LEASE
ROGUE VALLEY HEALTH SERVICES, LESSOR
and
MEDFORD CLINIC, P.C., LESSEE
Dated: June 13th, 1989
INDEX
PAGE
RECITALS 1
ARTICLES:
1. CONTEMPORANEOUS PROJECT AGREEMENT, TOTAL PROJECT
VALUE 1
2. PREMISES 2
3. TERM 2
4. OPTION TO EXTEND 2
5. RENT 3
6. REAL PROPERTY TAXES 5
7. FIRE INSURANCE AND CASUALTY COVERAGE 5
8. NET LEASE 6
9. MAINTENANCE AND REPAIR OF LEASED PREMISES 6
10. UTILITIES AND PERSONAL PROPERTY TAXES 6
11. USE OF PREMISES 7
12. INGRESS AND EGRESS EASEMENTS 7
13. PARKING AND COMMON USE AREAS AND FACILITIES 8
14. LIENS AND ENCUMBRANCES 9
15. LIABILITY INSURANCE 10
16. INDEMNIFICATION 11
17. WAIVER OF SUBROGATION RIGHTS 11
18. DAMAGE OR DESTRUCTION OF THE BUILDING 12
19. QUIET ENJOYMENT 12
20. ALTERATIONS 12
21. EMINENT DOMAIN - TOTAL TAKING 13
22. EMINENT DOMAIN - PARTIAL TAKING 13
23. EMINENT DOMAIN - SALE IN LIEU OF CONDEMNATION 14
24. XXXXXX'S RIGHT OF INSPECTION 14
25. ASSIGNMENT 14
26. TIME OF ESSENCE 15
27. DEFAULT 15
28. REMEDIES ON DEFAULT 15
29. SURRENDER OF PREMISES 17
30. ATTORNEY'S FEES 18
31. NOTICES 18
32. SUCCESSION 19
33. PARTIAL INVALIDITY 19
34. OPTION TO PURCHASE 19
35. RIGHT OF FIRST REFUSAL TO REPURCHASE BUILDING 20
36. ARBITRATION 21
37. MEMORANDUM OF LEASE 22
38. CONTINGENCY 22
39. MERGER 22
40. SALE OF LAND 22
41. ADDITION TO OFFICE BUILDING 23
SIGNATURES 25
LEASE
THIS LEASE entered into this 13th day of September, 1989 between ROGUE
VALLEY HEALTH SERVICES, INC., an Oregon nonprofit corporation, hereinafter
referred to as "Lessor", and MEDFORD CLINIC, P.C., an Oregon professional
corporation, hereinafter referred to as "Lessee",
WITNESSETH:
RECITALS:
X. Xxxxxx is the owner of that certain real property situated in Medford,
Xxxxxxx County, Oregon, more particularly described as parcels 1 and 2 on
exhibit "A" attached hereto and made a part hereof.
X. Xxxxxx is a professional corporation and desires to locate its medical
practice on lessor's property described on exhibit "A". Xxxxxx has agreed to
construct a medical clinic building for xxxxxx on said premises according to the
terms of a separate agreement between the parties.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. CONTEMPORANEOUS PROJECT AGREEMENT, TOTAL PROJECT
VALUE:
1.1 Construction: Lessor shall construct a medical clinic building for
lessee upon parcel 1 of said real property (hereinafter "the
building"), in accordance with a separate project agreement previously
executed by the parties on March 29, 1989.
1.2 Total Project Value: Upon completion of the project, the total project
value shall be calculated and the
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calculation set forth on Exhibit "B" as an addendum to this lease.
Total project value shall determine the initial rent. The building
project value as defined on Exhibit "B" shall establish the initial
purchase price for the building should the purchase option be
exercised pursuant to Article 34. Total project value shall include
any and all costs, direct or indirect, incurred by lessor in
connection with building construction and site development;
including but not limited to legal, accounting, architectural,
engineering and other professional fees, governmental permits and
expenses, and other miscellaneous costs; and parcel 1 of the premises
at a value of $3.80 per square foot. The lessee may choose a graduated
rent schedule which will defer rent as specified herein. The sum of
the above costs, including deferred rent if any, will be the total
project value.
1.3 For purposes of a future purchase of the building, or a subordinated
ground lease, the addendum (Exhibit B) will include a percentage ratio
reflecting that portion of the total project value for the development
of the building only, and that portion relating to the value of the
site and the development of site improvements. This percentage ratio
shall be applied to the total project value so as to yield a site
project value.
2. PREMISES: Lessor rents to lessee and lessee rents from lessor the
above described real property (exhibit "A"), together with all improvements
hereinafter constructed thereon, and all referred to as the "premises".
3. TERM: This lease shall be for a term of 180 months commencing from
lessee's occupancy or upon issuance of a certificate of occupancy for the
building, whichever first occurs. Said lease shall terminate at midnight on the
last day of the 180th calendar month following commencement.
4. OPTION TO EXTEND: Provided lessee is not in default in its performance
of this lease, or any extension thereof, it
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shall have the exclusive right and option to extend this lease for five
successive additional periods of ten years each upon all of the same terms and
conditions as are set forth herein, including but not limited to the periodic
adjustment of rent.
