Lease Agreement.pdf

U. S. GOVERNMENT LEASE FOR REAL PROPERTY

This LEASE AGREEMENT is made and entered into this 1/? day of ~ytdb<a.2009, by and between THE STATE OF WASHINGTON, Department of General Administ hon, actmg m accordance with RCW 43.82.010 for its administrators, successors, and assigns, hereinafter referred to as "Lessor," and THE UNITED STATES OF AMERICA, hereinafter referred to as "Lessee" or "Government," acting by and through the U.S. Department of Labor, Office of the Assistant Secretary for Administration and Management.

RECITALS

WHEREAS, the Government entered into a Lease Agreement on the third day of February, 1982, with The State of Washington, acting through the Director of General Administration, covering the property formerly known as The Northern State Hospital, located in the County of Skagit, State of Washington, hereinafter referred to as the "Leased Premises." The lease expiration date according to this lease was to have been December 31, 1991; and

WHEREAS, the Lease Agreement was amended by Lease Amendment dated July 13, 1982, for the purpose of modifying the leased premises to remove Building 17 and include Building 34; and

WHEREAS, the Lease Agreement was amended by Lease Amendment dated February 10, 1984, for the purpose of modifying the leased building description to include Building 17 and remove the duplicate entry for Building 31, and re-establishing the State lease number; and

WHEREAS, the Government and the Lessor entered into a new Lease Agreement dated March 13, 1992, for the purpose of extending the lease term for an additional twenty (20) years, and

WHEREAS, the Lease Agreement was amended by a supplemental Maintenance Agreement dated October 1996 which modified the maintenance responsibilities for the Lessor; and

WHEREAS, the Lease Agreement was amended by a supplemental Property Management Lease dated May 11, 1998, which modified the property management responsibilities for the Lessor; and

WHEREAS, the Government represents and warrants that it is the owner of said Lease and of the leasehold estate thereby created; and

WHEREAS, the Lessor represents and warrants that the Lessor has good title and that the Lessor is the owner of said Leased Premises; and

WHEREAS, the Government and the Lessor entered into a Settlement Agreement dated August 12, 2003, to resolve cost issues associated with the property; and

WHEREAS, the Lessor and the Government agree that this Lease will replace all previous agreements related to the Leased Premises, except the Settlement Agreement mentioned above, as of the commencement date above; and

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NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Lessor and the Government hereby agree to enter into this Lease under the following terms and conditions:

WITNESSETH:

1. Description of Property.

(a) Lessor does hereby grant, demise and lease to the Government and the Government does hereby lease from Lessor approximately 37.56 acres located on the Lessor's North Cascades Gateway Center campus located at 7782 Northern State Road, Sedro-Woolley, Washington 98284, together with all structures, buildings, and improvements thereon or appurtenant thereto, and as illustrated on the attached drawing marked "Exhibit A - Original Site Plan, Metes and Bounds Survey, and Legal Description", annexed hereto and made a part hereof ("Leased Premises").

(b) The Leased Premises are legally described as:

That portion of the southeast quarter of Section 7, and of the southwest quarter of Section 8, all in Township 35 North, Range 5 East, W. M. described as follows:

Commencing at the northeast comer of the southeast quarter of Section 7; thence S 1° 08' 29" E along the east line of said Section 7, a distance of 539.64 feet; thence S 88° 51' 31" W, a distance of 495.82 feet to the point of beginning of this description; thence S 680 23' 31" W, a distance of 114.59 feet; thence S 69° 32' 38" W, a distance of99.22 feet; thence S 87° 18' 04" W, a distance of 65.05 feet; thence S 72° 27' 15" W, a distance of 50.40 feet;

thence S 64° 00' 03" W, a distance of 50.73 feet; thence S 45° 52' 27" W, a distance of

51.67 feet; thence S 80° 36' 21" W, a distance of 41.68 feet; thence N 82° 48' 26" W, a distance of 64.52 feet; thence N 76° 02' 08" W, a distance of 96.68 feet; thence S 89° 54' 58" W, a distance of 101.42 feet; thence S 53° 44' IT' W, a distance of 191.59 feet; thence S 39° 24' 49" W, a distance of 56.39 feet; thence S 28° 18' 09" W, a distance of 492.33 feet; thence S 23° 10' 55" E, a distance of 16.64 feet; thence S 21 0 43' 57" E, a distance of

177.96 feet; thence S 24° 06' 36" E, a distance of 73.36 feet; thence S 32° 39' 59" E, a distance of 35.04 feet; thence S 41° 32' 28" E, a distance of 28.20 feet; thence S 51° 39' 48" E, a distance of 48.33 feet; thence S 77° 36' 55" E, a distance of 104.10 feet; to a point on a non-tangent curve from which the radius point lies S 77° 50' 41" E, a distance of

512.66 feet; thence southerly along said curve through a central angle of42° 53' 39", an arc distance of 383.80 feet to a point on a non-tangent curve from which the radius point lies S 23° 58' 51" E, a distance of 1437.52 feet; thence easterly along said curve through a central angle of 8° 36' 03", an arc distance of215.79 feet to a point oftangency; thence N 74° 37' 12" E, a distance of 388.25 feet to the point of curvature of a curve to the left having a radius of 1800.40 feet; thence easterly along said curve through a central angle of 9° 10' 56", an arc distance of 288.53 feet; thence N 26° 26' 43" W, a distance of 148.46 feet;

thence N 63° 28' 16" E, a distance of 110.38 feet; thence S 26° 28' 07" E, a distance of

