certifying that all such fire extinguishers comply
with all applicable requirements of the NFPA.

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT H   6  

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EXHIBIT I

Intentionally omitted

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT I   1  

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EXHIBIT J

FORM OF SNDA

RECORDING REQUESTED BY AND

WHEN RECORDED RETURN TO:

Bank of America, N.A.

RE Bank – Loan Administration

Attn: Barbara Johnson

Mail Code: WA1-501-37-54

800 Fifth Avenue, 37th Floor

Seattle, WA 98104

SUBORDINATION

NONDISTURBANCE

AND ATTORNMENT AGREEMENT

 

NOTICE:    THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS
IN YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER
PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.

DEFINED TERMS

Execution Date:

Beneficiary & Address:

Bank of America, N.A.

RE Bank – Loan Administration

Attn: Barbara Johnson

Mail Code: WAl-501-37-54

800 Fifth Avenue, 37th Floor

Seattle, WA 98104

 

Tenant & Address:

 

 

 

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT I   1  

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Landlord & Address:

S/I North Creek VII, LLC

c/o Schnitzer West

818 Stewart Street, Suite 700

Seattle, Washington 98101

Telephone: (425) 452-3700

Facsimile: (425) 454-1505

 

 

Loan: A first mortgage loan in the original principal amount of $            
from Beneficiary to Landlord.

 

 

Note: Promissory Note executed by Landlord in favor of Beneficiary in the amount
of the Loan dated as of                     .

 

 

Deed of Trust: Deed of Trust, Assignment, Security Agreement and Fixture Filing
dated as of                      executed by Landlord, to PRLAP, Inc. as
Trustee, for the benefit of Beneficiary securing repayment of the Note to be
recorded in the records of the County in which the Property is located.

 

 

Lease and Lease Date: The lease entered into by Landlord and Tenant dated as of
                    , 2010, covering the Premises.

 

 

Property:

Schnitzer North Creek Tech Campus II

Bothell, Washington 98011

The Property is more particularly described on Exhibit A.

 

 

THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

(the “Agreement”) is made by and among Tenant, Landlord, and Beneficiary and
affects the Property described in Exhibit A. Certain terms used in this
Agreement are defined in the Defined Terms. This Agreement is entered into as of
the Execution Date with reference to the following facts:

A. Landlord and Tenant have entered into the Lease covering certain space in the
improvements located in and upon the Property (the “Premises”).

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT I   2  

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B. Beneficiary has made or is making the Loan to Landlord evidenced by the Note.
The Note is secured, among other documents, by the Deed of Trust.

C. Landlord, Tenant and Beneficiary all wish to subordinate the Lease to the
lien of the Deed of Trust.

D. Tenant has requested that Beneficiary agree not to disturb Tenant’s rights in
the Premises pursuant to the Lease in the event Beneficiary forecloses the Deed
of Trust, or acquires the Property pursuant to the trustee’s power of sale
contained in the Deed of Trust or receives a transfer of the Property by a
conveyance in lieu of foreclosure of the Property (collectively, a “Foreclosure
Sale”), subject to the terms and conditions more particularly set forth in this
Agreement.

NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties agree as follows:

1. Subordination. Subject to the terms of this Agreement, the Lease and the
leasehold estate created by the Lease and all of Tenant’s rights under the Lease
are and shall remain subordinate to the Deed of Trust and the lien of the Deed
of Trust, to all rights of Beneficiary under the Deed of Trust and to all
renewals, amendments, modifications and extensions of the Deed of Trust.

2. Acknowledgments by Tenant. Tenant agrees that: (a) Tenant has notice that the
Lease and the rent and all other sums due under the Lease have been or are to be
assigned to Beneficiary as security for the Loan. In the event that Beneficiary
notifies Tenant of a default under the Deed of Trust and requests Tenant to pay
its rent and all other sums due under the Lease to Beneficiary, Tenant shall pay
such sums directly to Beneficiary or as Beneficiary may otherwise request and
such amounts shall be credited to Tenant’s payment obligations under the Lease.
(b) Tenant shall send a copy of any notice of default under the Lease to
Beneficiary at the same time Tenant sends such notice to Landlord. (c) This
Agreement satisfies any condition or requirement in the Lease relating to the
granting of a nondisturbance agreement, with respect to the Loan covered by this
Agreement.