If lessee elects to exercise its option for the first additional ten-year
period, it shall do so by giving to lessor written notice not less than 180 days
prior to the end of the initial term of this lease.
To exercise any additional ten-year renewal term thereafter, lessee shall
follow the same procedure by giving written notice of the exercise not less than
180 days prior to the end of the renewal term.
If the lessee is in default in the performance of this lease, does not
exercise its option for the first additional ten-year renewal period or for any
subsequent additional ten-year renewal period thereafter, or if for any other
reason this lease is terminated or expires, xxxxxx's options for any and all of
the following ten-year periods shall lapse and be void.
5. RENT: Xxxxxx agrees to pay as rent for the leased premises the
following:
5.1 A base rent payable monthly in advance on or before the first day of
this lease and on or before the first working day of each and every
month thereafter during the first seven years of this lease shall be
$53,243.82.
A. Commencing with the 85th month, rent shall be adjusted by a
percentage equal to one-half the accumulated yearly changes in
the Consumer Price
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Index for each of the first seven years. Any increase shall not
exceed a maximum of 3% per year, or a total increase of 21%. In
no event shall the rent decrease below that paid for the 84th
month. Rent shall be payable at the adjusted monthly rate
through and including the 120th month.
B. Beginning with the 121st month, rent shall again be adjusted by
one-half of the accumulated yearly changes in the Consumer Price
Index for each of years 8, 9 and 10. Said increase not to exceed
a maximum of 3% per year or a total increase of 9%. In no event
shall the rent decrease below that paid for the 120th month. Rent
shall be payable at this adjusted rate monthly through and
including the 180th month.
5.2 Adjustments to Rent during Renewal Periods: During the first and all
subsequent renewal terms, the rent shall be adjusted every five years,
commencing with the first monthly payment of the first renewal term,
by a percentage equal to one-half of the accumulated yearly changes in
the Consumer Price Index not to exceed a maximum increase of 3% per
year. In no event shall the rent decrease below that paid for the
last month of the previous term.
5.3 Lessee agrees to pay as additional rent all taxes, assessments,
utilities, insurance, interior and exterior maintenance, repairs and
all other incidental costs connected with the premises.
5.4 Option to Defer Rent: Lessee may, at xxxxxx's option, defer a portion
of the rent for each of the first three years of the initial lease
term up to a maximum of $200,000 per year, for a total maximum
deferral of $600,000. Xxxxxx must declare the amount of deferment upon
completion of the project. Any amount of rent deferred shall be added
to the value of the project and become part of the total project value
as described in paragraph 1, above. A fraction of the deferred rent
being a numerator of one (1) and a denominator equal to the number of
months of deferred rent shall be deducted from each monthly payment
for each of the months of deferred rent. No rent deferments will be
allowed after the first three years.
5.5 For purposes of computing rent adjustments pursuant to this article,
the Consumer Price Index used shall
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be the Consumer Price Index published by the United States Bureau of
Labor Statistics entitled "U.S. City Average all Urban Consumers
(Portland area)." If said index is not published, adjustments shall be
based upon the most comparable index then available from the United
States Department of Labor.
5.6 In the event there is an addition constructed by lessor to the
building pursuant to article 41 of this lease, the rent for the
initial five-year period for the addition shall be established in the
manner provided in article 1.2 and exhibit "B" of this lease.
5.7 At the commencement of this lease, lessee shall not occupy or pay rent
on that undeveloped portion of the premises described as parcel 2.
Upon the occupancy of parcel 2 or after the initial term of this
lease, whichever shall occur first, lessee shall commence paying rent
on parcel 2. The rent on parcel 2 shall be computed on the same basis
as the rent for parcel 1.
5.8 In the event lessee exercises its option pursuant to article 34 of
this lease, the rent for the property included in the ground lease
shall be determined pursuant to article 1.2 and as set forth in the
Addendum (Exhibit B) to this lease.
6. REAL PROPERTY TAXES: Lessee shall pay all real property taxes and
assessments levied or assessed against the premises promptly as the same become
due and payable, and shall promptly provide lessor with proof of such payment.
7. FIRE INSURANCE AND CASUALTY COVERAGE: Xxxxxx agrees to keep the
premises fully insured against loss by fire or casualty, with extended coverage,
in an amount not less than the full insurable replacement value of the building.
There shall be affixed to any policy of insurance a loss payable clause showing
the interest of xxxxxx and lessee under the terms of this lease agreement. All
policies or certificates
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evidencing said policies shall be delivered to lessor. In the event of fire or
other casualty, the insurance proceeds, if any, shall be used to repair or
replace as needed to restore the premises. Lessee shall pay all insurance
premiums promptly when due and shall promptly provide lessor with the proof of
such payment.
8. NET LEASE: Lessee shall be solely responsible for any and all costs
connected with the premises, of any nature whatsoever, and lessor shall have no
obligation to provide any services to the premises, and shall not be required to
incur any expenses in connection with the premises.
9. MAINTENANCE AND REPAIR OF LEASED PREMISES: Lessee shall be 100%
responsible for all repairs and maintenance in connection with the leased
premises, of any kind or nature whatsoever, including all repairs and
maintenance in connection with the building, the ground or other improvements
thereon. Lessee shall keep the premises in as good condition and repair as at
the time of initial occupancy, normal wear and tear excepted. Xxxxxx agrees
that it shall hire lessor at a reasonable cost to install and maintain the
landscaping upon the leased premises.