148.86 feet to a point on a non-tangent curve from which the radius point lies N 28° 04' 39" W, a distance of 1800.40 feet; thence northeasterly along said curve through a central angle of 27° 04' 01", an arc distance of 850.52 feet to a point on a non-tangent curve from

U.S. Government Lease for Real Property INITIALS: ~&~\ Page 2 of 65 Cascades Job Corps Center ($SSOR~ which the radius point lies S 62° 05' 48" W, a distance of 758.85 feet; thence northwesterly along said curve through a central angle of 22° 31' 25", an arc distance of 298.31 feet to a point of compound curvature with a curve to the left having a radius of 204.67 feet; thence westerly along said curve through a central angle of 65° 42' 25", an arc distance of234.71 feet to a point oftangency; thence S 63° 51' 57" W, a distance of234.96 feet; thence N 26° 41' 08" W, a distance of 115.69 feet; thence N 9° 32' 51" W, a distance of 72.93 feet;

thence N 26° 40' 42" W, a distance of 256.93 feet to the point of beginning of this description.

Situated in Skagit County, Washington.

Containing 37.56 acres.

(c) The above described property is to be used and occupied by the Government for the purposes of operating a Job Corps Center.

(d) The buildings existing at the commencement of the Government's tenancy in 1982 and leased to it are identified in "Exhibit B - Condition Survey Report and Existing Site Plan" and listed as follows:

Name as identified on:

Condition Survey Report Existing Site Plan

(i) 10 - Recreation 10 Recreation/Gymnasium

(ii) 12 - Smith 12 Mount Rainier Dormitory

(iii) 15 Thompson 15 Evergreen Dormitory

(iv) 16 Valdez 16 Challenger Dormitory

(v) 17 Wilkes 17 - Whitewater Dormitory

(vi) 24 - Paint Shop 24 - Career

(vii) 25 - Planer Shop 25 - Dental Assistant

(viii) 27 - Commissary 27E - WarehouselReceiving

27W - ElectlMed AssistlMed Office...

(ix) 28 - Garage 28 - Center Maintenance Shop

(x) 29 - Fire Hall 29 - Flam Stor/Center Support

(xi) 30 - Men's Occ. Therapy 30 - Cultural Center

(xii) 31 - Laundry 31 - Vocational Bldg

(xiii) 32 - Women's Occ. Therapy 32 - Admin/Education/Med-Dent

(xiv) 41 - Gatehouse (Not Listed)

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Additional buildings owned by Lessor and occupied by the Government:

(i) 13 - Dining Hall

(ii) 33A - Mental Health

(iii) 33B - Teap Classroom

(iv) 34 - Security/Safety

(v) 58 - Carport

(vi) 62 - Storage

Buildings owned and occupied by the Government located on the Leased Premises:

(i) 26 - Vocational Storage

(ii) 48 - LRClLibrary

(iii) 50 - Cement Masonry

(iv) 57 - Business/Clerical

(v) 63 - Center Maintenance Storage

(vi) 51 - Carpentry P.E.T.S

(vii) 52 - Storage

(viii) 53 - Storage

(ix) 54 - Carpentry Storage

(x) 55 - Carpentry Mock-Up

(xi) 56 - Electrical Mock-Up

(xii) 57A - Gazebo

(xiii) 57B - Gazebo

(xiv) 57C - Gazebo

(xv) 57D - Gazebo

(xvi) 57E - Pavilion

(xvii) 57F - Pavilion

(xviii) 57G - Pavilion

(xix) 59 - Cement Masonry Mock-Up

(xx) 61 - Storage

(xxi) 64 - Greenhouse

(xxii) 65 - Transformer Bldg

(xxiii) 66 - Electrical Mock-Up (Vacant)

(xxiv) 67 - Electrical Mock-Up

(e) Leased Premises include approximately 220,960 square feet of building space owned by Lessor and approximately 24,639 square feet of building space owned by Lessee, all located on approximately 37.56 acres of land owned by Lessor.

2. Tenn.

The basic term of the Lease will be one (1) year ("Basic Term") and the first such Basic Term shall commence July 1, 2009, and expire June 30, 2010. This Lease is subject, however, to the termination and renewal rights as hereinafter set forth.

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3. Rental Payment.

(a) The Government shall and does hereby agree to pay Lessor rent ("Basic Rent") consisting of an annual rental payment in the amount of Seven Hundred Seventy-Five Thousand Dollars ($775,000.00), beginning at the commencement date of July 1, 2009, payable monthly in arrears, provided also that these amounts may be adjusted as defined in Paragraph 5(c) and (d) of this Lease.

(b) All rental payments under this Lease shall be made promptly by wire transfer to the account specified by the Lessor.

4. Termination.

(a) The Government shall have the right to terminate this Lease at any time on one hundred eighty (180) days written notice. Said notice shall be computed commencing with the day after the date of mailing.

