Resolution - 2005 - 10 - Authorization To Sign Both The Office Lease And Ground Lease With Hawkins-Smith Eagle Hall, Llc - 05/16/2005
ORIGINAL
RESOLUTION NO. 05-10
A RESOLUTION OF THE EAGLE CITY COUNCIL, EAGLE, ADA COUNTY,
IDAHO, AUTHORIZING THE MAYOR AND OR COUNCIL PRESIDENT TO SIGN
BOTH THE OFFICE LEASE AND THE GROUND LEASE WITH HAWKINS-SMITH
EAGLE HALL LLC; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Eagle, in order to lease a new city hall hereby enters into
an office lease "Exhibit A," and a ground lease "Exhibit B" with Hawkins-Smith Eagle
Hall LLC.
NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE
CITY OF EAGLE, IDAHO.
Section 1: The Eagle City Council hereby authorizes the Mayor and or Council
President to enter into the office lease and ground lease with Hawkins-Smith Eagle Hall
LLC and agrees to all terms and conditions substantially the same as outlined in "Exhibit
A" and "Exhibit B" attached hereto.
Section 2: This Resolution shall be in full force and effect immediately upon its
adoption and approval.
ADOPTED by the Council of the City of Eagle, Idaho, this&.Jlday of May, 2005.
CITY OF EAGLE
Ada Counh', Idaho
ATTEST:
SHARON K. BERGMA
CITY CLERK/TREASURER
(SEAL)
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OFFICE LEASE
BASIC LEASE INFORMATION
1. Effective Date: , which is the date of the last signature on this Lease
which is needed for its full execution. The Lease's obligations and
liabilities are in full force and effect as of the Effective Date.
2. Landlord: Hawkins-Smith Eagle Hall LLC, an Idaho limited liability company
3. Tenant: City of Eagle, an Idaho municipal corporation
4. Building: Eagle City Hall, a one story building of approximately 12,762 square feet
of gross leasable area
5. Premises: The real property shown on the site plan attached hereto as Exhibit A, and
legally described on Exhibit A-I, containing approximately 12,762 square
feet of gross leasable area for the Building and site improvements
(collectively "Improvements"). The real property and Improvements shall
be the "Premises" as used in this Lease.
6. Lease Term 1 year
7.
Rent
Commencement
Date:
The Rent Commencement Date shall be on the date that Landlord delivers
the Building "substantially complete" to Tenant, as defined in Section 3.b.
8. Rent:
$18.50 per square foot, based on the Building described in Exhibits B, B-
1, B-2, and B-3 ("Landlord's Work" and/or "Exhibit B"), plus all
Operating Costs, as defined herein. Rent may be adjusted up or down
based on Exhibit B.
9. Landlord's
Work:
As described on Exhibits B, B-1, B-2, and B-3.
10. Purchase
Option:
Tenant shall have the option to purchase Landlord's interest
in the Improvements upon ninety (90) days written notice,
and pursuant to the procedures set forth in Section 32.
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EXHIBIT A
11. Notice Addresses:
For Landlord:
Hawkins-Smith Eagle Hall LLC
1951 S. Saturn Way, Suite 100
Boise, Idaho 83709
Ph. (208) 376-8521
Fx. (208) 376-6804
Attn. Property Management & Legal Counsel
F or Tenant:
City of Eagle
310 East State Street
Eagle, Idaho 83616
Premises Address:
660 E. Civic Lane
Eagle, Idaho 83616
12. Use:
Tenant shall use the Premises for a City Hall for the City of
Eagle, Idaho, office uses, municipal, and governmental and
quasi-governmental uses, and for no other purpose unless
Tenant obtains Landlord's prior written consent.
The foregoing basic lease information (the "Basic Lease Information") is incorporated in and
made a part of the Lease to which this Basic Lease Information is attached. If there is any conflict
between the Basic Lease Information and the Lease, the Basic Lease Information shall control.
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OFFICE LEASE
THIS OFFICE LEASE ("Lease") is entered into by and between Hawkins-Smith Eagle
Hall LLC, an Idaho limited liability company ("Landlord") and City of Eagle, an Idaho
municipal corporation ("Tenant"), as of the Effective Date.
1. BASIC LEASE INFORMATION. The Basic Lease Information attached hereto is
expressly incorporated into and made a part of this Lease. Any line items or other defined terms
contained therein shall be considered defined terms hereunder.
2. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the Premises upon and subject to the terms, covenants and conditions herein set forth. Landlord
and Tenant acknowledge that Landlord is leasing the real property upon which the Premises is
located pursuant to a Ground Lease dated concurrently herewith ("Ground Lease"). Tenant
agrees and acknowledges that in the event the Ground Lease is terminated, expires, or is not
renewed, for any reason, this Lease and the Lease Term shall automatically terminate
concurrently with the Ground Lease and without further action by Landlord or Tenant, except
that the parties shall follow the provisions in this Lease regarding termination/expiration of the
Lease Term herein.
3. TERM.
a. Lease Term and Option Terms. Except as otherwise provided herein, the initial
Lease Term shall begin on the Rent Commencement Date, and shall expire on September 30 of
the then current "Fiscal Year", as defined below. The next Lease Term shall then commence
upon the start of the next consecutive Fiscal Year. After the full first Lease Term, Tenant shall
have forty nine (49) one (1) year options to renew the Lease Term. The initial Lease Term and
the Lease Term, and any successive Lease Terms may be referred to herein as "the "Term" "a
Term", or "each Term." Tenant's option to renew are effective only so long as Tenant is not in
default of the Lease terms and conditions.
As used in this Lease, "Fiscal Year", "Lease Year" and "Lease Term" shall mean the
calendar year October 1 through September 30, except in the case of the initial Fiscal Year/Lease
Year/Lease Term, which shall be a partial calendar year as described above
b. Delivery of Premises. Landlord shall deliver the Premises upon the substantial
completion of Landlord's Work. For purposes of this Lease, the terms "substantial completion"
or "substantially complete" shall mean such date when occupancy of the Premises is permitted
by the appropriate governmental authority pursuant to Landlord's application for a certificate of
occupancy, and Landlord has reasonably determined that the Improvements have been
substantially completed to the extent necessary to enable Tenant to occupy the Premises and to
install its furniture, fixtures and equipment therein, as more specifically described in Exhibit B
("Tenant's Work") without unreasonable impairment or interference by Landlord, but subject to
"punchlist" items, the completion of which will not unreasonably interfere with Tenant's Work.
Within thirty (30) days from the Rent Commencement Date, Tenant will provide the Landlord
with the "punch list", Landlord will complete (or repair, as the case may be) the items on the
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"punch list" with commercially reasonable diligence and speed. Tenant agrees to furnish,
fixturize, and open as a City Hall after delivery of the Premises.
c. Renewal of Lease Term/Nonappropriation. If, in any Fiscal Year, the governing
body of Tenant specifically appropriates sufficient funds to make the Rent payments due under
this Lease in any Fiscal Year in the annual budget approved by its City Council, this Lease shall
be considered renewed by Tenant for another Lease Term. If, in any Fiscal Year, the governing
body of Tenant fails to specifically appropriate sufficient funds to make the Rent payments due
under this Lease in any Fiscal Year in the final budget approved by its city council, an event of
nonappropriation ("Event of Nonappropriation") will have occurred, and this Lease will
terminate effective as of end of the Fiscal Y ear in which nonappropriation occurred
("Termination Date"). Tenant agrees to provide Landlord as much notice as possible that
Tenant may not renew the Lease in the annual budget for any Fiscal Year.
Tenant will be obligated to pay all Rent due under the Lease until such Termination Date,
and shall leave the Premises as required in Section 10.a. In the event of any Rent, including but
not limited to taxes and/or utilities, that are due and owing under the Lease but have not been
paid by Tenant as of the Termination Date, or any amounts Tenant has pre-paid under the Lease,
such amounts shall be pro-rated based on the calendar year in which the Termination Date
occurs, and paid within thirty (30) days after the Termination Date. Landlord and Tenant
expressly agree and acknowledge that an Event of Nonappropriation for this Lease as discussed
herein will not affect any rights of Landlord under the Ground Lease in any way.
Upon such Termination Date, Landlord shall have the right to take possession of the
Building. Nothing in this Section or elsewhere in this Lease will be deemed in any wa):' to
obligate Tenant beyond its current Fiscal Year. If the Tenant fails to perform under this Lease in
the event of Nonappropriation, makes the payments as specified above and relinquishes the
Building as provided in this Section, the Tenant shall have no further liability to Landlord. Any
termination of the Lease provided herein, or otherwise in this Lease, shall not in any way operate
to terminate Landlord's Ground Lease.
4. ACCEPTANCE OF PREMISES. Landlord or Landlord's agents make no
representations or promises, or express or implied warranties as to any matter whatsoever, with
respect to the Premises or this Lease except as expressly set forth in this Section. Landlord
represents and warrants its labor and installation on the Premises shall be conducted in a good
and workmanlike condition for a period of one (1) year after substantial completion of the
Building. Under no circumstances will Landlord be liable for actual, special, incidental,
consequential or other damages of or to Tenant or any other entity arising out of or in connection
with the maintenance, use or performance of the Improvements. The taking of possession of the
Premises by Tenant shall be conclusive evidence that Tenant accepts the same subject to "punch
list" items as discussed in Section 3.b, that the Premises is suited for the use intended by Tenant,
and that it is in good and satisfactory condition at the time such possession was taken, subject to
the completion of the "punch list" items.
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5. RENT.
a. Rent Payments. Upon the Rent Commencement Date, Tenant shall pay the Rent
to Landlord in advance on the first day of each calendar month during the Term. The parties
acknowledge that the Rent amount may be adjusted pursuant to Exhibit B. If the Term
commences or ends on a day other than the first day of a calendar month, then the rent for the
months in which this Lease commences or ends shall be prorated (and paid at the beginning of
each such month) in the proportion that the number of days this Lease is in effect during such
month bears to the total number of days in such month. In addition to the Rent, Tenant agrees to
pay Operating Costs (as defined in Section 6), and all other sums due under the Lease. All Rent
shall be paid to Landlord, without prior demand and without any deduction or offset, in lawful
money of the United States of America, at the notice address or to such other person or at such
other place as Landlord may from time to time designate in writing. As used herein, except for
the purpose of the nonappropriations provisions in Section 3.c, Rent shall be deemed to include
any and all expenses due and owing under the Lease. This Lease is intended to be an absolute net
lease, with Landlord responsible for no costs or expenses whatsoever relating to the Premises
during each Term of the Lease.
b. Late Charge. If Tenant fails to pay any Rent, within ten (10) days after the same
is due, then Tenant shall pay to Landlord a late charge equal to five percent (5%) of the amount
so payable. In addition, all Rent hereunder, if not paid within ten (10) days after such amounts
are due, shall bear interest from the due date until paid at the rate of twelve percent (12%) per
annum.
c. Appropriations. In the event Tenant's governing body fails to appropriate
sufficient funds to fully fund all of Tenant's obligations to make Rent payments hereunder for
the next Fiscal Year, then Tenant will immediately notify Landlord of its assignee of such
occurrence, and Tenant's right to possess the Building will terminate as of the Termination Date.
Landlord's remedies will be limited to recovery of only the funds appropriated for Rent for the
then Fiscal Year. Tenant agrees, for each Fiscal Year in which the Rent is scheduled to be made,
to the extent funds have been appropriated for the current Fiscal Year, it will make all such Rent
payments; and that if sufficient funds are appropriated and budgeted by it for the next Fiscal
Year for the Lease, then the Term of this Lease will continue and be effective for that Fiscal
Year.
6. OPERATING COSTS. In addition to the Rent, Tenant shall pay for all "Operating
Costs" of the Premises for the Term of the Lease. "Operating Cost(s)" shall mean all expenses
incurred in maintaining, owning, operating and repairing the Premises and the personal property
used in conjunction therewith, and access to or from public roads to the Premises, including, but
not limited to expenses incurred for: property taxes (either real property taxes or personal
property taxes); utilities for the Premises, including but not limited to electricity, power, gas,
steam, oil or other fuel, water, sewer, lighting, heating, air conditioning and ventilating,
electricity and gas for the Premises, permits, licenses and certificates necessary to operate,
manage and lease the Premises; insurance that Landlord and Tenant are required to carry
pursuant to this Lease; supplies, tools, equipment and materials used in the operation, repair and
maintenance of the Premises; accounting, legal, inspection, consulting, and other services;
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equipment rental (or installment equipment purchase or equipment financing agreements);
management agreements (including the cost of any management fee actually paid thereunder and
the fair rental value of any office space provided thereunder, up to customary and reasonable
amounts); payments under any easement, operating agreement, declaration, restrictive covenant,
or instrument pertaining to the sharing of costs in any planned development or similar
arrangement; ground lease, rent and other payments; operation, repair, and maintenance of all
systems and equipment and components thereof (including replacement of components),
including but not limited to, any heating and ventilating equipment; alarm and security service;
exterior window cleaning; trash removal; cleaning of walks, parking facilities and Building
walls; maintenance and replacement of shrubs, trees, grass, sod and other landscape items,
irrigation systems, drainage facilities, fences, curbs, and walkways; re-paving and re-striping
parking facilities; and roof repairs and replacement, and any and all costs and expenses due to
access easements benefiting the Premises, including, but not limited to costs of replacement,
maintenance, repair and snow removal for any private roads providing ingress and egress to the
Premises.
7. USES; HAZARDOUS SUBSTANCES.
a. Use. Tenant agrees that it will continuously during the Term use the Premises for
the use set forth in the Basic Lease Information and for no other business or purpose, without
Landlord's written consent. Tenant shall pay all expenses, costs and fees associated with its use
of the Premises. On the Rent Commencement Date, Landlord shall provide the Premises in
compliance with all local, state or federal laws, statutes, ordinances and governmental rules,
regulations or requirements now in force including, without limitation, the Americans with
Disabilities Act, 42 U.S.C. 9 12101 et seq. and any governmental regulations relating thereto,
including any required alterations for purposes of "public accommodations" under such statute.
Tenant shall not use or permit the Premises to be used in any manner nor do any act which would
increase the existing rate of insurance on any portion on the Premises or cause the cancellation of
any insurance policy covering the Premises, nor shall Tenant permit to be kept, used or sold, in
or about the Premises, any article which may be prohibited by the standard form of fire insurance
policy, unless Tenant obtains an endorsement to the policy allowing such activity. Tenant shall
not during the Term (i) commit or allow to be committed any waste upon the Premises, or any
public or private nuisance in or around the Premises or the Premises, (ii) allow any sale by
auction upon the Premises, (iii) place any loads upon the floor, walls, or ceiling of the Premises
which endanger the Premises, (iv) use any apparatus, machinery or device in or about the
Premises which will in any manner damage the Premises, (v) place any harmful liquids in the
drainage system or in the soils surrounding the Premises, (vi) obstruct the sidewalks or parking
area on the Premises by placing any item thereon (except vehicles in a parking area) without
Landlord's prior written consent; or (vii) commit or allow any use that violates recorded or
unrecorded agreements affecting the Premises, including, but not limited to, the Ground Lease.
Additionally, Tenant agrees to comply with all laws, rules and regulations with respect to the
use, maintenance and operation of the Premises.
b. Hazardous Materials. Tenant shall not generate, use, manufacture, keep, store,
refine, release, discharge or dispose of any substance or material that is described as a toxic or
hazardous substance, waste or material or a pollutant or contaminant by any federal, state or
local law, ordinance, rule or regulation now or hereafter in force, as amended from time to time,
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in any way relating to or regulating human health or safety or industrial hygiene or
environmental conditions or pollution or contamination, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,42 U.S.C. 9 9601, et seq., the
Solid Waste Disposal Act, 42 U.S.C. 9 6901, et seq., including, without limitation, PCBs,
petroleum products, asbestos and asbestos-containing materials (collectively, "Hazardous
Substances"), on, under or near the Premises or the Premises, except that Tenant may use
Hazardous Substances on the Premises that are incidental to general office use, such as
photocopier toner, provided such use is in compliance with laws and prudent business practices.
Tenant agrees to defend, indemnify and hold Landlord harmless from any and all loss, cost,
liability, claim, damage, and expense including, without limitation, reasonable attorneys' fees
and disbursements, incurred in connection with or arising from the generation, use, manufacture,
storage, disposal or release of any Hazardous Substances by Tenant or any person claiming
through or under Tenant or any contractor, agent, employee, visitor, assign or licensee of Tenant,
on or about the Premises throughout the Term. The foregoing indemnification shall survive the
termination or expiration of this Lease.
8. MAINTENANCE AND REPAIRS.
During the Lease Term, Tenant shall maintain, repair and replace the Improvements and
any portions thereof, both structural and non-structural, at Tenant's sole cost and expense,
including, but not limited to the following: the foundations, exterior walls, roof, the electrical,
plumbing, heating and ventilating equipment in the Premises, equipment or fixtures relating
thereto, floors, lamp/ballast replacement, parking lot, parking lot lighting, landscaping, and
interior or exterior glass. At the expiration or earlier termination of a Term, Tenant shall
surrender the Premises in good condition, except for normal wear and tear and damage by fire or
other casualty, and will clean all walls, doors and carpeting therein. Tenant shall indemnify,
defend and hold Landlord harmless for any loss or liability resulting from any delay by Tenant in
surrendering the Premises to Landlord as provided herein. It is the intent of this Section that
Landlord shall not be responsible for any maintenance, repair and/or replacement of the
Improvements, or any portion thereof, and all such maintenance, repair and/or replacement shall
be by the Tenant at the Tenant's sole cost and expense.
During the Lease Term, Tenant shall ensure that it specifically conducts the following
maintenance on the Premises: (a) it shall cause the roof system to have semi-annual preventative
maintenance performed by a contractor approved by the roof manufacturer and specifically
licensed to repair and maintain the Building's specific roof system; and (b) quarterly
preventative maintenance of the Building's HV AC system performed by a certified HV AC
technician.
9. ALTERATIONS.
a. Landlord's Consent. Tenant shall not make any alterations, additions or
improvements, or add or disturb any systems within the Premises (including all Improvements),
or cause any roof system penetration, including, but not limited to, installation of a satellite
(collectively, "Alterations") or make changes to locks or doors, without obtaining the prior
written consent of Landlord, which consent shall not be unreasonably withheld. In the case of a
satellite, Landlord's consent may be reasonably withheld for reasons including, but not limited
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to, the following: (i) roof penetrations are not to be performed by the roofing contractor who
installed the roof, which could void the roof warranty; (ii) it is in a size and/or location that the
Landlord is opposed to; and/or (iii) it is not attractively screened from view. Any satellite must
meet all applicable laws, ordinances and rules. The satellite shall be removed by Tenant at the
expiration or earlier termination of the Lease, and the roof must be restored to its previous
condition by Tenant at its sole cost and expense.
b. Performance of Work. Any Alterations shall be made at Tenant's sole expense
and by contractors or mechanics approved by Landlord, in its reasonable discretion, shall be
made at such time and in such manner as Landlord may from time to time designate, and shall
become the Premises of Landlord without its obligation to pay therefore. All work with respect
to any Alterations shall be performed in a good and workmanlike manner. Alterations shall be
diligently prosecuted to completion to the end that the Premises shall be at all times a complete
unit except during the period necessarily required for such work. All Alterations shall be made
strictly in accordance with all laws, regulations and ordinances relating thereto, and no interior
improvements installed in the Premises may be removed unless the same are promptly replaced
with interior improvements of the same or better quality. Tenant shall require any contractor or
mechanic working in the Premises to provide lien waivers and liability and workers
compensation insurance covering the Alterations to the Premises. Tenant shall secure, at
Tenant's sole cost and expense, completion and lien indemnity bonds satisfactory to Landlord,
and/or to require such other instruments as may be reasonably requested by Landlord. Tenant
shall give Landlord ten (10) days written notice prior to the commencement of any Alterations
and shall allow Landlord to enter the Premises and post appropriate notices to avoid liability to
contractors or material suppliers for payment for any Alterations. All Alterations shall remain in
and be surrendered with the Premises as a part thereof at the termination of this Lease, without
disturbance, molestation or injury, unless Landlord requires any Alterations to be removed upon
termination of this Lease, at Landlord's option. In such event, all expenses to restore the
Premises to normal Premises standards shall be borne by Tenant. Under no circumstances shall
Landlord be liable to Tenant for any damage, loss, cost or expense incurred by Tenant on
account of Tenant's plans and specifications, Tenant's contractors or subcontractors, or Tenant's
design of any work, construction of any work or delay in completion of any work.
10. TENANT'S PREMISES.
a. Removal Upon Termination or Expiration of Lease. All articles of personal
property and all business and trade fixtures, machinery and equipment, furniture and movable
partitions owned by Tenant or installed by Tenant at its expense in the Premises shall be and
remain the property of Tenant and may be removed by Tenant at any time during the Term,
subject to the other requirements of this Lease. At the expiration or earlier termination of this
Lease, all signs, lights, symbols, canopies, awnings or other advertising or decorative matter
attached to or painted by Tenant upon the Premises, whether on the exterior or interior thereof,
shall be removed by Tenant at its own expense, and Tenant shall immediately repair any damage
or injury to the Premises or Premises and correct and restore any unsightly condition, caused by
the maintenance and removal thereof. If Tenant shall fail to remove all of such property from the
Premises at the expiration of the Term or within ten (10) days after any earlier termination of this
Lease for any cause whatsoever, Landlord may, at its option, remove the same in any manner
that Landlord shall choose, and store such property without liability to Tenant for loss thereof.
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In such event, Tenant agrees to pay Landlord upon demand any and all expenses incurred in such
removal, including court costs and attorneys' fees and storage charges on such Premises for any
length of time that the same shall be in Landlord's possession. If Tenant has not obtained its
property from the Property or place of storage of such property, as applicable, within sixty (60)
days after the termination or expiration of the Lease, such property shall be conclusively deemed
abandoned by Tenant. Landlord may, at its option, without notice, sell said property or any of the
same, at private sale and without legal process, for such price as Landlord may obtain and apply
the proceeds of such sale to any amounts due under this Lease from Tenant to Landlord and to
the expense incident to the removal and sale of said property.
b. Taxes. Tenant shall pay all taxes lawfully imposed on or levied against the
Premises directly to the taxing authority. Tenant shall be liable for and shall pay, at least ten (10)
days before delinquency, all taxes levied against any real property, personal property or trade
fixtures placed by Tenant in or about the Premises. If any such taxes on Tenant's personal
property or trade fixtures are levied against Landlord or Landlord's Premises or if the assessed
value of the Premises or Landlord's obligations are increased by a value placed upon such
personal property or trade fixtures of Tenant and if Landlord pays the taxes or obligations based
upon Tenant's personal property or trade fixtures, which Landlord shall have the right to do
regardless of the validity thereof, Tenant shall, within thirty (30) days after written demand,
repay to Landlord the taxes or obligations resulting from such increase in the assessment.
Tenant shall have the ability to contest in good faith any tax assessment with the applicable
governmental authority, so long as Tenant makes arrangements to ensure that the Premises will
not have a tax lien and such contest will not negatively affect Landlord or the Premises in any
manner.
11. ENTRY BY LANDLORD. After reasonable notice (except in emergencies, where no
such notice shall be required), Landlord, its authorized agents, contractors, and representatives,
shall at any and all times have the right to enter the Premises to inspect the same, to supply any
service to be provided by Landlord to Tenant hereunder, to show the Premises to prospective
purchasers or tenants, to post notices, to alter, improve or repair the Premises or any other
portion of the Premises, all without being deemed to have interfered with Tenant's right to quiet
enjoyment and without abatement of Rent, provided that Landlord will conduct the same in a
manner which does not unreasonably and materially interfere with Tenant's business. Landlord
may, in order to carry out such purposes, erect scaffolding and other necessary structures where
reasonably required by the character of the work to be performed, provided that Landlord will
conduct the same in a manner which does not unreasonably and materially interfere with
Tenant's business. Landlord shall have the right to use any and all means, which Landlord may
deem proper, to open said doors in an emergency in order to obtain entry to the Premises. Any
entry to the Premises obtained by Landlord pursuant to the terms hereof shall not be deemed to
be a forcible or unlawful entry into the Premises, or an eviction of Tenant from the Premises or
any portion thereof, and 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 and about the Premises.
12. LIENS AND INSOLVENCY. Tenant shall keep the Premises and the Premises free
from any liens or encumbrances of any kind or nature arising out of any taxes, work performed,
materials ordered or obligations incurred by or on behalf of Tenant. If Tenant becomes
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insolvent, makes an assignment for the benefit of creditors, or if this Lease shall, by operation of
law or otherwise, pass to any person or persons or entity other than Tenant, Landlord may, at its
option, terminate this Lease, which termination shall reserve unto Landlord all of the rights and
remedies available under Sections 24 and 27 hereof, and Landlord may accept rent from such
assignee without waiving or forfeiting said right of termination.
13. INDEMNIFICATION.
a. Tenant. Tenant shall indemnify, defend and hold Landlord harmless from all
losses, liabilities, costs, expenses and claims arising from (a) Tenant's use of the Premises or the
conduct of its business or any activity, work, or thing done, permitted or suffered by Tenant in
the Premises or on the Premises (b) any breach or default in the performance of any obligation to
be performed by Tenant under the terms of this Lease, (c) any act, neglect, fault or omission of
Tenant or of its agents or employees, and (d) all costs, attorneys' fees, expenses and liabilities
incurred in or about such claims or any action or proceeding brought thereon. In case any action
or proceeding shall be brought against Landlord by reason of any such claim, Tenant upon notice
from Landlord, shall defend the same at Tenant's expense by counsel approved in writing by
Landlord. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of
and waives all claims against Landlord with respect to damage to Premises or injury to persons
in, upon or about the Premises from any cause whatsoever except that which is caused by the
failure of Landlord to observe any of the terms and conditions of this Lease, and, unless such
failure results in an isolated incident, where such failure has persisted for an unreasonable period
of time after written notice to Landlord of such failure.
b. Landlord. Landlord shall indemnify, defend and hold Tenant harmless from all
losses, liabilities, costs, expenses and claims arising from (a) Landlord's use of the Premises or
the conduct of its business or any activity, work, or thing done, permitted or suffered by
Landlord in the Premises or on the Premises (b) any breach or default in the performance of any
obligation to be performed by Landlord under the terms of this Lease, (c) any act, neglect, fault
or omission of Landlord or of its agents or employees, and (d) all costs, attorneys' fees, expenses
and liabilities incurred in or about such claims or any action or proceeding brought thereon. In
case any action or proceeding shall be brought against Landlord by reason of any such claim,
Landlord upon notice from Tenant, shall defend the same at Landlord's expense by counsel
approved in writing by Tenant. Landlord, as a material part of the consideration to Tenant,
hereby assumes all risk of and waives all claims against Tenant with respect to damage to
Premises or injury to persons in, upon or about the Premises from any cause whatsoever except
that which is caused by the failure of Tenant to observe any of the terms and conditions of this
Lease, and, unless such failure results in an isolated incident, where such failure has persisted for
an unreasonable period of time after written notice to Tenant of such failure.
14. DAMAGE TO TENANT'S PREMISES. Notwithstanding anything to the contrary in
this Lease, Landlord or its agents shall not be liable for (i) loss or damage to any property by
theft or otherwise, (ii) except as covered by the warranty provided in Section 4, any injury or
damage to persons or Premises resulting from fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak from any part of the Premises or from the pipes,
appliances or plumbing work therein or from the roof, street or sub-surface or from any other
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place or resulting from dampness or any other cause whatsoever, or (iii) any damage or loss to
the business or occupation of Tenant arising from the acts or
neglect of other tenants or occupants of, or invitees to, the property or Premises. Tenant shall
give prompt notice to Landlord in case of fire or accident in the property or in the Premises or of
defects therein or in the fixtures or equipment.
15. EMINENT DOMAIN.
a. Complete Taking. If the whole of the Premises, or the Premises, shall be taken by
condemnation or in any other manner for any public or quasi-public use or purpose so that a
reasonable amount of reconstruction will not result in the Premises being reasonably suitable for
Tenant's continued occupancy, this Lease shall terminate as of the date that possession of the
Premises, or the Premises is so taken (herein called "Date of the Taking"), and the Rent shall be
prorated and adjusted as of the date of taking.
b. Partial Taking. If only a part of the Premises, or the Premises shall be so taken
and the remaining part thereof after reconstruction is reasonably suited for Tenant's continued
occupancy, this Lease shall be unaffected by such taking, except that Landlord may, at its option,
terminate this Lease by giving Tenant notice to that effect within sixty (60) days after the Date of
the Taking. In such event, this Lease shall terminate on the date that such notice from the
Landlord to Tenant shall be given, and the Rent shall be prorated and adjusted as of such
termination date. Upon a partial taking in which this Lease continues in force as to any part of
the Premises, the Rent shall be adjusted according to the rentable area remaining. In the event of
a partial taking and reconstruction is not reasonably suited for Tenant's continued occupancy,
this Lease shall terminate as provided in Section 15 .a.
c. Award. Landlord shall be entitled to receive the entire award or payment in
connection with any taking without deduction therefrom for any estate vested in Tenant by this
Lease, and Tenant shall receive no part of such award. Tenant hereby expressly assigns to
Landlord all of its right, title and interest in and to every such award or payment.
16. INSURANCE. During the entire term of this Lease, the parties designated below shall
keep in full force and effect the following insurance:
a. Special Form Premises Insurance. Landlord shall carry Special Form property
insurance insuring against the perils of fire, extended coverage, vandalism, malicious mischief,
special extended coverage and sprinkler leakage for 100% replacement value. This insurance
policy shall be upon the Improvements, the Premises, and all of Landlord's fixtures located on
the Premises, and shall name Landlord and/or Landlord's lender as loss payee, in an amount not
less than the full replacement cost thereof.
b. Liability Insurance. Landlord shall carry Commercial General Liability Insurance
insuring Tenant against any liability arising out of the lease, use, occupancy, or maintenance of
the Premises and all areas appurtenant thereto. Such insurance shall be in the amount of Two
Million Dollars ($2,000,000.00) General Aggregate, One Million Dollars ($1,000,000.00) Single
Occurrence Limit for injury to or death of one or more persons in an occurrence, and for damage
to tangible Premises (including loss of use) in an occurrence, with such liability amount to be
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adjusted from year to year as reasonably required by Landlord. The policy shall insure the
hazards of premises and operations, independent contractors, contractual liability (covering the
indemnities contained in Section 13 hereof), and shall name Tenant as an additional insured.
Tenant acknowledges that the above liability insurance does not cover Tenant when it is solely
liable, and that Tenant will obtain liability insurance coverage, at its sole cost and expense, for
such sole liability.
c. Workers' Compensation Insurance. Tenant shall carry, at Tenant's sole cost and
expense, Workers' Compensation and Employer's Liability Insurance as required by state law.
d. Personal Property Insurance. Tenant shall, at Tenant's sole cost and expense,
carry casualty insurance insuring its personal property and fixtures located on the Premises.
e. Form of Insurance. All such policies shall be written in a form satisfactory to
Landlord and shall be with insurance companies qualified to issue insurance in the State of Idaho
and holding a General Policyholder's Rating of "A" and a Financial Rating of "VIII" or better, as
set forth in the most current issue of Best's Key Rating Guide. Such insurance shall provide that
it is primary insurance, and not excess over or contributory with any other insurance in force for
or on behalf of Landlord. Each policy shall have a clause providing that Tenant will be notified
in writing thirty (30) days prior to cancellation or reduction in coverage.
f. Reimbursement for Landlord's Insurance. Tenant agrees, as an Operating Cost
and Rent, to reimburse Landlord Landlord's insurance described above in Section 16.a and b.
Landlord shall notify Tenant in writing annually, at the first of each calendar year, of such
amount. Tenant shall pay such amount to Landlord within thirty (30) days of receipt of
Landlord's notice.
17. DAMAGE OR DESTRUCTION. If the Premises and/or the Premises are damaged by
fire or other perils covered by insurance carried by Tenant, Landlord and Tenant shall have the
following rights and obligations:
a. Repair and Restoration.
(1) If the Building and/or the Premises are damaged or destroyed by any such peril, to
the extent the cost to repair exceeds twenty-five percent (25%) of the then full
replacement value thereof or the damage thereto is such that the Building and/or the
Premises cannot reasonably be repaired, reconstructed and restored within six (6) months
from the date of such damage or destruction, Landlord shall, at its sole option, as soon as
reasonably possible thereafter, either (1) commence or cause the commencement of the
repair, reconstruction and restoration of the Building and/or the Premises and prosecute
or cause the same to be prosecuted diligently to completion, in which event this Lease
shall remain in full force and effect; or (2) within sixty (60) days after such damage or
destruction, elect not to so repair, reconstruct or restore the Building and/or the Premises,
and notify Tenant in writing of Landlord's election in which event this Lease shall
terminate. If Landlord elects not to restore the Building and/or the Premises, this Lease
shall be deemed to have terminated as of the date of such damage or destruction.
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(2) If the Building and/or the Premises are partially damaged or destroyed by any
such peril, to the extent the cost to repair is twenty-five percent (25%) or less of the then
full replacement value thereof, and if the damage thereto is such that the Building and/or
the Premises reasonably may be repaired, reconstructed or restored within a period of six
(6) months from the date of such damage or destruction, then Landlord shall commence
or cause the commencement of and diligently complete or cause the completion of the
work of repair, reconstruction and restoration of the Building and/or the Premises and
this Lease shall continue in full force and effect. If the Building and/or the Premises may
not reasonably be repaired, reconstructed or restored within a period of six (6) months
from the date of either damage or destruction, Landlord shall notify Tenant in writing and
this Lease shall terminate. If Landlord elects to not restore the Building and/or Premises,
this Lease shall be deemed to have terminated as of the date of such damage or
destruction.
(3) Landlord shall not have any obligation to repair, reconstruct or restore the
Premises and may terminate this Lease when the damage resulting from any casualty
covered under this Section 17 occurs during the last thirty six (36) months of the Term.
b. Uninsured Casualties. If damage or destruction of the Building and/or the
Premises is due to any cause not covered by collectible insurance carried by Tenant at the time of
such damage or destruction, Landlord may elect to terminate this Lease. If the repairing or
restoring of the damage is delayed or prevented for longer than six (6) months after the
occurrence of such damage or destruction by reason of acts of God, war, governmental
restrictions, inability to procure the necessary labor or materials, or other cause beyond the
control of Landlord, Landlord may elect to be relieved of its obligation to make sush repairs or
restoration and terminate this Lease.
c. Tenant's Termination Right. If the work of repair, reconstruction and restoration
in connection with damage or destruction of the Building and/or Premises initially affects more
than twenty-five percent (25%) of the gross leasable area of the Premises and shall require a
period longer than six (6) months to complete, then Tenant may elect to terminate this Lease,
provided that Tenant shall give written notice to Landlord of its intention within sixty (60) days
after the date it is advised of such repair period.
d. Termination of Lease. Upon any termination of this Lease under any of the
provisions of this Section 17, Landlord and Tenant shall each be released without further
obligation to the other from the date possession of the Premises is surrendered to Landlord or
such other date as is mutually agreed upon by Landlord and Tenant except for payments or other
obligations or third party liabilities which have theretofore accrued and are then unpaid or
unperformed.
e. Rent Abatement. In the event of repair, reconstruction and restoration by or
through Landlord as herein provided, the portion of Rent payable under this Lease shall be
abated proportionately to the degree to which Tenant's use of the Premises is materially impaired
during the period of such repair, reconstruction or restoration. Tenant shall not be entitled to any
compensation or damages for loss of the use of the whole or any part of the Premises and/or any
inconvenience or annoyance occasioned by such damage, repair, construction or restoration, nor
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shall Tenant be entitled to any of Landlord's insurance proceeds, including those in excess of the
amount required by Landlord for such repair, reconstruction or restoration. Tenant shall not be
released from any of its obligations under this Lease due to damage or destruction of the
Premises and/or the Premises except to the extent and upon the conditions expressly stated in this
Section 17.
f. Extent of Repair Obligation. Notwithstanding anything to the contrary in this
Section 17, If Landlord is obligated to or elects to repair or restore as herein provided, Landlord
shall be obligated to make repair or restoration only of those portions of the Premises which were
originally provided at Landlord's expense and those portions which are covered by Tenant's
insurance, and the repair and restoration of items not provided at Landlord's expense shall be the
obligation of Tenant.
18. WAIVER OF SUBROGATION. Tenant and Landlord waive all rights to recover
against each other for any loss or damage to their respective tangible personal or real property
(whether owned or leased) from any cause covered by insurance maintained by each of them,
including their respective deductibles or self-insured retentions. Tenant and Landlord will cause
their respective insurers to issue appropriate waivers of subrogation rights endorsements to all
property insurance policies maintained by each party. Each party shall give the other party
written notice if a waiver of subrogation is unobtainable, or obtainable only at an additional
expense. If the party receiving such notice agrees to reimburse the other party for such
additional expense, the other party shall obtain such waiver of subrogation. If a waiver is
unobtainable or if a party elects not to pay the additional expense of a waiver, then neither party
nor their insurers shall waive such subrogation rights.
19. ASSIGNMENT OR SUBLETTING.
a. Landlord's Consent. Except as otherwise provided below, without the express
written consent of Landlord, which may be withheld by Landlord in its sole and absolute
discretion, Tenant shall not directly, voluntarily or by operation of law, sell, assign, encumber,
pledge, or otherwise transfer or hypothecate all or any portion of its interest in or rights with
respect to the Premises (collectively, "Assignment"), or permit all or any portion of the Premises
to be occupied by anyone other than Tenant or sublet all or any portion of the Premises or
transfer a portion of its interest in or rights with respect to the Premises (collectively,
"Sublease"). Notwithstanding the above, Tenant may sublease various portions (but not all) of
the Premises to other governmental entities upon Landlord's written approval, which approval
will not be unreasonably withheld. Any sublease for the Premises must contain a provision that
the sublessee agrees to abide by the terms and conditions of this Lease and the Ground Lease.
b. Assignment by Landlord. Landlord may convey, assign and grant a security
interest in any of its rights or interests in and to this Lease and the Premises.
20. SUBORDINATION. Tenant agrees that this Lease is and shall be subordinate to any
mortgage, deed of trust, ground lease, or other prior or future lien (hereinafter "Prior Lien") that
may heretofore or hereafter be placed upon the Premises and the Premises, and all renewals,
replacements and extensions thereof. If any mortgage or deed of trust is foreclosed or a
conveyance in lieu of foreclosure is made for any reason, Tenant shall, notwithstanding any
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subordination, attorn to and become the tenant of the successor in interest to Landlord, provided
that such successor in interest recognizes the interest of Tenant and shall not disturb the Tenant
in its use under this Lease if no default under this Lease then exists. Tenant shall execute any
document which any such Prior Lien holder may require to effectuate the provisions of this
Section, including, but not limited to, a subordination, non-disturbance and attornment
agreement on the Prior Lien holder's standard form, within fifteen (15) days of presentation of
such document.
21. ESTOPPEL CERTIFICATE. Tenant will, within fifteen (15) days after a request by
Landlord, execute, acknowledge and deliver to Landlord a statement in writing executed by
Tenant, substantially in the form of Exhibit C, attached hereto and incorporated herein, or in such
other form reasonably requested by any Prior Lien holder. The parties agree and intend that any
such statement by Tenant may be relied upon by any prospective purchaser or mortgagee of the
Premises and/or Premises. Tenant's failure to timely deliver such a statement shall be deemed to
be an acknowledgement by Tenant that this Lease is in full force and effect without modification
(except as set forth by Landlord), there are no uncured defaults under this Lease by Landlord, no
setoffs or deductions exist which may be made by Tenant, and no more than one monthly
installment of Rent has been paid in advance.
22. SERVICES. Tenant shall be responsible to pay for all electricity, natural gas, and other
utilities to and within the Premises at its sole cost and expense. Landlord shall not be liable to
Tenant for any loss or damage caused by or resulting from any variation, interruption or failure
of said services due to any cause whatsoever; and no temporary interruption or failure of such
services incident to the making of repairs, Alterations or improvements due to accident or strike
or conditions or events not under Landlord's control shall not be deemed an eviction of Tenant or
relieve Tenant from any of Tenant's obligations hereunder.
23. REPRESENTATIONS, COVENANTS AND WARRANTIES OF TENANT.
Tenant represents, covenants and warrants for the benefit of Landlord the following: (a) Tenant is a
political subdivision of the State of Idaho with statutory authority to enter into this Lease, and has
been duly authorized to execute, deliver and carry out its obligations under this Lease and will do
or cause to be done all things necessary to preserve and keep in full force and effect its existence as
a body politic and corporate. Tenant is not subject to any legal or contractual provision which
restricts or prevents it from entering into performing under this Lease, except laws affecting
creditors' rights generally. There is no known pending or threatened action, proceeding, or
investigation affecting Tenant, nor to the best knowledge of Tenant is there any basis therefor,
wherein an unfavorable result would adversely affect this Lease; (b) There are no Hazardous
Substances on the Premises and Tenant shall comply with all Hazardous Substance laws relating to
the Improvements as though Tenant were an owner of the Improvements; (c) The execution and
performance of this Lease will not violate any judgment, order, law or regulation, constitute a
default under any instrument binding upon Tenant, or create any encumbrance upon any assets of
Tenant, the Improvements, or the Premises, except as herein provided; (d) City has been duly
authorized to execute and deliver this Lease under the terms and provisions of its duly adopted
resolution and further represents, covenants and warrants that all requirements have been met
and procedures have occurred in order to ensure the due authorization of this Lease; (e) No
approval, consent, or withholding of objection is required from any governmental authority other
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than Tenant with respect to the entering into or performance by Tenant of this Lease; and (1) The
balance sheet of Tenant for its most recent Fiscal Year and the related earnings statement of
Tenant for such Fiscal Year have been furnished to Landlord and fairly present Tenant's financial
condition as of such date and the result is of its operations for such year in accordance with
generally accepted accounting principles consistently applied, and since such date there has been
no material adverse change in such conditions or operations.
24. DEFAULTS AND REMEDIES.
a. Defaults. The occurrence of anyone or more of the following events shall
constitute a default hereunder by Tenant (each an "Event of Default"):
(1) The vacation or abandonment of the Premises by Tenant. Abandonment is
herein defined to include, but is not limited to, any absence by Tenant from
Premises for five (5) business days or longer, whether or not Tenant has removed
its personal property from the Premises.
(2) The failure by Tenant to make any payment of Rent, as and when due,
where such failure shall continue for a period of twenty (20) days after written
notice thereof from Landlord to Tenant; provided, however, that any such notice
shall be in lieu of, and not in addition to, any notice required under Idaho law
regarding unlawful detainer actions.
(3) The failure by Tenant to observe or perform any of the express or implied
covenants or provisions of this Lease to be observed or performed by Tenant,
other than as specified in subsections 24.a (1) or 24.a (2) above, where such
failure shall continue for a period of twenty (20) days after written notice thereof
from Landlord to Tenant. Any such notice shall be in lieu of, and not in addition
to, any notice required under Idaho law regarding unlawful detainer actions. If
the nature of Tenant's default (other than a default specified in subsections 24.a
(1) or 24.a (2) above) is such that more than twenty (20) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if Tenant
shall commence such cure within said twenty (20) day period and thereafter
diligently prosecute such cure to completion, and such completion shall occur not
later than forty five (45) days from the date of such notice from Landlord.
(4) Any of the following: (a) The making by Tenant of any general
assignment for the benefit of creditors; (b) the appointment of a trustee or receiver
to take possession of substantially all of Tenant's assets located at the Premises or
of Tenant's interest in this Lease, where possession is not restored to Tenant
within thirty (30) days; or (c) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's interest
in this Lease where such seizure is not discharged within thirty (30) days.
b. Remedies. If an Event of Default exists, in addition to any other remedies
available to Landlord at law or in equity, Landlord shall have the following rights and remedies:
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(1) The right to terminate Tenant's right to possession of the Premises and to
recover the present value (assuming an interest rate often percent (10%)) of Rent
due over the remainder of the Term as liquidated damages due from Tenant to
Landlord, less the amount of rental loss for the same period that the tenant proves
could be reasonably avoided;
(2) The right to continue this Lease in effect and to enforce all of its rights and
remedies under this Lease, including the right to recover Rent;
(3) The right to enter the Premises and remove therefrom all persons and
Premises, store such Premises in a public warehouse or elsewhere at the cost of
and for the account of Tenant, and sell such Premises and apply the proceeds
therefrom pursuant to applicable law. No re-entry or taking possession of the
Premises by Landlord pursuant to this Section 24 shall be construed as 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;
(4) The right to take steps necessary or appropriate to have a receiver
appointed for Tenant in order to take possession of the Premises and apply any
rent collected and exercise all other rights and remedies granted to Landlord;
(5) The right to terminate this Lease by giving written notice to Tenant of
such termination;
(6) If an Event of Default occurs prior to the expiration of the Initial Term, the
right to recover the full amount of any tenant improvement allowance and any
free rent granted by Landlord; and
(7) The right to recover any attorneys' fees, costs and or other expenses
incurred by Landlord in pursuit of its default remedies.
d. Remedies Cumulative; Waiver. All rights, options and remedies of Landlord
contained in this Lease or provided by law or in equity shall be construed and held to be
cumulative, and no one of them shall be exclusive of the other. No waiver of any default
hereunder shall be implied from any acceptance by Landlord of any Rent due hereunder or any
omission by Landlord to take any action on account of such default, and no express waiver shall
affect any default 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.
26. TRANSFER OF LANDLORD'S INTEREST. In the event of any transfer or transfers
of Landlord's interest in the Premises or the Premises, other than a transfer for security purposes
only, Tenant agrees that Landlord shall be automatically relieved of any and all obligations and
liabilities on the part of Landlord accruing from and after the date of such transfer and Tenant
agrees to attorn to the transferee, so long as the transferee agrees to abide by the terms and
conditions of this Lease.
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27. RIGHT TO PERFORM. If Tenant shall fail to pay any sum of money, other than Rent
required to be paid by it hereunder, or shall fail to perform any other act on its part to be
performed hereunder, and such failure shall continue for twenty (20) days after notice thereof by
Landlord, Landlord may, but shall not be obligated so to do, and without waiving or releasing
Tenant from any obligations of Tenant, make any such payment or perform any such other act on
Tenant's part to be made or performed as provided in this Lease. Tenant shall reimburse
Landlord for all costs incurred in connection including interest at a rate of twelve percent (12%)
with such payment or performance immediately upon demand.
28. NOTICES. All notices under this Lease shall be in writing to the Notice Address for the
respective party, or such addresses as may hereafter be designated by either party in writing.
Any such notices shall be either sent by certified mail, return receipt requested, in which case
notice shall be deemed delivered three (3) business days after timely deposit, postage prepaid in
the U.S. Mail; sent by a nationally recognized overnight courier, in which case notice shall be
deemed delivered one (1) business day after timely deposit with such courier; or personally
delivered, in which case notice shall be deemed delivered upon receipt.
29. ATTORNEYS' FEES. If either party places the enforcement of this Lease or any part
hereof, or the collection of any Rent, or recovery of the possession of the Premises, in the hands
of an attorney, or files suit upon the same, the prevailing party shall be entitled to receive its
reasonable attorneys' fees and court costs, including paralegal fees and any attorneys' fees and
court costs in connection with any appeals and any bankruptcy or insolvency proceedings, from
the non-prevailing party.
30. HOLDING OVER. If Tenant holds over after the expiration or earlier termination of
the Term without the express consent of Landlord, Tenant shall become a tenant at sufferance
only, at a rental rate equal to one hundred ten percent (110%) of the Rent, Operating Cost and
other charges in effect upon the date of such expiration and otherwise subject to the terms,
covenants and conditions herein specified, so far as applicable. Acceptance by Landlord of Rent
after such expiration or earlier termination shall not result in a renewal of this Lease and shall not
waive Landlord's right to bring an unlawful detainer action against Tenant or otherwise remove
Tenant from the Premises. If Tenant fails to surrender the Premises upon the expiration of this
Lease despite demand to do so by Landlord, Tenant shall indemnify, defend and hold Landlord
harmless from all loss or liability, including without limitation, any claim made by any
succeeding tenant founded on or resulting from such failure to surrender.
31. SURRENDER OF PREMISES. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation hereof, shall not work a merger, and shall, at the option of
Landlord, operate as an assignment to it of any subleases or subtenancies.
32. PURCHASE OPTION. During the Term, Tenant shall have the option to purchase the
Improvements upon ninety (90) days' prior written notice to Landlord. The purchase price shall
be based on the lease year in which Tenant exercises the option contained in this Section, as
shown on the schedule on Exhibit D. Landlord shall convey the Improvements by quitclaim
deed, and Landlord and Tenant shall cooperate to execute any other documents necessary for
such sale, including, but not limited to, assigning all warranties related to the Building to Tenant.
This Lease shall automatically terminate upon the purchase described in this Section. In the
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event this Lease is terminated for any reason, Tenant's option to purchase the Improvements
shall also terminate.
33. GENERAL PROVISIONS.
a. Entire Agreement. This Lease contains all of the agreements of the parties, and
there are no verbal or other agreements which modify or affect this Lease. This Lease
supersedes any and all prior agreements made or executed by or on behalf of the parties hereto
regarding the Premises.
b. Successors and Assigns. All of the covenants, agreements, terms and conditions
contained in this Lease shall inure to and be binding upon Landlord and Tenant and their
respective successors in interest and assigns.
c. No Brokers. Tenant represents and warrants to Landlord that it has not engaged
any broker, finder or other person, except for Tenant's Broker who would be entitled to any
commission or fees in respect of the negotiation, execution or delivery of this Lease and shall
indemnify, defend and hold harmless Landlord against any loss, cost, liability or expense
incurred by Landlord as a result of any claim asserted by any such broker, finder or other person,
except for Tenant's Broker or Landlord's Broker (as defined in the Basic Lease Information) on
the basis of any arrangements or agreements made or alleged to have been made by or on behalf
of Tenant. The provisions of this section shall not apply to brokers with whom Landlord has an
express written broker agreement. Landlord shall be responsible for paying all leasing
commissions due Landlord's Broker in connection with this Lease.
d. Severability. Any provision of this Lease which shall prove to be invalid, void or
illegal shall in no way affect, impair or invalidate any other provision hereof, and the remaining
provisions hereof shall nevertheless remain in full force and effect.
e. Force Majeure. Except as may be otherwise specifically provided herein, time
periods for Landlord's or Tenant's performance under any provisions of this Lease not involving
the payment of money shall be extended for periods of time during which the non-performing
party's performance is prevented due to circumstances beyond the party's control, including,
without limitation, strikes, embargoes, governmental regulations, acts of God, war or other strife.
Tenant hereby waives and releases its right to terminate this Lease under any law, statute or
ordinance now or hereafter in effect.
f. Modification for Lender. If, in connection with Landlord's obtaining
construction, interim or permanent financing for the Premises, the lender shall request reasonable
modifications in this Lease as a condition to such financing, Tenant will not unreasonably
withhold, delay or defer its consent thereto, provided that such modifications do not increase the
Rent hereunder or materially adversely affect the leasehold interest hereby created or Tenant's
rights hereunder.
g. Recording. Neither Landlord nor Tenant shall record this Lease nor a short form
memorandum hereof without the written consent of the other.
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h. Applicable Laws. This Lease shall be governed by and construed pursuant to the
laws of the State of Idaho.
i. Survival of Obligations. All provisions of this Lease which require the payment
of money or the delivery of Premises after the termination of this Lease or require Tenant to
indemnify, defend or hold Landlord harmless shall survive the termination of this Lease.
j. Appendices and Riders. The following appendices and riders are attached hereto
and by this reference made a part of this Lease:
Exhibit A
Site Plan of Premises (showing Improvements)
Exhibit A-I
Legal Description of Premises
Exhibit B
Landlord's Work - General
Exhibit B-1
Exterior Elevations
Exhibit B-2
Interior Floor Plan
Exhibit B-3
Interior & Exterior Finish Schedules
Exhibit C
Form of Tenant Estoppel
Exhibit D
Schedule for Purchase of Improvements
k. Authority. Each individual executing this Lease represents that it has all requisite
power and authority to execute and deliver this Lease on behalf of the entity for which it is
signing, and by his or her signature, will bind such party to the terms of this Lease.
[End of text; Signature Page follows.)
OFFICE LEASE
L:\Projecl Direclory\20802
Page 20
Eagle City Hall - Leases with City of Eagle\Lease - Office - Final.doc
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first
above written.
LANDLORD:
Hawkins-Smith Eagle Hall LLC,
an Idaho limited liability company
By: Hawkins-Smith Management, Inc.,
an Idaho corporation, its Manager
By:
Robert L. Phillips, President
Date:
TENANT:
City of Eagle,
an Idaho municipality
By:
Its:
ATTEST:
[ seal]
Sharon K. Bergmann, City Clerk
OFFICE LEASE
L:\Project Directory\20802
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Eagle City Hall - Leases with City of Eagle\Lease - Office - Final.doc
OFFICE LEASE
L:\Project Directory\20802
EXHIBIT A
SITE PLAN OF PREMISES
[1 page attached]
Page 22
Eagle City Hall - Leases with City of Eagle\Lease - Office - Final.doc
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EXHIBIT A-I
LEGAL DESCRIPTION OF PREMISES
Lots 6 and 7 in Block 1 of AQUILA VILLAGE SUBDIVISION, according to the plat
thereof, filed in Book 82 of Plats at Page 8908 through 8909, Records of Ada County, Idaho
OFFICE LEASE
L:\Project Directory\20802
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Eagle City Hall - Leases with City of Eagle\Lease - Office - Final.doc
EXHIBIT B
LANDLORD'S WORK - GENERAL
Improvements. Landlord shall provide Tenant with the Improvements, consisting of
a single story building of approximately 12,762 square feet and related site improvements, all
in accordance with this Exhibit B. The parties agree and acknowledge that there may be
some changes to Exhibit B made due to Design Review proceedings by the City of Eagle,
and agree to cooperate in good faith to resolve any issues with the Exhibits due to such
reVIew.
Tenant Representative. Tenant shall designate to Landlord in writing the name of
one individual representative ("Tenant's Representative") who will work with Landlord's
representatives throughout the period of construction of the Building and Site Improvements.
Tenant's Representative shall have the authority to make all decisions relating to the design
and construction of the Improvements and Tenant shall be bound by the decisions of
Tenant's Representative.
Off-Site Improvements. Landlord and Tenant agree and acknowledge that some of
Landlord's work includes site improvements which are located on the adjacent property of
Tenant, upon which the city library is located. Tenant, as owner of the adjacent parcel,
hereby grants to Landlord, and its agents and contractors, a license to enter upon Tenant's
adjacent property to conduct any and all work necessary for the construction of the site
improvements to be located on such property.
Site Preparation. The parties acknowledge that Landlord has budgeted for
construction costs for the Improvements based on to Tenant's representations and
assumptions contained in the estimate of probable construction cost contained in its original
Request for Proposal #EC 05-101 dated February 19,2005, which portion of such proposal is
hereby incorporated herein by reference. In the event there are issues with the site
preparation not indicated in Tenant's original request for proposal, Tenant shall be
responsible for such additional costs at its sole cost and expense. At Tenant's option, any
additional costs and expenses may be paid by Tenant out of pocket upon within thirty (30)
days after receipt of an invoice pertaining thereto, or Tenant may elect to have its Rent
adjusted pursuant to the formula provided in the "Change Order" paragraph below.
Change Orders. In the event Tenant requests changes to this Exhibit B, Tenant and
Landlord must sign a written change order detailing such change and additional increases or
decreases in costs due to such change. Tenant shall be required to pay for any additional
costs incurred by such changes. Any increase or decrease in costs shall adjust the Rent
upward or downward in a proportionate amount of such cost excess or savings, as applicable,
as contained in Landlord's existing Rent calculation.
Delivery. Landlord will use its best efforts to deliver the Premises substantially
complete to Tenant on or before March 1, 2006, based on this Exhibit B and any change
orders agreed to as provided in this Exhibit B.
Tenant's Work. Tenant shall supply a Premises to Landlord, at Tenant's sole cost
and expense, with the ability to tap into the existing storm water drainage system and with a
sufficient pipe size for the Building and also adequate sewer stub for the Building, and with a
OFFICE LEASE
L:\Project Directory\20802
Page 24
Eagle City Hall- Leases with City of Eagle\Lease - Office - Final.doc
buildable lot, across the eXlstmg lot line, upon the Premises. Tenant shall furnish, at
Tenant's sole cost and expense, and at Tenant's option, any and all furniture, fixtures and
equipment, required for Tenant's use of the Improvements (including the Building). In no
way limiting the foregoing sentence, Tenant may supply and install, all at its own cost and
expense, a conventional stove oven with hood and/or microwave oven, millwork, all
communication/A V equipment, satellite dish, signage, and all security systems.
Cooperation. Landlord and Tenant agree to coordinate with each other regarding
work done in the Premises concurrently by both parties. Tenant shall provide Landlord with
adequate notice (i.e. prior to Landlord's relevant construction) of any fixtures it plans to
install that will require a corresponding structural component in the Building. Tenant agrees
that Tenant's work will not materially interfere with Landlord's Work in completing the
Premises within the scheduled time frame.
Conflict. In the event of any conflict within the Exhibits B, B-1, B-2, and B-3,
Exhibit B-3 shall control.
OFFICE LEASE
L:\Project Directory\20802
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Eagle City Hall - Leases with City of Eagle\Lease - Office - Final.doc
OFFICE LEASE
L:\Project Directory\20802
EXHIBIT B-1
EXTERIOR ELEVATIONS
[1 page attached]
Page 26
Eagle City Hall - Leases with City of Eagle\Lease - Office - Final.doc
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OFFICE LEASE
L:\Project Directory\20802
EXHIBIT B-2
INTERIOR FLOOR PLAN
[1 page attached]
Page 27
Eagle City Hall - Leases wilh City of Eagle\Lease - Office - Final.doc
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OFFICE LEASE
L\Project Direclory\20802
EXHIBIT B-3
INTERIOR & EXTERIOR FINISH SCHEDULES
r2 pages attachedl
Page 28
Eagle City Hall- Leases with City of Eagle\Lease - Office - Final.doc
I
Eagle City Hall Interior Finish Schedule
,
Room Number
Flooring
Base
Walls
Ceiling
Cabinetry
100 Tile 1 Tile 1 Tile 1/Paint GyO -
101 Tile 1 LE1 Paint Illusion -
102 VCT Resilient Paint Illusion -
103 Carpet 1 Camet 1 Paint- note 2 Illusion Note 3
104 VCT Resilient Paint Radar -
105 VCT Resilient Paint Radar -
106 Camet 1 Camet 1 Paint Illusion -
107 Caroet 1 Caroet 1 Paint Illusion -
108 Tile 2 Tile 2 Tile 2&3/Paint GyO Note 4
109 Tile 2 Tile 2 Tile 2&4/Paint Gyp Note 4
110 Tile 1 Tile 1 Paint Illusion Note 5
111 Carpet 1 Carpet 1 Paint Illusion -
112 Carpet 1 Carpet 1 Paint Illusion -
113 VCT Resilient Paint Illusion -
114 Camet 1 Camet 1 Paint Illusion -
115 Carpet 1 Carpet 1 Paint Illusion -
116 VCT Resilient Paint Radar -
117 VCT Resilient Paint Illusion Note 6
118 Carpet 1 Carpet 1 Paint Illusion -
119 Carpet 1 Camet 1 Paint Illusion -
120 Camet 1 Camet 1 Paint Illusion Note 7
121 Carpet 1 Carpet 1 Paint Illusion -
122 Carpet 1 Camet 1 Paint Illusion -
123 VCT Resilient Paint Radar Note 8
124 Carpet 1 Caroet 1 Paint Illusion -
125 Carpet 1 Camet 1 Paint Illusion -
126 VCT Resilient Paint Radar Note 9
127 Carpet 1 Carpet 1 Paint Illusion Note 10
128 Carpet 1 Carpet 1 Paint Illusion -
129 Carpet 1 Carpet 1 Paint Illusion -
130 Carpet 2 Carpet 2 Wainscot/WC Soec Note 11
131 VCT Resilient Paint Radar -
132 Carpet 1 Carpet 1 Paint Illusion -
133 Tile 2 Tile 2 Tile 2&4/Paint GyO -
134 VCT Resilient FRP/Paint Gyp -
135 Tile 2 Tile 2 Tile 2&3/Paint GyO -
136 VCT Resilient Paint Illusion Note 12
137 Carpet 1 Carpet 1 Paint Illusion -
138 Carpet 1 Carpet 1 Paint Illusion -
139 Carpet 2 Carpet 2 WC Soec
Note 1
Note 13
Note 1
Note 1
Note 13
Note 1
Note 1
EX~JgJT 8-J 10
oFFllE ~~
5/12/20051:56 PM
Page 1 of 2
Interior Finish Notes
Note 1- Tile to 42" AFF all around. Standard color painted steel toilet partitions as required.
Note 2- Tectum panels as needed, paint accenting color
Note 3- CouncillClerk desks, wood veneer front, laminate tops
Note 4- Stone vanity top, undermount sinks. Stone tops are in $40k cabinetry allowance.
Note 5- Laminate Meet & Greet stations to rooms 115, 119, & 128
Note 6- Plan cubbys to 5' on south wall, melamine
Note 7- Laminate transaction top to room 110, separate laminate work top/2 drawer fjle
Note 8- Plan cubbys to 5' on north wall, melamine
Note 9- Laminate tops on north and east wall
Note 10- Laminate transaction top to room 110, separate laminate work top/2 drawer fjle
Note 11- Built-in credenza and bookshelves, wood to be determined, wood wainscot to 3'
Note 12- Laminate lower and upper units with dishwasher, microwave, and refrigerator
Note 13- tile floor shown is an upgrade to be funded from the cabinetry budget as requested by tenant
General Interior Notes
Room 129 and 130- windows on corridor 137 side, door sidelites on room 128 side
All interior walls smooth wall or hand texture, no orange peel texture
Laminates to be selected from Formica or Wilsonart standards
Levelor Riviera style mini-blinds in office area windows
Tile 1- Colusseum Noce, 18"x18"
Tile 2-Toilet Room fjeld- American Olean Satin Glo, 2"x2", Almond D12
Tile 3- Women's Toilet Room Accent- American Olean Satin Glo, 2"x2", Plum D33
Tile 4- Men's Toilet Room Accent- American Olean Satin Glo, 2"x2", Satin Olive D30
Carpet 1- Shaw Ripple wi TekLock backing
Carpet 2- Durkan Marquette wi TekLock backing
Cabinetry budget of $40k may be used for cabinetry noted above or for flooring upgades, see note 13 above
Tenant may furnish cabinetry, tenants choice. Installation by tenant or from cabinetry budget
Acoustic ceilings are USG or equivalents
I
t
Eagle City Hall Exterior Finish Schedule
Finish
Manufactured stone
Brick
Stucco
Para et ca
Precast
Brick
Storefront
Exterior Soffits
Exterior Concrete
Exterior Finish Notes
Cornin
Note 14
lass Note 15
Note 16
Note 14- EIFS or Stucco, developer's choice, color selection by owner (1 color)
Note 15- Medium duty storefront doors and hardware, green tint glass, bronze frames
Note 16- Developer's choice
5/12/20051 :56 PM
~UHr 6-.3 To
0Pfl(E lEAse
Page 2 of 2
EXHIBIT C
FORM OF TENANT ESTOPPEL
Tenant Estoppel Certificate
Tenant:
Premises Address:
Area:
Sq. Ft. (Rentable)
Date of Lease:
Date(s) of Lease Amendments(s):
Commencement Date:
Expiration Date:
Current Monthly Rental:
Operating Expenses:
The undersigned, as Tenant under the Lease of the above-referenced premises
("Premises") executed by ("Landlord"), as Landlord, and Tenant
on the above-referenced date, does hereby represent, certify and covenant to
("Buyer") ("Lender"), and its assignees, as follows:
1. Lease. The copy of the Lease, including all addenda and amendments thereto,
attached hereto as Exhibit A is a true and correct copy of the Lease which is in full force
and effect and which has not been further amended, supplemented or changed by letter
agreement or otherwise.
2. Completion of Premises / No Disputes. Tenant has accepted possession of all of
the premises, and all conditions to be satisfied by Landlord under the Lease have been
satisfied pursuant to the terms of the Lease, including but not limited to, completion of
construction of any required improvements to the Premises except those listed below:
3. No Defaults / Claims. Neither Tenant nor Landlord is in default under any terms
of the Lease nor has any event occurred which with the passage of time (after notice, if
any, required by the Lease) would become an event of default under the Lease. Tenant
has no disputes, claims, counterclaims, defenses or setoffs against Landlord or liens
against the Premises arising from the Lease. Tenant is not entitled to any concessions,
rebate, allowance or free rent for any period after this certification, not is Landlord
obligated to construct or install any additional improvements in the Premises except those
listed below:
4. No Advance Payments; Security Deposit. No rent or other amount payable under
the Lease has been paid in advance by Tenant except the current month's rent. Landlord
has no obligation to segregate the security deposit (if any) or to pay interest thereon.
5. No Extension, Purchase or Termination Rights. Tenant has no option and no right
of first refusal to purchase the Premises or any interest therein and no right to cancel or
terminate the Lease or extend the term of the Lease, except as otherwise provided in the
following sections of the Lease:
6. No Sublease / Assignment. Tenant has not entered in any sublease, assignment or
other agreement transferring any of its interest in the Lease or the Premises.
7. No Notice. Tenant has not received notice of any assignment, hypothecation,
mortgage, or pledge of Landlord's interest in the Lease or the rents or other amounts
payable thereunder, nor any violation of any federal, state, county or municipal laws,
regulations or orders related to the use or condition of the Premises or the Premises
except those listed below.
8. Hazardous Materials. No Hazardous Material has been used, treated, stored or
disposed of on the Premises by Tenant. Tenant does not have any permits or
identification numbers issued by the United States Environmental Protection Agency or
by any state, county or municipal agencies with respect to its operations on the Premises,
except those listed below. For the purposes hereof, the term "Hazardous Material" shall
mean any substance, chemical, waste or other material which is listed, defined or
otherwise identified as "hazardous" or "toxic" under any federal, state, local or
administrative agency ordinance or law or any regulation, order, rule or requirement
adopted thereunder, as well as any petroleum, petroleum product or by-product, crude oil,
natural gas liquids, liquefied natural gas, or synthetic gas usable as fuel, and "source",
"special nuclear" and "by-product" material as defined in the Atomic Energy Act of
1985,42 U.S.c. 93011 et. Seq.
9. No Modification of Lease. From the date of this Certificate through -
, non-modification or amendment to the Lease, forgiveness of payment of
rent or other amount due under the Lease, grant of extension or option, or prepayment of
rents more than one month in advance may be made except with the written consent of
Buyer.
10. Reliance; Buyer's Rights. Tenant recognizes and acknowledges it is making these
representations to Buyer with the intent that Buyer or its assignees will rely on tenant's
representations in connection with Buyer's acquisition of the Premises. All rent
payments under the Lease shall continue to be paid to Landlord in accordance with the
terms of the Lease until Tenant is notified otherwise inn writing. As of the effective date
of the purchase of the Premises by Buyer, Tenant will recognize Buyer as landlord under
the Lease. Tenant further acknowledges and agrees that Buyer and its successors and
assigns (including any entity holding a Deed of Trust at any time after the date of this
Certificate) shall have the right to rely on the information contained in this Certificate.
11. Binding. The provisions hereof shall be binding upon and inure to the benefit of
the successors, assigns, personal representatives and heirs of Tenant and Buyer.
12. Due Execution and Authorization. The undersigned, and the person(s) executing
this Certificate on behalf of the undersigned, are duly authorized to execute this
Certificate on behalf of Tenant and to bind Tenant thereto.
TENANT:
a
By:
Name:
Title:
EXHIBIT D
PURCHASE OPTION SCHEDULE
Lease Year
1
2
3
4
5 - 50
Purchase Price
$2,460,000
$2,440,000
$2,420,000
$2,400,000
$2,370,000
GROUND LEASE
BY AND BETWEEN
CITY OF EAGLE,
AN IDAHO MUNICIPAL CORPORATION
"LESSOR"
AND
HA WKINS-SMITH EAGLE HALL LLC,
AN IDAHO LIMITED LIABILITY COMPANY
"LESSEE"
EXHIBIT B
GROUND LEASE
THIS GROUND LEASE ("Ground Lease" or "Lease") effective the day of
, 2005, ("Lease Commencement Date") by and between CITY OF EAGLE, an Idaho
municipal corporation ("Lessor"), and HAWKINS-SMITH EAGLE HALL LLC, an Idaho
limited liability company ("Lessee"), on the following terms and conditions:
1. Leased Premises; Term. Lessor hereby leases to Lessee certain real property and
appurtenances located in the City of Eagle, County of Ada, State of Idaho, being more
particularly described on Exhibit "A", attached hereto (the "Real Property" or "Leased
Premises"). The Real Property is also known as Block 1, Lot 6 and Block 1, Lot 7, in that
certain Plat showing Aquila Ridge Subdivision dated 2001 recorded in Book 82 of Plats at
page 8908 and 8909 ("Plat").
Lessee may demolish any existing Improvements and may construct new buildings and
related improvements on the Real Property ("Improvements"). Upon completion thereof,
Lessee may sublease the Improvements and the Real Property to a sublessee ("Sublessee").
The sublease of the Improvements and the Real Property shall be pursuant to the terms of a
written sublease between Lessee and a sublessee ("Sublease"), a memorandum of which
may be filed of record in the office of the Clerk of Ada County, Idaho (after a memorandum
of this Lease shall have been so filed). The initial sublessee of the Real Property and
Improvements is the City of Eagle. Any termination, expiration, or non-renewal of the
Sublease shall not affect Lessor's rights in this Ground Lease in any way.
2. Initial Term; Options; Delivery. This Lease shall have a term commencing on the Lease
Commencement Date and continuing to and including September 30,2026 ("Initial Term").
Lessee shall have three (3) options to extend this Lease for a period of ten (10) years each
("Option Term") which shall be exercised at least ninety (90) days prior to the termination
date of the then current term by written notice (The Initial Term and any Option Term
exercised are sometimes referred to herein collectively as "Term"). Lessor shall deliver the
Leased Premises on the date of full execution of this Lease ("Delivery Date").
3. Rent. Lessee shall pay rent as follows ("Rent"):
Years
1-20
21-30 (Option)
31-40 (Option)
41-50 (Option)
Annual Fixed Rent
$ 1,000.00
$ 12,000.00
$ 12,000.00
$ 12,000.00
Fixed Rent shall be paid to Lessor on the tenth (10th) day of January in each year after the
Lease Commencement Date during the Term of this Lease at the following address:
City of Eagle
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P. O. Box 1520
Eagle,ID 83616
Or payment shall be made to such other address to which Lessor had notified Lessee in
writing.
Rent for the initial calendar year shall be prorated for the calendar year and paid to Lessor
within ten (10) days after the Lease Commencement Date. In the final calendar year of the
lease term, or any year in which the Ground Lease is terminated or not renewed, Tenant
shall be responsible for a pro-rated amount of rent based on the number of days in which the
Lease was in force during the calendar year. If Tenant has prepayed the Rent for such
calendar year, it shall be entitled to a refund from Landlord for the remainder of the year
within thirty (30) days after the end of the Ground Lease.
4. Additional Rent and Value to Lessor.
(a) Lessor shall be entitled to the ownership of Improvements located upon the Real
Property, if any, upon the termination or expiration of this Lease; and
(b) Under the initial Sublease, the City of Eagle intends to use the Improvements and
Real Property for a City Hall. If the initial Sublease with the City of Eagle
terminates, the Lessor shall be entitled to one-half (1/2) of any increase in the rental
rate paid by a new sublessee above the amount previously paid by the City of Eagle
in its respective sublease, less the following losses and costs and expenses incurred
by Lessee, which shall be recovered first: (i) any lost rents for vacancy caused by
early termination of the Sublease; (ii) additional tenant improvements costs for new
tenants, commissions, and (iii) any other costs or expenses associated with re-letting
the Leased Premises.
5. Taxes. Utility Charl!es. Etc. After the Lease Commencement Date, Lessee agrees to pay
(or cause to be paid) all charges for electricity, gas, heat, water, telephone and other utility
services used on the Leased Premises. Lessee further agrees after the Lease
Commencement Date to pay all taxes and assessments on or with respect to the Leased
Premises with taxes and assessments to be prorated to the Rent Commencement Date and
the last day of the Term. Taxes and assessments shall include without limitation all federal,
state, county or local governmental taxes, fees, levies assessment, charges or other
impositions of every kind and nature respecting the Leased Premises and all improvements
thereon, including real estate and other ad valorem taxes, general and special assessments,
and personal property taxes imposed upon the fixtures and equipment and other personal
property used in connection with the Leased Premises.
Lessor covenants and agrees that if there shall be any refunds or rebates on account of any
tax, governmental imposition or levy paid by Lessee under the provisions of this Lease,
such refund or rebate shall belong to Lessee. Any such refunds or rebates received by
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Lessor shall be held in trust for the benefit of Lessee and shall be immediately paid to
Lessee. Lessor shall, upon request of Lessee, sign any receipt which may be necessary to
secure the payment of any such refund or rebate, and shall pay over to Lessee such refund or
rebate as received by Lessor.
6. Warranties.
(a) Warranties of the Lessor. The Lessor covenants and warrants to Lessee:
(1) that the Lessor has good and merchantable title to the Real Property, has the
authority to enter into, to execute and to deliver this Ground Lease and has
duly authorized the execution and delivery of this Ground Lease;
(2) that the Real Property is not subject to any dedication, easement, right of way,
reservation in patent, covenant, condition, restriction, lien or encumbrance that
would prohibit or would interfere materially with the Improvements or the use
of the Real Property or the financing of the Improvements by the Lessee;
(3) that all taxes, assessments or impositions of any kind with respect to the Real
Property, except current taxes, have been paid in full;
(4) that the Real Property is properly zoned for the uses thereof contemplated by
the Improvements;
(5) the Real Property has vehicular and pedestrian ingress and egress to the public
streets ofN. Stierman Way, E. State Street and N. Palmetto Avenue;
(6) Lessee will have one buildable lot spanning the lot lines of Block I, Lot 6 and
Block 1, Lot 7 in the Plat; and
(7) There are no unrecorded easements, agreements or restrictions affecting the
design, use and development of the Real Property, except for those
previously disclosed to Lessee.
In the event any of the representations and warranties contained in this Section 6(a)
are not true in any material respect, Lessee shall provide written notice to Lessor of
such issue. If the Lessor cannot cure the issue within sixty (60) days after receipt of
Lessee's written notice to Lessee's satisfaction, Lessee shall be entitled to terminate
this Ground Lease by written notice to Lessor.
(b) Warranties of Lessee. Lessee covenants and warrants to the Lessor that Lessee has
the authority to enter into, to execute and to deliver this Ground Lease, has duly
authorized the execution and the delivery of this Ground Lease, and will record a
short form memorandum of this Ground Lease.
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7. Leasehold Title Insurance. Lessee may obtain, at Lessee's option and sole cost and
expense, a leasehold title insurance policy insuring a leasehold interest in the Real
Property and all access agreements for Lessee in an amount not less than $2 million
dollars from First American Title Insurance Company, in form and substance satisfactory
to Lessee in Lessee's sole discretion, including, but not limited to, any endorsements
required by Lessee. Such policy shall include insured access to the public streets ofN.
Stierman Way, E. State Street and N. Palmetto Avenue. Lessor agrees to use its best
efforts to cause the removal of any title exceptions objected to by Lessee. In the event
Lessee cannot obtain a satisfactory title policy in its sole discretion (including, but not
limited to, the City's failure to vacate/remove/relocate easements as described in Section
8), Lessee shall notify Lessor in writing of its title objections. If Lessor cannot cure the
objection(s) within sixty (60) days after receipt of Lessee's notice to Lessee's satisfaction,
Lessee may terminate this Ground Lease upon thirty (30) days' written notice to Lessor.
8. Easements To Be VacatedIRelocated and Other Title Issues. Lessor agrees to cause,
at Lessor's sole cost and expense (including, but not limited to, the costs of any necessary
surveys and legal descriptions), the termination, vacation and/or relocation (to the
location requested by Lessee) of the following easements located on the Real Property
within one hundred eighty (180) days from the full execution of this Ground Lease: (a)
storm drain easement running north/south through the middle of the Real Property, as
shown on the Plat; (b) sanitary sewer easement as shown on the Plat; (c) Perpetual
Storm Water Drainage Easement dated December 4, 2002 recorded as Instrument No.
102145324 on December 5, 2002~ (d) any and all utility easements associated with the lot
line between Lot 6 and Lot 7 of the Real Property; and (e) any other easements that
would interfere with the construction of Lessee's building across Lot 6 and Lot 7.
Lessor has provided to Lessee a copy of an unrecorded Declaration of Restrictions, Grant
of Easements and Operating Agreement dated October 22, 1998 ("Declaration'). It shall
be Lessor's responsibility, at Lessor's sole cost and expense, to obtain any and all
approvals for the construction of the Improvements required under the Declaration within
thirty (30) days after execution of this Ground Lease. Lessor shall indemnify, defend and
hold Lessee harmless from all losses, liabilities, costs, expenses and claims against
Lessee, Lessee's employees, contractors, management company and/or agents, arising in
any manner or way whatsoever from the Declaration. In case any action or proceeding
shall be brought against Lessee or other indemnified parties by reason of any such loss,
liability, cost, expense and/or claim, Lessor, upon notice from Lessee, shall defend the
same at Lessor's expense by counsel approved in writing by Lessee.
9. Access Easement. The Real Property has ingress/egress to the public roads of N.
Stierman, State Street and N. Palmetto Avenue pursuant to that certain Special
Declaration dated April 24, 2001, recorded as Instrument No. 101038961 on April 26,
2001, in the records of Ada County, Idaho ("Access Easement"). Lessee agrees,
represents and warrants to Lessee that it will not consent to any modification,
amendment, dissolution, or termination of the Access Easement without Lessee's prior
written consent. The Lessor shall be responsible for all costs and expenses incurred in
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maintaining, repairing and replacing the private roads described in the Access Easement,
including but not limited to, snow removal, at Lessor's sole cost and expense.
10. Sienaee. During the term of this Lease, Lessor agrees that Lessee shall have signage on
any building on the Real Property, and off-premises signage, to the maximum extent
permitted by the Eagle City Code. The City hereby grants an easement to Lessee, and
lessee's sublessees, on through, over, under and across Lessor's property on the corner of
State Street, as approximately shown on Exhibit "B", for the purpose of placing any off-
premises signage as permitted by the Eagle City Code. At Lessee's request, Lessor agrees
to execute a reasonable easement document regarding the foregoing sign easement, to be
recorded against Lessor's affected property. In the event the City of Eagle, as the initial
sublessee under the Sublease, vacates the Real Property, Lessee shall have the right to
place signage in all locations that the City of Eagle had signage for City Hall prior to
vacating the Real Property, with such signage to conform to the Eagle City Code sign
ordinance and other applicable laws and regulations. The costs of any actual signage
installed pursuant to this Section shall be at Lessee's sole cost and expense. The
easement contained in this Section shall run with the Lessor's property, and shall
terminate upon the termination of this Ground Lease.
11. Permits and Construction Insurance. Provided that Lessor shall not be obligated to
expend any sums of money, Lessor hereby: (a) gives its consent to any action taken by
Lessee in applying for any and all permits, licenses, certificates, variances or other
entitlements for use ("permits") which Lessee finds necessary or desirable and Lessor
hereby appoints Lessee its agent for applying for said permits; and (b) Lessor agrees to
cooperate with Lessee in arranging for the release and/or relocation and/or the granting of
any reasonable utility easements as may be required by Lessee. During the construction of
the Improvements, Lessee shall carry or cause to be carried full coverage builder's risk
insurance naming Lessee and Lessor as additional insureds.
12. Construction. Repairs and Alterations. Lessee shall build the Improvements, and any
other improvements, on the Real Property in compliance with all applicable laws. Lessor
shall not be obligated to maintain the Leased Premises or to maintain, replace or rebuild any
improvements thereon. Lessee shall maintain (or cause to be maintained) the Leased
Premises in good condition and repair and shall make any repairs and replacements
necessary or appropriate, or construct or remove Improvements without Lessor's consent.
Without limiting the generality of the foregoing, during the term of any Sublease, Lessee
shall be deemed in compliance with all of its maintenance and repair obligations under this
Lease by delegating such maintenance and repair obligations to a Sublessee. All
improvements constructed on the Leased Premises by Lessee or Sublessee, and all
additions, alterations and Improvements thereon made by Lessee or Sublessee, and all of
Lessee's and/or Sublessee's trade fixtures and equipment, shall not become a part of the
realty even if affixed to the realty but shall remain the exclusive personal property of Lessee
and/or Sublessee during the Term of this Lease. Upon surrendering possession to Lessor,
all building improvements then located on the Leased Premises shall become the exclusive
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property ofthe Lessor (said improvements do not include Lessee's and/or Sublessee's Trade
Fixtures as defined in Section 8 below).
Lessee agrees not to permit any liens to stand against the Leased Premises for work done or
materials furnished to Lessee or Sublessee, provided, however, that Lessee may contest the
validity of any such lien, but upon a final determination of the validity thereof, Lessee shall
cause such lien to be paid and released of record without cost to Lessor. Lessee may sell
and/or obtain financing on any improvements, alterations or additions made by Lessee on
the Leased Premises, and/or Lessee's leasehold interest in the Real Property, subject
however, to the provisions of this Lease. In the event of any such sale and/or financing, no
mortgagee or other holder of a security interest in Lessee's leasehold or in the
improvements on the Leased Premises shall be deemed to have assumed the performance of
any of Lessee's obligations under this Lease. Lessee is not permitted to encumber Lessor's
fee simple interest in the Real Property in any way.
13. Lessee's Trade Fixtures. Lessee, Sublessee or their successors, may install in or upon the
Leased Premises such trade fixtures equipment and other personal property ("Trade
Fixtures") as they deem desirable and all of said items shall remain the property of the
installer whether or not affixed to the Leased Premises. Said items may be removed from
the Leased Premises at any time but any damage caused by such removal shall be repaired
by the removing party within thirty (30) days after the expiration of the Term. Any trade
fixtures or other personal property remaining on the Leased Premises sixty (60) days after
the expiration or other termination of this Lease shall be deemed abandoned and shall
become the property of Lessor. Lessor hereby waives any interest Lessor may have to any
Trade Fixtures installed in or upon the Leased Premises by Lessee or Sublessee.
14. Environmental. Lessor hereby warrants that to its knowledge, the Leased Premises are
free from all hazardous substances as defined in this Section.
Lessee shall not generate, use, manufacture, keep, store, refine, release, discharge or
dispose of any substance or material that is described as a toxic or hazardous substance,
waste or material or a pollutant or contaminant by any federal, state or local law,
ordinance, rule or regulation now or hereafter in force, as amended from time to time, in
any way relating to or regulating human health or safety or industrial hygiene or
environmental conditions or pollution or contamination, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 D.S.C. 9 9601, et
seq., the Solid Waste Disposal Act, 42 U.S.C. 9 6901, et seq., including, without
limitation, PCBs, petroleum products, asbestos and asbestos-containing materials
(collectively, "Hazardous Substances"), on, under or near the Premises or the Premises,
except that Lessee may use Hazardous Substances on the Premises that are incidental to
general office use, such as photocopier toner, provided such use is in compliance with
laws and prudent business practices.
Lessee and Lessor hereby agrees to indemnify and save each other harmless from and
against any liability, damage, expense, causes of action, suits, claims or judgments,
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including without limitation attorney's fees and costs, resulting from the presence, removal
or disposal of any hazardous substance or solid waste pursuant to the terms of this Section.
The foregoing indemnification shall survive the termination or expiration of this Ground
Lease.
15. Indemnification. Lessee agrees to defend indemnify and hold harmless Lessor from any
and all liability, damage, expense, causes of action, suits, claims or judgments arising from
injury to person or property on the Leased Premises or on the adjoining streets and
sidewalks, except if caused by the willful or negligent act of Lessor or Lessor's agents or
employees, it being understood that Lessor has no obligation whatsoever to maintain or
repair any portion of the Leased Premises or the Improvements during the Term.
16. Assil!nment and Sublettinl!. Throughout the duration of this Ground Lease, Lessee shall
have the right to assign or sublet all or any portion of Lessee's rights under this Ground
Lease, including, but not limited to an assignment concurrent with a sale of the
Improvements to any Sublessee. Any assignment or subletting by Sublessee which
Sublessee shall have the right to make pursuant to the terms of the Sublease without the
necessity of consent by Lessee shall be deemed approved and/or allowed under this Ground
Lease.
17. Holdinl! Over. If Lessee remains in possession of the Leased Premises after the expiration
of the Term and rent is paid and accepted, such possession and acceptance shall create a
month-to-month tenancy on the same terms as are applicable during the Term, except that
rent due for such tenancy shall be equal to one hundred twenty-five percent (125%) of the
amount of rent in effect immediately prior to such holdover tenancy, and such tenancy may
be terminated by either party by thirty (30) days' notice to the other party.
18. Default. Lessee shall be in default hereunder upon (i) any failure to pay any rent or any
other amount payable by Lessee to Lessor hereunder within ten (10) days of the date due
and a failure of Lessee or Lessee's mortgagee to cure such default within ten (10) days of
notice from Lessor of such failure, (ii) any breach by Lessee of any other term or provision
hereof and a failure of Lessee or Lessee's mortgagee to cure the same within thirty (30) days
of notice of such failure from Lessor (or, if such default cannot reasonably be cured within
30 days, a failure to commence action reasonably designed to cure the same within such
thirty (30) day period and pursue such action diligently to completion), or (iii) the filing by
or against Lessee of any proceedings under the federal bankruptcy or any similar law and a
failure to obtain a discharge of such proceeding within sixty (60) days, the adjudication of
Lessee, as bankrupt or insolvent, the insolvency of Lessee or Lessee's inability to pay debts
generally as they become due or the appointment of a receiver, trustee, or other conservator
for Lessee, or any of its assets and a failure to obtain a discharge of such receiver or trustee
within sixty (60) days. Any such event shall be deemed an "Event of Default" hereunder.
19. Remedies. On the occurrence of any Event of Default hereunder Lessor shall have the
option to do anyone or more of the following, upon notice and demand and under the terms
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required in this Lease, in addition to and not in limitation of any other remedy permitted
hereunder or by law:
(a) Termination. Lessor may, by written notice to Lessee, terminate this Lease, in which
event Lessee v.rill immediately surrender the Leased Premises to Lessor but if Lessee fails to
do so, Lessor may, without further notice and without prejudice to any other remedy, enter
and take possession of the Leased Premises and remove Lessee and Lessee's property
therefrom.
(b) Performance bv Lessor. Lessor may perform or cause to be performed any of the
obligations of Lessee hereunder and except for the willful misconduct or negligence of
Lessor, may enter the Leased Premises to accomplish such purpose without being liable for
any claim for damages. Lessee agrees to reimburse Lessor on demand for any expense
which Lessor may incur in effecting compliance with this Lease on behalf of Lessee
including court costs and reasonable attorneys' fees.
(c) Other Remedies. Lessor shall have any other remedy which may be permitted by law,
including the right to recover from Lessee all damages suffered by Lessor as a result of
Lessee's default. Lessor shall credit against any amounts owed by Lessee under this Section
14 the actual net proceeds from any reletting for the remainder of the Term.
20. Estoppel and Non-Disturbance. Lessor shall execute and acknowledge a estoppel and in
substantially the same form and content as Exhibit "C" respectively attached hereto, and/or
a non-disturbance and attornment agreement, or as may be agreed to by the Lessor and the
Lessee's lender or prospective purchaser. Subject to the terms of the estoppel and non-
disturbance and attornment agreement, in the event Lessee is in default of the terms of this
Lease and proceedings are brought by Lessor to regain possession of the Leased Premises,
Lessor shall not bring suit against Sublessee or a mortgagee or disturb Subles'ee's or said
mortgagee's right to quiet enjoyment of the Leased Premises, provided that Sublessee or
said mortgagee is not in default under the terms of the Sublease or mortgage respectively.
Upon Lessor or Lessee's written request and provided the other party can do so truthfully,
the other party will certify in writing to all persons designated by the requesting party within
three (3) days of a request: (1) that the requesting party has performed all of its obligations
and is not in default under this Lease, (2) that this Lease is in full force and effect and (3)
that each person receiving such certification may rely thereon for all purposes.
