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HomeMy WebLinkAboutItem 11- City Property PurchaseAGENDA ITEM SUMMARY Meeting Date: 11/21/2022 Meeting Type: Regular Meeting Department: City Manager's Office Staff Contact: Sam Kelly-Quattrocchi, Legislative & Economic Development Analyst SPRINGFIELD Staff Phone No: 541-726-3700 CITY COUNCIL Estimated Time: 10 Minutes ITEM TITLE: CITY PROPERTY PURCHASE ACTION Authorize City Manager to enter into Purchase and Sale Agreements for one parcel REQUESTED: of real property in the Glenwood Tax Lot 17-03-34-31-00300 upon the terms as substantially provided in Attachments 1. ISSUE Council previously authorized staff to enter into negotiations for the Glenwood STATEMENT: property after the current owner approached staff looking to sell. This site is currently in plans to be included in a future phase of the Franklin Boulevard Redesign. ATTACHMENTS: Attachment 1 — Purchase and Sale Agreement DISCUSSION/ Staff are requesting City Council approve a Purchase and Sale Agreement for a FINANCIAL parcels owned $410,000 (Attachment 1) IMPACT: The purchase prices were negotiated on behalf of the City by a real estate broker and were based upon the properties' appraised values and current cash flows. Additional information regarding these properties is provided to the City Council in the Executive Session Board Briefing Memorandum. Existing transportation plans outline the intersection of Franklin and Henderson for future Franklin Boulevard improvements which will include fully utilizing the land currently in this tax. The Franklin project is currently awaiting additional federal funds before construction can begin and acquiring the property now would allow work to begin quickly after receiving funding. Acquisition must follow the federal Uniform Relocation and Property Acquisition Act, which means the owner's business may be eligible for relocation benefits if displaced by future roundabout construction. The purchaser has requested to lease back the property after the sale. The proposed lease terms are appended to the Purchase and Sale agreement (Attachment 1). The first 5 months of the lease would include nominal rent of $1.00, with rent at market rates following that initial time period. Providing the lease -back to the seller delays the requirement to provide relocation benefits to the owner's business until the time of project construction. {00025563:1} PURCHASE AND SALE AGREEMENT THIS PURCHASE AND SALE AGREEMENT is entered into this day of September, 2022, by and between 1MT, LLC ("Seller's, and the City of Springfield, a municipal corporation of the state of Oregon ("Purchaser"). RECITALS A. Seller owns certain property commonly known as the real property located at 3697 Franklin Blvd, Springfield, Lane County, Oregon (Map and Tax No. 17-03-34-31-00300)," as more particularly described in Section 1 below (collectively, the "Property'. B. Purchaser desires to acquire all of the Property from Seller, and Seller is willing to sell and convey all of the Property to Purchaser, on and subject to the terms of this agreement (the "Agreement'. C. The property has been appraised by Purchaser and the sale price as reflected in this Agreement is the appraised fair market value of the property. D. Seller wishes to occupy the property for a period after closing, described in the Lease Agreement in Exhibit C, for nominal rent that does not exceed the fair market rent for the occupancy. E. Seller and Seller's business Ace Trading Co. may be displaced from the property during the term of the lease in Exhibit C, as a result of a future roadway improvement project. Seller understands that if the roadway improvement project proceeds, and if Seller's business is displaced as a result of rehabilitation or demolition for the project, Seller D3ay be eligible for relocation assistance and payments under the Uniform Relocation and Property Acquisition Act. Please note the following important points. Purchaser will notify Seller or Seller's business in writing if determined eligible for relocation assistance, which includes: (1) At least 90 days' advance written notice of lease termination; and(3) Payment for moving expenses. AGREEMENT 1. PURCHASE AND SALE OF THE PROPERTY. Seller agrees to sell the Property to Purchaser, and Purchaser agrees to purchase the Property from Seller, on the terms and conditions set forth in this Agreement. 1.1 The Property consists of: (a) The land described in Exhibit A attached hereto (the "Land's and all easements, rights, and interests appurtenant thereto; (b) All of the improvements currently situated on the Land (the "Improvements'; (c) All of Seller's rights (if any) in all of the following intangible property now or hereafter existing with respect to the Property (the "Intangible Property"):AII warranties, guaranties and sureties now or hereafter received in connection with the construction of or equipment on the Improvements. 1.2 Lease. This transaction also includes Tenant leasing the Improvements starting on the Closing Date (hereinafter defined) of this Agreement consistent with a separate written lease agreement set out in Exhibit C attached hereto ("the Lease") 2. EFFECTIVE DATE. It is the intent of the parties to this Agreement that this Agreement shall be effective on the date the last party signs this Agreement (the "Effective Date' {00025699:2} 3. PURCHASE PRICE. The total purchase price (the "Purchase Price") for the Property is four hundred and ten thousand dollars ($410,000). 4. EARNEST -MONEY DEPOSIT. Upon execution of this Agreement, Purchaser will deliver to Evergreen Land Title Company (the "Escrow Agent') in Eugene, Oregon, $20,000 in cash with the Escrow Agent, which sum constitutes Purchaser's earnest -money deposit under this Agreement (the "Deposit"). The Deposit will be placed in an interest-bearing account, and all interest thereon will be added to and become part of the Deposit. The Deposit must be applied in accordance with the terms of this Agreement. S. PAYMENT OF PURCHASE PRICE. The Purchase Price must be paid by Purchaser in all cash on the Closing Date (as defined below), subject to application of the Deposit and the adjustments and credits as provided in this Agreement. 6. PROPERTY INSPECTIONS. 6.1 Inspection Rights. Purchaser has the right to perform any tests, inspections, and feasibility studies on the Property as Purchaser may deem necessary, including any environmental assessment that would require soils analysis, groundwater testing, or other studies commonly associated with such assessment, with the prior consent of Seller in each instance, which consent will not be unreasonably withheld. 6.2 Inspection Expenses. All costs and expenses of all of Purchaser's tests, inspections, and studies will be paid by Purchaser when due, regardless of whether this transaction closes. Provided, however, that Seller will reimburse Purchaser for the costs of the Level 1 Environmental Survey at time of closing. 6.3 Inspection Indemnity. Purchaser will indemnify, defend, and hold harmless Seller from and against any and all costs, losses, damages, expenses, liabilities, actions, liens, or claims arising from or related to any activities on or about the Property by Purchaser or any agent, employee, contractor, or invitee of Purchaser. 