(b) In the event the Government terminates this Lease in less than the Basic Term, the Lessor agrees to exert its best effort to re-lease the Leased Premises at the best possible rent. In the event the Lessor is unsuccessful in re-Ieasing the Leased Premises, or if it leases the Leased Premises at a lower rent than specified herein, the Government agrees to pay the Lessor the difference between the aggregate rent contracted by the Lessor in re-Ieasing and the rental the Government would have paid during the remainder of the Basic Term. Said amounts shall be payable upon receipt of certified requests for such payments.

(c) In the event that the Washington State Legislature directs the Lessor to terminate this Lease or transfer any of the rights provided herein by lease, sale or other means, Lessor reserves the right to terminate this Lease provided that written notice of such cancellation and termination shall have been given at least 30 months prior to the effective date thereof, in which event rent shall be prorated to the date of termination.

(d) In the event of termination, tenant improvement costs incurred by Lessor for the benefit of the Government, and not fully recovered through lease payments or other arrangements, shall become immediately due and payable. Said payment shall be made to Lessor no later than the final day of occupancy.

5. Renewals.

(a) This Lease may be renewed at the option of the Government for nineteen (19) consecutive one-year terms, so long as the Government is not in default under the terms of this Lease.

(b) It is agreed that the Basic Term of this Lease may be renewed for nineteen (19) consecutive one (1) year periods by written notice from the Government to the Lessor prior to the expiration of the Basic Term or any renewal term, unless the Government notifies the Lessor in writing of its intention not to renew the Lease not later than sixty (60) days before each of the successive dates of expiration of the Basic Term or any renewal term of this Lease.

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(c) The monthly Basic Rent to be paid by the Government shall be increased annually effective on every anniversary of the commencement date of this Lease by a percentage equal to the annual percentage increase in the Consumer Price Index (CPI) published by the Bureau of Labor Statistics according to "Exhibit C - Annual Rent Increase Formula" attached hereto. The Lessor and the Government agree that any renewal of this Lease by either party hereto is subject to the availability of funds to continue the Government program as stated in Paragraph l(c). All terms and conditions of this Lease shall apply to the Basic Term of the Lease as well as to the renewal periods. For the renewal period beginning July 1st, 2014, and every five (5) years thereafter, the rental payment will be reviewed and adjusted according to the procedure specified in Paragraph 5(d) below.

(d) Beginning July 1st in the years 2014, 2019, and 2024, the annual rent shall be established according to the following process:

i) No later than nine months prior to the effective date of the next five year term of the Lease, that is October 1,2013, and following, the parties to this Lease shall each select an appraiser and said appraisers shall agree on a third appraiser, each of whom shall be requested to submit a qualifications statement and to quote a fee for establishing the fair market rent for the Leased Premises, not to include the improvements made by the Lessee to the Leased Premises over the Lease Term. The parties shall agree on a scope of work for the appraiser. The information submitted by the appraisers shall be evaluated by the parties and they shall agree on one (the "Appraiser") no later than six months prior to the effective date of the next five year term. Said Appraiser shall be directed to establish a fair market annual rent for the Leased Premises for each of next five years. The parties shall split the cost of the appraisal equally.

ii) No later than three months prior to the effective date of the next five year term, the Appraiser shall submit to the parties the fair market annual rent established in accordance with the scope of work. If the amount submitted is less than the last prior annual rent paid as provided in this Lease, the annual rent to be paid by Government shall remain the same.

Ifnot, the amount established by the Appraiser shall become the new annual rent as of the effective date of the new five year term.

The Lessor and the Government further agree that they shall be bound by the estimate of value which shall be determined in the manner herein described.

6. Notices.

(a) All notices to be given or served hereunder, whether pursuant to the terms of this Lease or any provisions of law, shall be sent by certified mail to:

Lessor: Assistant Director

General Administration

Division of Facilities

Post Office Box 41011

Olympia, WA 98504-1011

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Government: Contracting Officer U.S. Department of Labor - OASAMIBOC/OPS Division of Job Corps A&E and Construction Services 200 Constitution Ave., N.W. Rm. N-4308 Washington, DC 20210

With a copy to: USDOUOASAM - Real Estate Department 2101 Wilson Boulevard, Suite 200 Arlington, VA 22201

(b) In the event of a change of address by either party, the parties hereto covenant and agree to notify each other in writing of such change. Said notices shall be deemed effective when deposited in the United States mail, postage prepaid, or by overnight delivery service.

7. Assignment or Subletting.

The Government may authorize its agent or contractor to enter the Leased Premises to operate its program on its behalf. The Government may assign this Lease or sublet all or part of the Leased Premises, provided that the Government shall remain liable for the payment of the rent provided in this Lease and for the full performance of the covenants of this Lease, and further provided that the Government shall first obtain the Lessor's written approval of such assignment, which shall not be unreasonably withheld.

8. Maintenance of the Leased Premises.

(a) Lessor shall be responsible at its own cost and expense for maintenance and repair of the buildings identified in Paragraph 1, "Description of Property," item (d) except for matters which may be caused by the Government, its employees, agents, invitees or guests and for those buildings owned by the Government. Said maintenance and repair shall include, but shall not be limited to, foundations, tunnels, supports, andjoists under the lowest sub-floor and interior load bearing supports, concrete floorings or wood sub-flooring; repair of shingles, shake, metal or composition roofs; exterior surfaces of all buildings, including painting, roofing, clean gutter/down spouts, wood decking, walkways and stairways; heating, plumbing or electrical systems (maintain and repair electrical fixtures and plumbing fixtures); boilers, steam lines, heating units, heating controls and appurtenances;

replacement of furnace filters; interior and exterior plumbing, sewer lines and related appliances within the buildings; snow removal on public roads and parking areas; roads (patching, curbs, blacktop or gravel, and drainage); barriers (log, rock, or other outside of the Government's land assignment area);

light posts (bulbs, replacement parts); traffic signs and public information signs related to general campus information; pest control management to exterior of all buildings to include the tunnels under the buildings; and fire alarm systems and associated appurtenances (maintenance and annual inspections and certification must be completed by a certified technician or contractor; copies of all inspections must be submitted to the Government.)

(b) In the event that Lessor fails to maintain and repair the buildings as provided herein, the Government may provide written notice of such failure to Lessor. Following receipt of said notice, Lessor shall have a reasonable period of time to cure said failure so long as such cure proceeds on a u.s. Government Lease for Real Property INITIALS:~· & Q Page 7 of 65 timely basis. In the event that Lessor fails to cure such failure in a reasonable period of time, the Government reserves the right to cure such failure at its own cost and expense and to deduct said cost and expense from rent. Prior to initiating any cure of such failure, Government shall provide to Lessor a written Notice of Intent to Cure describing in reasonable detail the nature of the failure to cure, the proposed cure and the proposed cost to be deducted from rent. In the event that Lessor fails to complete the repair within thirty days of receipt of said Notice of Intent to Cure, Government may proceed to cure such failure.

(c) If the Lessor neglects or refuses to make any needed repairs within a reasonable time after written notice is received, the Government, without liability, may make such repairs and deduct the actual cost thereof from the rental payment(s) next falling due. However, the costs of said repairs deducted from rental payments shall not exceed, for anyone repair, the total rental payments for two years under the Lease at the rental rate in effect at the time of the repair.

(d) Except as expressly provided in 8(a) above, the Government at its sole cost and expense shall maintain and keep free from debris all walkways, sidewalks, stairs, and other access ways to the Leased Premises; pickup, remove and dispose of litter, debris, food and other waste from all outside areas of the Leased Premises, in order to minimize attracting pests; pickup, remove, and dispose of litter, debris, and tripping hazards on all access ways within the Leased Premises; maintain, repair, or replace all interior walls, wall surfaces, ceilings, light bulbs, door hardware, floors, carpeting, tile surfaces, windows, window coverings, screens, and walking surfaces (replacement of walls, ceilings, floors, floor coverings and windows must be approved by the Lessor in advance of the work commencement); provide all interior painting, staining, varnishing and application of other protective coating as needed, depending upon condition; maintain and/or repair interior wood trim around doors and windows; range hoods in kitchen and staff lounge are to be inspected and certified annually as per NFPA 13A (copies of inspections must be submitted to the Lessor); provide all janitorial services to include window washing, restroom supplies and light bulbs; provide weekday grounds maintenance and services such as litter pickup, removal of safety hazards, etc., included within the Leased Premises;

provide mowing, weeding, planting and fertilizing within the Leased Premises - all major changes to the landscape must be approved by the Lessor in advance of the work commencement; provide, maintain and keep in good repair picnic tables within the Leased Premises (picnic tables are Government property); sweep and provide minor surface repair of sidewalks, walkways, employee trails, and steps; maintain safe public access to facilities and services offered during winter season, which will include, but not be limited to ice and snow removal. The Government will collect and transport all solid waste that it generates; waste concrete or other construction debris from the Government shall be stockpiled in an area designated by the Lessor until proper disposal can be arranged by the Government. The Government is responsible for the installation, maintenance and replacement of all interior and exterior signs within the Leased Premises. Public signs, flags and banners must receive prior approval from the Lessor. The Government will provide pest control management within the interior of buildings of the Leased Premises. The Government is responsible for all on-premises equipment and inside wiring and the cost associated with it. The Government is responsible for the installation, repair or replacement of heating, plumbing or electrical systems related to tenant improvements to the building within the Leased Premises. The Government shall at its sole cost and expense repair all vandalism damage caused by its employees, agents, invitees or guests to the Leased Premises. Any required written approval for the abovementioned repairs shall not be unreasonably withheld, and in the event that the Lessor does not disapprove of the making of said

U.S. Government Lease for Real Property INITIALS: ~& M Page 8 of65 Cascades Job Corps Center t1SsoR~ repairs within thirty (30) days of receipt of notice from the Government, then it shall be conclusively deemed that approval is granted. The Government agrees in performing the above work to comply with all applicable local, state and federal laws and regulations including, but not limited to, compliance with building codes and public works requirements and obtaining appropriate permits and inspections, as governed by Public Law 100-678, Section 21, of the Public Buildings Amendments of 1988.

(e) This Paragraph shall not apply if the Leased Premises are partially or totally destroyed as described in Paragraph 11, or for that portion installed or constructed by the Government.

9. Utilities.

The Lessor will provide, on a reimbursable basis, the following utilities for the Leased Premises:

steam, electricity, gas, water, and sewer. The reimbursements of the utilities are based on private party rates that the Lessor is being billed by the various utility providers, as follows:

(a) Steam: 95% of the rate the Seattle Steam Company bills its commercial customers applied to metered usage by the Government.

(b) Electricity, gas, water, and sewer: The Lessor will bill the Government for exact consumption by the Government of these utilities by reading the metered usage and applying the rates that the various utility providers use to bill the Lessor. The bill must show the billing period, units of measure for each utility, the cost per unit, number of units consumed and any service/delivery charges for the total cost of service(s). The electric bill should show the charge for KW (Demand) as well as KWH. The Government will only be billed for its exact utility usage; no additional charges or costs will be added by the Lessor.

10. Modifications of Leased Premises by the Government.

(a) All furniture, furnishings, removable partitions, fixtures, signs or equipment placed on the Leased Premises by the Government or purchased from the Lessor in connection with the Lease shall remain the property of the Government.

(b) The Government may, at its own cost and expense, make such alterations, improvements or renovations to the Leased Premises as the Government deems necessary for its use, provided that the Government shall first obtain written approval from the Lessor for any such alterations, improvements or renovations. The Government shall cause plans and specifications to be developed at its sole cost and expense and submit to Lessor for approval. Said approval from the Lessor shall not be unreasonably withheld, and in the event that the Lessor does not disapprove of the making of any said alterations, improvements or renovations within thirty (30) days of receipt of notice from the Government, then it shall be conclusively deemed that approval is granted. If such alterations.

improvements or renovations are made, they shall be at the Government's option and may include, but shall not be limited to, structural changes and the installation of air conditioning, heating or electrical systems. If such alterations, improvements or renovations are made, the Government shall be responsible for the full cost and expense, including any and all building system or structural changes necessary to support the project or caused by the project. Acquisition of construction, renovation and u.s. Government Lease for Real Property INITIALS:~& ~\ Page 9 of 65 Cascades Job Corps Center ¥JSSOR~ remodeling services, maintenance and other housekeeping services, and utilities as described in this Lease are regulated by appropriate portions of the Federal Acquisition Regulation (FAR). Access to the FAR is available at http://www.arnet.gov/far. The Government agrees in performing the above work to comply with all applicable federal, state and local laws and regulations to the extent required by Public Law 100-678, Section 21, of the Public Buildings Amendments of 1988. If the Government makes any alterations, additions, installations, changes or improvements, they shall be and remain the property of the Government and they or any part of them shall, at the Government's option, be subject to removal by the Government prior to the end or other termination of this Lease (or if this Lease comes to an end prior to the expiration of the term hereof, they shall be so subject to removal within thirty (30) days after the date of such termination), provided, however, that any injury or damage to the Leased Premises resulting from such removal shall be promptly repaired at the Government's sole cost and expense, returning the Leased Premises to a comparable condition to that which existed prior to the Government's alteration or like change, reasonable wear and tear excepted. Any of such alterations and like changes in the Leased Premises as are not so removed shall, at the termination of this Lease, become and remain the property of the Lessor without compensation to the Government.

11. Destruction of Leased Premises.

If the entire premises are destroyed by fire or other casualty, this Lease will immediately terminate. In case of partial destruction or damage, so as to render the premises untenantable, as determined by the Government, the Government may terminate the Lease by giving written notice to the Lessor within 15 calendar days of the fire or other casualty; if so terminated, no rent will accrue to the Lessor after such partial destruction or damage and the Government shall be reimbursed for any unearned rent that has been paid; and if not so terminated, the rent will be reduced proportionately by supplemental agreement hereto effective from the date of such partial destruction or damage. Nothing in this Lease shall be construed as relieving Lessor from liability for damage to or destruction of property of the United States of America caused by the willful or negligent act or omission of Lessor.

12. Access to the Leased Premises and Surrounding Property.

The Lessor will coordinate the access of its employees, agents, invitees, and guests to the Leased Premises with the Job Corp Center Designated Staff. The Lessor acknowledges that the Leased Premises are being used for a secured Government facility and agrees to have its abovementioned representatives abide by the rules established by the Cascades Job Corps Center. Notwithstanding the above, reasonable access to the Leased Premises shall be provided to the Lessor and its representatives.

13. Condemnation.

(a) In the event the entire Leased Premises shall be appropriated or taken under the power of eminent domain by any public or quasi-public authority, this Lease shall terminate and expire as of the date of such taking, and the Government shall thereupon be released from any further liability hereunder.

(b) If ten percent (10%) or more of the ground floor area of the buildings on the Leased Premises shall be appropriated or taken under the power of eminent domain by any public or quasi public authority, then in such event the Government shall have the right to cancel and terminate this

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Lease as of the date of such taking upon giving to the Lessor notice in writing of such election within thirty (30) days after the receipt by the Government from the Lessor of written notice that said Leased Premises have been so appropriated or taken. In the event of such cancellation the Government shall thereupon be released from any further liability under this Lease. The Lessor agrees immediately after any appropriation or taking to give the Government notice in writing thereof.

(c) If this Lease is terminated in either manner herein above provided, the rent for the last month of the Government's occupancy shall be prorated, and the Lessor agrees to refund to the Government any rent paid in advance; and if the Government shall have made improvements or alterations or erected any building on the Leased Premises after the beginning date of this Lease and shall have not yet fully amortized its expenditures for such improvements, alterations, or structures, the Lessor shall and hereby does assign to the Government out of any award payable to the Lessor the pro rata portion of the award relative to the respective interests of the parties.

14. Condition of Leased Premises.

A Condition Survey, dated December 1, 1981, was completed at the commencement of the Government's initial occupancy of this space. This Condition Survey is incorporated herein by reference and shall be used for the purpose of Paragraph 32 herein. A copy of this Condition Survey is attached hereto as "Exhibit B - Condition Survey Report and Existing Site Plan." The Government has examined the Leased Premises and accepts them in their present condition, excepting the work provided in Paragraph 38, "Asbestos," and Paragraph 45, "Seismic Safety," herein.

15. Right of First Refusal by the Government.

(a) If at any time during the term of this Lease, or any extension thereof, the Lessor shall receive a bona fide offer from any third person or corporation to purchase the Leased Premises, Lessor shall serve on the Government a notice in writing of the price and terms of such offer from such third person or corporation and of the intention of the Lessor to accept the same. The Government shall have the right for forty-five (45) days thereafter to purchase the Leased Premises for the purchase price and on the terms specified in said notice. If the Government shall not within the said period of forty five (45) days elect to acquire the said Leased Premises upon the terms and conditions set forth in the notice herein above referred to, and if the Leased Premises are not sold subject to the terms and conditions of this Lease, the Government shall be reasonably compensated for any improvements it has made to the property, the Lessor may then sell the Leased Premises to said third person provided the said sale is on the said terms and conditions and for the price set forth in the abovementioned notice.

(b) The Government acknowledges that any sale of the Leased Premises is subject to the approval of the State of Washington legislature.

16. Holding Over.

(a) The Government shall have the right to hold over for a period of thirty (30) days after the termination of this Lease or any extension thereof, for the purpose of removing any and all personal property belonging to the Government and located in the Leased Premises, subject to the terms, conditions and covenants of this Lease.

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(b) Any holding over after the expiration of the thirty (30) day period referenced in 16(a) above shall be construed to be a tenancy from month-to-month subject to the terms, conditions and covenants of this Lease.

17. Taxes.

The Government shall not be obligated to pay any taxes levied on any real or personal property owned by Lessor and leased to the Government during the term of this Lease or any extensions thereof.

18. Curing Lessor's Default.

Lessor agrees that if it fails to pay any interest, cost or other charges upon any mortgage or deed of trust or other lien affecting the Leased Premises, including any deposits for taxes and insurance, when any of the same becomes due, or fails in any other respect to perform any covenant and agreement in this Lease contained on the part of the Lessor to be performed, then in any such event or events, the Government may, after the continuance of any such failure or default for fifteen (15) days after notice in writing thereof is given by the Government to Lessor, pay such costs or other charges and cure such defaults on behalf of and at the expense of Lessor, including, but not limited to, the same to the payment of any fees, costs and charges of or in connection with any legal action which may have been brought; and Lessor agrees to reimburse the Government therefore; and the Government shall be entitled to deduct all sums expended by it pursuant to the provisions of this section from the rent(s) payable thereafter to Lessor, pursuant to the provisions hereof.

19. Warranty of Title.

Lessor warrants that it is lawfully possessed of the Leased Premises hereby demised and has good, right, and lawful authority to enter into this Lease, and that in the event Lessor has not the right, title and authority aforesaid, the Government, at its option, may quit and surrender the Leased Premises without liability for further rent and hold Lessor for any damages resulting therefrom; and that Lessor shall put the Government into actual possession of the Leased Premises at the beginning of the term of this Lease and shall insure to the Government the sole, peaceable and uninterrupted use and occupancy of said Leased Premises during the full term (except to the extent provided elsewhere in the Lease with reference to destruction of Leased Premises.)

20. Assignment of Claims.

Pursuant to the provisions of the Assignment of Claims Act of 1940, as amended (31 U.S.C. 203,41 U.S.C. 15), if this Lease provides for payments aggregating $1,000 or more, claims for monies due or to become due the Lessor from the Government under this Lease may be assigned to a bank, trust company, or other financing institution, including any federal lending agency, and may thereafter be further assigned or reassigned to any such institution. Any such assignment or reassignment shall cover all amounts payable under this Lease and not already paid, and shall not be made to more than one (1) party, except that any such assignment or reassignment may be made to one (1) party as agent or trustee for two (2) or more parties participating in such financing. Notwithstanding any provisions of this Lease, payments to an assignee of any monies due or to become due under this contract shall not, to the extent provided in said Act, as amended, be subject to reduction or set-off.

u.s. Government Lease for Real Property INITIALS' \)f - & ~ Page 12 of 65 Cascades Job Corps Center ~ GO MENT

21. Amendments or Modifications to Lease.

This instrument embodies all the agreements between the parties respecting the Leased Premises described in this Lease, and no oral agreements or correspondence shall be held to vary the provisions of this Lease. Any subsequent changes and modifications shall become effective only by written instrument duly executed by Lessor and the Government. To the extent there is any conflict between this Lease and the Settlement Agreement referenced in the Recitals, this Lease shall govern.