21. Easements and Ouiet Enjovment.
(a) Grantin2 Easements. The Lessor shall promptly grant such permanent
easements in the property on which the Improvements in such form and content as
are determined by Lessee to be reasonably necessary for the following:
(i) to construct and maintain the Improvements; and (ii) to exercise Les'ee's rights
and obligations under this Ground Lease.
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(b) Additional Space. The Lessor, during the construction period of the
Improvements, will set aside additional space as is determined to be required by
Lessee or the contractor for the deliberate and efficient construction of the
Improvements. If required by Lessee, the Lessor will promptly grant temporary
easements for such space in such form and content as Lessee shall deem
necessary. Lessee will use its best efforts to minimize interference with the
operation of the Lessor during the period of construction.
(c) Ouiet Use and Enjovment. Subject to the terms of the Ground Lease, the Lessor
hereby covenants to provide Lessee during the term of this Ground Lease with
quiet use and enjoyment of the Real Property, and Lessee shall during such term
peaceably and quietly have and hold and enjoy the Real Property, without suit,
trouble or hindrance from the Lessor.
22. Condemnation. In the event of a full condemnation Lessee shall be entitled to an equitable
portion of any condemnation award. In the event of a partial condemnation, Lessee shall be
entitled to an equitable portion of any award and/or to an equitable reduction in the fixed
rents due.
23. Compliance with Laws. Lessee agrees not to violate any law, ordinance, rule or regulation
of any governmental authority having jurisdiction of the Leased Premises. Lessee, at
Les'ee's sole expense, shall make (or cause to be made) all reasonable alterations to the
Improvements which may be required in the future as a result of alterations or amendments
to any of the foregoing authorities. Lessee may contest the validity of any such law,
ordinance, rule or regulation but shall indemnify and hold Lessor harmless against the
consequences of any violation thereof by Lessee.
24. Notices. Any notice provided for herein shall be given by registered or certified United
States mail, postage prepaid, or reputable overnight service, addressed, if to Lessor, to the
person to whom the rent is payable at the address to which the rent is then mailed, and, if to
Lessee, to it at 1951 S. Saturn Way, Suite 100, Boise, Idaho 83709. The person and the
place to which notices are mailed may be changed by either party by written notice to the
other party. Lessor agrees that a copy of all notices which Lessor gives Lessee hereunder
shall also be given by registered or certified United States mail to such other persons and at
such places as Lessee may designate in writing. Lessee agrees to designate in writing, as
recipients of all notices hereunder, all mortgagees, and/or other holders of a security interest
in Les'ee's leasehold interest or in the Improvements and/or any assignee or sublessee of
Lessee.
25. Insurance. Lessee shall obtain and carry an all-risk (including fire and extended coverage)
insurance policy (naming Lessor as an additional insured) covering the building and other
improvements on the Leased Premises to the extent of no less than 90% of the full insurable
value of the improvements, with companies which are authorized to do business in the State
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of Idaho and are governed by the regulatory authority which establishes maximum rates in
the vicinity. Lessee shall also procure and continue in effect public liability and property
damage insurance with respect to the Leased Premises and its operation. Such public
liability insurance shall cover liability for death or bodily injury in anyone accident, mishap
or casualty in a sum of no less that $500,000, and shall name Lessor as an additional
insured. During the term of the Sublease, Lessee shall be in compliance with its obligations
to maintain insurance under this Section 22 if it causes Sublessee to comply with its
obligations under the Sublease.
26. Brokers. Lessor and Lessee hereby acknowledge and represent no real estate brokers have
been used in this transaction.
27. Non-Men~er. The leasehold interest created by this Lease shall not merge into the fee
interest in the Leased Premises and this Lease shall continue in full force and effect unless
formally terminated, notwithstanding future ownership by a single party or entity of the fee
interest in the Leased Premises and the leasehold interest created by this Lease.
28. Remedies Cumulative. No remedy herein conferred upon or reserved to Lessor or Lessee
shall exclude any other remedy herein or by law provided, but each shall be cumulative and
in addition to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute.
29. Short Form Lease. This Lease shall not be recorded but it is agreed that the parties will
execute and record a short form of this Lease substantially in the form attached hereto as
Exhibit "D".
30. Section Headines. The Section headings of this Lease are inserted only for convenience
and do not affect the terms and provisions hereof.
31. Lease Execution and Chanee. It is understood and agreed that until this Lease is fully
executed and delivered by both Lessor and the authorized party of Lessee there is not and
shall not be an agreement of any kind between the parties hereto. It is further agreed that
once this Lease is fully executed and delivered that it contains the entire agreement between
the parties hereto and that, in executing it, the parties do not rely upon any statement,
promise or representation not herein expressed and this Lease once executed and delivered
shall not be modified, changed or altered in any respect except by a writing executed and
delivered in the same manner as required for this Lease.
32. Warranty Of Authority Each person executing this lease represents and warrants that he
or she is a party hereto or an agent of a party hereto, duly authorized to execute this lease on
behalf of his or her principal, and to bind his or her principal to the performance of the
principal's obligations hereunder.
33. Riehts of Successors. All of the rights and obligations of the parties under this Lease shall
run with the land, and bind and inure to the benefit of their respective successors and
GROUND LEASE - 11
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assIgns.
34. Reasonabilitv. Any provision of this Lease to the effect that a party will not unreasonably
withhold its consent or approval shall be construed to include a provision that such party
will not unreasonably delay its response to the request for such consent or approval.
[End of Text]
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IN WITNESS WHEREOF, the parties have executed this Ground Lease effective as of the
day and year first above written.
LESSOR:
LESSEE:
CITY OF EAGLE,
an Idaho municipal corporation
HAWKINS-SMITH EAGLE HALL LLC,
an Idaho limited liability company
By:
Its:
By: Hawkins-Smith Management, Inc., Manager
By:
Robert L. Phillips, President
ATTEST:
[Seal]
Sharon K. Bergman, City Clerk
GROUND LEASE -]3
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GROUND LEASE -14
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INDEX OF EXHIBITS
Exhibit "A" -- Real Property Description
Exhibit "8" - Sign Easement Location
Exhibit "C" -- Ground Lease (Short Form)
Exhibit "D" - Estoppel
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EXHIBIT "A" (to Ground Lease)
Real Property Description
Lots 6 and 7 in Block 1 of AQUILA VILLAGE SUBDIVISION, according to the plat
thereof, filed in Book 82 of Plats at Page 8908 through 8909,
Records of Ada County, Idaho
GROUND LEASE - IS
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EXHIBIT "B" (to Ground Lease)
Sign Easement Location
[2 pages attached]
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@ SHEET NOTES:
41. BUILDING SIGNAGE PARALLEL TO STATE ST. RE: A1.2-21 ADDENDUM
SITE PLAN A1.1-1
DIlA WING NAMJ:
Detail N....r
CSHeA.. ARCHITECTS/PLANNERS
1- = 30'
s....
Dale
MAY 2.6, 1998
EAGLE LIBRARY
PRonCl NO. 95119
CopyrichU'lttS
EXHIBIT "C" (to Ground Lease)
Ground Lease (Short form)
MEMORANDUM OF GROUND LEASE
THIS MEMORANDUM OF GROUND LEASE ("Memorandum") is made effective as of
, 2005, by and between CITY OF EAGLE, an Idaho municipal corporation ("Lessor"), and
HA WKINS-SMITH EAGLE HALL LLC, an Idaho limited liability company ("Lessee"). Pursuant to
that certain Ground Lease by and between Lessor and Lessee, dated even date herewith (the "Lease"),
Lessor has leased to Lessee that certain real property (the "Property") described as follows:
Lots 6 and 7 in Block 1 of AQUILA VILLAGE SUBDIVISION,
according to the plat thereof, filed in Book 82 of Plats at Page 8908
through 8909, Records of Ada County, Idaho
All the terms, conditions, covenants and agreements in the Ground Lease are incorporated into
this Memorandum with the same force and effect as if they were fully recited herein. The initial term of
the Lease shall commence on or about May _, 2005 and shall terminate on September 30, 2026,
unless sooner terminated as provided in the Lease. Lessee has three (3) ten year options to renew the
Lease.
IN WITNESS WHEREOF, the parties have executed this Memorandum as of the date first set
forth above.
LESSOR:
LESSEE:
CITY OF EAGLE,
an Idaho municipal corporation
HA WKINS-SMITH EAGLE HALL LLC,
an Idaho limited liability company
By:
By: Hawkins-Smith Management, Inc., Manager
Nancy C. Merrill
By:
Robert L. Phillips, President
ATTEST:
[Seal]
Sharon K. Bergmann, City Clerk
GROUND LEASE - 17
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EXHIBIT "D" (to Ground Lease)
Form of Estoppel
Landlord/Tenant:
Premises Address:
Sq. Ft. (Rentable)
Area:
Date of Lease:
Date(s) of Lease Amendments(s):
Commencement Date:
Expiration Date:
Current Monthly Rental:
Operating Expenses:
The undersigned, as Landlord under the Lease of the above-referenced premises ("Premises")
does hereby represent, certify and covenant to ("Buyer")
("Lender"), and its assignees, as follows:
1 Lease. The copy of the Lease, including all addenda and amendments thereto, attached
hereto as Exhibit A is a true and correct copy of the Lease which is in full force and effect and
which has not been further amended, supplemented or changed by letter agreement or otherwise.
2. Completion of Premises / No Disputes. Tenant has accepted possession of all of the
premises, and all conditions to be satisfied by Landlord under the Lease have been satisfied
pursuant to the terms of the Lease, including but not limited to, completion of construction of any
required improvements to the Premises except those listed below:
3. No Defaults / Claims. Neither Tenant nor Landlord is in default under any terms of the
Lease nor has any event occurred which with the passage of time (after notice, if any, required by
the Lease) would become an event of default under the Lease. Landlord has no disputes, claims,
counterclaims, defenses or setoffs against Tenant or liens against the Premises arising from the
Lease. Landlord is not entitled to any concessions, rebate, allowance or free rent for any period
after this certification, not is Landlord obligated to construct or install any additional
improvements in the Premises except those listed below:
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4. No Advance Payments: Security Deposit. No rent or other amount payable under the
Lease has been paid in advance by Tenant except the current month's rent. Landlord has no
obligation to segregate the security deposit (if any) or to pay interest thereon.
5. No Extension, Purchase or Termination Rights. Tenant has no option and no right of
first refusal to purchase the Premises or any interest therein. Tenant has no right to cancel or
terminate the Lease or extend the term of the Lease, except as otherwise
follows:
6. No Sublease / Assignment. Landlord has not entered in any sublease, assignment or
other agreement transferring any of its interest in the Lease or the Premises.
7. No Notice. Landlord has not received notice of any assignment, hypothecation,
mortgage, or pledge of Tenants's interest in the Lease or the rents or other amounts payable
thereunder, nor any violation of any federal, state, county or municipal laws, regulations or orders
related to the use or condition of the Premises or the Premises except those listed below.
8. Hazardous Materials. No Hazardous Material has been used, treated, stored or disposed
of on the Premises by Landlord. Landlord does not have any permits or identification numbers
issued by the United States Environmental Protection Agency or by any state, county or
municipal agencies with respect to its operations on the Premises, except those listed below. For
the purposes hereof, the term "Hazardous Material" shall mean any substance, chemical, waste or
other material which is listed, defined or otherwise identified as "hazardous" or "toxic" under
any federal, state, local or administrative agency ordinance or law or any regulation, order, rule or
requirement adopted thereunder, as well as any petroleum, petroleum product or by-product,
crude oil, natural gas liquids, liquefied natural gas, or synthetic gas usable as fuel, and "source",
"special nuclear" and "by-product" material as defined in the Atomic Energy Act of 1985, 42
U.S.C. 93011 et. Seq.
9. No Modification of Lease. From the date of this Certificate through , non-
modification or amendment to the Lease, forgiveness of payment of rent or other amount due
under the Lease, grant of extension or option, or prepayment of rents more than one month in
advance may be made except with the written consent of Buyer.
10. Reliance: Buyer's Rights. Landlord recognizes and acknowledges it is making these
representations to Buyer with the intent that Buyer or its assignees will rely on tenant's
representations in connection with Buyer's acquisition of the Premises. All rent payments under
the Lease shall continue to be paid to Landlord in accordance with the terms of the Lease until
Tenant is notified otherwise inn writing. As of the effective date of the purchase of the Premises
by Buyer, Tenant will recognize Buyer as landlord under the Lease. Landllord further
acknowledges and agrees that Buyer and its successors and assigns (including any entity holding
a Deed of Trust at any time after the date of this Certificate) shall have the right to rely on the
information contained in this Certificate.
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11. Binding. The provisions hereof shall be binding upon and inure to the benefit of the
successors, assigns, personal representatives and heirs of Tenant and Buyer.
12. Due Execution and Authorization. The undersigned, and the person(s) executing this
Certificate on behalf of the undersigned, are duly authorized to execute this Certificate on behalf
of Landlord and to bind Landlord thereto.
a
By:
Name:
Title:
GROUND LEASE - 20
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