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HomeMy WebLinkAboutBethlehem Inn Lease Agrmt+�JrESC I. ❑ Deschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org AGENDA REQUEST & STAFF REPORT For Board Business Meeting of February 9, 2010 Please see directions for completing this document on the next page. DATE: February 2, 2011 FROM: Erik Kropp Admin. Services 388-6584 TITLE OF AGENDA ITEM: Consideration of Board Signature of Document 2011-004, A Lease with the Bethlehem Inn. PUBLIC HEARING ON THIS DATE? No. BACKGROUND AND POLICY IMPLICATIONS: The Bethlehem Inn operates an emergency homeless shelter at the County owned property located at 3705 N. Highway 97 in Bend. When the Bethlehem Inn first occupied the property, the plan was for the Bethlehem Inn to purchase the property and the parties did not enter into a lease. The Bethlehem Inn indicated to the County that they would not purchase the property for the price the County paid and the BOCC directed staff to draft a two-year lease. The draft lease, document 2011-004, covers the period of July 1, 2010 - June 30, 2012. The monthly lease amount is $2,034 and represents the interest payment accumulating in the account. Under the lease conditions, the Bethlehem Inn will continue to be responsible for the general maintenance of the property and the County will be responsible for the building structure, foundation, roof, and electrical issues deemed to be an imminent hazard. The Bethlehem Inn Board has approved the draft lease. FISCAL IMPLICATIONS: The lease will provide $2,034 in revenue, but will be offset by the interest payments in the Bethlehem Inn Fund 128. RECOMMENDATION & ACTION REQUESTED: Move approval of Board Signature on Document 2011-004, A Lease with the Bethlehem Inn. ATTENDANCE: Erik Kropp, Deputy County Administrator DISTRIBUTION OF DOCUMENTS: Erik Kropp LEASE BETWEEN DESCHUTES COUNTY AND THE BETHLEHEM INN 1. Basic Provisions ("Basic Provisions"). 1.1 Parties: This Lease ("Lease"), dated as of the date last indicated on the signature page, is made by and between Deschutes County, Oregon ("Lessor") and Bethlehem Inn, an Oregon domestic non-profit corporation ("Lessee"), collectively the "Parties," or individually a "Party"). 1.2 Premises: That certain real property, located at 3705 N Hwy 97, Bend, Oregon, consisting of three buildings totaling approximately 10,160 square feet, including a parking lot that will accommodate vehicles and all associated improvements therein or to be provided by Lessor under the terms of the Lease (the "Premises"), to be operated by Lessee as a shelter for homeless individuals and families (the "Permitted Use"). 1.3 Term: Two (2) years, commencing on July 1, 2010 (the "Commencement Date"), and ending June 30, 2012, provided Lessee is not in default beyond any applicable notice and cure periods. 1.4 Possession: Lessee is currently in possession of the Premises. 1.5 Base Rent: For all or any portion of a month the rent is $2,034, payable in advance on the 5th day of each month commencing on the Commencement Date. This amount includes the cost ($34 per month) of the County providing property insurance on the Premises, as described in Section 7.3. 2. Premises. 2.1 Lease of Premises. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the terms, at the rental, and upon all of the terms, covenants and conditions set forth in this Lease. Unless otherwise provided herein, any statement of size set forth in this Lease is an approximation which the Parties agree is reasonable and the rental based thereon is not subject to revision whether or not the actual size is more or less. 2.2 Condition. Except with respect to Section 5.6 of this Lease, Lessor makes no warranties, implied or otherwise, and Lessee accepts Premises in its "as is" condition. Bethlehem Inn — Lease Agreement - Document 2011-004 1 E °00 3. Term. 3.1 Possession. Lessee shall be entitled to possession of the Premises as of the Commencement date of this Lease. 3.2 Lessee Insurance Compliance. Lessee shall provide evidence of insurance as required by Section 7.5. 4. Rent. 4.1 Rent Defined. All monetary obligations of Lessee to Lessor under the terms of the Lease are deemed to be rent ("Rent"). 4.2 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States on or before the day on which it is due. Payment of Rent shall be made to Lessor at Property & Facilities Department, 14 NW Kearney Avenue, Bend, OR 97701; or to such other persons or place as Lessor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent or any other remedy at law or equity, regardless of Lessor's endorsement of any check so stating. Contemporaneously with Tenant's execution of this Lease, Tenant shall pay Landlord base rent for the months of July — February 2011, in the amount of Sixteen Thousand Two Hundred and Seventy Two Dollars ($16,272.00). 5. Use. 5.1 Use. Lessee shall use and occupy the Premises only for the Permitted Use, or any other legal use which is reasonably comparable or related thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance. 5.2 Hazardous Substances. (a) Reportable Uses Require Consent. The term "Hazardous Substance" as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release is regulated by applicable environmental law. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof. Lessee shall not engage in or allow any subtenant to engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all applicable law or regulation. "Reportable Use" shall mean (i) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit form, or with respect to which a report, notice, registration or business plan is required to be filed with, any government authority, and/or (ii) the presence at the Premises of a Hazardous Substance with respect to which any applicable law or regulation requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Permitted Use, so long as such use is in compliance with all applicable law or Bethlehem Inn — Lease Agreement - Document 2011-004 2 regulation, and is not a Reportable Use. (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, Lessee shall immediately give written notice of such fact to Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance. (c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee. (d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees, and lenders, if any, harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys' and consultants' fees (collectively, "Claims") arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, its agents or employees (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties). Lessee's obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease for a period of two years. (e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its employees, agents and lenders, harmless from and against any and all Claims and environmental damages, including the cost of remediation, which existed as a result of Hazardous Substances on the Premises prior the Commencement Date, or which are caused by the Lessor, its agents or employees. Lessor's obligations, as and when required by the applicable law or regulation, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessor from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessee in writing at the time of such agreement. Investigations and Remediations. Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to the Commencement Date, unless such remediation measure is required as a result of Lessee's use (including "Alterations," as defined in Section 6.3(a) below but in all events excluding the discovery or disturbance of pre-existing Hazardous Substances) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities Bethlehem Inn — Lease Agreement - Document 2011-004 3 at the request of Lessor, including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable times in order to carry out Lessor's investigative and remedial responsibilities. Notwithstanding the foregoing, and unless a spill or release requiring remediation is attributed to activities of Lessee or Lessee's invitees, if the estimated cost of required remediation exceeds $1,000, the party responsible for the remediation shall have the option to terminate this lease upon written notice to the other party given within 15 days after notice that remediation is required, and the terminating party shall have no further obligation under this lease with respect to the non terminating party. 5.3 Lessee's Compliance with Applicable Law. Except as otherwise provided in this Lease, Lessee shall, at Lessee's sole expense, fully, diligently and in a timely manner, materially comply with all laws and regulations applicable to its use and operations. 5.4 Inspection; Compliance. Lessor shall have the right to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times upon prior notice and in a manner that will not unreasonably disturb the residents, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor. 5.5 Condition. This Lease and Lessee's use of the Premises is subject to the condition that Lessee obtain all necessary land use permits and other governmental licenses or authorizations and satisfy any conditions imposed by such governmental licenses or authorizations for Lessee's use of and operations on the Premises. 5.1 Asbestos. Lessor and Lessee acknowledge and agree that the Premises contain asbestos, the presence of which predates Lessee's possession of the Premises, as more particularly described in The Environmental Site Screening and Asbestos Survey Report project #10019(1) on May 10, 2010 prepared by The Wallace Group. If asbestos remediation is required as a result of Lessee causing asbestos disturbance through building alterations, remodeling, or other action, Lessee shall be responsible for asbestos remediation. Lessor shall be responsible for asbestos remediation if such disturbance is required to repair or maintain the building structure or building systems listed in section 6.2 (Lessor's Obligations) or under conditions described in Section 8 (Damage or Destruction), and the Lessor is notified of the necessary repairs before the asbestos disturbance and has the opportunity to perform the repair and asbestos remediation. Notwithstanding the foregoing, and unless an asbestos disturbance is attributed to the activities of Lessee or Lessee's invitees, if the estimated cost of required asbestos remediation exceeds $1,000, the party responsible for the remediation shall have the option to terminate this lease upon written notice to the other party given within 15 days after notice that asbestos remediation is required, and the terminating party shall have no further obligation under this lease with respect to the non terminating party. 6. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations. 