Resolution - 2006 - 09 - Approve Easement Agreement W/Eagle Water Company Inc., For New City Hall Property - 03/14/2006
RESOLUTION NO. 06-09
A RESOLUTION OF THE CITY OF EAGLE, ADA COUNTY, IDAHO, APPROVING AN
EASEMENT AGREEMENT WITH EAGLE WATER COMPANY, INC., FOR THE NEW
CITY HALL PROPERTY, A MANAGEMENT LETTER AND ESTOPPEL CERTIFICATE
FOR THE NEW CITY HALL, AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE SAME; AND PROVIDING AN EFFECT DATE.
WHEREAS, the City is desirous of entering into an easement agreement with Eagle
Water Company, Inc., management letter and Estoppel Certificate for the new City Hall.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
EAGLE, Ada County, Idaho, as follows:
Section 1: The Easement Agreement between the City and Eagle Water Company, Inc.,
attached hereto as Exhibit A and by reference made a part hereof, is hereby approved, and the
Mayor and City Clerk are hereby authorized and directed to execute the same on behalf of the
City.
Section 2: The Management Letter for the new City Hall attached hereto as Exhibit B
and by reference made a part hereof, is hereby approved, and the Mayor and City Clerk are
hereby authorized and directed to execute the same on behalf of the City.
Section 3: The Estoppel Certificate for the new City Hall attached hereto as Exhibit C
and by reference made a part hereof, is hereby approved, and the Mayor and City Clerk are
hereby authorized and directed to execute the same on behalf of the City.
Section 4: This Resolution shall take effect and be in force from and after its passage and
approval.
DATED this./.!Lii.. day of March, 2006.
CITY OF EAGLE
Ada County, Idaho
By~1: ~
N"" y C:M'rj!ll, Ma'(
ATTEST:
/!jll~~ ~ k \2.e~'n.4""/---
....Sharo K. Bergmann, City Cle k
Page 1
Afterrecording, please return to:
Hawkins Companies LLC
8645 W. Franklin Road
Boise, Idaho 83709
Attn. Amanda K. Schaus
EASEMENT AGREEMENT
(EAGLE WATER COMPANY, INC.)
THIS EASEMENT AGREEMENT is made and entered into this ~ day of
m ('~ r ch , 2006 ("Agreement"), by and between the CITY OF EAGLE, an Idaho
muhicipal corporation ("City"), as grantor, and the EAGLE WATER COMPANY, INC.,
an Idaho corporation ("Company"), as grantee. The City and the Company may be
referred to herein as the "parties" or a "party" as the case may be.
RECITALS
A. The City owns certain real property known as Block 1, Lot 6 and Block 1, Lot 7,
Aquila Village Subdivision filed in Book 82 of Plats at Page 8908 through 8909,
Records of Ada County, Idaho, and certain real property adjacent to the west of
such above described property as legally described on Exhibit C (collectively
"Property").
B. The Property contains an underground fire water main line, a hydrant, and related
facilities.
C. The Company desires to maintain, repair and operate the fire water main line,
hydrant, and related facilities located on the Property in the area legally described
on Exhibit A, and as approximately shown on Exhibit B ("Easement Area").
D. The City and the Company desire to create and establish a formal easement for
said fire water main line, hydrant and related facilities, and to set forth the manner
in which they shall be maintained, repaired, operated and used.
AGREEMENT
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. The City, subject to the terms and conditions hereinafter set forth, hereby grants
and conveys unto the Company a non-exclusive easement over, across and under
the Easement Area for the purpose of permitting the Company to maintain, repair,
use and operate the underground water main line, hydrant, and related facilities
("Easement") over the Easement Area.
EASEMENT AGREEMENT - 1
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2. The duration of the Easement shall be perpetual unless the City and the Company
agree in writing to terminate or abandon this Agreement, and such termination is
recorded in the records of Ada County, Idaho.
3. The Easement includes the right of the Company, its agents, employees,
contractors and assigns, to traverse the Easement Area with vehicles and
equipment to repair, replace, operate or use the above-specified underground
sewer line and facilities. The maintenance, repair, and replacement of the water
facilities within the Easement shall be at the Company's sole cost and expense.
The Easement is subject to all easements, road rights of way and encumbrances of
record or appearing on the land. The City shall not erect any buildings within the
Easement Area.