22. Lessor's Successors.

The terms and provisions of this Lease and the conditions herein shall bind the Lessor, and the Lessor's successors, and assigns.

23. Entry and Inspection.

The Government shall permit Lessor and its duly authorized agents to enter into and upon the Leased Premises at any reasonable time after reasonable and proper notification, subject, however, to the security requirements of the United States Government, for the purpose of inspecting the same, if Lessor should deem it necessary to do so, and for the purpose of maintaining or repairing the Leased Premises.

24. Building Code Violations.

(a) Lessor is delivering the Leased Premises to the Government in its present condition and it is understood and agreed that the Government accepts the Leased Premises in said present condition, excepting the work provided in Paragraph 38, "Asbestos," and Paragraph 45, "Seismic Safety," herein.

Lessor represents that the Leased Premises may be used for a residential training center without violation of any zoning code applicable to the area, and Lessor represents that neither it nor its employees or agents have any knowledge of any violation of city, state or federal building codes on the Leased Premises at present. If the Leased Premises should be barred by any zoning code from use as a Job Corps Center, the Government may cancel the Lease. Lessor agrees to correct any building code violation which existed at the time of the commencement of the Government's tenancy in 1982. If the Lessor neglects or refuses to correct such violation within a reasonable time after written notice from the Government, the Government without liability for forfeiture may correct the violation itself and deduct the cost of doing so from the rental payment(s) next falling due. The Government may require the Lessor to make such corrections at any time during the basic term of this Lease or during any renewal period thereof.

(b) The Lessor shall not be responsible for correcting building code violations caused by changes made to the Leased Premises by the Government during its occupancy from 1982 to the present. If correction of such building code violations is required, the Government shall make said corrections at its full cost and expense.

(c) The Lessor shall not be responsible for correcting such building code violations as are generated by the special purposes to which the premises are put by the Job Corps program, or such other purposes for which the Government may use the Leased Premises, and which arise during the u.s. Government Lease for Real Property ~~INITIALS: & Page 13 of65 Cascades Job Corps Center SSOR GO MENT course of occupancy by the Government, its sub lessee, agents and assigns. Special purposes are those purposes which differ from the normal and reasonable purposes to which the building would be put if a tenant other than the Government were the Lessee. Special purposes do not include compliance with Executive Order 12941, as described in Paragraph 45, "Seismic Safety," of this Lease.

25. Broker's Commissions.

Lessor and the Government warrant to each other that they have not been represented by any real estate brokers or agents in connection with the negotiation of this Lease and each party shall be responsible for their respective costs, if any.

26. Covenant Against Contingent Fees.

The Lessor warrants that no person or selling agency has been employed or retained to solicit or secure this Lease upon an agreement or understanding for a commission, percentage brokerage, or contingent fee, excepting bona fide employee or bona fide established commercial or selling agencies maintained by the Lessor for the purpose of securing business. For breach or violation of this warranty the Government shall have the right to annul this Lease without liability or in its discretion to deduct from the rental price or consideration, or otherwise recover the full amount of such commission, percentage, brokerage, or contingent fee. (Licensed real estate agents or brokers having listings on property for rent, in accordance with general business practice, and who have not obtained such licenses for the sole propose of effecting this Lease, may be considered as bona fide employees or agencies within the exception contained in this clause).

27. Officials Not to Benefit.

(a) No member of or delegate to Congress or Resident Commissioner shall be admitted to any share or part of this Lease or to any benefits that may arise therefrom; but this provision shall not be construed to extend to this Lease if made with a corporation for its general benefit.

(b) No funds have been paid or will be paid to any person for influencing or attempting to influence an employee of any Governmental Agency, representative of Congress, or Congressional staff/employee on its behalf in connection with the awarding of this Lease or the extension, continuation, renewal, amendment or modification of this Lease.

28. Audit and Records - Negotiation.

(a) As used in this clause, "records" includes books, documents, accounting procedures and practices, and other data, regardless of type and regardless of whether such items are in written form, in the form of computer data, or in any other form.

(b) Examination ofcosts. If this is a cost-reimbursement, incentive, time-and-materials, labor-hour, or price redeterminable contract, or any combination of these, the Lessor shall maintain and the Contracting Officer, or an authorized representative of the Contracting Officer, shall have the right to examine and audit all records and other evidence sufficient to reflect properly all costs claimed to have been incurred or anticipated to be incurred directly or indirectly in performance of this Lease. This

.&u.s. Government Lease for Real Property INITIALS: ~~ Page 14 of65 . SSOR GO· MENTCascades Job Corps Center right of examination shall include inspection at all reasonable times of the Lessor's plants, or parts of them, engaged in performing the contract.