10. UTILITIES AND PERSONAL PROPERTY TAX: Xxxxxx agrees to pay all water,
gas, electricity, heat, telephone and all other utilities or services rendered
to the premises, and all such utilities shall be placed in xxxxxx's name alone.
Lessee
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further agrees to pay as the same become due and payable all personal property
taxes which may be levied or assessed against any property belonging to xxxxxx.
11. USE OF THE PREMISES: Xxxxxx agrees that:
11.1 It will not make any unlawful or offensive use of the premises.
11.2 It will not permit or allow the accumulation of litter or flammable
material upon the premises.
11.3 It shall comply with all applicable laws and governmental
regulations in storing, discharging or transporting hazardous wastes
or toxic substances from or on the premises. Hazardous wastes and
toxic substances are any wastes or substances defined as such and
regulated by any governmental body or agency.
11.4 Lessee shall use said premises for its medical practice or medically
related activities and shall make no other use of the property
without first obtaining the written consent of lessor.
12. INGRESS AND EGRESS EASEMENT: During the term of this lease, lessee,
its employees, agents, invitees, transferees, assigns and patients shall have a
nonexclusive easement for ingress and egress to the premises over and across
lessor's roads, driveways, parking lots and sidewalks presently existing or as
later constructed.
During the term of this lease, lessor, its employees, agents, invitees,
transferees, tenants, assigns and patients shall have a nonexclusive easement
for ingress and egress to the adjoining campus property over and across the
roads, driveways, parking lots and sidewalks presently existing or as later
constructed upon the leased premises. This easement does
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not xxxxx xxxxxx, or any other lessees or invitees on the RVMC campus, the right
to park on the leased premises.
13. PARKING AND COMMON USE AREAS AND FACILITIES: All non-exclusive
automobile parking areas, driveways, entrances and exits thereto, and other
facilities furnished by lessor in or near the RVMC campus, including employee
parking areas, pedestrian sidewalks and ramps, landscaped areas, exterior
stairways, comfort stations and other areas and improvements provided by lessor
for the general use, in common, of tenants, their officers, agents, employees
and patients, shall at all times be subject to the exclusive control and
management of lessor, and lessor shall have the right from time to time to
establish, modify and enforce reasonable rules and regulations with respect to
all facilities and areas mentioned in this section. Lessor shall have the right
to construct, maintain and operate lighting facilities on all said areas and
improvements; to police the same; from time to time to change the area, level,
location and arrangement of parking areas and other facilities hereinabove
referred to; to restrict parking by tenants, their officers, agents and
employees to employee parking areas; to enforce parking charges (by operation of
meters or otherwise), with appropriate provisions for free parking ticket
validating by tenants; to close all or any portion of said areas or facilities
to such extent as may, in the opinion of xxxxxx's counsel, be legally sufficient
to
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prevent a dedication thereof or the accrual of any rights to any person or the
public therein; to close temporarily all or any portion of the parking areas or
facilities; to discourage non-patient parking; and to do and perform such other
acts in and to said areas and improvements as, in the use of good business
judgment, lessor shall determine to be advisable with a view to the improvement
of the convenience and use thereof by tenants, their officers, agents, employees
and patients. Lessor will operate and maintain the common facilities referred to
above in such manner as lessor, in its sole discretion, shall determine from
time to time. Without limiting the scope of such discretion, lessor shall have
the full right and authority to employ all personnel and to make all reasonable
rules and regulations pertaining to and necessary for the proper operation and
maintenance of the common areas and facilities.
This article is intended to describe xxxxxx's rights in and to property
provided by lessor for the general use, in common, of tenants and not the leased
premises described on Exhibit "A" or the exclusive parking areas described
herein.
14. LIENS AND ENCUMBRANCES: Except with respect to activities for which
lessor is responsible, the lessee shall pay as due all claims for work done on
or for services rendered or materials furnished to the premises for or on behalf
of lessee and shall keep the premises free from any liens arising
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therefrom. If lessee fails to pay any such claims or to discharge any lien,
lessor may do so and collect the costs as additional rent. Any amounts so added
shall bear interest at the rate of 12% per annum from the date expended by
lessor and shall be payable on demand. Such action by lessor shall not
constitute a waiver of any right or remedy which lessor may have on account of
lessee's default.
Lessee may withhold payment of any claim in connection with a good faith
dispute over the obligation to pay so long as lessor's property interests are
not jeopardized. If a lien is filed as a result of nonpayment, lessee shall,
within 30 days after knowledge of the filing, secure the discharge of the lien
or deposit with lessor cash or a sufficient corporate surety bond or other
security satisfactory to lessor in an amount sufficient to discharge the lien
plus any costs, attorney's fees and other charges which could accrue as a result
of a foreclosure or sale under the lien.
15. LIABILITY INSURANCE: During the first five years of the lease lessee
shall carry public liability and property damage insurance on the premises in
the amount of $1,000,000 public liability and $100,000 property damage. Lessor
shall be named as an additional insured on such policy of insurance and a memo
copy of the policy shall be furnished by lessee to lessor.
The limits of the liability insurance shall be reviewed
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and revised each five years thereafter.
If the parties are unable to agree on the limits of the insurance that
should be secured, they shall have that amount determined by arbitration in the
manner provided for in Article 36 below. Provided, however, the arbitrators
picked by the parties shall be general insurance agents with experience in the
liability insurance business, and shall not be an insurance agent for either
party. The two insurance agent arbitrators shall choose a third arbitrator who
shall be a lawyer experienced in insurance defense litigation. The standard to
determine the appropriate amount of coverage is the reasonable amount of
insurance coverage in light of the type of risks involved and the parties to be
protected by the coverage.
16. INDEMNIFICATION: Lessee shall indemnify and defend lessor from any
claim, loss or liability, including any attorney fees and costs arising out of
or related to any activity of lessee, its agents, servants, customers,
subtenants or licensees on the premises or any condition of the premises or any
other property located on the premises.
17. WAIVER OF SUBROGATION RIGHTS: Each party hereby waives the
subrogation rights, if any, of each and all of its insurance carriers and each
party shall take such steps as necessary to inform all such carriers of this
agreement and to have riders, if necessary, placed upon any insurance policies
to carry the provisions of this paragraph into effect.
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18. DAMAGE OR DESTRUCTION OF THE BUILDING: In the event of the destruction
or partial destruction of the building which is the subject of this lease by
fire or other casualty to the extent of 50% or more of its then sound value,
either party may within 30 days after such destruction elect to terminate the
lease. If the election be to terminate, this lease shall be terminated as of
the date of such fire or other casualty. If, however, the parties elect to
reconstruct or if the building be but partially destroyed and the damage does
not amount to 50% of the then sound value, lessor shall repair the building with
all convenient speed. In either event, if lessor shall rebuild or repair said
building or the portion thereof damaged, it shall have the right to take
possession of and occupy all of the premises or such part thereof as may be
reasonably necessary to make the repairs or rebuild said building and xxxxxx
agrees to vacate the same upon request. For the period of time between the date
of such fire or other casualty and until such repairs have been substantially
completed, there shall be such an abatement of rent as may be fair and equitable
to the parties, considering the use which lessee may be able to make of the
premises during such period.
19. QUIET ENJOYMENT: If and as long as lessee pays the rent herein
specified and performs all of lessee's obligations hereunder, lessee shall
quietly enjoy the premises.
20. ALTERATIONS: Lessee may not make any alterations or
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additions to the building in excess of $100,000, without first obtaining the
written consent of lessor, which consent shall not be unreasonably or
arbitrarily withheld. Any additions or alterations of the building shall become
part of the real property and belong to the owner of the building.
21. EMINENT DOMAIN - TOTAL TAKING: If a condemning authority takes all
the premises or portions sufficient to render the remaining premises reasonably
unsuitable for the use which the lessee was then making of the premises, the
lease shall terminate as of the date the title vests in the condemning
authorities. Lessor shall be entitled to all of the proceeds of condemnation
except tenant improvements and the lessee shall have no claim against lessor as
a result of the condemnation.
22. EMINENT DOMAIN - PARTIAL TAKING: If a portion of the premises is
condemned and paragraph 21 does not apply, the lease shall continue on the
following terms:
22.1 Lessor shall be entitled to all of the proceeds of condemnation
except tenant improvements and lessee shall have no claims
against lessor as a result of the condemnation.
22.2 Lessor shall proceed as soon as reasonably possible to make
such repairs and alterations to the premises as are necessary
to restore the remaining premises to a condition as comparable
as reasonably practicable to that existing at the time of the
condemnation. The lessor may, but shall not be required to,
perform alterations prior to the actual taking after the
portion to be taken has been finally determined. Rent shall be
abated to the extent the premises are untenantable during the
period of alteration and repair.
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22.3 After the date on which title vests in the condemning authority or an
earlier date on which alterations and repairs are commenced by lessor
to restore the balance of the property in anticipation of taking, the
rent shall be reduced commensurately with the reduction in value of
the premises, as an economic unit, on account of the partial taking.
If the parties are unable to agree upon the amount of reduction of
rent, the amount of such reduction shall be determined by arbitration
as set forth in Article 36 below.
22.4 If a portion of the lessor's property not included in the premises is
taken and severance damages are awarded on account of the premises, or
an award is made for detriment to the premises as a result of change
of grade of adjacent streets or other activity by a public body not
involving a physical taking of any portion of the land, this shall be
regarded as a partial condemnation and the rent shall be reduced to
the extent of diminution of the premises as though a portion had been
physically taken.
23. EMINENT DOMAIN - SALE IN LIEU OF CONDEMNATION: Sale of all or part of
the premises to a purchaser with the power of eminent domain in the face of a
threat or probability of exercise of the power shall be treated as a taking by
condemnation.
24. XXXXXX'S RIGHT OF INSPECTION: Lessor, its agents and representatives,
shall have the right to enter upon and inspect the premises during normal
business hours and after 24 hours written notice provided that said inspection
does not unreasonably interfere with xxxxxx's practice and provided further that
in the case of emergency, lessor shall have the right to immediately inspect
without notice.
25. ASSIGNMENT: Lessee shall not assign this lease or sublease the
premises without the prior written consent of
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lessor which consent shall not unreasonably be withheld, provided, however, that
lessee may sublease portions of the premises under 2,000 square feet without
obtaining permission of lessor.
26. TIME OF ESSENCE: Time is of the essence of this lease and waiver by
lessor in enforcing any of the terms and conditions hereof shall not constitute
a waiver of lessor's rights to insist upon strict compliance with such terms and
conditions in the future.
27. DEFAULT: The following shall be events of default:
27.1 Failure of lessee to pay any rent, including additional rent, within
ten days after the same becomes due. Lessor shall be obligated to
provide lessee with 10 days written notice of any failure to pay rent
one time and only one (1) time during each calendar year. Otherwise no
notice of failure to pay rent shall be required.
27.2 Failure of lessee to comply with any term or condition or fulfill any
obligation of the lease (other than the payment of rent including
additional rent), within thirty days after written notice by lessor
specifying the particulars in which lessor claims that lessee is in
default and lessee shall have said period of time within which to
commence action to remove any such default.
27.3 Insolvency of lessee; an assignment by xxxxxx for the benefit of
creditors; the filing by lessee of a voluntary petition in bankruptcy;
an adjudication that lessee is bankrupt or the appointment of a
receiver for the properties of xxxxxx; the filing of an involuntary
petition of bankruptcy and failure of lessee to secure a dismissal of
the petition within 30 days after filing; attachment of or the levying
of execution on the leasehold interest and failure of lessee to secure
discharge of the attachment or release of the levy of execution within
ten days.
28. REMEDIES ON DEFAULT:
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28.1 In the event of a default, the lease may be terminated at the option
of the lessor by notice in writing to lessee. The notice may be given
before or within the running of any grace period for default and may
be included in a notice of failure of compliance given pursuant to
paragraph 27.2. If the premises are abandoned by lessee in connection
with a default, termination shall be automatic and without notice.
28.2 If the lease is not terminated by lessor upon default, lessor shall be
entitled to recover all damages from lessee for any default.
28.3 If the lease is terminated for any reason, xxxxxx's liability to
lessor for damages shall survive such termination and the rights and
obligations of the parties shall be as follows:
X. Xxxxxx shall surrender and vacate the premises immediately,
remove any property of lessee, including any fixtures which
lessee are required to remove at the end of the lease term and
perform any cleanup, alterations or other work required to leave
the premises in the condition required under Article 29 below,
and shall deliver all keys to lessor.
X. Xxxxxx may re-enter, take possession of the premises and remove
any persons or property by legal action or by self help with the
use of reasonable force and without liability for damages.
28.4 Following re-entry lessor may relet the premises and in that
connection may:
A. Make any suitable alterations or refurbish the premises, or both,
or change the use of the premises, but lessor shall not be
required to relet for any use or purpose (other than that
specified in the lease), which lessor may reasonably consider
injurious to the premises, or to any lessee which lessor may
reasonably consider objectionable.
B. Relet all or part of the premises alone or in conjunction with
other properties for a term longer or shorter than the term of
this lease upon any reasonable terms and conditions, including
the granting of some rent free
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occupancy or other rent concession.
28.5 In the event of termination on default, lessor shall be entitled to
recover immediately without waiting until the due date of any future
rent or until the date fixed for expiration of the lease term the
following amounts as damages:
A. Any excess of (a) the value of all lessee's obligations under
this lease, including the obligation to pay rent from the date of
default until the end of the term, over (b) the reasonable rental
value of the premises for the same period figured as of the date
of default, the net result to be discounted to the date of
default at a reasonable rate not exceeding 8% per annum.
B. The reasonable costs of re-entry and reletting, including,
without limitation, the costs of any cleanup, refurbishing,
removal of lessee's property and fixtures, any other expense
occasioned by xxxxxx's failure to quit the premises upon
termination and to leave them in the required condition, any
remodeling costs, attorney's fees, court costs, broker
commissions and advertising costs.
C. The loss of reasonable rental value from the date of default
until a new lessee has been or with the exercise of reasonable
efforts, could have been secured.
28.6 The foregoing remedies shall be in addition to and shall not exclude
any other remedy available to lessor under applicable law.
29. SURRENDER OF PREMISES: Upon the expiration of the lease term or
earlier termination on account of default, lessee shall deliver all keys to
lessor and surrender the premises in first class condition, normal wear and tear
excepted, and broom clean. Alterations constructed by the lessee with permission
from the lessor shall not be removed or restored to the
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original condition unless the terms of permission for the alterations so
require. Depreciation and wear from ordinary use for the purpose for which the
premises were let need not be restored, but all repairs and maintenance shall be
completed to the latest practical date prior to such surrender.
The lessee's obligations shall be subordinate to the provisions of
paragraph 18 related to destruction.
30. ATTORNEY'S FEES: In the event that arbitration or legal action is
brought by either of the parties hereto to enforce any of their rights or
remedies hereunder, the party prevailing in such arbitration or action shall be
entitled to recover such additional sum from the other party as the arbitrator
or court may adjudge reasonable for costs and attorney's fees in such
arbitration or action whether in arbitration, trial court or on appeal.
31. NOTICES: Any notice required or permitted under this lease shall be
given when actually delivered or when deposited in the United States certified
mail, postage prepaid, addressed as follows.
To lessor: Rogue Valley Health Services
0000 Xxxxxxxx Xxxx.
Medford, Oregon 97504
To lessee: Medford Clinic
000 Xxxxx Xxx Xx.
Xxxxxxx, Xxxxxx 00000
or to such other address as may be specified from time to time by either of the
parties in writing.
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32. SUCCESSION: Subject to the above stated limitations on transfer of
xxxxxx's interest, this lease shall be binding upon and inure to the benefit of
the parties, their respective successors and assigns.
33. PARTIAL INVALIDITY: If any term, provision, covenant or condition of
this lease should be held by arbitration or a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of this lease shall continue in
full force and effect and shall in no way be affected, impaired or invalidated
thereby.
34. OPTION TO PURCHASE: Provided that lessee is not in default under any
of the terms and conditions of this lease, lessee may purchase the building and
the appurtenant easement set forth in Article 12 of this lease as follows:
34.1 If xxxxxx decides to purchase the building, upon exercise of said
option the parties shall execute a ground lease for the real property,
which lease is set forth as exhibit "C" attached hereto. The rent for
the property included in the ground lease shall be calculated pursuant
to the addendum (Exhibit B) to this lease.
34.2 During the first five years of the initial lease term, the price for
purchase of the building shall be the actual cost of the building as
determined pursuant to Article 1.2 and as set forth in the Addendum
(Exhibit B) to this lease, including deferred rent, if any.
Thereafter, the purchase price shall be the then fair market value of
the building, but in no event less than the total cost of the
building, including deferred rent, if any.
34.3 If the lessee elects to purchase the building and provided that the
financing obtained by lessee to purchase the building does not exceed
80% of the then combined value of the building, the site and the site
19 - Lease
improvements, then lessor shall join with xxxxxx and execute a first
deed of trust for the purpose of encumbering its interest in the land
in order for lessee to secure said financing. In addition, lessor
shall subordinate to any refinancing of the building by xxxxxx, upon
these same terms and conditions.
34.4 Lessor shall not be liable for xxxxxx's debt to finance the purchase
of the building. Lessor's sole obligation is the subordination of its
interest in the property. Lessor shall be entitled to receive all
notices of default under the note or security instrument and shall
have the rights to cure any such default. In the event lessor incurs
any expense in connection with the curing of any default of lessee,
the expense so incurred shall become immediately due and payable from
lessee to lessor upon demand, as additional rent under the ground
lease.
34.5 Lessee shall exercise any option to purchase under this article by
delivering to lessor, in writing, notice of its exercise of a purchase
option not less than 180 days prior to the end of the then current
lease term. The writing shall specify lessee's proposed purchase
price.
34.6 The terms of sale shall be payment in full in cash at closing. Closing
shall occur within 90 days from the date of the written notice of
xxxxxx's exercise of its option.
34.7 In the event that the parties cannot agree upon the fair market value
for the purchase price of the building or total project under this
article, the matter shall be resolved by arbitration as set forth in
Article 36 below.
35. RIGHT OF FIRST REFUSAL TO REPURCHASE BUILDING: If
xxxxxx has purchased the building and lessee thereafter receives a bona fide
offer to purchase the building by a third party, lessor shall have a right of
first refusal to repurchase the building upon the same terms and conditions as
the bona fide offer received by xxxxxx. This right of first refusal shall
remain open for a period of 30 days following xxxxxx's
20 - Lease
delivery to xxxxxx, in writing, of the bona fide offer it has received and
intends to accept. No offer shall be considered a bona fide offer unless it is
set forth in writing containing the basic terms and conditions of the proposed
purchase, and unless it intends to accept said offer.
36. ARBITRATION: Any and all disputes which may arise
between the parties concerning the interpretation or enforcement of this lease
shall be submitted to and resolved by arbitration. Either party may request
arbitration and appoint an arbitrator in writing. The other party shall then
choose and appoint an arbitrator in writing. The two arbitrators shall then
choose a third arbitrator, with appropriate qualifications, without delay. If
the choice of the second or third arbitrator is not made within 10 days of the
date of the writing naming the prior arbitrator, then either party may apply to
the presiding judge in the Circuit Court for Xxxxxxx County to appoint the
required arbitrator. The arbitration shall then proceed according to Oregon
statutes governing arbitration, and the award of the arbitrators may assess the
costs of arbitration, including attorney and other expert fees, against either
party.
If the dispute involves the value of the building, the two (2) initial
arbitrators shall be MAI appraisers with practices in Xxxxxxx County, Oregon and
the third (3) arbitrator shall be an MAI appraiser with at least 10 years
experience in the
21 - Lease
valuation of medical facilities.
37. MEMORANDUM OF LEASE: The parties shall execute an appropriate
memorandum of this agreement for purposes of recordation in Xxxxxxx County,
Oregon.
38. CONTINGENCY: Xxxxxx owns an existing clinic building
known as the Medford Clinic located at 0000 xxx 0000 Xxxx Xxxx xx Xxxxxxx,
Xxxxxx. If this existing facility has not been disposed of to the satisfaction
of lessee prior to commencement of the project, lessee shall have the right to
immediately terminate this lease. In the event lessee elects to terminate in
accordance with this article, lessee shall pay to lessor the costs of the
project incurred through the date of termination.
39. MERGER: This present lease agreement is intended to be a complete and
full agreement with regards to all matters contained herein. Any prior
agreements or writings between the parties with respect to the subject matter of
this lease shall be deemed merged into this agreement and shall be of no further
force and effect except for the prior construction agreement described in
paragraph 1 above.
40. SALE OF LAND: Lessor has adopted a policy that it will not sell any
of its RVMC campus land to private persons. In the event that policy changes
and lessor sells, offers to sell or gives an option for the purchase of any of
said land, lessee shall have the same right to purchase or obtain an option to
purchase at the same price per square foot and upon
22 - Lease
the same or similar terms. A purchase of the land would include the easements
granted pursuant to Article 12 of this lease.
41. ADDITION TO OFFICE BUILDING:
41.1 The parties have reserved sufficient property (Parcel 2) to allow for
the construction of an addition to the office building. Lessee
contemplates an expansion of the building to allow for the practice of
additional physicians. The proposed location of the addition to the
building and related necessary improvements are shown on exhibit "C".
41.2 In the event lessee desires to have the addition constructed and it
has not purchased the improvements pursuant to article 34 of this
lease it shall notify RVHS in writing. RVHS then has the option to
construct the addition in the same style and consistent in quality to
the rest of the building.
41.3 The initial rent shall be computed to reflect the cost of construction
in the same manner as provided in article 1.2 and the Addendum
(Exhibit B) of this lease. Thereafter, the rent for the addition
shall be increased or decreased in the same manner as provided in
article 5.2 of this lease.
41.4 If the addition is constructed by xxxxxx, lessor shall cooperate with
lessee to allow lessee to obtain financing for the construction.
Lessor will grant the lender a first security interest, agree to
subordinate or join in the execution of a first security agreement for
the real property to secure lessee's obligations. The rent of the
ground lease shall be adjusted to reflect the occupancy of parcel 2
and shall be in an amount as determined pursuant to article 5.8 of
this lease.
41.5 The term of the lease including any extension options shall coincide
with the lease term of the office building.
41.6 Upon termination of this lease, if xxxxxx has constructed an addition
to the office building, and to the extent that xxxxxx has not
otherwise paid for construction of said addition, xxxxxx agrees to pay
lessee an amount equal to any increase of the value
23 - Lease
of the total building project which may have resulted from the
addition paid for by xxxxxx. The amount of any such enhanced value, if
any, shall be agreed upon by the parties. If the parties are unable to
agree then the matter shall be arbitrated in accordance with Article
36.
(a) If the enhanced value is in excess of any debt then owing by
lessee as a result of the addition, lessor shall have the
following options for paying lessee for the enhanced value:
1. Lessor may assume the then existing debt for the addition
and pay the excess of the enhanced value over the assumed
debt to lessee in cash.
2. Lessor may pay lessee cash for the full enhanced value in
exchange for lessee paying off all debt and clearing title
to the improvements from any obligation incurred by lessee.
3. Lessor may pay the enhanced value in installments by paying
25% of the amount as a down payment in amortizing the
remainder over five years at an interest rate equal to the
then prime lending rate charged by local lending
institutions. All such installments paid by lessor shall be
applied by lessee to reduce the existing debt until such
time as the debt is paid in full.
(b) If the then existing debt incurred for the improvements exceeds
the enhanced value, lessor shall have the following options:
1. Pay cash for the enhanced value all of which will be applied
to the existing debt. In such event, lessee shall continue
to be liable for the remaining debt and shall indemnify,
defend and hold lessor harmless therefrom.
2. Assume the remaining debt with lessee to pay lessor the
amount of excess of the debt over the enhanced value in
cash.
IN WITNESS WHEREOF, the parties have executed this
24 - Lease
instrument as of the day and year first hereinabove written.
ROGUE VALLEY HEALTH SERVICES, INC.,
an Oregon nonprofit corporation
By: /s/ X.X. Xxxxxxxx 9/13/89
------------------------------------
X. X. Xxxxxxxx, President
Lessor
Medford Clinic, P.C., an Oregon
nonprofit corporation
By: /s/ Xxxx Xxxxxx
------------------------------------
Xxxx Xxxxxx, President
25 - Lease
Commencing at a point which bears South 00 DEG. 04' 30" East, 293.79 feet
and North 89 DEG. 42' 00" West, 32.00 feet from the Southwest corner of
Donation Land Claim Xx. 00, Xxxxxxxx 00 Xxxxx, Xxxxx 0 Xxxx, Xxxxxxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxx; said point being the Southeast corner of
the property described in Xxxxxxx County Instrument No. 68-07309; thence
North 00 DEG. 04' 30" West 6.00 feet; thence North 89 DEG. 42' 00" West 25.16
feet to a point on the Northerly right-of-way line of Xxxxxxx Road; thence
along said Northerly right-of-way line North 89 DEG. 42' 00" West 1558.73
feet to the Easterly line of the property described in Volume 443, page 400
of the Official Deed Records of Xxxxxxx County, Oregon; thence leaving said
Northerly right-of-way line along said Easterly line North 00 DEG. 04' 15"
West 80.00 feet; thence South 89 DEG. 42' 00" East 24.00 feet; thence North
00 DEG. 04' 15" West 130.00 feet; thence North 89 DEG. 42' 00" West 24.00
feet; thence North 00 DEG. 04' 15" West 336.57 feet; thence North 89 DEG. 42'
00" West 200.00 feet to the Easterly right-of-way line of Black Oak Drive;
thence along said Easterly right-of-way line North 00 DEG. 04' 15" West 71.48
feet to the POINT OF BEGINNING ; thence North 89 DEG. 55' 45" East 180.00
feet; thence North 00 DEG. 04' 15" West 120.00 feet; thence North 74 DEG.