4. Except as otherwise set forth in Section 5 below, the Company shall indemnify,
protect, save and hold the City harmless from any and all liability for personal
injury and property damage resulting from, or in any way connected with, said
underground water facilities conducted or located with said Easement Area,
except liability for personal injuries or property damage caused solely by the
negligence or wrongdoing of the City.
5. The Company shall at all times properly maintain the Easement herein granted,
and prevent the same from becoming dangerous and/or unsightly. The City shall
save and hold the Company harmless from any damage or disturbance to any of
the City's surface improvements that may be caused as the result of the
Company's construction or maintenance of the underground water line and
facilities. Any necessary repairs to such surface improvements shall be the sole
responsibility of the City.
6. The City and the Company acknowledge and agree that the Easement is non-
exclusive, and the City, or its successors or assigns, shall be entitled at all times to
travel over the Easement Area, make full use of the surface of the Easement Area
and conduct any and all activities which it may desire to conduct in the Easement
Area provided that same do not unreasonably interfere with the Company's use of
the Easement for the maintenance, repair, operation or use of the above-specified
underground water facilities.
7. The recitals and exhibits of this Agreement are hereby incorporated herein by
reference. This Agreement shall bind and run with the land, and be binding on
the successors and assigns ofthe City and the Company.
[End of Text; Signature Page to Follow]
EASEMENT AGREEMENT - 2
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EXECUTED EFFECTNE the date first stated above.
GRANTOR:
CITY OF EAGLE,
an Idaho municipal corporation
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.....Sharon . Bergman, City Clerk
GRANTEE:
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ATTEST:
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Name & Title: M ."""'-/17C'" R"'-L'-"~
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Exhibit A - Legal Description of Easement Area
Exhibit B - Location of Easement Area
Exhibit C - Legal Description of Adjacent Property
EASEMENT AGREEMENT - 3
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STATE OF IDAHO )
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COUNTY OF ADA )
On this !::L- day of Mil ruh , 2006, before me, a Notary Public in and
for said State, personally appeared Ml nf"(J C. mlrTI' I , known or identified to me, to
be the m[UWV 'of the City of Eagle, an Idaho municipal
corporation, thatexecuted the said instrument, and acknowledged to me that the City of
Eagle, an Idaho municipal corporation, executed the same.
IN W~~~REOF, I have hereunto set my hand and affixed my official
seal the day an.~. ~AA. ).lhii'~"lifioa" fim' abo~;"". .~.
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STATE OF IDAHO )
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COUNTY OF ADA )
On this .i!:L.day of mtlrr;.h ,2006, before me, a Notary Public in and for
said State, personally appeared Sharon K. Bergmann, known or identified to me, to be the
City Clerk of the City of Eagle, an Idaho municipal corporation, that executed the said
instrument, and acknowledged to me that the City of Eagle, an Idaho municipal
corporation, executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year i~tbis'ooujficate first above
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EASEMENT AGREEMENT - 4
I:\HS Legal\Proj Dir\20806 Eagle City Hall - Construction - EasementslWater Easement (3- J -06) rev.doc
STATE OF IDAHO )
) ss.
COUNTY OF ADA )
On this ftday of JJj. ,e."L , 2006, before me, a Notary Public in and
for said State, personally appeared lfl/'ul j)('~4 Z71 .:fb, known or identified to me, to
be the ?lte-S:rJd of the Eagle Water Company, Inc., an Idaho
corporation, that executed the said instrument, and acknowledged to me that the Eagle
Water Company, Inc., an Idaho corporation, executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
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On this .d!!:... day of 11/~1.-- , 2006, before me, a Notary Public in and for
, said State, personally appearedl\\ofl"/l(;tv) 'V.eJ:'I.s , known or identified to me, to be the
Dft'-~~ofthe Eagle Water Company, Inc., an Idaho corporation, that executed the said
instrument, and acknowledged to me that the Eagle Water Company, Inc., an Idaho
corporation, executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
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Notary blic for
Residing aL ~.z:--;
My commission expires / - {. - / /
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EASEMENT AGREEMENT - 5
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EXHIBIT A
LEGAL DESCRIPTION OF EASEMENT AREA
[1 page attached]
EASEMENT AGREEMENT - 6
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Project No. 05-195
February 23, 2006
Description for
Eagle Water Corporation
A strip ofland located in portions of Lot 6 and Lot 7, Block 1, Aquila Village
Subdivision as recorded in Book 82 of Plats at Page 8908, Ada County Records, and a
portion of the Southwest quarter of Section 9, Township 4 North, Range 1 East, Boise
Meridian, Eagle, Idaho, being more particularly described as follows: Commencing at
the southwesterly most comer of said Lot 6, thence along the South boundary line of said
Lot 6 South 89057'30" East, 97.35 feet to the REAL POINT OF BEGINNING;
Thence leaving said South boundary line North 00002'30" East, 13.94 feet;
Thence North 15056'31" West, 299.07 feet to a point on the West boundary line
of said Lot 7;
Thence continuing North 15056'31" West, 18.79 feet;
Thence North 74003'29" East, 5.38 feet to a point on said West boundary line.
Thence leaving said West boundary line and continuing North 74003' 29" East,
4.62 feet;
Thence South 15056'31" East, 319.26 feet;
Thence South 00002'30" West, 15.34 feet to a point on said South boundary line:
Thence along said South boundary line North 89057'30" West, 10.00 feet to the
Point of Beginning. Containing 3,332 square feet, more or less.
EXHIBIT B
LOCATION OF EASEMENT AREA
[1 page attached]
EASEMENT AGREEMENT - 7
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EAGLE WATER COMPANY
EXHIBIT "B"
NEW EASEMENT
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EXHIBIT C
LEGAL DESCRIPTION OF ADJACENT PROPERTY
[2 pages attached]
EASEMENT AGREEMENT - 8
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10'1.&7 Ceet and a Lonlil chord of U'.]3 reet bellring Nortl, ".47'59" West to an
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in thl ofl~c.. ot tbe Ada Countr alcorder, Boi,e, Id&ho in Book ~ of Plats It
pi". 3304 &nd 330$;
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t~ne. South &4128'SO. EI.t 201.19 fetl al0ft9. thlslid Southerly boundary
of tb. k'IJu "U1A~ $ubcllvi_~oD te, I poillt.1
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Page 2 01. 2
Mayor: Nancy C. Merrill
CITY OF EAGLE
P.O. Box 1520
Eagle. Idaho 83616
939.6813
Council: Stanley J. Bastian
Phil Bandy
Steve Guerber
Scott Nordstrom
March 14, 2006
Pam Reinert
American Equity Investment Life Ins, Company
5000 Westown Parkway, Suite 440
West Des Moines, IA 50265
Re: Eagle City Hall
660 East Civic Lane
Eagle, ID 83616
Dear Pam:
This letter is to inform you that the above referenced property is self-managed by The City of
Eagle, an Idaho Municipal Corporation.
~ncerelY,
1///}Al~ }~
~:r;~. ~~l '
M~or
NCM/skb
cc: City Council
City Attorney
ESTOPPEL CERTIFICATE
To: American Equity Investment Life Insurance Company
P. O. Box 71216
Des Moines, Iowa 50325
Attn: Mortgage Loan Department
Re: Lease dated May 16, 2005
Ladies and Gentlemen:
The undersigned ("Tenant" or "City of Eagle") has executed and entered into that certain
lease agreement, dated May 16, 2005, with Hawkins-Smith Eagle Hall LLC, as landlord
(referenced herein as "Hawkins-Smith" or "Landlord"), as amended by the First Amendment to
Office Lease, dated October 25, 2005 (the "Lease"), which Lease is attached hereto as Exhibit
"A" and made a part hereof for all purposes with respect to the land described in Exhibit "B"
attached hereto and he Building and improvements thereon (the "Premises") located in Eagle,
Ada County, Idaho. Tenant understands that American Equity Investment Life Insurance
Company ("Lender") shall be lending funds (the "Loan") to Landlord, which Loan will be
secured by a deed of trust on the Premises.
1. With respect to the Lease and the above-referenced loan transaction, Tenant
represents and warrants to Lender as follows:
(a) A true and correct copy of the Lease and all amendments thereto is
attached hereto as Exhibit "A." The Lease is in full force and effect and has not changed
except as indicated on Exhibit "A."
(b) The land described on Exhibit "B" is owned by the City of Eagle and
leased to Hawkins-Smith under a Ground Lease, dated May 16,2005.
(c) Tenant will occupy and accept the Premises and the Building no later than
April 1, 2006, which covers approximately 13,005 square feet of rentable area. The
commencement date of the term of the Lease will be April 1, 2006, and the Lease will
expire on September 30, 2006, unless it is sooner terminated as provided for in the Lease.
Tenant has the right to renew the Lease annually for periods of one (1) year each for up to
fifty (50) additional years. Tenant continues to occupy the Premises as of the date hereof.