(c) Cost or pricing data. If the Lessor has been required to submit cost or pricing data in connection with any pricing action relating to this Lease, the Contracting Officer, or an authorized representative of the Contracting Officer, in order to evaluate the accuracy, completeness, and currency of the cost or pricing data, shall have the right to examine and audit all of the Lessor's records, including computations and projections, related to

(1) The proposal for the Lease, subcontract, or modification;

(2) The discussions conducted on the proposal(s), including those related to negotiating;

(3) Pricing of the Lease, subcontract, or modification; or

(4) Performance of the Lease, subcontract or modification.

(d) Comptroller General

(1) The Comptroller General of the United States, or an authorized representative, shall have access to and the right to examine any of the Lessor's directly pertinent records involving transactions related to this Lease or a subcontract hereunder.

(2) This paragraph may not be construed to require the Lessor or subcontractor to create or maintain any record that the Lessor or subcontractor does not maintain in the ordinary course of business or pursuant to a provision of law.

(e) Reports. If the Lessor is required to furnish cost, funding, or performance reports, the Contracting Officer or an authorized representative of the Contracting Officer shall have the right to examine and audit the supporting records and materials, for the purpose of evaluating

(1) The effectiveness of the Lessor's policies and procedures to produce data compatible with the objectives of these reports; and

(2) The data reported.

(f) Availability. The Lessor shall make available at its office at all reasonable times the records, materials, and other evidence described in paragraphs (a), (b), (c), (d), and (e) ofthis clause, for examination, audit, or reproduction, until 3 years after final payment under this Lease or for any shorter period specified in Subpart 4.7, Contractor Records Retention, of the Federal Acquisition Regulation (FAR), or for any longer period required by statute or by other clauses of this Lease. In addition

(1) If this Lease is completely or partially terminated, the Lessor shall make available the records relating to the work terminated until 3 years after any resulting final termination settlement; and

INITIALS:~ & ~ Page 15 of65u.s. Government Lease for Real Property

(2) The Lessor shall make available records relating to appeals under the Disputes clause or to litigation or the settlement of claims arising under or relating to this Lease until such appeals, litigation, or claims are finally resolved.

(g) The Lessor shall insert a clause containing all the terms of this clause, including this paragraph (g), in all subcontracts under this Lease that exceed the simplified acquisition threshold, and

(1) That are cost-reimbursement, incentive, time-and materials, labor-hour, or price redeterminable type or any combination of these;

(2) For which cost or pricing data are required; or

(3) That require the subcontractor to furnish reports as discussed in paragraph (e) of this clause.

29. Occupancy.

Lessor agrees that the Government shall have full and complete occupancy of the Leased Premises. In the event that such possession is not received by the Government, it may terminate this Lease or may reduce the rental in proportion to the percentage of the program which is inhibited or barred thereby.

30. Facilities Nondiscrimination.

(a) As used in this section, the term "facility" means stores, shops, restaurants, cafeterias, restrooms, and any other facility of a public nature in the building in which the space covered by this Lease is located.

(b) The Lessor agrees that he will not discriminate by segregation or otherwise against any person or persons because of age, political affiliation or belief, race, creed, color, handicap, sex, religion or national origin in furnishing, or by refusing to furnish, to such person or persons the use of any facility, including any and all services, privileges, accommodation, and activities provided thereby.

Nothing herein shall require the furnishing to the general public of the use of any facility customarily furnished by the Lessor solely to tenants, their employees, customers, patients, clients, guests and invitees.

(c) It is agreed that the Lessor's noncompliance with the provisions of this section shall constitute a material breach of this Lease. In the event of such noncompliance the Government may take appropriate action to enforce compliance, may terminate this Lease, or may pursue such other remedies as may be provided by law. In the event of termination, the Lessor shall be liable for all excess costs of the Government in acquiring substitute space, including but not limited to the cost of moving to such space. Substitute space shall be obtained in as close proximity to the Lessor's building as is feasible and moving costs will be limited to the actual expenses thereof of costs incurred.

(d) It is further agreed that from and after the date hereof the Lessor will, at such time as any agreement is to be entered into or a concession is to be permitted to operate, include or require the inclusion of the foregoing provisions of this section in every such agreement or concession pursuant to u.s. Government Lease for Real Property INITIALS: Page 16 of 65 Cascades Job Corps Center ~~r.; SOR GOV NT which any person other than the Lessor operates or has the right to operate any facility, as defined in Paragraph 30(a). Nothing herein contained, however, shall be deemed to require the Lessor to include or require the inclusion of the foregoing provisions of this section in any existing agreement or concession arrangement or one in which the contracting party other than the Lessor has the unilateral right to renew or extend the agreement or arrangement, until the expiration of the existing agreement or arrangement and the unilateral right to renew or extend. The Lessor also agrees that it will take any and all lawful actions as expeditiously as possible, with respect to any such agreement as the contracting agency may direct, as a means of enforcing the intent of this section, including, but not limited to, termination of the agreement of concession and institution of court action.

31. Equal Opportunity Clause.

(The following clause is applicable unless this contract is exempt under the rules and regulations of the Secretary of Labor 41 CFR Part 60-1.)

During the performance of this Lease the Lessor agrees as follows:

(a) The Lessor will not…