6.4 No Inspection Contingencies. Notwithstanding Purchaser's right to inspect under this section 6, Purchaser agrees to accept the property and all aspects thereof in its then - current condition without regard for the outcome of Purchaser's inspection(s), except as specifically provided otherwise in this agreement. 7. TITLE TO THE PROPERTY. 7.1 Title Report. Within 10 days after the Effective Date, Seller must order a preliminary title report from the Escrow Agent (as hereinafter defined) with respect to the Land (the "Title Report'. The Title Report must be accompanied by legible copies of all special exceptions listed therein. Purchaser will have until 14 days after its receipt of the Title Report to notify Seller in writing of Purchaser's disapproval of any exceptions shown in the Title Report. Any special assessments shown on the Title Report objected to by Purchaser must be included in Purchaser's notice. In the event of any disapproval, Seller will notify Purchaser in writing within 14 days after Purchaser's notification as to whether Seller agrees to remove any of the disapproved exceptions, and upon delivering that notice, Seller may have until the Closing Date to cause the disapproved exceptions that Seller has agreed to remove to be removed of record and from the Title Report. Seller's failure to deliver written notice to purchaser within the 10 - day period will be deemed to be Seller's election not to remove any of the disapproved exceptions. Purchaser will be deemed to have accepted all title exceptions to which it has not timely objected. {00025699:2} 7.2 Rescission of Agreement—Title Defects. If Seller elects not to eliminate any title exception disapproved by Purchaser, Purchaser may elect to cancel this Agreement by written notice to Seller given on or before 5 days after Seller's notification of its election. In that event, the Deposit must be refunded to Purchaser and this Agreement will terminate. If Purchaser does not elect to cancel this Agreement, Purchaser's objections to the disapproved exceptions that Seller elected not to eliminate will be deemed waived and the Property will be conveyed to Purchaser subject to those defects without credit against the Purchase Price. The foregoing notwithstanding, Seller must cause all monetary liens against the Property that are not accepted by Purchaser to be released of record by the Closing Date. 8. PROPERTY DOCUMENTATION. 8.1 No Current Lease. Other than the Lease contemplated by the parties and attached in Exhibit C, there are no leases for the Property. 8.2 Information Provided by Third Parties. Purchaser acknowledges that Seller is not making any representation, warranty, or guaranty with respect to the completeness, accuracy, or reliability of any report, document, or record prepared by any third party regarding the Property. 9. SELLER'S REPRESENTATIONS. 9.1 Content of Representations. Seller's representations under this Agreement are limited to the following: (a) No Notice of Violation of Zoning and Other Laws Seller has not received any written notice from any governmental authority alleging that the Improvements violate any building codes, building or use restrictions, or zoning ordinances, rules, or regulations. (b) No Litigation. To Seller's knowledge, there is no pending or threatened litigation or administrative action with respect to the Property. (c) No Condemnation. To Seller's knowledge, there is no pending or contemplated eminent domain, condemnation, or other governmental taking of the Property or any portion thereof. (d) No Additional Assessments. To Seller's knowledge, there are no special or general assessments, which are in addition to those which will be disclosed in the Title Report, that have been levied against or are proposed for the Property. (e) No Government Obligations. To Seller's knowledge, there are no unperformed obligations required by any governmental or quasi -governmental body or authority that are currently due relative to the Property. (f) Authority of Se/%% Seller's execution, delivery of, and performance under this Agreement are undertaken pursuant to authority validly and duly conferred on Seller and the signatories hereto. (g) No Breach ofAgreements. This Agreement and the consummation of the transaction evidenced by this Agreement do not violate any other agreement to which Seller is a party. (h) Nonforeign Status. Seller is not a "foreign person" as defined in IRC section 1445 (1954). 9.2 Seller's Knowledge. In each event in which any representation of Seller is limited "to Seller's knowledge" or similar phrase, that knowledge includes only the actual, personal knowledge (and not the implied, imputed, or constructive knowledge) of Gilford Burgess, without any investigation or inquiry whatsoever. 9.3 Effect of Purchaser's Knowledge. Purchaser agrees that in the absence of an intent on the part of Seller to fraudulently conceal information about the Property or {00025699:2} fraudulently mislead Purchaser, Purchaser does not have the right to rely upon any representation of Seller, and Seller will not be liable for any misrepresentation, if and to the extent Purchaser is given access to data or information relating to the Property prior to the Closing Date that reveals, or Purchaser's tests or inspections prior to the Closing Date reveal, or Purchaser otherwise knows or has reason to know prior to the Closing Date of any information that reveals, the representation is incorrect, and Purchaser nevertheless elects to close this purchase. 9.4 Survival of Representations. All of Seller's representations in this Agreement will be deemed given only as of the date of this Agreement. Seller's liability for any misrepresentation under this Agreement will survive the Closing of this transaction for a period of one (1) year. 10. PURCHASER'S REPRESENTATIONS. 10.1 Purchaser's Existence and Authority. Purchaser is a validly existing and duly organized municipal corporation under the laws of the State of Oregon and has the full right and authority to conduct its business under the laws of the State of Oregon. 10.2 No Third Party Consents. Except as set forth in Section 9.1(a), the execution of this Agreement by Purchaser and Purchaser's performance of all of its obligations hereunder are not subject to any approval or consent of any person, board, committee, or third party. 10.3 No Litigation. Purchaser is not a party to any litigation or civil or criminal proceedings; no petitions in bankruptcy have been filed by or against Purchaser; and none of Purchaser's assets are currently subject to any insolvency, receivership, or foreclosure proceedings. 10.4 No Breach of Agreements. This Agreement does not breach or violate any term or provision of any other agreement or contract to which Purchaser is a party. 10.5 Survival of Representations. All of Purchaser's representations in this Agreement will be deemed given only as of the date of this Agreement. Purchaser's liability for a misrepresentation under this Agreement will survive the Closing of this transaction for a period of one (1) year. 11. CONDITIONS TO CLOSING. 