HomeMy WebLinkAboutDoc 163 - Telecare LeaseD R A F T
(SIGNED ORIGINALS TO BE RECEIVED FROM TELECARE)
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE
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 Telecare Mental Health
Services of Oregon, Inc., an Oregon corporation (“Lessee”), collectively the “Parties,” or
individually a “Party”).
1.2 Premises: That certain real property, located at 20370 Poe Sholes Rd., Bend,
Oregon, as described in the attached Exhibit A which is incorporated herein by this reference,
consisting of an approximately 7500 square foot building to be operated by Lessee as a 24-hour
secure residential treatment facility, including without limitation an approximately 150-square-
foot outdoor storage building, fenced yard, and a parking lot that will accommodate 12 vehicles
and all associated improvements therein or to be provided by Lessor under the terms of the Lease
(“Premises”).
1.3 Term: ten (10) years (“Original Term”) commencing upon issuance by the
appropriate regulatory authority of an occupancy permit (“Commencement Date”) and ending on
the tenth (10th) anniversary of the Commencement Date (“Expiration Date”). Provided Lessee is
not in default beyond any applicable notice and cure periods, Lessee shall have two (2)
consecutive options to extent the Original Term. (See also Paragraph 3)
1.4 Possession: The date on which Lessee takes possession, which shall be not
sooner than the Commencement Date (“Possession Date”). (See also Paragraphs 3.2 and 3.3)
1.5 Base Rent: Monthly rent is listed on Exhibit B (“Base Rent’), attached hereto
and incorporated herein, and shall be payable on the 5th day of each month commencing on the
Possession date. (See also Paragraph 4)
; If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted.
1.6 Permitted Use: The operation of a mental health care treatment facility, and uses
related and/or incidental thereto. (See also Paragraph 5)
1.7 Addenda and Exhibits: Attached hereto is an Addendum relating to dispute
resolution and Exhibits A and B, all of which are incorporated and made a part of this Lease.
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
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conditions set forth in this Lease. Unless otherwise provided herein, any statement of size set
forth in this Lease, or that may have been used in calculating rental, 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 5.2 of this Lease, Lessor makes no
warranties, implied or otherwise, and Lessee accepts premises in its “as is” condition.
3. Term.
3.1 Term. The Commencement Date, Expiration Date and Original Term of the
Lease are as specified in Paragraph 1.3.
3.2 Possession. Lessee shall be entitled to possession of the Premises as of the
Commencement date of this Lease. If Lessee totally or partially occupies the Premises prior to
the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such
early possession. All other terms of the Lease (including, but not limited to, the obligations to
pay Real Property Taxes and insurance premiums and to maintain the Premises) shall, however,
be in effect during such period. Any such early possession shall not affect the Expiration Date.
Notwithstanding the foregoing, and without being deemed to have occupied the Premises for
purposes of the Commencement Date, Landlord authorizes Tenant to enter the Premises to
inspect or otherwise investigate the Premises, provided such inspection and/or investigation does
not interfere with Landlord's construction in any material way.
3.3 Delay in Possession. Lessor agrees to deliver possession of the Premises to
Lessee as of the Commencement Date. If the Lessor does not deliver possession as of the
Commencement Date, such failure shall not be deemed a breach of lease and Lessee shall not,
however, be obligated to pay Rent or perform its other obligations until it receives possession of
the Premises. Lessee’s obligations under this lease shall run from the date it takes possession,
which date shall be no later than 30 days after the Commencement Date. Lessee shall be entitled
to rent abatement until Lessor delivers possession, and if Lessor fails to deliver possession within
30 days after the Commencement Date, Lessee shall have the right, at its option, to terminate the
Lease.
3.4 Lessee Insurance Compliance. Lessor shall not be required to tender possession
of the Premises to Lessee until Lessee complies with its obligation to provide evidence of
insurance (Paragraph 7.5). Pending delivery of such evidence, Lessee shall be required to
perform all of its obligations under this Lease from and after the Commencement Date
notwithstanding Lessor’s election to withhold possession pending receipt of each evidence of
insurance.