6.1 Lessee's Obligations. Subject to the provisions of Section 2.2 (Condition), 5.3 (Lessee's Compliance with Applicable Law), 6.2 (Lessor's Obligations), 8 (Damage or Destruction), and 13 (Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises, utility supporting and drainage systems, utility installations, installations and alterations in good order, condition and repair, including, but not limited to, all equipment or facilities, such as Bethlehem Inn — Lease Agreement - Document 2011-004 4 plumbing, electrical (except the "imminent hazard" electrical items referenced in section 6.2), lighting facilities, fixtures, non-structural walls (interior and exterior), ceilings, finished floor surfaces, interior finished wall surfaces, doors, plate glass, skylights, landscaping, driveways, parking lots, fences, signs, sidewalks and parkways located in, on, or adjacent to the Premises. Lessee's obligations shall include restorations, replacements or renewals of the aforementioned components when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair. Lessor may at Lessor's cost create a photographic record of the property at the Commencement Date for purposes of comparing it with the move - out condition. 6.2 Lessor's Obligations. Subject to the provisions of Sections 2.2 (Condition), 6.1 (Lessee's Obligations), 8 (Damage or Destruction) and 13 (Condemnation), it is intended by the Parties hereto that Lessor shall have the obligation to repair and maintain the building structure, foundation, sub -floor, exterior walls and internal structural components of interior bearing walls and the roof and roof supporting and drainage systems associated with the Premises. Lessor agrees to pay the cost of correcting electrical items deemed an "imminent hazard" by the October 12 and 13, 2010 Deschutes County electrical inspection. Lessor agrees to pay for these items only if Deschutes County public contracting code requirements are followed. 6.3 Utility Installations; Trade Fixtures; Alterations. (a) Definitions; Consent Required. The term "Utility Installations" refers to all floor and window coverings, air lines, power panels, electrical distribution, security and fire protection systems, communication systems, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term "Trade Fixtures" shall mean Lessee's machinery and equipment, including the washer and dryer and tent, that can be removed without doing material damage to the Premises. The term "Alterations" shall mean any modification of the improvements, other than Utility Instillations or Trade Fixtures, whether by addition or deletion. "Lessee Owned Alterations and/or Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Section 6.4(a). Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent. Lessee may, however, make non-structural Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they are not visible from the outside and do not involve relocating or removing the roof or any existing walls. (b) Consent. Any Alterations or Utility Installations that Lessee desires to make shall be subject to Lessor's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Consent may be conditioned upon Lessee's (i) preparation of detailed plans and specifications, (ii) acquiring all applicable governmental permits, (iii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, (iv) compliance with all conditions of said permits and other applicable law in a prompt and expeditious manner, (v) demonstration to Lessor's satisfaction that Lessee has adequate funding for such alterations and utility installations and (vi) Lessee shall not permit any lien to attach to the Premises on account of the work. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as -built plans Bethlehem Inn — Lease Agreement - Document 2011-004 5 and specifications. Lessee shall make no improvements or modifications to the undeveloped portion of the property. 6.4 Ownership; Removal; Surrender; and Restoration. (a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per Section 6.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall, at the expiration of termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises. (b) Removal. By delivery to Lessee of written notice from Lessor not earlier than ninety (90) and not later than thirty (30) days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations and/or Utility Installations be removed by the expiration or termination of this Lease, provided that such notice to remove shall not apply to Lessee's Alterations for which Lessor has given consent unless such consent specifically states that removal is required upon expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent. (c) Surrender/Restoration. Subject to Lessor's obligation under this Lease, Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operation, order, condition and state of repair, ordinary wear and tear and repairs not required to be performed pursuant to Section 8 excepted. "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by generally accepted industry maintenance practices. Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee Owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee, and the removal, replacement, or remediation of any soil, material or groundwater contaminated by Lessee. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. The failure by Lessee to timely vacate the Premises pursuant to this Section 6.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Section 26 below. 7. Insurance; Indemnity. 7.1 Payment for Insurance. Lessee shall pay for all insurance required of Lessee under this Section 7. 7.2 Liability Insurance. (a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability Policy of Insurance and Property Damage insurance protecting Lessee and Lessor against claims for bodily injury, and personal injury based upon or arising out of the, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount Bethlehem Inn — Lease Agreement - Document 2011-004 6 not less than $1,000,000 per occurrence with an "Additional Insured -Managers or Lessors of Premises Endorsement" and contain the "Amendment of the Pollution Exclusion Endorsement" for damage caused by heat, smoke or fumes from a hostile fire. The Policy shall not contain any intra -insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee's indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. All insurance carried by Lessee shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only. (b) Carried by Lessor. Lessor shall maintain any liability insurance Lessor deems necessary or desirable above or in addition to the coverage described in Section 7.2(a). Lessee shall not be named as an additional insured therein. 7.3 Property Insurance — Building, Improvements. The Lessor shall obtain and keep in force a policy or policies insuring loss or damage to the building and improvements on the Premises. The Lessee shall reimburse the Lessor for the cost of property insurance through the monthly lease payments. Such reimbursement has been included in the amount Base Rent amount listed in Section 1.5. The amount of such insurance shall be equal to the full replacement cost of the building and improvements, as the same shall exist from time to time, but in no event more than the commercially reasonable and available insurable value thereof. If the coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake), including without limitation coverage for debris removal and the enforcement of any applicable law requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, an inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city of Portland, Oregon. 7.4 Lessee's Property/Business Interruption Insurance. (a) Owned Alterations and Utility Installations. Lessee shall be responsible for obtaining its own insurance for Trade Fixtures and Lessee Owned Alterations and Utility Installations. Upon request by Lessor, Lessee shall provide Lessor with written evidence that such insurance is in force. (b) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of Insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease. 7.5 Insurance Policies. Insurance required herein shall be by companies duly licensed or admitted to transact business in Oregon, and maintaining during the policy term a "Best's Insurance Guide" financial strength rating of at least B+ and a financial size category rating of at least V, as set forth in the most current issue of "Best's Insurance Guide". Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the Commencement Date, deliver to Lessor certified copies of policies of Bethlehem Inn — Lease Agreement - Document 2011-004 7 such insurance or certificates evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification except after thirty (30) days prior written notice to Lessor. Lessee shall, at least thirty (30) days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may upon at least 3 days prior written notice to Lessee order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same and recover the cost thereof from the party failing to procure and maintain same. 7.6 Waiver of Subrogation. Anything in this Lease to the contrary notwithstanding, Lessor and Lessee release each other from any claims and demands of whatever nature for damage, loss or injury to the Premises, or to the other's property in, on or about the Premises that are caused by or result from risks or perils insured against under any property insurance policies required by the Lease to be carried by Lessor and/or Lessee, and in force at the time of any such damage, loss or injury. Each of Lessee and Lessor covenants that, to the fullest extent permitted by law and by their respective insurers, no insurer shall hold any right of subrogation against the other. Lessee shall advise its insurers of the foregoing and request such waiver be permitted under any property insurance policy maintained by Lessee pursuant to Section 7.4, above. 7.7 Indemnity. Except to the extent of Lessor's negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor and his agents, and employees from and against any and all claims, loss of rents and/or damages, liens, judgments, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out of, involving, or in connection with, the use and/or occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor, defend Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified under this Section 7.7. 8. Damage or Destruction. 8.1 Definitions. (a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction and represent less than 50% of the value of the building. Lessor shall notify Lessee in writing within thirty (30) days from the date of the damage or destruction as to whether or not the damage is Partial or Total. (b) "Premises Total Destruction" shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 6 months or less from the date of the damage or destruction and represent 50% or more of the value of the building. Lessee shall notify Lessor Bethlehem Inn — Lease Agreement - Document 2011-004 8 in writing within thirty (30) days from the date of the damage or destruction as to whether or not the damage is Partial or Total. (c) "Insured Loss" shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Section 7.3, irrespective of any deductible amounts or coverage limits involved. (d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of applicable law, and without deduction for depreciation. (e) "Hazardous Substance condition" shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined in Section 5.2(a), in, on, or under the Premises which requires repair, remediation, or restoration. 8.2 Partial Damage. If a Premises Partial Damage that is an Insured Loss occurs, then Lessee shall, at Lessee's expense, but subject to the availability of insurance proceeds, repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. 8.3 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate sixty (60) days following such Destruction unless the Parties negotiate an alternative provision in writing. In the event of such termination, the proceeds of the insurance applicable to such Total Destruction shall be payable to Lessor. 8.4 Abatement of Rent; Lessee's Remedies. (a) Abatement. In the event of Total Destruction or a Hazardous Substance condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated . All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein. (b) Remedies. If Lessor shall be obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within fifteen (15) days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor of Lessee's election to terminate this Lease on a date not less than thirty (30) days following the giving of such notice. If Lessee gives such notice and such repair or restoration is not commenced within thirty (30) days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such thirty (30) days, this Lease shall continue in full force and effect. "Commence" shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs. Bethlehem Inn — Lease Agreement - Document 2011-004 9 8.5 Waive Statutes. Lessor and Lessee agree that the terms of this Lease shall govern the effect of any damage to or destruction of the Premises with respect to the termination of this Lease and hereby waive the provisions of any present or future statute to the extent inconsistent herewith. 9. Real Property Taxes 9.1 Definition. As used herein, the term "Real Property Taxes" shall include any form of assessment; real estate, general, special, ordinary or based upon ad valorem taxes imposed upon or levied against any legal or equitable interest of Lessor in the Premises by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Premises are located. 9.2 Payment of Taxes. Lessee shall pay the Real Property Taxes applicable to the Premises during the term of this Lease. All such payments shall be made at least ten (10) days prior to any delinquency date. Lessee shall be entitled to take advantage of any periodic payments of such Real Property Taxes so long as the taxes do not become delinquent. Lessee shall promptly furnish Lessor with satisfactory evidence that such taxes have been paid. If any such taxes shall cover any period of time prior to or after the expiration or termination of this Lease, Lessee's share of such taxes shall be prorated to cover only that portion of the tax bill applicable to the period that this Lease is in effect, and Lessor shall reimburse Lessee for any overpayment. If Lessee shall fail to pay any required Real Property Taxes, Lessor shall have the right to pay the same, and Lessee shall reimburse Lessor therefor upon demand. 9.3 Tax Exempt. Lessee is assumed to be tax exempt as to real property tax liability on leased real property as provided in ORS 307.112 and 307.166. Such status requires Lessee to file for such exemption each year. Lessor agrees to cooperate and aid Lessee in all reasonable respects with such application for exemption. If Lessee fails to timely file for exemption or if Lessee application for exemption is denied, then Lessee shall be responsible for applicable real property taxes on account of Lessee's use or occupancy of the Premises. 9.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause such property to be assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within ten (10) days after receipt of a written statement. 10. Utilities. Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon. If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor, of all charges jointly metered. Bethlehem Inn — Lease Agreement - Document 2011-004 10 11. Assignment and Subletting. 11.1 Lessor's Consent Required. Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or assignment") or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessor's prior written consent, which consent may be withheld, delayed or conditioned in Lessor's sole discretion. 11.2 Terms and Conditions Applicable to Assignment and Subletting. Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of any of Lessor's rights. Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting. 12. Default; Breach; Remedies. 12.1 Default; Breach. A "Default" is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, conditions under this Lease. A "Breach" is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period: (a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of security, or where the coverage of the property insurance described in Section 7.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism. (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of three (3) business days following written notice to Lessee. (c) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, other than those described in subsections 12.1(a) or (b) above, where such Default continues for a period of thirty (30) days after written notice; provided, however, that if the nature of Lessee's Default is such that more than thirty (30) days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion. (d) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a "debtor" as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interestin this Lease, where possession is not restored to Lessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, Bethlehem Inn — Lease Agreement - Document 2011-004 11 where such seizure is not discharged within thirty (30) days; provided, however, in the event that any provision of this subsection (e) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. 