11.1 Purchaser's Conditions. Purchaser's obligation to close this transaction is subject to the satisfaction of each of the following conditions: (a) Seller's Compliance. Seller's fulfillment of each of its obligations under this Agreement in all material respects; (b) Seller's Representations The continuing accuracy of all of Seller's representations in Section 7 in all material respects as of the Closing Date; and (c) Material Casualty More Than $100,000. The absence of any material damage by casualty to the Improvements that has not been repaired by the Closing Date. For the purposes hereof, a "material damage by casualty" means any damage by fire or other casualty that has not been repaired and paid for by the Closing Date and for which the estimated cost of the remaining repairs exceeds $100,000.00. If the Improvements suffer any material damage by casualty, Purchaser has the right and option to terminate this Agreement within 30 days after the date of the casualty or by the Closing Date, whichever occurs first. Seller will also have the right to cancel this Agreement if the material damage by casualty is not fully covered by Seller's insurance policy. If Seller and Purchaser do not elect to terminate this Agreement, this transaction will close without increase or decrease in the Purchase Price, Seller must proceed to effect any repairs that are reasonably possible prior to Closing unless otherwise agreed to in {00025699:2} writing by Purchaser, and Purchaser is entitled to all insurance proceeds that are not used to pay the costs of those repairs. Seller must also credit against the Purchase Price the amount of any deductible or self-insurance applicable to the casualty, unless already paid by Seller. (d) Material Casualty Less than $100,000. If the estimated cost to repair any damage by casualty as of the Closing Date is less than $100,000.00, Purchaser does not have the right to terminate this Agreement because of that casualty and Purchaser will be given a credit against the Purchase Price in the amount of the estimated cost to repair the damage, whereupon Seller will be entitled to retain the right to all insurance proceeds that would otherwise be paid to Purchaser on the Closing Date. All repair cost estimates referred to in this section will be made by reference to a fixed-price construction contract, which estimate Seller must obtain as promptly as is reasonably possible after the date of the casualty. If the contract price estimate cannot be ascertained as of the Closing Date, Purchaser may waive its election to take a Purchase Price credit or must deposit with the Escrow Agent on the Closing an amount of the Purchase Price reasonably agreed to by the parties as a reasonable estimate of the credit, whereupon the actual estimate of the repairs will be ascertained by the means described above as soon as practicable. When the actual estimate is so determined, Purchaser will be given a credit against the Purchase Price in that amount, and the estimated amount deposited with the Escrow Agent will be paid to Purchaser to the extent of the actual estimate and any remainder paid to Seller. If the actual estimated repair costs exceed the escrowed amount, Seller will pay the difference to Purchaser. 11.2 Seller's Conditions. Seller's obligation to close this transaction is subject to the satisfaction of each of the following conditions: (a) Purchaser's Compliance. Purchaser's fulfillment of each of its obligations under this Agreement. (b) Purchaser's Representations The continuing accuracy of all of Purchaser's warranties and representations and until the Closing Date. 12. CLOSING. 12.1 Closing Date. This transaction will be closed no later than 10 days after satisfaction of all Seller's and Purchaser's conditions to closing as provided in this Agreement (the date this transaction does so close, as evidenced by the recordation of Seller's deed to Purchaser, being herein referred to as the "Closing Date"). Each party may extend the Closing Date one time by up to 30 days if that extension is required by illness, transportation delays, the unavailability of the Escrow Agent, or other causes beyond the party's reasonable control. 12.2 Manner and Place of Closing. This transaction will be closed by Evergreen Land Title Co. (the "Escrow Agent's in Eugene, Oregon, or any other place as the parties may mutually agree to in writing. Closing must take place in the manner and in accordance with the provisions set forth in this Agreement. 12.3 Prorations, Adjustments. (a) All ad valorem real -property taxes, assessments, personal -property taxes must be prorated and adjusted between the parties as of the Closing Date. Any taxes or additional penalties that would be due as a result of removal of the Property from any tax deferral or special -use assessment program will be charged to Seller as though the Property were removed from that program on the Closing Date. (b) Purchaser will pay conveyance, excise, or transfer taxes and fees in connection with this sale, and Purchaser will pay the recording fees for Seller's deed. {00025699:2} (c) Purchaser will pay the premium for a standard owner's title insurance policy in favor of Purchaser in the amount of the Purchase Price. Any additional title insurance coverages or endorsements requested by Purchaser or its lender will be paid by Purchaser. (d) Purchaser will pay the escrow and closing fees charged by the Escrow Agent. (e) Each party will pay their own legal fees associated with preparing this Agreement. 12.4 Events of Closing. Provided the Escrow Agent has received the sums and is in a position to cause the title -insurance policy to be issued as described below, this transaction will be closed on the Closing Date as follows: (a) Seller will convey the real property to Purchaser by statutory bargain and sale deed, subject to the matters accepted or deemed accepted by Purchaser pursuant to this Agreement, in the form attached hereto as Exhibit B. (b) Seller will provide Purchaser with the Certificate of Nonforeign Status as provided in IRC section 1445. (c) Seller will deliver the original copies of all current contracts relating to the Property that are in Seller's possession or control. (d) The Escrow Agent will calculate the prorations agreed to herein, and the parties will be charged and credited accordingly. (e) Any liens to be paid by Seller at closing will be paid and satisfied of record at Seller's expense. (f) Purchaser will pay the entire Purchase Price to Seller in cash, less the deposit, as adjusted for the charges and credits set forth in this Agreement. (g) The Escrow Agent will be committed to issuing the policy described in section 10.5 upon recordation of the closing documents. (h) Upon compliance with the parties' closing instructions, the Escrow Agent will record the deed to Purchaser at Purchaser's expense. 12.5 Title Insurance. As soon as possible after the Closing Date, Escrow Agent will furnish Purchaser a standard American Land Title Association (ALTA) form of owner's policy of title insurance in the amount of the Purchase Price for the Property, subject only to the Escrow Agent's standard preprinted exceptions and exclusions for that form and except for the matters accepted or deemed accepted by Purchaser pursuant to this Agreement. The costs of additional or extended title insurance beyond standard coverage will be paid by Purchaser, and the availability of that coverage will not be a condition of closing. 