3.5 Options to Extend Term. If Lessor has not in writing declared that Lessee is in
default under the terms of this Lease after expiration of all applicable notice and cure periods as
of the Exercise Date (as defined below in this Section 3.5), the Lessee shall have 2 consecutive
options to extend the Original Term of this Lease. Such options shall be on the express terms of
this Section but shall otherwise be on the same terms and conditions of this Lease except for the
establishment of the rent as herein provided. Options shall be for a period of five (5) years each
and shall be exercised by notice in writing given to the Lessor not less than 60 nor more than 180
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days prior to the last day of the expiring term. The day on which the written notice is given to
the Lessor as provided herein shall be the “Exercise Date”. Once exercised or lapsed, an option
shall be extinguished. Failure to exercise any option in the manner and within the period
provided in this Section 3.5 shall extinguish said option and any and all future options. Rent
during the option terms shall be based upon CPI. The Basic Rent shall be escalated by increases
in the CPI, not to exceed 3% for the first year in any one option term. Thereafter, the Basic Rent
shall be increased for the ensuing lease year in the amount of 2.5% above the prior year’s rent.
The term "CPI" as used in this Lease shall mean the Consumer Price Index for All Urban
Consumers, Portland-Salem area, published by the United States Department of Labor, Bureau
of Labor Statistics for the twelve (12) months ending with the September immediately preceding
such calendar year.
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. Rent for any period during
the term hereof which is for less than one (1) full calendar month shall be prorated based upon
the actual number of days of said month. Payment of Rent shall be made to Lessor at its address
stated herein 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.
4.3 Adjustment of Rent. As of the anniversary of the Commencement Date or
Possession Date, whichever is later and each anniversary thereafter throughout the Original Term
or any extended term (each an “Adjustment Date”), the Basic Rent or rent shall be increased for
the ensuing lease year in the amount of 2.5% above the prior year’s rent.
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. For purposes of this Lease Permitted Use shall mean and include:
Secure Residential Treatment Facility (SRTF) licensed by the Oregon Department of Human
Services in accordance with OAR 309-035-0100 through 309-035-0190, as such rule may be
amended by the State. The SRTF consists of mental health services delivered on a 24-hour basis
to individuals eighteen (18) years of age or older with mental or emotional disorders who have
been hospitalized, who are at immediate risk of hospitalization, who need continuing services to
avoid hospitalization, who are a danger to themselves or others or who otherwise require
continuing care to remain in the community. .
5.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term “Hazardous Substance”
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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 no be limited to, hydrocarbons, petroleum, gasoline,
and/or crude oil or any products, by-products or fractions thereof. Lessee shall not 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
installation or use of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires a permit form,
or with respect to when a report, notice, registration or business plan is required to be filed
with, any government authority, and/or (iii) 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 regulation, 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, other than as previously consented to by Lessor, 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. No termination, cancellation or release agreement entered into by Lessor and
Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous
Substances, unless specifically so agreed by Lessor in writing at the time of such agreement.
(e) Lessor Indemnification. Lessor and its successors and assigns shall
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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.
(f) 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
Paragraph 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 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.
(g) Lessee’s Termination Option. If a Hazardous Substance Condition
occurs during the term of this Lease which was an existing condition as of the Commencement
Date or is caused by uses on or previously on adjoining property, unless Lessee is legally
responsible therefore (in which case Lessee shall make the investigation and remediation
thereof required by the applicable law or regulation and this Lease shall continue in full force
and effect, but subject to Lessor’s rights under Paragraph 5.2(c) and Paragraph 12, Lessee may
at Lessee’s option, either (i) notify the Lessor to investigate and remediate such Hazardous
Substance condition, if required, as soon as reasonably possible at Lessor’s expense, in which
event this Lease shall continue in full force and effect, or ii) give written notice to Lessor,
within thirty (30) days after receipt by Lessee of knowledge of the occurrence of such
Hazardous Substance condition, of Lessee’s termination of this Lease as of the date sixty (60)
days following the date of such notice.
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, Lessor’s Lender and consultants 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 for its use of and operations on the Premises. In the event that Lessee does not
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obtain such permits, licenses or authorizations, the Lessee shall have the right to terminate this
Lease upon not less than 30 days prior written notice to Lessor.
6. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations.
6.1 Lessee’s Obligations. Subject to the provisions of Paragraph 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, installations and alterations in good order, condition and
repair, including, but not limited to, all equipment or facilities, such as plumbing, electrical,
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.
Lessor shall perform all necessary maintenance and repairs to the structure, foundation, exterior
walls, internal structural components of interior bearing walls, fire protection system, HVAC
(heating/ventilating/air-conditioning), and the roof and roof supporting and drainage systems.
Lessee’s obligations shall include restorations, replacements or renewals when necessary to keep
the Premises and all improvements thereon or a part thereof in good order, condition and state of
repair.
6.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 8
(Damage or Destruction) and 13 (Condemnation), it is intended by the Parties hereto that Lessor
shall have the obligation to maintain the structure, fire protection system, HVAC, foundation,
sub-floor, exterior walls and internal structural components of interior bearing walls and the roof
and roof supporting and drainage systems. Lessor hereby warrants that, as of the
Commencement Date, Lessor knows of no defects in the electrical or plumbing systems and that
the electrical and plumbing systems are in good working order.
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 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 Alterations" are defined as Alterations and/or Utility Installations
made by Lessee that are not yet owned by Lessor pursuant to Paragraph 6.4(e). 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 shall
desire to make and which require the consent of the Lessor shall be presented in advance to
Lessor in written form with detailed plans. Consent shall be deemed conditioned upon
Lessee's (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies
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of both the permits and the plans and specifications prior to commencement of the work, and
(iii) compliance with all conditions of said permits and other applicable law in a prompt and
expeditious manner. Any Alterations or Utility Installations shall be performed in a
workmanlike manner with good and sufficient materials. Lessee shall promptly upon
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completion furnish Lessor with as-built plans and specifications.
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 Paragraph 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 to 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 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 Paragraph 6.4(c) without the express written
consent of Lessor shall constitute a holdover under the provisions of Paragraph 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 protecting Lessee and Lessor against claims
for bodily injury, personal injury and property damage based upon or arising out of the
ownership, 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
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
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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
Paragraph 7.2(a). Lessee shall not be named as an additional insured therein.
7.3 Property Insurance – Building, Improvements. The Lessee shall obtain and
keep in force a policy or policies insuring loss or damage to the building and improvements on
the Premises, which policy or policies shall name the Lessor as additional insureds. 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 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
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
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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.
7.6 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee
and Lessor each hereby release and relieve the other, and waive their entire right to recover
damages against the other, for loss of or damage to its property to the extent of insurance
coverage for the perils required to be insured against herein. The effect of such releases and
waivers is not limited by the amount of insurance carried, or by any deductibles applicable
hereto. The Parties agree to have their respective property damage insurance carriers waive any
right to subrogation that such companies may have against Lessor or Lessee, as the case may be,
so long as the insurance is not invalidated thereby.
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
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
Paragraph 7.3, irrespective of any deductible amounts or coverage limits involved.
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(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 Paragraph 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, repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect. Notwithstanding the foregoing, if the required
insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the
Lessee shall promptly contribute the shortage as and when required to complete said repairs
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 Damage Near End of Term. If at any time during the last 6 months of this Lease
there is damage for which the cost to repair exceeds one month's Base Rent, whether or not
covered by insurance, Lessor or Lessee may terminate this Lease effective sixty (60) days
following the date of occurrence of such damage by giving a written termination notice to Lessee
within thirty (30) days after the date of occurrence of such damage. Notwithstanding the
foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by, (a) exercising such option and on or before
the earlier of (i) the date which is ten (10) days after Lessee's receipt of Lessor's written notice
purporting to terminate this Lease, or (ii) the day prior to the date upon which such option
expires. If Lessee duly exercises such option during such period and provides Lessor with funds
(or adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at
Lessor's commercially reasonable expense, repair such damage as soon as reasonably possible
and this Lease shall continue in full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during such period, then this Lease shall terminate on the date
specified in the termination notice and Lessee's option shall be extinguished.
8.5 Abatement of Rent; Lessee's Remedies.
(a) Abatement. In the event of Premises Partial Damage or Premises 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 . Rent shall be reduced in proportion to the area of
Premises damaged, destroyed or impaired. 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.
Document 2010-163 11
(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
sixty (60) 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.
8.6 Termination – Advance Payments. Upon termination of this Lease pursuant to
Paragraph 5.2(g), an equitable adjustment shall be made concerning advance Base Rent and any
other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so
much of Lessee's Security Deposit as has not been, or is not then required to be, used by Lessor.
8.7 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 Real Property Taxes
(a) 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.
(b) 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.
9.2 Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes
assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures,
Document 2010-163 12
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.
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 shall not be unreasonably withheld, delayed or conditioned. Notwithstanding this
general prohibition on assignment or subletting, Lessee may, without the consent of Lessor but
with prior notice to Lessor, transfer, assign or sublet the entirety of Lessee’s interest in this Lease
to any entity controlling Lessee, controlled by Lessee, or under common control with Lessee, or
in connection with the sale of all of Lessee’s stock or assets.
11.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) 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 Paragraph 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.
