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EXHIBIT 10.21

 

LEASE

 

 

Portland, Oregon

 

 

March 1, 1996

 

 

Parties

 

The parties to this lease are U.S. National Bank of Oregon, as Trustee, hereinafter referred to as “Landlord,” and Shared Communications Services, Inc. hereinafter referred to as “Tenant”.

 

Premises

 

The property subject to this lease, hereinafter referred to as the “Premises”, is described as follows:

 

The lease premises consist of approximately a 9,760 square foot 1 story commercial building, consisting of approximately 5,020 square feet warehouse space, and approximately 4,740 square feet of office space, and is situated upon approximately 20,000 square feet of land and is more commonly known as 810 S.E. Belmont Portland, Oregon.  The property can further be identified by Multnomah County tax account no. R64450-5900.  Also referred to attached legal description.

 

Term:  Rent, Deposit

 

The original term of this lease shall commence on March 1, 1996 and continue through the expiration date of February 28, 2001, at a monthly base rental rate as follows:

 

Base Rent :  The base rent shall be $4,500.00 per month, commencing March 1, 1996 and continue through February 28, 1999.  Effective March 1, 1999 the base rent shall escalate in accordance with any increase in the CPI Index, not to exceed 5% annually, based upon the Consumer Price Index, Pacific Cities and U.S. City Average, All Item Indexes, U.S. City Average, All Urban Consumers.  Said escalation shall cover the period March 1, 1996 through February 28, 1999, and each three year period during any options granted under this lease.

 

Should said index no longer be published, discontinued, or unavailable Landlord shall have the right to substitute a reasonably comparable index in which to base said escalation.

 

Should the above index be published at a date other than March 1, 1999 Landlord shall have the right to substitute another reasonably comparable published month in which to base said escalation.

 

Not withstanding the above, in no event shall the base rental rate be less than $4,500.00 per month during the original term of the lease, or any option term that may be exercised herein.

 

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This lease is subject to the additional terms and conditions as follows, to which the parties agree:

 

Section 1. Occupancy

 

1.1           Payment of Rent The monthly base rental rate herein stated shall be due and payable by the 1st day of each and every month through the above designated term.  Tenant shall pay the specified base rent, and any other charges due under the lease when due in lawful money of the United States at Landlord’s address stated in this lease, or such other address as Landlord shall designate by notice to Tenant.  Any rent which is not paid within 10 days of the date due shall bear a 5% late charge for each $1.00 and shall be paid to Landlord within 5 days of notice or billing from Landlord as additional rent.

 

1.2           Condition of Premises Landlord makes no warranty as to the condition of the Premises, or any improvements thereon or the adequacy of the Premises for Tenant’s intended use, and Tenant accepts the Premises “As Is”, except as defined in paragraph 1.2.1, based upon Tenant’s own inspection and not upon any representation by Landlord, or Landlord’s agent, except as may be stated in this lease.

 

1.2.1        Improvements/Repairs by Landlord :  As weather permits, as determined by Landlord, but no later than June 1, 1996, Landlord agrees to paint the exterior of the building, based upon a mutually acceptable color by Landlord and Tenant, repair the exterior dry rot, and re-stripe and seal coat the parking area.  Landlord will expend $25,000.00, plus a reasonable amount thereafter, not to exceed 10% of the initial amount of $25,000.00, on seismic improvements to the warehouse portion of the building in an effort to bring the warehouse portion of the building into compliance with current seismic code, or building department directives.

 

1.3           Security Deposit To secure Tenant’s compliance with all terms of this lease, Tenant shall paid Landlord, at the commencement of said lease, the sum of $4,500.00 as a deposit.  The deposit shall be a debt from Landlord owing to Tenant, refundable within 30 days following the expiration of the lease term, or any option term exercised under the lease, or other termination not caused by Tenant’s default.  Landlord shall have the right to offset against the deposit a) for any sums owing from Tenant to Landlord under the lease which have not been paid when due, b) any damages caused by Tenant’s default, c) the cost of curing any failure by Tenant to comply with any term or provision of said lease, should the Landlord elect to do so, d) and the cost of performing any repair or cleanup that is Tenant’s responsibility under this lease.  Offset against the deposit shall not be an exclusive remedy in any of the above cases, but may be invoked by Landlord, at its option, in addition to any other remedy provided by law or this lease for Tenant’s non-performance.  Landlord shall give notice to Tenant each time an offset is claimed against the deposit unless this lease is terminated, Tenant shall within 10 days following such notice deposit with Landlord a sum equal to the amount of the offset so that the total deposit amount, net of offset, shall remain constant throughout the lease term.  Landlord may deliver the funds deposited herein by Tenant to the purchaser or assignee of Landlord’s interest in the leased premises, in the event that such interest be sold or transferred, and thereupon Landlord shall be discharged from any further liability with respect to such deposit.  If tenant exercises their option(s) under paragraph 15.1 of the lease the Landlord at Landlord’s option may increase the

 

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amount of Tenant’s security deposit to an amount equal to one months rent, which shall be equal to the last months rent due and payable under the option period.

 

Section 2. Use of the Premises

 

2.1           Permitted Use   Tenant shall use and permit the Premises to be used for the following purposes only:  To provide telecommunications services and necessary activities associated with Tenants primary business.

 

Tenant shall operate the above business every business day during the hours and in the manner customary for such businesses, except during the time and to the extent such use is prevented by fire, flood, labor disputes, government edict or any other cause beyond Tenant’s control.

 

2.2           Restrictions on Use  In connection with its use of the Premises, Tenant shall:

 

a)              Refrain from conducting any activity or creating any condition on the Premises in violation of any federal, state or municipal laws or orders, which shall include any violation of any applicable environmental laws, regulations, or ordinances;

 

b)             Refrain from selling alcoholic beverages on the Premises unless expressly permitted by this lease;

 

c)              Refrain from any activity or the maintenance of any condition that would in any way tend to create a nuisance, damage the reputation of the Premises, or be reasonably offensive to Landlord, or other tenants of the building in which the Premises may be located.

 

d)             Refrain from any use of the Premises that would cause the fire insurance rate on the Premises or the Building to be increased or that will prevent Landlord from taking advantage of any future ruling of the Oregon Insurance Rating Bureau or its successor that would permit reduced premium rates for long-term fire insurance policies on the Premises.  If Tenant shall fail to comply with this restriction upon reasonable notice from Landlord, Tenant shall pay any resulting extra cost of fire insurance upon receipt of billings from Landlord.

 

e)              Refrain from any activity or installation that will, in the opinion of a qualified engineer or architect selected by Landlord, overload the floors or create undue stress upon any part of the Premises:

 

f)              Refrain from the use of any electrical equipment that will, in the opinion of a qualified electrician selected by Landlord, overload the electrical circuits from which Tenant obtains current or interfere with the reasonable use of such circuits by Landlord or other tenants of Landlord using the same circuits.  Any changes to the wiring necessary to prevent Tenant’s use from overloading the circuits shall be paid for by Tenant.

 

Signs and Attachments   Tenant at Tenants expense shall be responsible for obtaining all necessary permits, and installing Tenant’s signage.  Tenant shall not, without Landlord’s prior written consent, which shall not be unreasonably withheld, place any permanent sign, advertisement, notice, marquee, awning, decoration, aerial or attachment in, on or to the roof, canopy, windows, doors or exterior walls of the Premises or the Building.  Any such sign or attachment placed upon the Premises by Tenant with or without Landlord’s consent shall be removed at Tenant’s expense upon termination of this lease, and all damage caused by installation or removal shall be repaired at Tenant’s expense.  However, Tenant shall be able to

 

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place any temporary sign, advertisement, notice, marquee, awning, decoration, aerial or attachment on the premises without further consent of the Landlord.

 

2.3           Removal of Snow, Ice and Debris :  Tenant shall keep the sidewalks abutting the Premises and all pedestrian areas leading to and away from any entrances, include the parking area and driveways free and clear of snow, ice, debris and obstructions of every kind.  If the Premises consist of an entire building, Tenant shall keep the roof and drains leading from the roof free and clear of snow, ice, leaves, garbage, debris, or other obstruction which might overload or endanger the roof or adjoining Premises, sidewalks or streets.  In performing such work, Tenant shall take all necessary precautions to avoid damage to the roof, gutters, downspouts, and drains.

 

2.4           Alterations  Unless herein stated or agreed upon during the term of the lease, Tenant shall not make any alterations, additions or improvements to the Premises, without Landlord’s prior written consent, which shall not be unreasonably withheld.  Any such additions, alterations or improvements, except for unattached movable trade fixtures, shall at once become part of the realty and belong to Landlord and shall not be removed later by Tenant unless the terms of the applicable consent provide otherwise.

 

Section 3. Maintenance and Repair

 

3.1           Tenant’s Obligation to Maintain and Repair  Tenant shall at all times maintain the entire Premises in a neat condition, free of trash and debris and in good order and repair.  Except for those conditions stated in paragraph 1.2.1 and 3.2, Tenant’s responsibilities for maintenance and repair shall include the entire premises, without limitation, the following:

 

a)              Performance of all necessary maintenance and repair upon the electrical fixtures, interior lighting, interior and exterior lighting fixtures, switches and wiring from the service panel, all doors, windows and related hardware, window coverings, alarm system, concealed and exposed plumbing, indoor ceilings, walls, floors and floor coverings, heating and air conditioning units, and all exterior walls improvements to include the parking lot, exterior shell, and fencing.

 

b)             With respect to Tenant’s responsibility in performing all routine maintenance and repairs on all heating and air conditioning units Tenant shall maintain a servicing agreement which requires each and every heating and air conditioning unit being used in connection with the premises to be serviced at least semi-annually.

 

c)              Not permitting or suffering any waste upon the Premises.

 

d)             No rent abatement shall occur during periods when repairs or replacements are being performed.

 

e)              Tenant shall be required to comply with current ADA laws relating to the Premises and Tenant’s business activities which shall include all future requirements whether these requirements are associated with the interior space, access to and from the site, access to and from the building, or require modification to the existing structure.

 

f)              All required repairs and ADA compliance shall be completed whether the condition requiring such repair existed at the execution of this lease or occurs after occupancy.

 

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3.2           Landlord’s Obligations to Repair :  Landlord shall maintain and keep in good order and repair the roof and existing structural components to the improvements, and shall be responsible for major component replacement, including the HVAC if Tenant has complied with paragraph 3.1.  Landlord shall not be responsible for painting any portion of the interior or exterior of the Premises, except as stated in paragraph 1.2.

 

Except for repairs or replacements herein required to be made by Tenant, in the event that any repair or replacement requested to the Landlord has a reasonable estimated cost in excess of $3,500, and the remaining lease term, or option period thereof is less than 6 months, Landlord may elect not to make such repair or replacement.  Such election shal


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