3. Foreclosure and Sale. In the event of a Foreclosure Sale,

(a) So long as Tenant complies with this Agreement and is not in default under
any of the provisions of the Lease beyond any applicable notice and cure period,
(a) the Lease shall continue in full force and effect as a direct lease between
Beneficiary and Tenant, and Beneficiary will not disturb the possession of
Tenant, and (b) Tenant shall not be named or joined as a party in any suit,
action or proceeding for the foreclosure of the Beneficiary or the enforcement
of any rights under the Deed of Trust (unless the Tenant is a necessary party
under applicable law, and then only for such purposes and not for the purpose of
a terminating of the Lease, subject to this Agreement. To the extent that the
Lease is extinguished as a result of a Foreclosure Sale, a new lease

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT I   3  

--------------------------------------------------------------------------------

shall automatically go into effect upon the same provisions as contained in the
Lease between Landlord and Tenant, except as set forth in this Agreement, for
the unexpired term of the Lease. Tenant agrees to attorn to and accept
Beneficiary as landlord under the Lease and to be bound by and perform all of
the obligations imposed by the Lease, or, as the case may be, under the new
lease, in the event that the Lease is extinguished by a Foreclosure Sale. Upon
Beneficiary’s acquisition of title to the Property, Beneficiary will perform all
of the obligations imposed on the Landlord by the Lease except as set forth in
this Agreement; provided, however, that Beneficiary shall not be; (i) liable for
any act or omission of a prior landlord (including Landlord), except to the
extent that such act or omission is of a continuing nature, and subject to the
terms of Section 6 below; or (ii) subject to any offsets or defenses that Tenant
might have against any prior landlord (including Landlord), except to the extent
that such defense or offsets relates to a default of a continuing nature; or
(iii) bound by any rent or additional rent which Tenant might have paid in
advance to any prior landlord (including Landlord) for a period in excess of one
month or by any security deposit, cleaning deposit or other sum that Tenant may
have paid in advance to any prior landlord (including Landlord), except to the
extent that either such prepayment is required under the terms of the Lease
(e.g., taxes and operating expenses) or such sums are actually delivered to and
received by Beneficiary; or (iv) bound by any amendment, modification,
assignment or termination of the Lease made without the written consent of
Beneficiary.

(b) Upon the written request of Beneficiary after a Foreclosure Sale, the
parties shall execute a lease of the Premises upon the same provisions as
contained in the Lease between Landlord and Tenant, except as set forth in this
Agreement, for the unexpired term of the Lease.

(c) Notwithstanding any provisions of the Lease to the contrary, from and after
the date that Beneficiary acquires title to the Property as a result of a
Foreclosure Sale (i) Beneficiary shall not be required to grant nondisturbance
to any subtenants of Tenant except Permitted Transferees and (ii) other than
determination of fair market value, no disputes under the Lease shall be subject
to arbitration unless Beneficiary and Tenant agree to submit a particular
dispute to arbitration.

4. Subordination and Release of Purchase Options. Tenant represents that it has
no right or option of any nature to purchase the Property or any portion of the
Property or any interest in the Borrower. To the extent Tenant has or acquires
any such right or option, these rights or options are acknowledged to be subject
and subordinate to the Deed of Trust and are waived and released as to
Beneficiary and any third party purchaser at the Foreclosure Sale (a
“Foreclosure Purchaser”).

5. Acknowledgment by Landlord. In the event of a default under the Deed of
Trust, at the election of Beneficiary, Tenant shall and is directed to pay all
rent and all other sums due under the Lease to Beneficiary. Tenant is hereby
authorized to make such payment to

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT I   4  

--------------------------------------------------------------------------------

Beneficiary upon receipt of such notice without any duty of inquiry. Landlord
acknowledges and agrees that Tenant shall have no liability for any payments
made directly to Lender pursuant to the terms of this Agreement and any such
amounts paid to Beneficiary shall be credited to Tenant’s obligations under the
Lease.

6. Construction of Improvements. Beneficiary shall not have any obligation or
incur any liability with respect to the completion of the tenant improvements
for the Premises; provided, however, that in the event that (a) any tenant
improvements to be completed by Landlord under the Lease have not been
completed, or (b) any tenant improvement allowance has not been paid at the time
Beneficiary becomes Landlord under the Lease, and Beneficiary fails to assume
the Landlord’s obligation under the Lease to complete such improvements and/or
pay such allowance to Tenant on or before ten (10) days after written notice
from Tenant, then Tenant shall be entitled to terminate the Lease by giving
written notice of termination to Beneficiary.

7. Notice. All notices under this Agreement shall be deemed to have been
properly given if delivered by overnight courier service or mailed by United
States certified mail, with return receipt requested, postage prepaid to the
party receiving the notice at its address set forth in the Defined Terms (or at
such other address as shall be given in writing by such party to the other
parties) and shall be deemed complete upon receipt or refusal of delivery.