Document 2010-163 13
(c) A Default by Lessee as to the terms, covenants, conditions or provisions
of this Lease, other than those described in subparagraphs 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 interest in 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,
where such seizure is not discharged within thirty (30) days; provided, however, in the event
that any provision of this subparagraph (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. If Lessee fails to perform any of its affirmative duties or obligations,
within ten (10) days after written notice (or in case of an emergency, without notice), 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 and the
10 day written notice required by this paragraph, 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.
Document 2010-163 14
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. An
additional 5% will be assessed for each succeeding 15-day period, or portion thereof, for which
the lease payment is delinquent, beginning on the fifteenth day of that rental period and
continuing and accumulating until that rent payment, not including any late charge, is paid in
full, through that rental period only. 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.
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 Paragraph 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 Paragraph, 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.
Document 2010-163 15
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. If more than ten percent (10%) of the
Building, or more than twenty five percent (25%) of that portion of the Premises not occupied by
any building, is taken by Condemnation, Lessee may, at Lessee's option, to be exercised in
writing within ten (10) days after Lessor shall have given Lessee written notice of such taking (or
in the absence of such notice, within ten (10) days after the condemning authority shall have
taken possession) terminate this Lease as of the date the condemning authority takes such
possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease
shall remain in full force and effect as to the portion of the Premises remaining, except that the
Base Rent or the rent during any extended term shall be reduced in proportion to the reduction in
utility of the Premises caused by such Condemnation. 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 Paragraph. 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.
14.1 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 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
Document 2010-163 16
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. Definition of Lessor. The term "Lessor" as used herein shall mean the owner or owners
at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee's
interest in the prior lease. In the event of a transfer of Lessor's title or interest in the Premises or
this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such transfer or
assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved
of all liability with respect to the obligations and/or covenants under this Lease thereafter to be
performed by the Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease
to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.
Notwithstanding the above, and subject to the provisions of Paragraph 19 below, the original
Lessor under this Lease, and all subsequent holders of the Lessor's interest in this Lease shall
remain liable and responsible with regard to the potential duties and responsibilities of Lessor
pertaining to Hazardous Substances as outlined in Paragraph 5 above.
17. 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.
18. Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in
this Lease shall mean and refer to calendar days.
19. 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.
20. 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. Lessor and Lessee each
represents and warrants to the Brokers that it has made, and is relying solely upon, its own
investigation as to the nature, quality, character and financial responsibility of the other Party to
this Lease and as to the use, nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach hereof by either Party.
The liability (including court costs and attorneys' fees), of any Broker with respect to
negotiation, execution, delivery or performance by either Lessor or Lessee under this Lease or
any amendment or modification hereto shall be limited to an amount up to the fee received by
such Broker pursuant to this Lease; provided, however, that the foregoing limitation on each
Broker's liability shall not be applicable to any gross negligence or willful misconduct of such
Broker.
Document 2010-163 17
21. Notices.
21.1 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
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 Paragraph 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.
21.2 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.
22. 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.
23. 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.
24. 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.
Document 2010-163 18
25. 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.
26. 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.
27. 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 in
which the Premises are located. Any litigation between the Parties hereto concerning this Lease
shall be initiated in the county in which the Premises are located.
28. Attornment; Non-Disturbance.
28.1 Attornment. Subject to the non-disturbance provisions of Paragraph 28.2,
Lessee agrees to attorn to a Lender or any other party who acquires ownership of the Premises by
reason of a foreclosure of a security device, and that in the event of such foreclosure, such new
owner shall not: (i) be liable for any act or omission of any prior Lessor or with respect to events
occurring prior to acquisition of ownership, with the exception of continuing default; (ii) except
for offers expressly set forth in this lease, be subject to any offsets or defenses which Lessee
might have against any prior lessor; or, (iii), be bound by prepayment of more than one (1)
month's rent.
28.2 Non-Disturbance. With respect to security devices entered into by Lessor after
the execution of this Lease, Lessee's subordination of this Lease shall be subject to receiving a
commercially reasonable non-disturbance agreement (a "Non-Disturbance Agreement") from the
Lender which Non-Disturbance Agreement provides that Lessee's possession of the Premises,
and this Lease, including any options to extend the term hereof, will not be disturbed so long as
Lessee is not in Default hereof and attorns to the record owner of the Premises. Further, within
sixty (60) days after the execution of this Lease, Lessor shall use its commercially reasonable
efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing security
device which is secured by the Premises. In the event that Lessor is unable to provide the Non-
Disturbance Agreement within said sixty (60) days, then Lessee may, at Lessee's option, directly
contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance
Agreement.
28.3 Self-Executing. The agreements contained in this Paragraph 28 shall be effective
without the execution of any further documents; provided, however, that, upon written request
from Lessor or a Lender in connection with a sale, financing or refinancing of the Premises,
Lessee and Lessor shall execute such further writings as may be reasonably required to
separately document any subordination, attornment and/or Non-Disturbance Agreement provided
for herein.
29. 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
Document 2010-163 19
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.
30. 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 48 hours written 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 at any time place on or about the Premises
any ordinary "For Sublease" sign.
31. Signs. All signs placed on the Premises must comply with all applicable law.
32. 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.
Without limiting either party's termination rights elsewhere provided under this Lease or at
law, Landlord and Tenant shall each have the right to terminate this Lease at any time during the
Term if funding from State or other sources is not obtained and continued at levels sufficient to
allow Landlord to continue this lease, or if Tenant loses its funding contract with its funding
agency [Department of Human Services] upon which Tenant relies to perform under the Lease.
In the event of termination as a result of a loss of funding, the affected party shall provide written
notice of same to the other, and the Lease shall be terminated effective thirty days after receipt of
such termination notice
33. 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
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
Document 2010-163 20
determination, the determining party shall furnish its reasons in writing and in reasonable detail
within ten (10) business days following such request.
34. 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.
35. Options.
35.1 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 of
first refusal or first offer to lease either the Premises or other property of Lessor; (c) the right to
purchase or the right of first refusal to purchase the Premises or other property of Lessor.
35.2 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.
35.3 Multiple Options. In the event that Lessee has any multiple Options to extend or
renew this Lease, a later Option cannot be exercised unless the prior Options have been validly
exercised.
36. 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.
37. 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.
38. 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.
39. 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
Document 2010-163 21
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
40. 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.
41. 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.
42. Amendments. This Lease may be modified only in writing, signed by the Parties in
interest at the time of the modification.
43. 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.
44. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and/or
Arbitration of disputes between the Parties and/or Brokers arising out of this Lease ; is is not
attached to 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.
LESSOR: DATED this ____ day of ___________________, 2010
BOARD OF COUNTY COMMISSIONERS
OF DESCHUTES COUNTY, OREGON
____________________________________
DENNIS R. LUKE, CHAIR
ATTEST:
____________________________________
ALAN UNGER, VICE CHAIR
____________________________
Recording Secretary
____________________________________
TAMMY BANEY, COMMISSIONER
REVIEWED
______________
LEGAL COUNSEL
Document 2010-163 22
MORE SIGNATURES FOLLOW
LESSEE: DATED this ____ day of ___________________, 2010
Telecare Mental Health Services of Oregon, Inc.
________________________________
By: Marshall D. Langfeld
Title: Chief Financial Officer
Address: 1100 Marina Village Parkway,
Alameda, CA 94501
Telephone: (510) 337-7950_
Facsimile: (510) 337-7969
Federal ID No. 94-1735271
Document 2010-163 23
ARBITRATION AGREEMENT
Standard Lease Addendum
A. ARBITRATION OF DISPUTES:
Except as provided in Paragraph B below, the Parties agree to resolve any and all claims,
disputes or disagreements arising under this Lease, including, but not limited to any matter
relating to Lessor's failure to approve an assignment, sublease or other transfer of Lessee's
interest in the Lease under Paragraph 11 of this Lease, any other defaults by Lessor, or any
defaults by Lessee by and through arbitration as provided below and irrevocably waive any and
all rights to the contrary. The Parties agree to at all times conduct themselves in strict, full,
complete and timely accordance with the terms hereof and that any attempt to circumvent the
terms of this Arbitration Agreement shall be absolutely null and void and of no force or effect
whatsoever.
B. DISPUTES EXCLUDED FROM ARBITRATION:
The following claims, disputes or disagreements under this Lease are expressly excluded from
the arbitration procedures set forth herein: 1. Establishment of Basic Rent. 2. Disputes for
which a different resolution determination is specifically set forth in this Lease, 3. All claims by
either party which (a) seek anything other than enforcement or determination of rights under this
Lease, or (b) are primarily founded upon matters of fraud, willful misconduct, bad faith or any
other allegations of tortious action, and seek the award of punitive or exemplary damages, and 4.