12.2 Remedies. In the event of a Default by Lessee, Lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. The costs and expenses of any such performance by Lessor shall be due and payable by Lessee upon receipt of invoice therefor. If any check given to Lessor by Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its option, may require all future payments to be made by Lessee to be by cashier's check. In the event of a Default, after expiration of any applicable notice and cure periods, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach: (a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover Lessor's damages as provided by law. (b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests, shall not constitute a termination of the Lessee's right to possession. (c) Pursue any other remedy now or hereafter available under Oregon laws or judicial decisions. The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises. 12.3 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor due to its financing commitments. A late charge of five percent (5%) of the monthly Lease payment will be assessed if payment has not been received within 15 days of the Lease payment due date. The Parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment and is not a penalty. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for three (3) consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable quarterly in advance. Late charges will not be assessed for the months of July — December 2010 since the lease was not in effect. Bethlehem Inn — Lease Agreement - Document 2011-004 12 12.4 Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within thirty (30) days following the date on which it was due for non-scheduled payment, shall bear interest from the date when due, as to scheduled payments, or the thirty-first (31st) day after it was due as to non-scheduled payments. The interest ("Interest") charged shall be equal to the prime rate reported in the Wall Street Journal as published immediately prior to the date when due plus two percent (2%), but shall not exceed the maximum rate allowed by law. Interest is payable in addition to the potential late charge provided for in Section 12.3. 12.5 Breach by Lessor. (a) Notice of Breach. Lessor shall be deemed in breach of this Lease when Lessor fails within a reasonable time to commence performance and complete performance of an obligation required to be performed by Lessor. For purposes of this Section, except in cases of emergency, a reasonable time shall in no event be less than thirty (30) days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor's obligation is such that more than thirty (30) days are reasonably required for its performance, then Lessor shall not be in breach if performance is commenced within such 30 day period and thereafter diligently pursued to completion. (b) Performance by Lessee on Behalf of Lessor. In the event that Lessor fails to cure said breach within thirty (30) days after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such cure, provided however, that such offset shall not exceed an amount equal to the greater of one month's Base Rent, reserving Lessee's right to seek reimbursement from Lessor. Lessee shall document the cost of said cure and supply said documentation to Lessor. 13. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively "Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession, whichever first occurs. Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation attributed to Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Section. All Alterations and Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor. In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation. 14. Brokerage Fees. Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or Bethlehem Inn — Lease Agreement - Document 2011-004 13 finder in connection with this Lease, and that no one is entitled to any commission or finder's fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto. 15. Estoppel Certificates. (a) Each Party (as "Responding Party") shall within ten (10) days after written notice from the other Party (the "Requesting Party") execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current "Estoppel Certificate" form published by the American Industrial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party. (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such ten day period, the Requesting Party may execute an Estoppel Certificate stating that: (i) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party's performance, and (iii) if Lessor is the Requesting Party, not more than one month's rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate. (c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee shall deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee's financial statements for the past three (3) years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth. 16. Severability. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof. 17. Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Lease shall mean and refer to calendar days. 18. Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease. 19. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. 20. Notices. 20.1 Notice Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person (by hand or by courier) or may Bethlehem Inn — Lease Agreement - Document 2011-004 14 be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission if sent from a machine that automatically provides contemporaneous confirmation of delivery and shall be deemed sufficiently given if served in a manner specified in this Section 21. The addresses noted adjacent to a Party's signature on this Lease shall be that Party's address for delivery or mailing of notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice. A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing. 20.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given 48 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given twenty-four 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 21. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default of the same or of any other term, covenant or condition hereof. Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. The acceptance of Rent by Lessor shall not be a waiver of any Default by Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment. 22. Recording. Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and deliver to the other a short form memorandum of this Lease for recording purposes. The Party requesting recordation shall be responsible for payment of any fees applicable thereto. 23. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over, then the Base Rent shall continue to be charged at the rate at the end of the expiring term. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee. 24. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. Bethlehem Inn — Lease Agreement - Document 2011-004 15 25. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. 26. Binding Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be governed by the laws of the State of Oregon. Any litigation between the Parties hereto concerning this Lease shall be initiated in Deschutes County. 27. Attorneys' Fees. If any Party brings an action or proceeding involving the Premises to enforce the terms hereof or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred. 28. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times after 24 hours notice for the purpose of showing the same to prospective purchasers, lenders, or lessees, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary. All such activities shall be without abatement of rent or liability to Lessee unless such activities operate so as to unreasonably interfere with Lessee's operation of the Premises. Lessor may at any time place on the Premises any ordinary "For Sale" signs and Lessor may, during the last six (6) months of the term hereof, place on the Premises any ordinary "For Lease" signs. Lessee may, with Lessor's express written permission, place on or about the Premises any ordinary "For Sublease" sign. 29. Signs. All signs placed on the Premises must comply with all applicable law. 30. Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor's failure within ten (10) days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor's election to have such event constitute the termination of such interest. 31. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent Bethlehem Inn — Lease Agreement - Document 2011-004 16 be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor's consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons in writing and in reasonable detail within ten (10) business days following such request. 32. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof. 33. Options. 33.1 Definition. "Option" shall mean: (a) the right to extend the term of or renew this Lease or to extend or renew any lease that Lessee has on other property of Lessor; (b) the right to purchase or the right of first refusal to purchase the Premises. 33.2 Options Personal To Original Lessee. Each Option granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting. 34. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties. 35. Reservations. Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions. 36. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay. Bethlehem Inn — Lease Agreement - Document 2011-004 17 37. Authority. If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. Each party shall, within thirty (30) days after request, deliver to the other party satisfactory evidence of such authority 38. Conflict. Any conflict between the printed provisions of this Lease and typewritten or handwritten provisions shall be controlled by the handwritten provisions that are initialed by each Party. 39. Offer. Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto. 40. Amendments. This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. 41. Multiple Parties. If more than one person or entity is named herein as either Lessor or Lessee, such multiple Parties shall have joint and several responsibility to comply with the terms of this Lease. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures. Bethlehem Inn — Lease Agreement - Document 2011-004 18 LESSOR: DATED this day of , 2011 BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON TAMMY BANEY, CHAIR ATTEST: TONY DEBONE, VICE -CHAIR Recording Secretary ALAN UNGER, COMMISSIONER 1300 NW Wall Street, Suite 200 Bend, Oregon 97701 Telephone: Facsimile: LESSEE: DATED this day of , 2011 Bethlehem Inn By: Title: Address: Telephone: Facsimile: Federal ID No. Bethlehem Inn — Lease Agreement - Document 2011-004 19