55' 45" East 43.00 feet; thence North 89 DEG. 55' 45" East 338.00 feet;
thence North 00 DEG. 04' 15" West 108.00 feet; thence South 89 DEG. 5' 45"
West 100.00 feet; thence North 00 DEG. 04' 15" West 35.00 feet; thence
South 89 DEG. 55' 45" West 38.00 feet; thence North 00 DEG. 04' 15" West
182.51 feet to the Southerly right-of-way line of Siskiyou Boulevard; thence
along said Southerly right-of-way line, South 89 DEG. 58' 43" West 421.54
feet to the aforementioned Easterly right-of-way line of Black Oak Drive;
thence South 00 DEG. 04' 15" East along said Easterly right-of-way line
457.00 feet to the point of beginning. Containing 4.07 acres, more or less.
------------------
REGISTERED
PROFESSIONAL
LAND SURVEYOR
------------------
/s/Xxxxxxx X. XxXxxxx
------------------
OREGON
July 18, 1980
Xxxxxxx X. XxXxxxx
No. 1913
----------------
Xxxxxxx X. XxXxxxx
Xxxxxxxx & Associates, Inc.
Medford Replacement Clinic
Parcel I
November 16, 1989
A-2
Commencing at a point which bears South 00 DEG. 04' 30" East, 293.79 feet
and North 89 DEG. 42' 00" West, 32.00 feet from the Southwest corner of
Donation Land Claim Xx. 00, Xxxxxxxx 00 Xxxxx, Xxxxx 0 Xxxx, Xxxxxxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxx; said point being the Southeast corner of
the property described in Xxxxxxx County Instrument No. 68-07309; thence
North 00 DEG. 04' 30" West 6.00 feet; thence North 89 DEG. 42' 00" West 25.16
feet to a point on the Northerly right-of-way line of Xxxxxxx Road; thence
along said Northerly right-of-way line North 89 DEG. 42' 00" West 1558.73
feet to the Easter1y line of the property described in Volume 443, page 400
of the Official Deed Records of Xxxxxxx County, Oregon; thence leaving
said Northerly right-of-way line along said Easterly line North 00 DEG.
04' 15" West 80.00 feet; thence South 89 DEG. 42' 00" East 24.00 feet; thence
North 00 DEG. 04' 15" West 130.00 feet; thence North 89 DEG. 42' 00" West
24.00 feet; thence North 00 DEG. 04' 15" West 336.57 feet, thence North 89
DEG. 42' 00" West 200.00 feet to the Easterly right-of-way line of Black Oak
Drive; thence along said Easterly right-of-way line North 00 DEG. 04' 15"
West 71.48 feet; thence North 89 DEG. 55' 45" East 180.00 feet to the POINT
OF BEGINNING; thence North 00 DEG. 04' 15" West 120.00 feet; thence North 74
DEG. 55' 45" East 43.00 feet; thence North 89 DEG. 55' 45" East 338.00 feet;
thence South 00 DEG. 04' 15" East 150.00 feet; thence South 89 DEG. 55' 45"
West 300.00 feet; thence North 76 DEG. 43' 24" West 81.74 feet to the point
of beginning. Containing 1.28 acres, more or less.
------------------
REGISTERED
PROFESSIONAL
LAND SURVEYOR
------------------
/s/Xxxxxxx X. XxXxxxx
------------------
OREGON
July 18, 1980
Xxxxxxx X. XxXxxxx
No. 1913
----------------
Xxxxxxx X. XxXxxxx
Xxxxxxxx & Associates, Inc.
Medford Replacement Clinic
Parcel II
November 16, 1989
A-2
EXHIBIT B
ADDENDUM TO ARTICLE 1.2
OF
RVHS/MEDFORD CLINIC LEASE
1. Project Costs (indirect and direct) = $7,353,925
2. Project Value (for purpose of computing monthly lease pmts):
Initial Commitment - $6,500,000 @ 7.9% = $513,500.00 rent/yr.
Additional - 700,000 @ 9.0% = 63,000.00 rent/yr.
Additional - 153,925 @ 9.0% = 13,853.25 rent/yr.
---------- -----------
TOTAL $7,353,925 $590,353.25 rent/yr.
Initial Monthly Rent $590,353.25
-----------
12 = $49,196.10 per month
3. Land Value (Parcel I only) and Calculation of Monthly Lease Payments -
177,361.15 s.f. x $3.80 per s.f. = $673,972 x 7.9% = $53,243.82 divided by
12 months = $4,436.98 per month
4. Total Initial Monthly Rent of the Project (Sum of #1 and #3 above) =
$53,633.08
5. Purchase Price of Building (during first five years of lease) = Building
Project Value of $7,353,925
6. Occupancy date of the building by lessee 12/17/90 .
-------------