Claims relating to (a) Lessor's exercise of any unlawful detainer rights pursuant to applicable law
or (b) rights or remedies used by Lessor to gain possession of the Premises or terminate Lessee's
right of possession to the Premises, all of which disputes shall be resolved by suit filed in the
applicable court of jurisdiction, the decision of which court shall be subject to appeal pursuant to
applicable law.
C. APPOINTMENT OF AN ARBITRATOR:
All disputes subject to this Arbitration Agreement, shall be determined by binding arbitration
before an arbitrator affiliated with the Arbitration Service of Portland, or as may be otherwise
mutually agreed by Lessor and Lessee (the "Arbitrator"). Such arbitration shall be initiated by the
Parties, or either of them, within ten (10) days after either party sends written notice (the
"Arbitration Notice") of a demand to arbitrate by registered or certified mail to the other party
and to the Arbitrator. The Arbitration Notice shall contain a description of the subject matter of
the arbitration, the dispute with respect thereto, the amount involved, if any, and the remedy or
determination sought. If they are unable to agree within ten days, either party may apply to the
presiding judge of Multnomah County Circuit Court to appoint such an arbitrator from a list
approved by the Portland Arbitration Service.
D. ARBITRATION PROCEDURE:
1. PRE-HEARING ACTIONS. The Arbitrator shall schedule a pre-hearing conference
to resolve procedural matters, arrange for the exchange of information, obtain stipulations, and
narrow the issues. The Parties will submit proposed discovery schedules to the Arbitrator at the
pre-hearing conference. The scope and duration of discovery will be within the sole discretion of
Document 2010-163 24
the Arbitrator. The Arbitrator shall have the discretion to order a pre-hearing exchange of
information by the Parties, including, without limitation, production of requested documents,
exchange of summaries of testimony of proposed witnesses, and examination by deposition of
parties and third-party witnesses. This discretion shall be exercised in favor of discovery
reasonable under the circumstances. The Arbitrator shall issue subpoenas and subpoenas duces
tecum as provided under Oregon law.
2. THE DECISION. The arbitration shall be conducted in the city or county within
which the Premises are located at a reasonably convenient site or other location as the parties
may agree. Any Party may be represented by counsel or other authorized representative. In
rendering a decision(s), the Arbitrator shall determine the rights and obligations of the Parties
according to the substantive laws and the terms and provisions of this Lease. The Arbitrator's
decision shall be based on the evidence introduced at the hearing, including all logical and
reasonable inferences therefrom. The Arbitrator may make any determination and/or grant any
remedy or relief that is just and equitable. The decision must be based on, and accompanied by,
a written statement of decision explaining the factual and legal basis for the decision as to each
of the principal controverted issues. The decision shall be conclusive and binding, and it may
thereafter be confirmed as a judgment by the court of applicable jurisdiction, subject only to
challenge on the grounds set forth in the applicable Oregon statutes. The Arbitrator may award
costs, including without limitation, Arbitrator's fees and costs, attorneys' fees, and expert and
witness costs, to the prevailing party, if any, as determined by the Arbitrator in his discretion.
Whenever a matter which has been submitted to arbitration involves a dispute as to
whether or not a particular act or omission (other than a failure to pay money) constitutes a
Default, the time to commence or cease such action shall be tolled from the date that the Notice
of Arbitration is served through and until the date the Arbitrator renders his or her decision.
Provided, however, that this provision shall NOT apply in the event that the Arbitrator
determines that the Arbitration Notice was prepared in bad faith. Whenever a dispute arises
between the Parties concerning whether or not the failure to make a payment of money
constitutes a default, the service of an Arbitration Notice shall NOT toll the time period in which
to pay the money. The Party allegedly obligated to pay the money may, however, elect to pay
the money "under protest" by accompanying said payment with a written statement setting forth
the reasons for such protest. If thereafter, the Arbitrator determines that the Party who received
said money was not entitled to such payment, said money shall be promptly returned to the Party
who paid such money under protest together with Interest thereon as defined in Paragraph 12.4.
[END OF ADDENDUM]
Document 2010-163 25
EXHIBIT B
TELECARE (MH Facility) LEASE SCHEDULE
Monthly Lease Annual
Lease Year 2.5% annual escalator Lease Value
1 11,285
135,420
2 11,567
138,806
3 11,856
142,276
4 12,153
145,833
5 12,457
149,478
6 12,768
153,215
7 13,087
157,046
8 13,414
160,972
9 13,750
164,996
10 14,093
169,121
Escalation amount for the two 5-year options will be negotiated with each option
renewal.
Document 2010-163 26