12.6 Possession. Subject to the rights of Seller as a tenant under the Lease, Seller must deliver possession of the Property to Purchaser on the Closing Date. 12.7 As -Is Sale. Purchaser acknowledges that Purchaser has assessed, or has had the opportunity to assess, the size, configuration, utility service, environmentally sensitive areas, means of access, permitted uses, status of title, value, condition, and all other material aspects of the Property and, except as specifically stated herein, Purchaser is not relying on, nor has Purchaser been influenced by, any statement or representation of Seller or any agent or representative of Seller regarding any of these items. Except for any actionable breaches of Seller's representations and warranties contained herein, Purchaser's acceptance of the Property and the satisfaction or waiver of all of Purchaser's conditions to closing will be evidenced solely by the closing of this transaction and without any other act or confirmation by Purchaser. Purchaser will not have the option to close this transaction without accepting the Property in its then -current condition, and Purchaser acknowledges that except for any Seller's breach of an express warranty stated in this Agreement, Purchaser is acquiring the Property "AS {00025699:2} IS, WHERE IS" in its current condition existing as of the Closing Date, without any representation or warranty of any kind or nature by Seller. 12.8 Purchaser's Indemnification. Purchaser agrees to defend, indemnify, and hold harmless Seller from and against all actions, claims, losses, liabilities, damages, costs, and expenses (including without limitation reasonable attorney fees) that are caused by Purchaser's failure to perform any landlord's or owner's obligation under any lease of or contract relating to the Property on and after the Closing Date or for which Purchaser is responsible in accordance with the terms of this Agreement. The provisions of this Section 10.8 shall survive Closing. 13. DEFAULTS AND FAILURE TO CLOSE. 13.1 Seller's Remedies. If this transaction fails to close on account of a default by Purchaser under this Agreement, the Deposit will be forfeited by Purchaser and retained by Seller as liquidated damages as Seller's sole remedy for the default. This amount has been agreed by the parties to be reasonable compensation and the exclusive remedy for Purchaser's default, since the precise amount of damages would be difficult to determine. 13.2 Purchaser's Remedies. If this transaction fails to close on account of a default by Seller under this Agreement, Purchaser will be entitled to the return of the Deposit and any remedies for breach of contract as may be available under applicable law, including, without limitation, the remedy of specific performance and the right to recover its actual damages 13.3 Defaults. Except for (a) Purchaser's failure to pay any portion of the Deposit as and when due hereunder, or (b) either parties' wrongful failure to close or satisfy a condition to closing by the required Closing Date, neither party will be deemed in default under this Agreement unless the party is given written notice of its failure to comply with this Agreement and such failure continues for a period of 10 days following the date such notice is given. This section will not be construed as extending the time by which any notice or contingency waiver must be given. 13.4 Late Payments. Any debt due to either party by the other under this Agreement that is not paid when due will bear interest from its due date to and including the date of payment at the rate of 12% percent per annum. Debts stated to be payable on demand herein will be considered delinquent as of the fifth day after the demand is made in writing. The nondefaulting party will also be entitled to reimbursement by the defaulting party of all costs, expenses, collection agency charges, and attorney fees incurred, with or without litigation, in collecting any debt not paid within 15 days after its due date and written notice of such delinquency. 13.5 Costs and Attorney Fees. If any controversy or claim arises under this Agreement, the prevailing party shall be entitled to its reasonable costs, disbursements and attorney fees, together with all expenses that it may reasonably incur in taking such action, including, but not limited to, costs incurred in searching records, expert witness and consulting fees, discovery depositions, whether or not introduced into evidence at the trial, hearing or other proceeding, including an arbitration proceeding, and travel expenses in any arbitration, trial or other proceeding, including any proceeding brought to enforce an award to judgment and any and all appeals taken therefrom. 14. CONDUCT OF BUSINESS. 14.1 Operations. Between the date of this Agreement and the Closing Date, Seller will continue to operate the Property in accordance with its current management and operation standards and practices and will take no steps or actions that it knows would be materially detrimental to the value of the Property. {00025699:2} 14.2 Leases. Between the Effective Date and the Closing Date, and without Purchaser's prior written consent, Seller may not enter into any leases of the Property or any portion thereof. 14.3 Insurance. Seller agrees to continue to maintain its current casualty and liability insurance policies on the Property until the Closing Date. 14.4 No Additional Obligations. Except as provided in this section, Seller will have no obligation to maintain, repair, alter, reconstruct, or replace any portion of the Property, and Purchaser acknowledges that no express or implied representations or covenants to do so exist. 15. LEGAL RELATIONSHIPS. 15.1 Relationship of Parties. This Agreement creates only the relationship of seller and buyer and no joint venture, partnership, or other joint undertaking is intended hereby, and neither party hereto will have any rights to make any representations or incur any obligations on behalf of the other. Neither party has authorized any agent to make any representations, admit any liability, or undertake any obligation on its behalf. Neither party is executing this Agreement on behalf of an undisclosed principal. 15.2 No Third Party Beneficiaries. No third party is intended to be benefitted or afforded any legal rights under or by virtue of this Agreement. 15.3 3oint and Several Liability. If either party is comprised of more than one person or entity, the obligations of each person or entity comprising that party under this Agreement will be joint and several. 15.4 Real Estate Brokers. Seller has not employed a real estate broker. Purchaser has employed real estate broker John Brown, but neither Seller nor Purchaser is responsible for the payment of any real estate broker's commission. 15.5 Indemnified Parties. Any indemnification contained in this Agreement for the benefit of a party will extend to that party's members, directors, shareholders, officers, employees, and agents. 15.6 Assignments and Successors. Purchaser may not assign or otherwise transfer this Agreement or any interest herein, voluntarily, involuntarily, or by operation of law, without the prior written consent of Seller in each instance, which consent will not be unreasonably withheld. Purchaser will not be released from its obligations under this Agreement in the event of any assignment or transfer by Purchaser. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties hereto and their respective successors and assigns. Notwithstanding the foregoing, Purchaser is aware that Seller is considering performing an IRC Section 1031 tax-deferred exchange. Purchaser will reasonably cooperate with Seller in such an exchange and Seller agrees to hold Purchaser harmless from any and all claims, costs, liabilities, or delays in time resulting from an exchange. Purchaser agrees to an assignment of this Agreement to a qualified intermediary by the Seller. 16. GENERAL PROVISIONS. 16.1 Notices. Notices under this Agreement must be in writing and if personally delivered will be effective when received. If mailed, a notice will be deemed effective 48 hours after deposited as registered or certified mail, postage prepaid, directed to the other party. Notice may be given by email transmission to the email address set forth in this Agreement or at such other email address as one party may indicate by written notice to the other party and shall be effective if and when the addressee acknowledges by return email that the addressee has received the email notice. For notice to be effective by email, it must include this statement in the subject or reference line: "THIS IS A FORMAL NOTICE GIVEN IN {00025699:2} ACCORDANCE WITH THE PURCHASE AND SALE AGREEMENT." Notices must be delivered, mailed, or sent by email to the following address and telephone numbers: Seller: 1MT, LLC PO Box 615 Yoncalla, OR 97499 Attn: Gil Burgess Gburgess50@comcast.net Purchaser: City of Springfield 225 Fifth Street Springfield, OR 97477 Attn: Sam Kelly-Quattrochi email: skellyauattrocchi@springfield-or.gov Either party may change its address for notices by at least 15 days' advance written notice to the other. 16.2 Time of Essence. Except as otherwise specifically provided in this Agreement, time is of the essence of each and every provision of this Agreement. 16.3 Invalidity of Provisions. If any provision of this Agreement, or any instrument to be delivered by the parties at closing pursuant to this Agreement, is declared invalid or is unenforceable for any reason, that provision will be deleted from the document and will not invalidate any other provision contained in the document. 16.4 Neutral Construction. This Agreement has been negotiated with each party having the opportunity to consult with legal counsel and will not be construed against either party. 16.5 Number, Gender and Captions. In construing this Agreement, it is understood that if the context so requires, the singular pronoun shall be taken to mean and include the plural, the masculine, the feminine and the neuter, and that generally all grammatical changes shall be made, assumed and implied to individuals and/or corporations and partnership. All captions and section headings used herein are intended solely for convenience of reference and shall in no way limit any of the provision of this Agreement. 16.6 Waiver. The failure of either party at any time to require performance of any provision of this Agreement will not limit the party's right to enforce that provision. Waiver of any breach of any provision will not be a waiver of any succeeding breach of the provision or a waiver of the provision itself or any other provision. 16.7 Subsequent Modifications. This Agreement and any of its terms may only be changed, waived, discharged, or terminated by a written instrument signed by the party against whom enforcement of the change, waiver, discharge, or termination is sought. 16.8 Saturday, Sunday and Legal Holidays. If the time for performance of any of the terms, conditions, and provisions hereof fall on a Saturday, Sunday, or legal holiday, then the time of performance will be extended to the next business day thereafter. 16.9 Venue. In any action brought to interpret or enforce any of the provisions of this Agreement, the venue of same will be laid in Lane County, Oregon. 16.10 Applicable Law. This Agreement will be construed, applied, and enforced in accordance with the laws of the State of Oregon. All sums referred to in this Agreement will be calculated by and payable in the lawful currency of the United States. {00025699:2} 16.11 Entire Agreement. This Agreement, and the exhibits thereto, constitutes the entire agreement of the parties with respect to the Property and supersedes and replaces all written and oral agreements previously made or existing between the parties. 16.12 No Offer. By providing an unexecuted copy of this Agreement to any person, neither party will be deemed to have made an offer to sell or purchase or otherwise indicated its willingness to enter into any transaction with respect to the Property, and this Agreement will not be binding upon any party unless and until it has been fully executed and delivered by Seller and Purchaser. 16.13 No Recording. Neither this Agreement nor any memorandum or short form thereof may be recorded. 16.14 Counterparts. This Agreement may be executed simultaneously or in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same contract. 16.15 No Merger. The obligations set forth in this Agreement shall not merge with the transfer or conveyance of title to any party of the Property but shall remain in effect until fulfilled. 16.16 Statutory Warning (ORS 93.040(2)). THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT TO LAND USE LAWS AND REGULATIONS THAT, IN FARM OR FOREST ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE AND THAT LIMIT LAWSUITS AGAINST FARMING OR FOREST PRACTICES, AS DEFINED IN ORS 30.930, IN ALL ZONES. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON'S RIGHTS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND SECTIONS 2 TO 7, CHAPTER 8, OREGON LAWS 2010. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING TRANSFERRED IS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS 92.010 OR 215.010, TO VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO VERIFY THE EXISTENCE OF FIRE PROTECTION FOR STRUCTURES AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND SECTIONS 2 TO 7, CHAPTER 8, OREGON LAWS 2010. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first above written. SELLER: PURCHASER: By: By: Nancy Netwon, City Manager Its: Date Executed: Date Executed: {00025699:2} EXHIBIT A LEGAL DESCRIPTION Beginning at a point 195.3 feet South and 224.4 feet South 89° 22' East of the Northwest corner of Lot 10, GLENWOOD PARK, as platted and recorded in Book T, Page 481, Lane County Oregon Deed Records; run thence South 88° 22' East 420 feet to the West line of Henderson Avenue; thence North on the West line of Henderson Avenue 118 feet to the place of beginning of this description; run thence West at right angles to Henderson Avenue 90 feet; thence North to the Pacific Highway; thence following the Pacific Highway Southeast to the West line of Henderson Avenue; thence South to the place of beginning, in Lane County, Oregon. {00025699:2} EXHIBIT B - FORM OF DEED After Recording Return To: City of Springfield City Attorney's Office 225 Fifth Street Springfield, OR 97477 Until Requested otherwise, send all tax statements to: City of Springfield City Attorney's Office 225 Fifth Street SDrinafield. OR 97477 SPECIAL WARRANTY DEED — STATUTORY FORM 1MT, LLC, Grantor, conveys to the City of Springfield, a municipal corporation of the state of Oregon, Grantee, the following described real property free of encumbrances created or suffered by the Grantor except as specifically set forth in the Purchase and Sale Agreement dated , and any duly executed amendments, in Lane County, Oregon, and more particularly described in Exhibit A attached hereto and incorporated by reference. The true consideration of this conveyance is $410,000.00. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON'S RIGHTS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND SECTIONS 2 TO 7, CHAPTER 8, OREGON LAWS 2010. THIS INSTRUMENT DOES NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING TRANSFERRED IS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS 92.010 OR 215.010, TO VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES, AS DEFINED IN ORS 30.930, AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND SECTIONS 2 TO 7, CHAPTER 8, OREGON LAWS 2010. DATED this day of , 2022. By: Gilford Burgess Its: STATE OF OREGON, County of Lane ) ss. This instrument was acknowledged before me on , 2022, by Gilford Burgess as of 1MT, LLC. Notary Public for Oregon ACCEPTANCE OF DEED BY CITY OF SPRINGFIELD: Grantee approves and accepts this conveyance this day of , 2022. By: Nancy Newton, City Manager {00025699:2} LEASE AGREEMENT Contract # Date: , 2022 Between: The City of Springfield (City) ("Landlord") 225 Fifth Street Springfield, OR 97477 And: Ace Trading Co. ("Tenant") PO Box 615 Yoncalla, OR 97499 Statement of Purpose Landlord purchased the Premises from Tenant and the parties have agreed to lease the Premises to Tenant for a 5 -month period starting on the Closing Date of that transaction's Purchase and Sale Agreement. This Agreement sets out each parties' rights and responsibilities with regard to the lease. Landlord leases to Tenant and Tenant leases from Landlord real property located at located at 3697 Franklin Blvd, Springfield, Lane County, Oregon (Map and Tax No. 17-03-34-31-00300), on the terms and conditions stated below: Section 1. Occupancy 1.1 Term. The original term of this lease shall commence at Closing of the parties' Purchase and Sale Agreement and continue for 5 months after the Closing Date of the related Purchase and Sale Agreement between the Landlord and Tenant for the Premises (the "Term"), unless sooner terminated as set forth in this Lease Agreement. 1.2 Possession. Tenant's right to possession and obligations under the lease shall commence at closing of the parties' Purchase and Sale Agreement. 1.3 Renewal. Unless Tenant notifies Landlord in writing prior to the expiration of the initial term, this lease will automatically renew on a month-to-month basis upon the same terms and conditions provided herein, except that rent will be adjusted as provided in Section 2.3. 1.4 Right to Termination. Except as limited under the Uniform Relocation and Property Acquisition Act, Landlord may provide notice to Tenant, pursuant to Section 14.3, to vacate the Premises prior to the conclusion of the Term or during the renewal term. Tenant shall vacate the Premises within ninety (90) days of receipt of such notice. Tenant may provide notice to Landlord, pursuant to Section 14.3, of its intent to vacate the Premises prior to the conclusion of the Term. Tenant shall vacate in the time stated in its notice. Section 2. Rent {00025699:2} 2.1 Rent. Nominal rent of $1.00 will charged for the Premises upon execution of the Lease for the original lease term. 2.3 Base Rent for Renewal Term. The base rent for the renewal term shall not exceed current market rate of $1,000 per month. Rent shall be paid on the first day of each month during the renewal term. Rent for any partial calendar month will be prorated based on a thirty (30) day month for the number of days during that partial month the premises are occupied by Tenant. Once every 12 months during the renewal term, base rent shall be increased by the increase in the Western Region C.P.I.-U City Size B based on preceding 12 months percentage. Section 3. Use of the Premises 3.1 Permitted Use. Tenant will use and occupy the Premises continuously during the Term as a pawnshop and related business activities. 3.2 Restrictions on Use. In connection with the use of the Premises, Tenant shall: (a) Conform to all applicable laws and regulations of any public authority affecting the Premises and the use, and correct at Tenant's own expense any failure of compliance created through Tenant's fault (as Tenant and not as prior owner) or by reason of Tenant's use, but Tenant shall not be required to make any structural changes to effect such compliance unless such changes are required because of Tenant's specific use. (b) Refrain from any activity that would make it impossible to insure the Premises against casualty. (c) Refrain from any use that would be reasonably offensive to users of neighboring premises or that would tend to create a nuisance or damage the reputation of the Premises. (d) Refrain from loading the electrical system or floors beyond the point considered safe by a competent engineer or architect selected by Landlord. (e) Refrain from making any marks on or attaching any sign, insignia, antenna, aerial, or other device to the exterior or interior walls, windows, or roof of the Premises without the prior written consent of Landlord. (f) Tenant shall not cause or permit any Hazardous Substance to be stored, spilled, leaked, disposed of, or otherwise released on or under the Premises. Tenant shall comply with all Environmental Laws. The term Environmental Law shall mean any federal, state, or local statute, regulation, or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term Hazardous Substance shall mean any hazardous, toxic, infectious or radioactive substance, waste, and material as defined or listed by any Environmental Law and shall include, without limitation, petroleum oil and its fractions. Section 4. Repairs and Maintenance {00025699:2} 4.1 Parties' Responsibilities. The parties recognize this is a short-term lease and therefore the parties' maintenance and repair obligations are limited. Except as set forth in Section 8.2 for damage caused by fire, Tenant shall repair any damage caused by Tenant during the lease Term. Tenant shall repair any graffiti and shall maintain the gutters during the Term. Tenant shall have no other repair or maintenance obligations, other than as set forth herein. Tenant shall notify Landlord of any damage or maintenance needs during the Term. Landlord may choose, in its sole discretion, whether to repair the damage or perform any maintenance. In the event Landlord chooses not to repair the damage or perform the maintenance, either party may terminate the lease on notice to the other party. Tenant shall have no claim against Landlord for Landlord's election not to repair damage or perform maintenance under this section. 4.2 Landlord's Interference with Tenant. In performing any repairs, replacements, alterations, or other work performed on or around the Premises, Landlord shall not cause unreasonable interference with use of the Premises by Tenant. Landlord shall comply with the requirements of Section 4.3. Tenant shall have no claim against Landlord for any inconvenience or disturbance resulting from Landlord's activities performed in conformance with the requirement of this provision. 