(d) The Lease represents the entire agreement between Landlord and Tenant
relating to the Premises (other than the Ground Lease), and specifically, Tenant is not
permitted any rent holiday, rental concession, rebate of rent, or other offset or credit
against rents except as provided for in the Lease.
(e) Landlord has complied with all of its construction and other obligations
under the Lease to this date, and Tenant is fully obligated to pay rent and other charges
due thereunder as of April 1, 2006, and is fully obligated to perform, and will perform,
all of the other obligations of Tenant under the Lease without right of counterclaim,
offset, or defense.
(f) Tenant's current annual base rent is $240,592.50 per year, payable in equal
monthly installments of $20,049.38. Tenant will make all rent payments and other
charges due under the Lease commencing on April 1,2006. To Tenant's knowledge (i)
neither Landlord nor Tenant is in default in any respect under the Lease, and (ii) no
condition exists, which with the passage of time or the giving of notice, or both, would
constitute a default under the Lease.
(g) Tenant has paid in full for all labor and materials and other services in
connection with Tenant's construction work and Tenant's other work on the Premises, so
that no lien by reason thereof may attach against the Premises.
(h) Hawkins-Smith is not in default under the Ground Lease. If and when the
City of Eagle notifies Hawkins-Smith of a default or claimed default by Hawkins-Smith
under the Ground Lease, the City of Eagle shall send a copy of the written notice or a
written explanation of any oral notice (the "Notice") concurrently therewith to Lender.
Lender shall be permitted to remedy any such default or claimed default specified in the
Notice within an equal period of time, commencing on the date Lender receives or is
deemed to have received such notice, that Hawkins-Smith would be permitted to remedy
same pursuant to the Ground Lease. Notwithstanding the foregoing, Lender shall have a
minimum of thirty (30) days after its receipt of the Notice to remedy the default or
claimed default; provided, however, where such a default cannot be remedied with
reasonable diligence by Lender within thirty (30) days, Lender shall have such additional
time as is reasonably necessary to remedy the default with reasonable diligence and
continuity. Any notice or communication required or permitted hereunder to be given to
Lender shall be effective only if given in writing, signed by the party giving such notice,
and delivered either personally to such other party, or sent by nationally recognized
overnight courier delivery service or by certified mail of the United States Postal Service,
postage prepaid, return receipt requested, addressed to Lender as follows (or to such other
address or person as Lender may by written notice to the City of Eagle specifY):
American Equity Investment Life Insurance Company
Mailing address: P. O. Box 71216
Des Moines, IA 50325
Attention: Mortgage Loan Department
Delivery address:
5000 Westown Parkway, Suite 440
West Des Moines, IA 50266
Attention: Mortgage Loan Department
(i) Tenant has not made any prepayment of rent or other charges in advance
except for the monthly payments for the current month or payment of rent for the next
ensuing month. Tenant will not pay rent for more than one month in advance without
Lender's prior written consent.
G) No security or other deposit has been paid by Tenant with respect to the
Lease.
(k) Tenant does not know of any assignment, hypothecation, or pledge of the
Lease or of the rentals thereof other than an assignment referred to in paragraph 2 below.
2. Tenant acknowledges that Landlord will execute an Assignment of Landlord's
interest in the Lease to Lender in connection with the Loan by Lender to Landlord.
3. This instrument shall be binding upon Tenant and shall inure to the benefit of
Lender and its successors and assigns.
4. The person executing this instrument on behalf of Tenant is authorized to do so.
5. Tenant acknowledges and agrees that Lender may rely and is relying on this letter
for all purposes, including making the Loan, provided that Lender acknowledges
that Tenant has made this Estoppel based on the best of its knowledge at the time of execution of
this Estoppel, that construction of the Premises and Building is ongoing at the time of Tenant's
execution of this Estoppel, and that Tenant may have punch-list and/or other issues regarding
acceptance of the Premises that may affect the statements made herein.
EXECUTED on
3-//
,2006.
TENANT:
CITY OF EAGLE,
an Idaho municipal corporation
ATTEST:
1Q~k\~
VShaton K. Bergmann, City Cl rk
EXHIBITS:
A - Lease
B - Legal Description
EXHIBIT" A"
Lease
FIRST AMENDMENT TO OFFICE LEASE
THIS FIRST AMENDMENT TO OFFICE LEASE is made the~ day of
rool-e> /0..0- ,2005 ("Amendment"), by and between HAWKINS-SMITH EAGLE
HALL LLC, an Idaho limited liability company ("H-S") and CITY OF EAGLE, an Idaho
municipal corporation ("City"). H-S and the City may be referred to herein as the
"parties" or a "party", as the case may be.
RECITALS
A. H-S, as Landlord, and the City, as Tenant, entered into that certain Office Lease
dated May 16,2005 ("Lease") for certain property and improvements as defined
more specifically therein as "Premises". Any capitalized terms not defined herein
shall have the same meanings as in the Lease.
B. The parties desire to amend the Lease to accommodate the increased square
footage of the Building, to adjust the purchase price due to increased square
footage, to provide a mechanism for adjusting the purchase price in the future.
and to address the budget for landscaping, based on the terms and conditions
stated herein.
AGREEMENT
NOW THEREFORE, for valuable consideration, the parties do hereby agree as
follows:
1. Increased Square Footage of Building. The final square footage of the Building. as
measured by the foundation. is 13,005 square feet. Thus, the Lease is hereby
amended as follows:
In Basic Lease Information, Section 4, "12,762" is hereby deleted and replaced with
"13,005". In Exhibit B, the paragraph titled "Improvements", "12,762" is hereby
deleted and replaced with "13,005".
2. Adiustment to Purchase Price Regarding Square Footage. As described in the Lease,
the City has an option to purchase the Improvements constructed by H-S. The parties
acknowledge that the purchase price for the Improvements is based, in part. on H-S's
cost for constructing the Building and related site improvements, and that the cost has
increased based on additional square footage.
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Thus, Exhibit D of the Lease is hereby deleted and replaced as follows:
"Lease Year
Purchase Price
I
2
$2,505,687
$2,485,687
$2,465,687
$2,445,687
$2,415,687"
.,
.)
4
5 - SO
3. Adiustment to the Purchase Price Regarding Increased or Decreased Costs. The parties
acknowledge that increased costs in additional materials and site improvements (as
caused by the City), also result in increasing H-S's cost to construct the Improvements
over its original budget. The parties agree that any such increase in costs (as caused by
the City) shall increase the purchase price in Exhibit D of the Lease, by the actual
amount of such costs, unless the City agrees to pay for such additional costs out of
pocket. If the City causes a cost savings by reducing the overall project quality or
quantity of materials and/or site improvements, the purchase price in Exhibit D shall be
reduced by the actual amount of such cost savings.
Thus, Exhibit B of the Lease, the paragraph titled "Change Orders" is hereby amended
by adding the following sentences at the end:
"Tenant may elect to pay for any additional costs out of pocket, which payment shall be
prior to the Rent Commencement Date. If Tenant pays additional costs out of pocket.
the Rent shall not be increased for such costs. Additionally. as with the Rent, any cost
increase by the City or cost savings by the City (due to a reduction in the overall project
quality or quantity of materials and/or site improvements) shall adjust the purchase price
of the Improvements contained in Exhibit D upward or downward in the actual amount
of such cost excess or savings."
4. Landscaping. Exhibit B of the Lease is hereby amended by adding the following
paragraph at the end:
"Landscaping. The original amount budgeted for landscaping, based on the City's
RFP, was $70,000. The parties acknowledge that the landscape scope has increased
from the RFP. The City agrees to pay to Landlord, out-of pocket, for any and all
additional "landscape costs" over $87,000, prior to the Rent Commencement Date.
As used herein, "landscape costs" shall be all costs for landscape items, including but
not limited to, the following: sod, trees, plants, irrigation system, top soil, fine
grading, mulch, soil additives, decorative mounds, the design, installation and "as
built" verification of the irrigation system, the fabric and rock in the north swale area.
brick pavers in the entrance island, and bollards."
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5. Full Force and Effect. Except as modified herein, all terms and conditions of the
Lease shall remain in full force and effect. In the event of any conflict between the
Lease and this Amendment, this Amendment shall control.
[End of Text; Signatures to Follow]
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IN WIlNESS 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 "/~ Manager
By: ~2~
Robert L. Phillips, President
/o/;?r/<SJ
,
Date:
TENANT:
City of Eagle,
an Idaho municipality
By:
Its:
ATTEST:
[seal]
Date:
5.-v?
]) 1l G-+-<L- ~ t ~P~4TV>-'"
Shar0I1'K. Bergmann, City lerk
Date: /tJ-;Z~-o?
FIRST AMENDMENT TO OFFICE LEASE Page 4
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OFFICE LEASE
BASIC LEASE INFORMATION
1. Effective Date: Mp}..l~_cU()(' , which is the date of the last signature on this Lease
~ 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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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
For 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 ofthis 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 (I) 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 ofthe initial Fiscal YearILease
YearILease 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 Year 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 way 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. S 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. AL TERA TIONS.
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) Ifthe 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 such 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 Ten ant.
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 ofIdaho 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 (f) 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
(I) 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
OFFICE LEASE
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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.
OFFICE LEASE
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h. Applicable Laws. This Lease shall be governed by and construed pursuant to the
laws of the State ofIdaho.
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
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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 corporati n, its Manager
Date:
(J1t9y /~ 206~
( )
TENANT:
City of Eagle,
~y~
Its: ~
ATTEST: [seal]
OFFICE LEASE Page 2\
L:\Project Directory\20802 Eagle City Hall- Leases with City of EaglelLease - 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
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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
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buildable lot, across the existing 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
communicationlA 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
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OFFICE LEASE
L:\Project Directory\20802
EXHIBIT B-1
EXTERIOR ELEVATIONS
[1 page attached]
Page 26
Eagle City Hall - Leases with City ofEaglelLease - Office - Final.doc
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Eagle City Hall Interior Finish Schedule
Room Number
Flooring
Base
Walls
Ceiling
Cabinetry
100 Tile 1 Tile 1 Tile 1/Paint Gve -
101 Tile 1 LE1 Paint Illusion -
102 VCT Resilient Paint Illusion -
103 Caroet 1 Camet 1 Paint- note 2 Illusion Note 3
104 VCT Resilient Paint Radar -
105 VCT Resilient Paint Radar -
106 Caroet 1 Carnet 1 Paint Illusion -
107 Caroet 1 Caroet 1 Paint Illusion -
108 Tile 2 Tile 2 Tile 2&3/Paint Gvo 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 Camet 1 Paint Illusion -
112 Caroet 1 Caroet 1 Paint Illusion -
113 VCT Resilient Paint Illusion -
114 Caroet 1 Carnet 1 Paint Illusion -
115 Caroet 1 Caroet 1 Paint Illusion -
116 VCT Resilient Paint Radar -
117 VCT Resilient Paint Illusion Note 6
118 Caroet 1 Caroet 1 Paint Illusion -
119 Caroet 1 Caroet 1 Paint Illusion -
120 Caroet1 Camet 1 Paint Illusion Note 7
121 Carpet 1 Camet 1 Paint Illusion -
122 Carpet 1 Camet 1 Paint Illusion -
123 VCT Resilient Paint Radar Note 8
124 Caroet 1 Caroet 1 Paint Illusion -
125 Carnet 1 Caroet 1 Paint Illusion -
126 VCT Resilient Paint Radar Note 9
127 Carpet 1 Camet 1 Paint Illusion Note 10
128 Caroet 1 Caroet 1 Paint Illusion -
129 Caroet 1 Caroet 1 Paint Illusion -
130 Carpet 2 Camet 2 Wainscot/WC Soec Note 11
131 VCT Resilient Paint Radar -
132 Caroet 1 Caroet 1 Paint Illusion -
133 Tile 2 Tile 2 Tile 2&4/Paint Gve -
134 VCT Resilient FRP/Paint GYP -
135 Tile 2 Tile 2 Tile 2&3/Paint Gvo -
136 VCT Resilient Paint Illusion Note 12
137 Caroet 1 Caroet 1 Paint Illusion -
138 Carpet 1 Camet 1 Paint Illusion -
139 Caroet 2 Carpet 2 WC Seec
Note 1
Note 13
Note 1
Note 1
Note 13
Note 1
Note 1
EXtllSIT 8-.1 70
oFft("E t.EASE"
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- Council/Clerk 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 file
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 file
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 field- American Olean Satin Glo, 2"x2", Almond 012
Tile 3- Women's Toilet Room Accent- American Olean Satin Glo, 2"x2", Plum 033
Tile 4- Men's Toilet Room Accent- American Olean Satin Glo, 2"x2", Satin Olive 030
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
,
l
Eagle City Hall Exterior Finish Schedule
Finish
Manufactured stone
Brick
Stucco
Para et ca
Precast
Brick
Storefront
Exterior Soffits
Exterior Concrete
Exterior Finish Notes
Note 14
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
~ISlr 6-.3 To
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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 Riehts. 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. S 3011 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
EXHIBIT "B"
Le2al DescriDtion
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.