8. Miscellaneous. Beneficiary shall not be subject to any provision of the Lease
that is inconsistent with this Agreement; provided, however, that
notwithstanding anything to the contrary contained in this Agreement, the terms
of the Lease shall continue to govern with respect to the disposition of any
insurance proceeds or eminent domain awards, and any obligations of Landlord to
restore the real estate of which the Premises are a part shall be limited,
insofar as they apply to Beneficiary, to insurance proceeds or eminent domain
awards received by Beneficiary after the deduction of all costs and expenses
incurred in obtaining such proceeds or awards and any such obligation to restore
shall be conditioned on such net proceeds or awards being sufficient to pay in
full for such restoration. Nothing contained in this Agreement shall be
construed to derogate from or in any way impair or affect the lien or the
provisions of the Deed of Trust. This Agreement shall be governed by and
construed in accordance with the laws of the State of in which the Property is
located.

9. Liability and Successors and Assigns. In the event that Beneficiary shall
acquire title to the Premises or the Property, Beneficiary shall have no
obligation, nor incur any liability, beyond Beneficiary’s then equity interest,
if any, in the Property, and Tenant shall look exclusively to such equity
interest of Beneficiary, if any, and all rents and proceeds from the property,
for the payment and discharge of any obligations imposed upon Beneficiary. This
Agreement shall run with the land and shall inure to the benefit of the parties
and, their respective successors and permitted assigns including a Foreclosure
Purchaser. If a Foreclosure Purchaser acquires the Property or if Beneficiary
assigns or transfers its interest in the Note and Deed of Trust or the Property,
all obligations and liabilities of Beneficiary under this Agreement shall
terminate and be the responsibility of the Foreclosure Purchaser or other party
to whom Beneficiary’s interest

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT I   5  

--------------------------------------------------------------------------------

is assigned or transferred. The interest of Tenant under this Agreement may not
be assigned or transferred except in connection with a transfer that is
permitted under the Lease of its interest in the Lease or an assignment of its
interest in the Lease to which Landlord and Beneficiary have consented.

IN WITNESS WHEREOF, the parties have executed this Subordination, Nondisturbance
and Attornment Agreement as of the Execution Date.

IT IS RECOMMENDED THAT THE PARTIES CONSULT WITH THEIR ATTORNEYS PRIOR TO THE
EXECUTION OF THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT.

 

BENEFICIARY:   Bank of America, N.A.         By  

 

    Its  

 

    TENANT:  

 

        By  

 

    Its  

 

    LANDLORD:   S/I North Creek VII, LLC         By  

 

    Its  

 

   

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT I   6  

--------------------------------------------------------------------------------

STATE OF WASHINGTON   )      )    ss.

COUNTY OF KING

  )   

I certify that I know or have satisfactory evidence that the person appearing
before me and making this acknowledgment is the person whose true signature
appears on this document.

On this              day of                             , 2010, before me
personally appeared                                         , to me known to be
the                                          of Bank of America, N.A., the bank
that executed the within and foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said bank, for the uses
and purposes therein mentioned, and on oath stated that (s)he was authorized to
execute said instrument.

WITNESS my hand and official seal hereto affixed the day and year first above
written.

 

     

 

        Notary Public in and for the State of Washington,
residing at                                                                    
  My commission expires:                                              

 

        [Type or Print Notary Name]                          

(Use This Space for Notarial Seal Stamp)

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT I   7  

--------------------------------------------------------------------------------

STATE OF                                    )      )    ss.

COUNTY OF                     

  )   

I certify that I know or have satisfactory evidence that the person appearing
before me and making this acknowledgment is the person whose true signature
appears on this document

On this              day of                             , 2010, before me
personally appeared                                         , to me known to be
the                                          of
                                        , the company that executed the within
and foregoing instrument, and acknowledged the said instrument to be the free
and voluntary act and deed of said company, for the uses and purposes therein
mentioned, and on oath stated that (s)he was authorized to execute said
instrument

WITNESS my hand and official seal hereto affixed the day and year first above
written.

 

     

 

        Notary Public in and for the State of                     ,
residing at                                                                    
  My commission expires:                                              

 

        [Type or Print Notary Name]                          

(Use This Space for Notarial Seal Stamp)

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT I   8  

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STATE OF WASHINGTON   )      )    ss.

COUNTY OF KING

  )   

I certify that I know or have satisfactory evidence that the person appearing
before me and making this acknowledgment is the person whose true signature
appears on this document.

On this              day of                             , 2010, before me
personally appeared                                         , to me known to be
the                                          of S/I North Creek VII, LLC, the
company that executed the within and foregoing instrument, and acknowledged the
said instrument to be the free and voluntary act and deed of said company, for
the uses and purposes therein mentioned, and on oath stated that (s)he was
authorized to execute said instrument.

WITNESS my hand and official seal hereto affixed the day and year first above
written.

 

     

 

        Notary Public in and for the State of Washington,
residing at                                                                    
  My commission expires:                                              

 

        [Type or Print Notary Name]                          

(Use This Space for Notarial Seal Stamp)

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT I   9  

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EXHIBIT A TO SNDA

 

SCHNITZER-STANDARD FORM OFFICE LEASE     EXHIBIT I   10