4.3 Inspection of Premises. Landlord shall have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Notwithstanding the foregoing, the parties acknowledge the Premises is being leased to provide childcare services during the Covid-19 pandemic and Landlord shall comply with all notice or other requirements in advance of any inspection. Whether or not an inspection is made, the duty of Landlord to make repairs shall not mature until a reasonable time after Landlord has received from Tenant written notice of the repairs that are required. Section 5. Alterations 5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on the Premises of any kind without first obtaining Landlord's written consent, which consent shall not be unreasonably withheld. All alterations shall be made in a good and workmanlike manner, and in compliance with applicable laws and building codes. 5.2 Ownership and Removal of Alterations. All improvements and alterations performed on the Premises by either Landlord or Tenant shall be the property of Landlord when installed. Section 6. Fire Insurance 6.1 Fire Insurance. Tenant shall keep the Premises insured on a standard all risks of loss insurance policy including, at Tenant's option, earthquake and flood coverage. Tenant will carry, and shall bear the expense of, any similar insurance insuring the personal property of Tenant and Tenant improvements on the Premises. 6.2 Waiver of Subrogation. Neither the Landlord nor the Tenant shall be liable to the other for loss arising out of damage to or destruction of the Premises, or the building or improvements of which the Premises are a part or with which they are connected, or the contents of any {00025699:2} thereof, when such loss is caused by any of the perils which are or could be included within or insured against by a standard all risk property insurance policy. All such claims for any and all loss, however caused, hereby are waived. Such absence of liability shall exist whether or not the damage or destruction is caused by the negligence of either Landlord or Tenant or by any of their respective agents, servants, officials, or employees. It is the intention and agreement that the Landlord and the Tenant shall provide their own property insurance and that both parties shall look to their respective insurance carriers for reimbursement for any such loss, and further, that the insurance carriers involved shall not be entitled to subrogation under any circumstances against any party to this lease. Neither the Landlord nor the Tenant shall have any interest or claim in the other's insurance policy or policies, or the proceeds thereof, unless specifically covered therein as a joint insured. Section 7. Taxes; Utilities 7.1 Property Taxes. Tenant shall pay as due all taxes on its personal property located on the Premises. Landlord shall pay all real property taxes and special assessments levied against the Premises. 7.2 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax or assessment as long as such contest is conducted in a manner that does not cause any risk that Landlord's interest in the Premises will be foreclosed for nonpayment. 7.3 New Charges or Fees. If a new charge or fee relating to Tenant's use of the Premises is assessed or imposed, then, to the extent permitted by law, Tenant shall pay such charge or fee. Tenant, however, shall have no obligation to pay any income, profits, or franchise tax levied on the net income derived by Landlord from this lease. 7.4 Payment of Utilities Charges. Tenant shall pay when due all charges for services and utilities incurred in connection with the use, occupancy, and operation of the Premises, including (but not limited to) charges for fuel, water, gas, electricity, sewage disposal, power, refrigeration, air conditioning, telephone, and janitorial services. Section S. Damage and Destruction 8.1 Partial Damaae. If the Premises are partly damaged and Section 8.2 does not apply, either party may elect to terminate the lease upon notice to the other party. 8.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds 25% of the value of the structure before the damage, either party may elect to terminate the lease upon notice to the other party. Section 9. Liability and Indemnity 9.1 Liens. Tenant shall keep the Premises free from any liens. If Tenant fails to discharge any lien, upon written notice from Landlord, Landlord may do so and collect the cost as rent. Any amount so added shall bear interest at the rate of 12% per annum from the date {00025699:2} expended by Landlord and shall be payable on demand. Such action by Landlord shall not constitute a waiver of any right or remedy which Landlord may have on account of Tenant's default. 9.2 Indemnification. Subject to the limits of the Oregon Tort Claims Act and the Oregon Constitution, Tenant shall defend, indemnify and hold harmless Landlord from any claim, loss, or liability arising out of or related to any activity of Tenant on the Premises. Landlord shall have no liability to Tenant for any injury, loss, or damage caused by third parties, or by any condition of the Premises except to the extent caused by Landlord's failure to perform Landlord's obligations under this lease. This Section 9.2 is not intended to abridge, in any way, Landlord's obligations to Tenant under Sections 10.7 and 10.8 of the Purchase and Sale Agreement between Purchaser (Landlord in this lease) and Seller (Tenant in this lease). 9.3 Liability Insurance. Tenant shall procure and thereafter during the term of the lease shall continue to carry the following insurance at Tenant's cost: Commercial General Liability Insurance (occurrence version) with limits of not less than $1,000,000 per single claimant per occurrence and $2,000,000 in the aggregate. Such insurance shall cover all risks arising directly or indirectly out of Tenant's activities on the Premises, and shall name Landlord as an additional insured. A Certificate evidencing such insurance and bearing endorsement requiring 30 days written notice to Landlord prior to any material change or cancellation shall be furnished to Landlord prior to Tenant's occupancy of the Premises. Landlord's liability insurance shall be excess of and not contributing with Tenant's liability coverage. Section 10. Assignment and Subletting 10.1 Assignment/Sublease. No part of the Premises may be assigned, mortgaged, subleased, nor may a right of use of any portion of the property be conferred on any third person by any other means, without the prior written consent of Landlord. This provision shall apply to all transfers by operation of law. No consent in one instance shall prevent the provision from applying to a subsequent instance. Landlord shall consent to a transaction covered by this provision when withholding such consent would be unreasonable in the circumstances. Section 11. Default The following shall be events of default: 11.1 Default in Other Covenants. Failure of Tenant to comply with any term or condition or fulfill any obligation of the lease within 20 days after written notice by Landlord specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the 20 -day period, this provision shall be complied with if Tenant begins correction of the default within the 20 -day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable. 11.2 Insolvency. The following occurrences each constitute a default by Tenant: insolvency of Tenant; an assignment by Tenant for the benefit of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is bankrupt or the appointment of a receiver of the properties of Tenant; the filing of any involuntary petition of bankruptcy {00025699:2} and failure of Tenant 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 Tenant to secure discharge of the attachment or release of the levy of execution within 10 days. If Tenant consists of two or more individuals or business entities, the events of default specified in this Section shall apply to each individual unless within 10 days after an event of default occurs, the remaining individuals produce evidence satisfactory to Landlord that they have unconditionally acquired the interest of the one causing the default. Section 12. Remedies on Default 12.1 Termination. In the event of a default the lease may be terminated at the option of Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of Landlord or otherwise, Landlord shall be entitled to recover damages from Tenant for the default, if any, and Landlord may reenter, 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 and without having accepted a surrender. 12.2 Right to Sue More than Once. Landlord may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages shall bar a later action for damages subsequently accruing. 12.3 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation under this lease, Landlord shall have the option to do so after 30 days' written notice to Tenant. For clarification, the 30 days' written notice is in addition to any notice provided pursuant to Section 11.1. All of Landlord's expenditures to correct the default shall be reimbursed by Tenant on demand with interest at the rate of twelve percent (12%) per annum from the date of expenditure by Landlord. Such action by Landlord shall not waive any other remedies available to Landlord because of the default. 12.4 Remedies Cumulative. The foregoing remedies shall be in addition to and shall not exclude any other remedy available to Landlord under applicable law. Section 13. Surrender at Expiration 13.1 Condition of Premises. Upon expiration of the lease term or earlier termination, Tenant shall deliver all keys to Landlord and surrender the Premises in first- class condition and broom clean. 13.2 Fixtures. All fixtures placed upon the Premises during the term including fixtures, become the property of Landlord. Prior to expiration or other termination of the lease Term, Tenant shall remove all furnishings and furniture that remain its property. If Tenant fails to do so, this shall be an abandonment of the property, and Landlord may retain the property and all rights of Tenant with respect to it shall cease or, by notice in writing given to Tenant within 20 days after removal was required, Landlord may elect to hold Tenant to its obligation of removal. If Landlord elects to require Tenant to remove, Landlord may effect a removal and place the property in public storage for Tenant's account. Tenant shall be liable to Landlord for the cost of removal, {00025699:2} transportation to storage, and storage, with interest at the legal rate on all such expenses from the date of expenditure by Landlord. 13.3 Holdover. If Tenant does not vacate the Premises at the time required, Landlord shall have the option to treat Tenant as a tenant from month to month, subject to all of the provisions of this lease except the provisions for rent and term. Rent for the holdover period will be market rate determined by the Landlord. Landlord may also eject Tenant from the Premises and recover damages caused by wrongful holdover. Failure of Tenant to remove furniture or furnishings that Tenant is required to remove under this lease shall constitute a failure to vacate to which this section shall apply if the property not removed will substantially interfere with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant. Section 14. Miscellaneous 14.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision. 14.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out of this lease, the prevailing party shall be entitled to recover in addition to costs such sum as the court or arbitrator may adjudge reasonable as attorney fees at arbitration, at trial, and on any appeals. 14.3 Notices. Any notice required or permitted under this lease shall be given when actually delivered or 48 hours after deposited in United States mail as certified mail addressed as follows: To Landlord: City Manager's Office City of Springfield 225 Fifth Street Springfield, OR 97477 Phone: 541.726.3700 To Tenant: PO Box 615 Yoncalla, OR 97499 Attn: Gil Burgess Gburgess50@comcast. net Phone: 541-915-8022 or to such other address as may be specified from time to time by either of the parties in writing. 14.4 Succession. Subject to the above -stated limitations on transfer of Tenant's interest, this lease shall be binding on and inure to the benefit of the parties and their respective successors and assigns. {00025699:2} 14.5 Recordation. This lease, or any memorandum thereof, shall not be recorded without the prior express written consent of Landlord. 14.6 Time of Essence. Time is of the essence of the performance of each of Tenant's obligations under this lease. 14.7 Oregon Law. This agreement is subject to, and shall be interpreted in accordance with, the laws of the State of Oregon. 14.8 Soil/Waste. Tenant will not store, treat, deposit, place, or dispose of treated or contaminated soil, industry by-products, or any other form of waste on the Property or Premises, without the prior written consent of Landlord. 14.9 Landlord Consent or Action. In the event this Lease is silent on the standard for any consent, approval, determination, or similar discretionary action, the standard is the sole discretion of Landlord, rather than any standard of implied good faith or reasonableness. If Tenant requests Landlord's consent or approval under any provision of the Lease and Landlord fails or refused to give the consent or approval, Tenant will not be entitled to any damages as a result of the failure or refusal, whether or not unreasonable. In the event Landlord has expressly agreed, in writing, not to act unreasonably in withholding its consent or may not unreasonably withhold its consent as a matter of law, and Landlord has, in fact, acted unreasonably in either of those instances, Tenant's sole remedy will be an action for specific performance or injunction. Whenever consent, approval, or direction by Landlord is required under the terms contained herein, all such consent, approval, or direction must be received, in writing, from the Landlord. 14.10 Subordination. This Lease is subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed on the Property, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Tenant agrees that the holders of any Security Devices (in this Lease together referred to as "Lender") have no liability or obligation to perform any of the obligations of Landlord under this Lease. Tenant consents to any and all future mortgages or encumbrances which Landlord may place on the premises. 14.11 Si na e. Subject to the consent of Landlord, Tenant will be permitted to install signage that is in compliance with local sign ordinances. IN WITNESS WHEREOF, the parties have executed this Commercial Lease Agreement to be effective the date first set forth above. Landlord: CITY OF SPRINGFIELD By: Nancy Newton, City Manager {00025699:2} Tenant: Ace Trading Co By: Gilford Burgess Its: