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AD1996-0217 - Original - Kent Centennial Limited Partnership - Purchase of 400 West Gowe Street - 04/08/1996
MEMO DATE: May 28, 1996 TO: Brent McFall, Director of Operation s FROM: Charlie Lindsey, Facilities Manag aL CC: Mayene Miller, Finance Division Manager SUBJECT: Centennial Center Inspection Doug Klappenbach has responded to my letter regarding the concerns brought to our attention by the consulting engineers that evaluated the building systems. Concern #1 was water penetration on the south side of the building. As I mentioned last time we met there was work being done regarding this the day the evaluation was done. Doug has indicated that he felt they had solved the problem but that we would not know for certain until we had another driving rain from the south. I will ask Sound Ventures for some assurance that if the problem has not been solved that they will provide a mutually agreed upon solution in the future. Concern #2 was the issue of the fall restraints as required by WAC. Doug has proposed to have his engineer evaluate the tube steel frame of the mechanical roof screen to determine if it is adequate to support the appropriate anchors and to give the City a $3,000 credit to allow us to install the restraints. I think this is satisfactory as long as the tube steel frame will support the anchors. Concern #3 deals with the parking garage and Doug stated he was not able to find all of the areas of concern that the consultant spoke to but has indicated he will repair those he found. I have asked the consulting engineers to review and identify more specifically the areas of concern. Upon hearing from the consulting engineers I will respond to Doug regarding all of these items. If you have any concerns or questions please let me know. AGREEMENT OF PURCHASE AND SALE between KENT CENTENNIAL LIMITED PARTNERSHIP SELLER and THE CITY OF KENT BUYER April `5 , 1996 CENTENNIAL CENTER KENT, WASHINGTON ------------------------------------------------------------- --------------------------------------------------------------- 1SWS.030 THIS AGREEMENT entered into this day of April, 1996, by KENT CENTENNIAL LIMITED PARTNERSHIP, a Was ington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation, ("Buyer"), hereby agree as follows: ARTICLE I TERMS AND DEFINITIONS In addition to the other terms herein defined, the following terms shall have the meanings set forth in this Article I, unless the context otherwise requires: Section 1.1 Buildings. The buildings commonly known as: (a) Centennial Center, located generally at 400 West Gowe Street, Kent, WA, 98032, containing approximately 75,000 square feet of office building and a 361 stall parking garage ("Centennial Center"); and (b) Municipal Court Building located at 302 West Gowe Street, Kent, WA, 98032, containing approximately 4,100 gross square feet of rentable office space. Section 1.2 Closing. The consummation of the sale and purchase of the Property pursuant to this Agreement. Section 1.3 Earnest Money. The amount of Two Hundred Fifty Thousand Dollars ($250,000) in accordance with the provisions of Section 4 herein. Section 1.4 Effective Date. The date of execution of this Agreement by both Buyer and Seller. Section 1.5 Hazardous Substances. Any substance, chemical, waste or material that is or becomes regulated by any federal, state or local governmental authority because of its toxicity, infectiousness, radioactivity, explosiveness, ignitabiltiy, corrosiveness or reactivity, including, without limitation, asbestos, petroleum derivatives, polychlorinated biphenyls, flammable explosives and those substances regulated by the Hazardous Substances Laws, in quantities which exceed levels allowed under Hazardous Substances Laws. Hazardous Substances Laws shall mean any currently effective federal, State of Washington, or other applicable law, rule, regulation,permit, agreement, order or other binding determination of any governmental authority having jurisdiction over and affecting all or any part of the Real Property or Improvements relating to Hazardous Substances. Section 1.6 Improvements. All improvements located on the Real Property, including the Buildings, Parking and all amenities and appurtenances thereto. Section 1.7 Intangible Personal Property. All of Seller's right, title and interest in any intangible property now or hereafter owned by Seller and used in connection with the Real Property, Improvements and Personal Property, including without limitation all of Seller's rights under all governmental approvals, and applications therefore, claims, contracts, licenses, permits, plans, studies, warranties, utility arrangements and other agreements relating to the ownership, operation or occupancy of the Property and the name "Centennial Center" or other trade name associated with the Improvements. Section 1.8 Leases. All of Seller's right, title and interest in all leases and occupancy agreements covering space in the Improvements, including without limitation, those certain Leases identified on the Rent Roll dated as of March 1, 1996, attached hereto as Exhibit A. - 2 - /SAS\Ps.030 Section 1.9 Parking. All of the parking available to the Buildings, including a 361 stall parking garage within the Centennial Center Building, and surface parking stalls located on the Real Property. Section 1.10 Permitted Exceptions. Those exceptions to title to the Property attached hereto as Exhibit B and any others determined to be acceptable to Buyer in accordance with the provisions of Section 6.2. Section 1.11 Personal Property. The personal property owned by Seller located on the Real Property and used in connection with the ownership, operation or occupancy of the Real Property or the Improvements identified on Exhibit C attached hereto. Section 1.12 Property. The Real Property, Improvements, Personal Property, and Intangible Personal Property. Section 1.13 Property Information. All information in Seller's possession, or which Seller has access to or caused to be prepared relating to the Property as more particularly described in Exhibit D. Section 1.14 Proposed Lease Transactions. Those proposed transactions for leases of vacant space within the Buildings, or extensions of expansions of existing Leases within the Buildings, all as more particularly shown on Exhibit E attached hereto. Section 1.15 Purchase Price. The Purchase Price shall be specified in Section 3. Section 1.16 Real Property. The real property located in the City of Kent, State of Washington, at 400 West Gowe Street and 302 West Gowe Street, more particularly described in Exhibit F attached hereto and by this reference made a part hereof, together with all rights and privileges, easements and appurtenances thereto. Section 1.17 Service Contracts. All those service contracts, operating agreements, janitorial contracts, and maintenance agreements, including elevator and HVAC maintenance, relating to the operation of the Buildings. Section 1.18 Title Commitment. The commitment for issuance of an Owner's Policy of Title Insurance (extended coverage) issued by Title Company, Order No. 318287-5, and delivered to Buyer within five (5) days of the Effective Date, with coverage in the full amount of the Purchase Price together with legible copies of all exceptions shown therein. Section 1.19 Title Company. First American Title Insurance Company, 2101 Fourth Avenue, Suite 800, Seattle, Washington, 98121. Section 1.20 Title Policy. The Owner's Policy of Title Insurance (extended coverage) issued by Title Company with coverage in the full amount of the Purchase Price, subject to the Permitted Exceptions. Section 1.21 Warranties. All those certain warranties and guarantees in effect with respect to the Property, as disclosed to Buyer as a part of the Property Information. ARTICLE II PURCHASE AND SALE Section 2.1 Purchase and Sale. Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller, the Property, subject to the terms and conditions set forth herein. - 3 - /S/1S1PS.030 ARTICLE III PURCHASE PRICE Section 3.1 Purchase Price. The Purchase Price for the Property shall be ELEVEN MILLION SEVEN HUNDRED TWELVE THOUSAND SIX HUNDRED AND NO/100 DOLLARS ($11,712,600.00). The Purchase Price shall be paid in all cash, at Closing, via wire transfer or other immediately available funds. ARTICLE IV EARNEST MONEY Section 4.1 Earnest Money. Not later than two (2)business days after the Effective Date, Buyer shall deposit the Earnest Money with Title Company.. In the event of Closing, Buyer shall receive a credit against the Purchase Price for the amount of the Earnest Money and interest accrued thereon. The Earnest Money shall be held by Title Company in an interest bearing account, with interest accruing for the benefit of the party entitled to receive the Earnest Money hereunder. The Earnest Money shall be non-refundable to Buyer, except in the event of the following circumstances: 4.1.1 Termination of this Agreement in accordance with the provisions of Section 5.1; or 4.1.2 Seller's failure, without legal excuse, to close the transaction contemplated by this Agreement, including without limitation, conveyance of title to the Property to Buyer. ARTICLE V INSPECTION PERIOD: INSPECTIONS Section 5.1 Inspection Period. Buyer shall have until expiration of forty five (45) days after the Effective Date (the "Inspection Period") within which to complete those studies, examinations and inspections desired by Buyer in order to determine whether there exists Hazardous Substances in, under or on the Property, and whether the structure and plumbing, electrical and other systems of Centennial Center are sound ("Inspections"). If the Inspections disclose the presence of Hazardous Substances under, in or on the Property, or a structural or systems deficiency in Centennial Center including its 361 stall parking garage, Buyer shall so notify Seller, in detail, including providing Seller with a copy of any written report or investigation, on or before the expiration of the Inspection Period ("Inspections Notice"). Buyer's failure to issue the Inspections Notice shall be deemed to mean that all matters related to the Inspections are satisfactory to Buyer. If Buyer issues the Inspections Notice, Seller shall respond to Buyer within fifteen (15) days of receipt of the Inspections Notice as to whether Seller shall effect a remediation or correction of any matter disclosed in the Inspections Notice ("Response Notice"). If Seller elects to remediate or correct any matter contained in the Inspections Notice, Seller shall proceed to do so, at Seller's expense and in the manner recommended by Seller's consultants, on or before the Closing Date, and the parties shall proceed to Closing as provided in this Agreement. If Seller elects not to remediate or correction any matter disclosed in the Inspections Notice, this Agreement may, at Buyer's election not later than five (5) business days after Buyer's receipt of the Response Notice, be terminated by written - 4 - 'VJ /SAS\PS.030 notice to Seller, and the parties shall have no further obligations hereunder, the Earnest Money and all interest then accrued thereon shall be refunded by Title Company to Buyer; or, Buyer may accept such condition of the Property and elect to proceed to Closing in accordance with the terms of this Agreement. If, after the Response Notice, Buyer fails to terminate the Agreement in accordance with this Section, Buyer shall be deemed to have elected to proceed to Closing. Section 5.2 Property Information. Seller shall provide to Buyer the Property Information on or before that date which is ten(10) days after the Effective Date. Section 5.3 Access. Seller shall cause access and entry on the Property to be afforded to Buyer, its agents, consultants, representatives and employees, for inspection and investigation during the Inspection Period, provided that such investigation and inspection shall occur at Buyer's sole cost and expense. Buyer shall be responsible for all costs and expenses arising out of the Inspections and Buyer's entry on the Property. ARTICLE VI TITLE REVIEW AND TITLE POLICY Section 6.1 Title Policy. At the time of Closing, Seller shall cause the Title Company to issue the Title Policy to Buyer in the amount of the Purchase Price against any loss or damage by reason of defect in Seller's title to the Property, other than the Permitted Exceptions as determined hereunder. Seller shall deliver to Title Company such instruments, documents, payments, indemnities, releases and agreements (including an owner's affidavit and the like) and shall perform such other acts as Title Company shall reasonably require in order to issue the Title Policy. Section 6.2 Title Review. Within five (5) days following the Effective Date, Buyer shall be furnished with the Title Commitment. Within fifteen(15) days of Buyer's receipt of the Commitment, Buyer shall notify Seller in writing ("Buyer's Notice") of Buyer's approval of such exceptions or defects shown in the Commitment; provided, however, that Buyer agrees that the Permitted Exceptions shown on Exhibit B, shall have been approved by Buyer on the Effective Date. Within ten (10) days of receipt of Buyer's Notice, Seller shall notify Buyer which exceptions to the title Seller shall agree to have eliminated or cured on or before the Closing Date ("Seller's Notice"). If, however, Seller shall not have agreed to eliminate or cure each of the exceptions not listed as Permitted Exceptions in Buyer's Notice, Buyer may elect to terminate this Agreement by sending Seller written notice of such termination within five (5) days of receipt of Seller's Notice; in which event, the Earnest Money together with accrued interest, shall be returned and paid to Buyer and neither party shall have any right or remedy against the other. Alternatively, Buyer may, at its sole option, accept any exceptions that Seller did not agree to eliminate, as a Permitted Exception; in which event, the Agreement shall remain in full force and effect. If, after a determination of the Permitted Exceptions in accordance with the foregoing, title is not insurable subject only to the Permitted Exceptions and cannot be made so insurable by the Closing Date, Buyer may, as its sole remedy, terminate this Agreement, whereupon the Earnest Money, together with interest accrued thereon, if any, shall be returned to Buyer or Buyer may waive its prior disapproval and elect to approve such exceptions as a Permitted - 5 - /SAS\Ps.030 Exception, whereupon the Agreement shall remain in full force and effect. If Buyer elects to terminate this Agreement in accordance with the foregoing, Seller shall pay any cancellation fee charged by the Title Company for the Commitment. ARTICLE VII CLOSING Section 7.1 Closing. Closing shall be held at the offices of the Title Company on or before 5:00 p.m. Seattle Time, on July 1, 1996 (the "Original Closing Date"). Buyer shall be entitled to extend the Original Closing Date to August 1, 1996 (the"Extended Closing Date"),by providing written notice to Seller of such extension, together with payment to Seller in the amount of One Hundred Ten Thousand Five Hundred Dollars ($110,500) (the "Closing Extension Fee"), which Closing Extension Fee shall be non-refundable to Buyer under any circumstances and shall not apply to Buyer's payment of the Purchase Price. ARTICLE VIII ESCROW. CLOSING MATTERS Section 8.1 Escrow. At Closing, each of the parties shall take such actions and execute and deliver to the other and to escrow such documents, instruments, opinions and agreements as may be required pursuant to the terms hereof, including, but not limited to, the following: 8.1.1 Title to the Property shall be conveyed to Buyer in fee simple by Statutory Warranty Deed, subject only to Permitted Exceptions. 8.1.2 Upon Closing, effective as of the Closing Date, Seller shall assign and Buyer shall assume Seller's rights, interest and obligations as lessor under the Leases, pursuant to execution of the Assignment and Assumption of Leases, attached hereto as Exhibit G and Seller shall deliver to Buyer a Rent Roll effective not more than five (5) business days prior to the Closing Date. 8.1.3 Upon Closing, effective as of the Closing Date, Seller shall assign and Buyer shall assume Seller's rights, interest and obligations under those certain Service Contracts,pursuant to execution of the Assignment of Service Contracts, attached hereto as Exhibit H. 8.1.4 Upon Closing, effective as of the Closing, Seller shall assign to Buyer all Seller's right, title and interest in any Warranties in effect for the Property pursuant to execution of the Assignment of Warranties, attached hereto as Exhibit 1. 8.1.5 Upon Closing, effective as of the Closing, Seller shall assign and Buyer shall assume Seller's rights, interest and obligations under all Intangible Personal Property. 8.1.6 Seller shall execute and deliver a warranty Bill of Sale conveying to Buyer that portion of the Property which is Personal Property. 8.1.7 Upon Closing, Seller shall execute and deliver to Buyer a non-foreign affidavit as required by the Foreign Investment and Real Property Tax Act, IRS Section 1445 (b) (2), as amended. - 6 - /SAS1Ps.030 8.1.8 Upon Closing, Seller shall deliver to Buyer originals (or,to the extent originals are not available, certified copies)of the Leases, Service Contracts, subcontractor and supplier lists,operations and maintenance manuals,heating and air conditioning(HVAC) software, and such other information and materials as may be reasonably be requested by Buyer affecting the Property not theretofore delivered by Seller. 8.1.9 Upon mutual execution of this Agreement, Buyer shall deliver to Seller the opinion of Buyer's counsel stating that Buyer's entry into this Agreement and the performance of Buyer's obligations hereunder have been fully authorized by Buyer pursuant to all appropriate governmental actions. Section 8.2 Closing Costs. Seller shall be responsible for the title premium and sales tax thereon for the portion of the Policy relating to standard owner's coverage and sales tax thereon;real estate excise taxes; and one-half the Title Company's escrow fee and sales tax thereon. Buyer shall be responsible for the portion of the Policy relating to the difference between standard and extended owner's coverage and sales tax thereon any retail sales, transfer or use tax applicable to the conveyance of Personal Property; recording fees; and one-half(1/2) the Title Company's escrow fee and sales tax thereon. Section 8.3 Prorations and Adjustments. The following proration shall be made between Seller and Buyer on the Closing Date, computed as of the Closing Date,with income and expenses for the Closing Date itself being allocated to Buyer: 8.3.1 Actually received rental and parking income, common area/operating expense reimbursement and other payments payable by tenants and other persons occupying or using the Property or any part thereof, for or in connection with such use or occupancy. However, Seller shall not be obligated to make any payment or give any credit to Buyer on account of or by reason of any rental or other payments which are unpaid as of the Closing Date. All payments received by Buyer from a tenant or such other person shall be applied against the most delinquent obligation or obligations of the payor,and any rental or other income accrued prior to the Closing Date shall be paid by Buyer to Seller,when received. Any checks received by Seller with respect to the Property shall be endorsed by Seller without recourse and promptly forwarded to Buyer, who shall apply the proceeds thereof in accordance with the foregoing. 8.3.2 Real property taxes and assessments,personal property taxes. 8.3.3 The amount of the security deposits and prepaid rents, if any, shall be credited against the Purchase Price. 8.3.4 Seller shall pay all gas, water, electricity, heat, fuel, sewer and other utilities relating to the Property up to the Closing Date (excluding those that are separately contracted for by,billed directly to and paid directly by tenants under the Leases or those which constitute any part of the Operating Expenses for the Property). If meters are not read on the Closing Date,the bills for such utilities will be prorated_ It shall be assumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. 8.3.5 Payments under Service Contracts(excluding those that are separately contracted for by, billed directly to,and paid directly by,the tenants under the Leases). Section 8.4 Proposed Lease Transactions. Upon Closing, Seller shall be reimbursed for the cost of any and all tenant improvements and leasing commissions paid by Seller with - 7 - /S/1S\PS.030 respect to any Proposed Lease Transactions which are entered into by Seller as "landlord" and "tenant", prior to the Closing Date,provided, however, such amount shall not exceed One Hundred Thousand Dollars ($100,000), in the aggregate, unless the Proposed Lease Transactions causing such tenant improvements and leasing commissions to exceed $100,000, in the aggregate, have been approved by Buyer. Buyer shall be solely responsible for any and all tenant improvements and leasing commissions arising out of any Proposed Lease Transactions which are entered into after the Closing Date. Section 8.5 Procedures for Proration. The prorations and payments to be made at Closing under the foregoing Sections 8.3 and 8.4 shall be made on the basis of a written statement or statements to Buyer from Seller, based upon actual amounts when known, and when not known, based upon Seller's estimates and the operating history of the Property. To the extent that not all information is complete on the Closing Date, Buyer and Seller shall adjust the prorations set forth in this Section based upon actual amounts as soon as the same are known, and no later than thirty (30) days after the Closing Date. Section 8.6 Post-Closing Payment for Supplies. Within thirty (30) days after Closing, Buyer and Seller shall inventory the janitorial and similar supplies of the Buildings, such as light bulbs, cleaning equipment, bathroom supplies, etc., the value of which shall be the actual cost paid by Seller for such items; whereupon Buyer shall pay to Seller for said items within five (5) business days of determination of value. ARTICLE IX SELLER'S REPRESENTATIONS AND WARRANTIE Section 9.1 Due Authorization. Seller has legal power, right and authority to enter in to this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby, and this Agreement constitutes the legal, valid and binding agreement and obligations of Seller enforceable against Seller in accordance with its terms. Section 9.2 Bankruptcy. Seller is not the subject of any bankruptcy proceedings, insolvency or other similar insolvency proceedings. Section 9.3 Default. Seller has received no notice of any alleged default in respect of any of its obligations or liabilities pertaining to the Property. Section 9.4 Litigation: Condemnation. There are no actions, suits or proceedings pending or, to the best knowledge of Seller,threatened, before or by any judicial, administrative or union body, any arbiter or any governmental authority, against or affecting Seller of the Property (or any portion thereof). To the best knowledge of Seller, there is no existing, proposed or contemplated eminent domain or similar proceeding which would affect the Real Property or Improvements in anyway whatsoever. Section 9.5 Leases. Exhibit A is a full, true and correct lease summary for the Buildings as of the date hereof which sets forth all leases, agreements, or understandings (whether written or oral) with any and all tenants, concessionaires or licensees of the Buildings. Seller has not received a written default notice from any tenant under a current Lease which default remains uncured, and except as set forth on the Rent Roll, there are no tenants in default of their rent payments under the Leases. Section 9.6 Operation and Compliance. To the actual knowledge of Seller, the Property and the operation thereof are in compliance in all material respects with applicable federal, state and local laws, ordinances, rules, regulations and order of any governmental entity having jurisdiction over the Property. - 8 - /S/1S1PS.030 Section 9.7 Hazardous Substances. Except as otherwise disclosed to Buyer in writing or as Buyer may become aware through Buyer's investigation of the Property, there is not present upon and Seller has not participated in or approved any production, installation, disposal or storage on the Property of any Hazardous Substances, and no such Hazardous Substances in excess of legally permitted levels exist within or on the Property (above or beneath the surface), nor is there currently any proceeding or inquiry by any governmental authority with respect to the presence of such Hazardous Substances in excess of legally permitted levels on the Property or the migration thereof from or to an adjoining property. Section 9.8 Survival. The representations and warranties made by Seller in this Agreement shall survive the Closing and shall not be merged in any deed of conveyance or other instrument. ARTICLE X BUYER'S REPRESENTATIONS AND WARRANTIES Section 10.1 Due Authorization. Buyer has legal power, right and authority to enter in to this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby, and this Agreement constitutes the legal, valid and binding agreement and obligations of Buyer enforceable against Buyer in accordance with its terms. Section 10.2 Survival. The representations and warranties made by Buyer in this Agreement shall survive the Closing and shall not be merged in any deed of conveyance or other instrument. ARTICLE XI DAMAGE, DESTRUCTION OR CONDEMNATION Section 11.1 Fire or CasualtX. Risk of loss to the Property from fire or other casualty shall be borne by Seller until Closing. If the Property in its entirety or such portion thereof which exceeds $500,000 in cost to repair, is damaged or destroyed by fire or other casualty prior to the Closing, Buyer may (a) elect to proceed with the transaction contemplated herein, in which event Buyer shall be entitled to such insurance as is paid on the claim of loss; or(b) elect to terminate this Agreement, in which event this Agreement shall be so terminated and the Earnest Money together with interest accrued thereon, shall be returned to Buyer, and, neither party shall have any further obligations or liabilities under this Agreement. If Buyer elects to terminate this Agreement, it shall notify Seller in writing within five (5) business days after Buyer has received written notice of such damage or destruction from Seller. If Buyer does not elect to terminate this Agreement, or if such damage does not exceed $500,000 in cost to repair, Seller shall proceed to restore the Property as nearly as possible to that condition existing prior to such damage or destruction, whereupon the date for Closing as described in Article VII herein shall be extended for such time as is adequate for such repair to be completed. Section 11.2 Condemnation. In the event that all or any portion of the Property becomes the subject of a condemnation proceeding or threat thereof by a public or quasi-public authority having the power of eminent domain prior to the Closing, Seller shall immediately notify Buyer thereof in writing and Buyer may (a) elect to proceed with the transaction contemplated herein, in which event Buyer shall be entitled to receive all proceeds of any award or payment in lieu thereof resulting from such proceeding or threat thereof, or, (b) elect to terminate this Agreement, in which event this Agreement shall be so terminated and the Earnest Money together with interest accrued thereon, shall be returned to Buyer, and above, neither party shall have any further obligations or liabilities under this Agreement. If Buyer elects to terminate this Agreement, it shall so notify Seller within five (5) business days after Buyer has received written notice of such proceedings from Seller. - 9 - isnsTs.o3o ARTICLE XII SELLER'S COVENANTS Section 12.1 Seller's Obligation. From the Effective Date until Closing, Seller covenants as follows: 12.1.1 Seller shall exert its reasonable best efforts to operate and manage the Property in a normal, business manner in accordance with the Property's current operation by Seller, including, without limitation, leasing of vacant space and extensions of existing leases in the Buildings at lease rates in excess of$17.00 per square foot of rentable space per year; 12.1.2 Buyer shall be entitled to review and comment upon Proposed Lease Transactions during the term of this Agreement, and Seller shall provide Buyer with a copy of the terms applicable to the Proposed Lease Transactions and any revisions thereto. All Proposed Lease Transactions shall be documented on Seller's standard form Lease Agreement, modified to meet the requirements of the applicable Proposed Lease Transaction. ARTICLE XIII BROKERS Section 13.1 Commission. Buyer and Seller each acknowledge and agree that there is no brokerage commission payable under this transaction. Buyer and Seller hereby indemnify each other against and agree to defend and hold each other harmless from any and all claims for any other real estate commission or similar fees arising out of or in any way connected with any claimed agency relationship with the indemnitor. ARTICLE XIV NOTICES Section 14.1 Notices. All notices consents, approvals and other communications provided for herein or given in connection herewith shall be validly given, made, delivered or served if in writing and delivered personally or sent by registered, certified mail, or receipted overnight service, postage prepaid, or by facsimile to: BUYER AT: The City of Kent 220 4th Avenue South Kent, WA 98032 Attn: J. Brent. McFall Roger Lubovich Fax: (206) 813-2067 SELLER AT: Kent Centennial Limited Partnership 200 - 112th Avenue NE, Suite 205 Bellevue, WA 98004 Attn: Douglas W. Klappenbach Fax: (206) 453-1712 or to such other addresses as either party hereto may from time to time designate in writing and deliver in a like manner. - 10 - /SAWS.030 Notices, consents, approvals and communications given by mail shall be deemed delivered upon the earlier of receipt or seventy-two (72) hours after deposit in the United States mail in the manner provided above. Notices, consents, approvals and communications given by facsimile shall be deemed delivered upon the receipt by sender of a confirmed received statement as printed by the sender's facsimile machine. Originals of the facsimile transmittals shall, on the same day as the facsimile transmittal was sent, be mailed or personally delivered to the recipient of the facsimile transmittal. ARTICLE XV REMEDIES Section 15.1 Default. In the event of breach of this Agreement by Buyer of its obligations hereunder, Seller shall be entitled to elect either to: (a) terminate this Agreement and receive the Earnest Money as liquidated damages, together with the interest thereon, and retain the Closing Extension Fee, the receipt of the Earnest Money and Closing Extension Fee being Seller's sole and exclusive remedy and waiver of any other remedies which it may have at law or in equity, and as its sole and exclusive remedy against Buyer, or(b)pursue all remedies available to it at law and in equity as may be afforded by the laws of the State of Washington including, without limitation, specific enforcement of this Agreement. In the event of breach of this Agreement by Seller, Buyer shall have available to it such remedies at law or in equity as may be afforded to it by the laws of the State of Washington, including, without limitation, specific performance of the provisions hereof. Section 15.2 Attorneys' Fees. The prevailing party in an action or proceeding brought under this Agreement shall be entitled to recover from the nonprevailing party all of its reasonable attorney's fees and costs, including but not limited to expert witness fees. This entitlement survives the entry of judgment and encompasses all appeal and judgment enforcement activity. Section 15.3 Waiver. No delay in exercising any right or remedy shall constitute a waiver thereof, and no waiver by Seller or Buyer of the breach of any covenant of this Agreement shall be construed as a waiver of any preceding or succeeding breach of the same or any other covenant or condition of this Agreement. ARTICLE XVI GENERAL Section 16.1 Time. Time is of the essence in the performance of the respective obligations of the parties contained in this Agreement. Section 16.2 Successors and Assigns. Except as herein otherwise provided, this Agreement and all of the terms and provisions hereof shall insure to the benefit of and be binding upon the heirs, executors, personal representatives, successors and assigns of the parties hereto. Section 16.3 Entire Agreement. This Agreement, together with the Exhibits hereto, represents the entire agreement between the parties covering everything agreed upon or understood in this transaction. There are no oral promises, conditions, representations, understandings, interpretations or terms of any kind as conditions or inducements to the execution hereof or in effect between the parties, except as may otherwise be provided herein. No change or addition is to be made to this Agreement except by a written agreement executed by the parties. - 11 - /S/1SlPS.030 10V Section 16.4 Jurisdiction. This Agreement and the rights of the parties hereto shall be governed and construed in accordance with the laws of the State of Washington. Venue shall be in King County Superior Court. Section 16.5 Headings. The descriptive headings of the Articles of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 16.6 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 16.7 Construction. The parties acknowledged that each party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or Exhibits hereto. Section 16.8 Possession. Full possession of the Property shall be delivered to Buyer by Seller at Closing, subject to the tenants in occupancy and the terms of the Leases thereunder and subject to the Permitted Exceptions. Section 16.9 Mutual Indemnification. Seller hereby indemnifies and agrees to hold Buyer harmless (including reasonable attorneys' fees) from claims of third parties arising from or related to the negligent acts or omissions or willful misconduct of Seller, its agents, contractors or employees arising from or related to the Property prior to the Closing Date. Buyer hereby indemnifies and agrees to hold Seller harmless (including reasonable attorneys' fees) from claims of third parties arising from or related to the negligent acts or omissions or willful misconduct of Buyer, its agents, contractors or employees arising from or related to the Property on and after the Closing Date Section 16.10 Buyer's Acknowledgment. Buyer acknowledges for Buyer and Buyer's successors and assigns (a)that Buyer is being afforded a reasonable opportunity to inspect and investigate the Property, all improvements thereon and all aspects relating thereto, either independently or through agents and experts of Buyer's choosing, and(b)that Buyer is acquiring the Property based solely upon Buyer's own investigation and inspection thereof, and (c) the provisions of this Section 16.10 shall survive Closing and not be merged therein. EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 9, SELLER AND BUYER AGREE THAT THE PROPERTY SHALL BE SOLD AND THAT BUYER SHALL ACCEPT POSSESSION OF THE PROPERTY ON THE CLOSING DATE "AS IS, WHERE IS, WITH ALL FAULTS", WITH NO RIGHT OF SETOFF OR REDUCTION IN THE PURCHASE PRICE, AND THAT EXCEPT AS EXPLICITLY SET FORTH IN THIS AGREEMENT, SUCH SALE SHALL BE WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTY OF INCOME, POTENTIAL, OPERATING EXPENSES, USES, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE (BUT SPECIFICALLY EXCLUDING THE WARRANTY OF TITLE GIVEN IN THE DEED AND OTHER CONVEYANCE DOCUMENTS), AND SELLER DOES HEREBY DISCLAIMS AND RENOUNCE ANY SUCH REPRESENTATION OR WARRANTY EXCEPT AS SET FORTH IN SECTION 9. BUYER SPECIFICALLY ACKNOWLEDGES THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, OTHER AGENTS OR BROKERS AS TO ANY MATTER CONCERNING OR RELATED TO THE PROPERTY (EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS EXPRESSLY SET FORTH HEREIN AND THE WARRANTY OF TITLE SET FORTH IN THE DEED), INCLUDING WITHOUT LIMITATION: (i) THE CONDITION OR SAFETY - 12 - /SASTS.030 OF THE PROPERTY OR ANY IMPROVEMENTS THEREON, INCLUDING, BUT NOT LIMITED TO, PLUMBING, SEWER,HEATING AND ELECTRICAL SYSTEMS, ROOFING, AIR CONDITIONING, IF ANY, FOUNDATIONS, SOILS AND GEOLOGY INCLUDING HAZARDOUS SUBSTANCES, LOT SIZE, OR SUITABILITY OF THE PROPERTY OR ITS IMPROVEMENTS FOR A PARTICULAR PURPOSE (ii) WHETHER THE PLUMBING AND UTILITIES ARE IN WORKING ORDER, (iii) THE HABITABILITY OR SUITABILITY FOR OCCUPANCY OF ANY STRUCTURE AND THE QUALITY OF ITS CONSTRUCTION; (iv) WHETHER THE IMPROVEMENTS ARE STRUCTURALLY SOUND, IN GOOD STATE OR CONDITION, OR IN COMPLIANCE WITH APPLICABLE CITY, COUNTY, FEDERAL STATUTES, CODES OR ORDINANCES; OR(v)MATTERS RELATED TO THE LEASES OR THE TENANTS. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT EXCEPT AS SET FORTH HEREIN, IT IS RELYING SOLELY UPON ITS OWN INSPECTION OF THE PROPERTY, REVIEW OF THE LEASES AND INVESTIGATIONS CONCERNING THE TENANTS AND NOT UPON ANY REPRESENTATIONS MADE TO IT BY SELLER, ITS PARTNER, OFFICERS, DIRECTORS, CONTRACTORS, MANAGERS OR EMPLOYEES NOR ANY PERSON WHOMSOEVER. ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE TO BE THE SOLE RESPONSIBILITY OF BUYER AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE PARTY OF SELLER TO MAKE ANY CHANGES, ALTERATIONS, OR REPAIRS TO THE PROPERTY SUBSEQUENT TO CLOSING, EXCEPT TO THE EXTENT THAT SUCH ALTERATIONS OR REPAIRS ARE NECESSITATED BY A BREACH OF ANY OF SELLER'S WARRANTIES SET FORTH IN SECTION 9. Section 16.11 Survival. The provisions of the Agreement and particularly the representations, warranties and indemnities of the parties hereto shall survive the Closing and shall not be deemed merged in any instrument of conveyance. ARTICLE XVII TAX DEFERRED EXCHANGE Section 17.1 Tax Deferred Exchange. At Closing, Seller may elect to structure this transaction and Seller's receipt of the Purchase Price hereunder as part of a 1031 Tax Deferred Exchange. Buyer shall cooperate with Seller in its efforts to effect a Tax Deferred Exchange, provided that Buyer shall incur no liability with respect to such Tax Deferred Exchange, nor shall Buyer hold title to any property other than the Property, nor shall the Closing Date be delayed as a result of such Tax Deferred Exchange. BUYER: THE CITY OF KENT By: Its ayorr Date: - 13 - /sns\Ps.o3o ATTE s - ityJorne Date: L/ /o r SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: Allougl W. Klappe Its General Partner Date - 14 - /SASTS.030 Exhibits Attached Hereto: Exhibit A Leases/Rent Roll Exhibit B Permitted Exceptions Exhibit C Personal Property Exhibit D Property Information Exhibit E Proposed Lease Transactions Exhibit F Legal Description Exhibit G Assignment and Assumption of Leases Exhibit H Assignment of Service Contracts Exhibit I Assignment of Warranties - 15 - /SAS1PS.030 EXHIBIT A LEASES/RENT ROLL A--1 GASTS.030 Parking Lease Agreement by and between The Corporation of Catholic Archbishop of Seattle as Tenant, dated January 23, 1990. A-2 GASTS.030 0 X n m Z -a m (D cD (D (D (D (D m cD cD (D (D Z A rn rn rn rn rn rn rn rn rn rn rn rn n n CO kn 0to160 (AEA69 <flEn (AfAV) A = m -J -J -J v J -J -J -J v -1 -J rn CD z (D A w w A .ram W w w w W i (D < CD 3 iD o -(D -(0iD cD D. A a cn o) N -i A (D N O V W N N N N N N Ut w i = x (D N co -A N N O O O o N W OD c N Z '0 -� c n i —J v O W -4 v U1 W (A i (D (D N w O) a D N r p O -+ N N N N N N N N N N N N � (� � rn 'o oD O O o 0 0 0 m O W o 0 0 0 0) Q z co Co .A A A P A A 1i A A A A A CD m ° (D 0 0 0 0 0 0 0 0 0 0 0 0 0 v tD 0 0 0 0 0 0 0 0 0 0 0 0 0 a` X 0 � a m to mN , a .t+ A :N :N A A A N CD z co M4a p � � ' r� aN N N .A A A .AZ. .A A A .A E{i cn M � O A A 0 0 0 0 0 0 0 0 0 0 0 0 (p CDU1 A A A A A A A A .A N O W w W W W w w w w co W O a r r- oN :N :NJ, W (D N N N N N N N N IV N N N (D M. X --• o .P, 1i A .A 1i 3a A A ? .A A .A —0 O O 0) 9) D) 9) 0) Q) 9) 9) 9) P D) v V V V -J v v V -J V V L J v N 4 O W w W W W W w W W W w W to r 0. w tJrnrnrnrnrnrnrnrnrnrn0)M>(D 0 0 0 0 0 0 0 0 0 0 0 0 0 0Cca d O 60600000000603 N O O O O O O O O O o 0 0 0 0 = t� C pO 69 < Oo ka (D i � i i i i i i " r (D N W 0 = _ = 0 0 0 0 O O O O O (D (A ` co xA — 0 0 00 0 0 0 00 0) — -* -A 0) °1 v (;1 m CT 1 c n m m c n c n u l m , UJ 6 i i i i ...1 i i i i = (n O w v -4 v -4 v v v V -I u a° � W i i i i i Q) i ( m /� i �! i i i C .A (D A rA P .A .A +A A .A .A A A A (D m O O O O O O O o 0 0 0 d \/ co N O (D (D (D (D (D (D (D (D (D (D (D CD x V Du A A .A. A 7� A A P- A A A (D in (D O O O O O o 0 0 0 0 0 0 -, (D W 00 0 0 0 0 0 0 0 0 0 0 o a° b9 V rlj i l NJ" N N N tJ N N N N IV N N v r-+ 0 i rn rn — — — — — — — — — i m D i i i i i i i i i 0 V < Ul Ul Ul (n Ul Ul Ul U1 Ul U7 U7 69Ln N Awwwwwwwr- o W (n (n (, MCnoOOOoo0 �D Zy W W N N N N NN N N N N N N r N w m m (D (D (D (D (D v v V -J V v v w EXHIBIT B PERMITTED EXCEPTIONS B--1 GASTS.030 UNRECORDED LEASEHOLDS, IF ANY, RIGHTS OF VENDORS AND SECURITY AGREEMENTS ON PERSONAL PROPERTY AND RIGHTS OF TENANTS AND SECURED PARTIES TO REMOVE TRADE FIXTURES AT THE EXPIRATION OF THE TERM. EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: ' RECORDED: JANUARY 30, 1980 RECORDING NO. : 8001300413 r IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: UTILITIES A RECORD OF SURVEY RECORDED ON FEBRUARY 16, 1989 UNDER RECORDING NO. 8902169001. B-2 TERMS, COVENANTS, CONDITIONS AND RESTRICTIONS AS CONTAINED .IN LOT LINE ADJUSTMENT: n NO. : LL89-36 RECORDED: JANUARY 24, 1990 v RECORDING NO. : 9001240759 AGREEMENT AND THE TERMS AND CONDITIONS THEREOF BETWEEN: CITY OF KENT, A MUNICIPAL CORPORATION AND: KENT CENTENNIAL LIMITED PARTNERSHIP RECORDED: FEBRUARY 9 , 1990 RECORDING NO. : 9002090976 PURPOSE: ENVIRONMENTAL MITIGATION EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: MARCH 30, 1990 RECORDING NO. : 9003300960 IN FAVOR OF: WASHINGTON NATURAL GAS COMPANY FOR: GAS PIPELINE OR PIPELINES EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: SEPTEMBER 25, 1990 RECORDING NO. : 9009251075 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: SANITARY SEWER EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: OCTOBER 1, 1990 RECORDING NO. : 9010010461 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: WATERLINE TERMS, COVENANTS, CONDITIONS AND/OR PROVISIONS CONTAINED IN A EMERGENCY ACCESS EASEMENT SERVING SAID PREMISES, AS CONTAINED IN DOCUMENT: RECORDED: NOVEMBER 9, 1990 RECORDING NO. (S) : 9011091191 I B-3 i AGREEMENT AND THE TERMS AND CONDITIONS THEREOF BETWEEN: THE CITY OF RENT, A MUNICIPAL CORPORATION AND: RENT CENTENNIAL LIMITED PARTNERSHIP, A WASHINGTON LIMITED PARTNERSHIP DATED: OCTOBER 22, 1990 RECORDED: JANUARY 25, 1991 RECORDING NO. : 9101251105 PURPOSE: EMERGENCY ACCESS EASEMENT EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: JUNE 25, 1991 RECORDING NO. : 9106251686 IN FAVOR OF: PUGET SOUND POWER AND LIGHT COMPANY FOR: AN UNDERGROUND ELECTRIC TRANSMISSION AND/OR DISTRIBUTION SYSTEM B-4 EXHIBIT C PERSONAL PROPERTY [NONE] C•-1 G:\S1PS.030 EXHIBIT D PROPERTY INFORMATION 1. Copies of all Leases and amendments thereto. 2. Copies of all those service contracts, operating agreements,janitorial contracts, and maintenance agreements, including elevator and HVAC maintenance, relating to the operation of the Buildings. 3. All those certain environmental assessments relating to the presence of existence of Hazardous Substances on the Property. 4. Any and all as-built plans, specifications, drawings, surveys architectural drawings and matters of a similar nature relating to the Property. 5. ALTA survey of the Real Property and Improvements. 6. Copies of all soils tests and analysis affecting the Property. 7. Copies of all warranties and guarantees in effect at the Property, if any. 8. Copies of all current contracts, if any, relating to construction and installation of any tenant improvements or items of the Buildings' maintenance. D-1 G:\S\PS.030 EXHIBIT E PROPOSED LEASE TRANSACTIONS E-1 G:ASTS.030 91- EXHIBIT E Proposed Lease Transactions 31-Mar-96 PROPOSED ESTIMATED TENANT AREA RATE T.I.COST NLK Expansion into Delmonte space 930 $19.38 $2,000 ,000 $ $18.00 12 Panalpina Expansion into adjacent Vacant Space 504 504 $18 00 12,000 Christian Church Administrative Offices part of suite 204 Society for the Accused Public Defenders west end of 3rd floor 10,000 $18.00 $80,000 TOTALS 12,169 $100,000 E-2 EXHIBIT F LEGAL DESCRIPTION F--1 G:1S\PS.030 r�/ THE LAND REFERRED TO IN THIS COMMITMENT IS SITUATED IN THE STATE OF WASHINGTON, COUNTY OF KING AND IS DESCRIBED AS FOLLOWS: PARCEL A: LOTS 4, 5, 6, 7, 8 AND 9, BLOCK 8 AND THE EAST 20 FEET OF LOTS 4, 5 AND 6, BLOCK 13, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (A PORTION OF PARCEL A IS ALSO KNOWN AS LOT A OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759 . ) PARCEL B: LOTS 10, 11 AND 12, BLOCK 8, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (ALSO KNOWN AS LOT B OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759. ) BOTH SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON. F-2 ,/� EXHIBIT G ASSIGNMENT AND ASSUMPTION OF LEASES THIS ASSIGNMENT AND ASSUMPTION OF LEASES is made this day of 199 , by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation,("Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996, (the"Agreement"),whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein(the"Property"); and WHEREAS,pursuant to the Agreement, Seller has agreed to assign and Buyer has agreed to assume all of Seller's right,title and interest in, and Seller's obligations under, all leases affecting the Property; NOW,THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration,the receipt of which is hereby acknowledged, the parties agree as follows: AGREEMENTS 1. Seller hereby assigns, transfers and conveys to Buyer all of Seller's right,title and interest in and to, and all of its obligations under,the leases listed on Exhibit A attached hereto and incorporated herein by this reference (the"Leases"). 2. Buyer hereby assumes all of Seller's right, title and interest in, and agrees to fully perform all of Seller's obligations under, the Leases from and after the date hereof. 3. Seller agrees to indemnify Buyer against and hold Buyer harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Seller's obligations under the Leases prior to the date of this Assignment Agreement. Seller shall, from and after the date hereof, be relieved of any liability or obligation under the Leases. 4. Buyer agrees to indemnify Seller against and hold Seller harmless for and from any and all liabilities, losses, damages and expenses, including without limitation,reasonable attorneys' fees, arising out of Buyer's obligations under the Leases from and after the date of this Assignment Agreement. DATED as of the day and year first above written_ G-1 GASTS.030 BUYER: THE CITY OF KENT By: Its Mayor Date: ATTEST: City Attorney Date: SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: Douglas W. Klappenbach Its General Partner Date STATE OF WASHINGTON ) COUNTY OF KING ) On this day personally appeared before me Douglas W. Klappenbach to me known to be the General Partner of Centennial Venture Limited Partnership, General Partner of Kent Centennial Limited Partnership,the partnership that executed the within and foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of said partnership for the uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the partnership. GASTS.030 �"" I ' I IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of , 199_. NOTARY PUBLIC in and for the State of Washington,residing at My commission expires: STATE OF WASHINGTON ) COUNTY OF KING ) On this day personally appeared before me to me known to be the of THE CITY OF KENT, a Washington municipal corporation„the corporation that executed the within and foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of said corporation for the uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the corporation. IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of 199_. NOTARY PUBLIC in and for the State of Washington, residing at My commission expires: G-3 G:\S\PS.030 EXHIBIT H ASSIGNMENT OF SERVICE CONTRACTS THIS ASSIGNMENT is made this day of , 199 , by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation,("Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996 (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein(the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign and Buyer has agreed to assume all of Seller's right,title and interest in, and Seller's obligations under, all service contracts affecting the Property; NOW,THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt of which is hereby acknowledged,the parties agree as follows: AGREEMENTS 1. Seller hereby assigns, transfers and conveys to Buyer all of Seller's right,title and interest in and to, and all of its obligations under, the service contracts listed on Exhibit A attached hereto and incorporated herein by this reference (the"Service Contracts"). 2. Buyer hereby assumes all of Seller's right, title and interest in, and agrees to fully perform all of Seller's obligations under, the Service Contracts from and after the date hereof. 3. Seller agrees to indemnify Buyer against and hold Buyer harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Seller's obligations under the Service Contracts prior to the date of this Assignment Agreement. Seller shall, from and after the date hereof, be relieved of any liability or obligation under the Service Contracts. 4. Buyer agrees to indemnify Seller against and hold Seller harmless for and from any and all liabilities, losses, damages and expenses, including without limitation,reasonable attorneys' fees, arising out of Buyer's obligations under the Service Contracts from and after the date of this Assignment Agreement. DATED as of the day and year first above written. H -1 G:iS1PS.030 BUYER: THE CITY OF KENT By: Its Mayor Date: ATTEST: City Attorney Date: SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: Douglas W. Klappenbach Its General Partner Date H-2 G:\.S\PS.030 �(m}� EXHIBIT A to Exhibit H SERVICE CONTRACTS 3/31/96 Exterior& Interior Landscape Maintenance Earth Enterprises Janitorial Allied Building Services HVAC Maintenance & Filter Replacement McKinstry Service Water Treatment for Cooling Tower CHEM-AQUA Fire Protection & Sprinklers Fire Systems West Fire Alarm Monitoring ADT Security Systems Elevator Service & Repair Sound Elevator Trash Collection Kent Disposal H-3 , EXHIBIT I ASSIGNMENT OF WARRANTIES THIS ASSIGNMENT is made this day of 5199 , by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation, ("Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996 (the"Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign all of Seller's right, title and interest in all warranties affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration,the receipt of which is hereby acknowledged, Seller hereby assigns,transfers and conveys to Buyer all of Seller's right,title and interest in and to the warranties listed on Exhibit A attached hereto and incorporated herein by this reference DATED as of the day and year first above written. BUYER: THE CITY OF KENT By: Its Mayor Date: ATTEST: City Attorney Date: I--1 G:AWS.030 'y SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: Douglas W. Klappenbach Its General Partner Date I--2 G:1S\PS.030 1111"ASF TYPE OR PRINT jt(,Al, j;S'J'A'1�1; 1:XCISL TAX AFFIDAVIT This form is your receipt when stamped 1'I.F.ASI? SEE. REVERSE by cashier. CHAPTER 82.45 RCW - CHAPTER 458-61 WAC For Use at County Treasurer's Office (Use Form No. 84-000113 for Reporting Transfers of Controlling Interest of Entity ownership to the Department of Revenue) THIS AFFIDAVIT WILL NOT IIE ACCEPTED UNLFSS ALL AREAS 1-7 ARE FULLY COMPLE-YED ® Narnc Centennial Limited Partnership, a ® Name The City of Kent x Washington Limited Partnership w� w� waStreet 400 W. Gowe, Suite 204 street 220 4th Avenue South, 3rd Floor Kent WA 98032 City/State/zip Kent, WA 98032 City/State/Zip , _ ADURI,SS'CU SEND ALL PROI'ER'Cl 'I'AX RI:LA'fGD CORRESPONDI?N<'1? ALL TAX PARCEL NUMBERS C3��EE��11T� RrA$13REi[2 ALACE' A�S $ L►VALUE IL}7AX EXEt41t'T Nance The City of Kent 982570-0566-05 Street 220 4th Avenue South, 3rd Floor lc - 152S City/Slate/zip Kent, WA 98032 ® LEGAL DESCRIPTION OF PROPERTY SITUATED IN f I UNINCORPORNITI-) King COUNTY ❑ OR IN CITY OF Street Address (if properly is improved): ---- SEE A'ITTACIIMENT ® Is this property currently: YES NO ©Description of tangible personal property if included in sale (furniture, appliances, etc.) Classified or designated as forest land? Chapter 84.33 RCW Classified as current use land (open space, farm ❑ and agricultural, or timber)? Chapter 84.34 RCW ® If exemption claimed, list VAC number and explanation. Excmpt from property tax as a nonprofit organization? Chapter 84.36 RCW WAC No. (Sec/Sub) Seller's Exerupt Reg. No. __——— — ——— Receiving special valuation as historic F1 FN Explanation property? Chapter 84.26 RCW Properly Type: 17 land only L1 land with new building D(I Innd will) previously used hnilding 1 1 land will) mohile. horru: of Docurneul Stattltory W117'ninty Dcod 11 lurrlrrr oldy I I building only Dale of Ikreument I't io;I'M V've l AIX1 l l 1 uuil) I I lcsid,-116a0 1 I limber I I agricultural XXconunercial/industrial Gross Sale Price $-1-1.,712,600.00 11 other Personal Property (deduct) $ Taxable Sale Price $11,712,600.00 13 (1) NOTICE OP CONTINUANCE (RCW 84.33 or RCW 84.34) Excise 'lax: State $ 149,921.28 If the new owncr(s)of land that is classified or designated as current use Local $ 29,281.S0 or lorest land wish to continue the classification or designation of such land,the new owner(s)must sign below. If the new owncr(s)(to not desire Delinquent Interest: State $ to Continue such classification or designation, all compensating or addi- [Awal $ tional lax calculated pursuant to RCW 84.33.120 and 140 or RCW Delinquent Penalty: Stale $ 84.34.108 shall be due and payable by the seller or transferor at the tinie 179 202.78 of sa1c.']'he county assessor must determine if the land transferred qualifies Total Due $ to continue classification or designation and must so indicate below. THERE IS A $2.00 ITE FOR PROCESSING THIS FORM IF NO TAX IS UL1F. Signatures do not necessarily mean the land will remain in classification or designation. If it no longer qualities, it will be removed and the com A FFI llAV IT taxes will be applied. All new owners ,oust sign. I certify cutler penalty of perjury under the laws of the slate of '['his land L7 does ❑ does not qualify for continuance. Washington that the foregoing is true and correct (See hack of this form). Kent Centennial Limited Partnership, a WA Date __ SignaturLiai ted. Partnership DEPUTY Assessox Grantor/Agent SEE ATTACHMENT FOR SIGNATURE PAGE (2) NOTICI? OF COMPLIANCIi (Chapter 84.26 RCW) Nance (print) ----- _. If the new owner(s)of property with special valuation as historic property wish to continue this special valuation the new owner(s)mist sign below. Dale & Place of Signing -------- If the new owner(s)do not desire to continue such special valuation, all The Clt f Ke additional tax calculated pursuant to Chapter 84.26 RCW, shall be due Signature of and payable by the seller or transferor at the time of sale. GCautee/Agent �I (3) OWNER(S) SIGNA'I'URL Nance (print) _ Brent McFall, Director of -F finance Date & Place of Signing Perjury: Perjury is a class C felony which is punishable by imprisonment in a state correctional institulion for it maximum tern[ of not u)re than five years, or by a fine in an amount fixed by the court ol'not luore than live thousand(dollars(.$5,000.00),or by bosh it pi isonntenl n and fine (RCW 9A.20.020 (IC)). RI,V 84 0001n(6-I6-95)(111) H/29;951 FOR TREASURIAUS USE ONLY CMIN"t'1 VRI ,A' IURI{R SIGNATURE PAGE Kent Centennial Limited Partnership, a Washington Limited Partnership By: Centennial Venture Limited Partnership, a Washington Limited Partnership, its: General Partnership By 4aWZ-- 4Douh EXHIBIT A r PARCEL A: LOTS 4, 5, 6, 7, 8 AND 9, BLOCK 8 AND THE EAST 20 FEET OF LOTS 4, 5 AND 6, BLOCK 13 , YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (A PORTION OF PARCEL A IS ALSO KNOWN AS LOT A OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759 . ) PARCEL B: LOTS 10, 11 AND 12 , BLOCK 8, YESLER' S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64 , RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (ALSO KNOWN AS LOT B OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759 . ) BOTH SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON. First American Title Insurance Company 2101 FOURTI I AVENUE,SUITE 800 • SEATTLE,WASI IINGTON 98121-2387 • (206)728-0400 • FAX(206)728-7220 BUYER'S CLOSING STATEMENT Escrow: 37973CP Order: 318287-5 Escrow Officer: Cyndi M. Pedersen Date: 6/27/96 ESTIMATED Closing Date: 7/01/96 ESCROW STATEMENT OF: The City of Kent SELLER: Kent Centennial Limited Partnership, a Washington Limited Partnership Property Address: 400 West Gowe Street, Kent, WA 98032 ITEMS DEBITS CREDITS TOTAL CONSIDERATION 11, 712,600 .00 OTHER CONSIDERATION: Operating Expenses (6 months) 1, 315.22 OTHER CONSIDERATION: Expense Recon for Court Bldg. 840.45 OTHER CONSIDERATION: Leasing Commission 11, 928 .48 OTHER CONSIDERATION: Tenant Improvement Costs 56, 140 .00 ADDITIONAL DEPOSITS TO ESCROW 250, 000.00 TITLE CHARGES TO First American Title Insurance Come Extended Owner' s Premium for $11, 712, 600.00 3, 896 .00 SALES TAX 319 .47 Deed Recording Fee 100.00 Mortgage Recording Fee 100.00 Miscellaneous Recording Fees 100. 00 ESCROW CHARGES Escrow Fee 2, 000. 00 SALES TAX 164 .00 BALANCE DUE ESCROW 11, 536, 873 .18 TOTALS $ 11,788, 188 .40 $ 11, 788, 188 .40 The City of Kent BY: e� Brent McFal , Director Operations 1k AMgR/t19 First American Title Insurance Company 2101 FOURTH AVENUE,SUITE 800 • SEATTLE,WASI IINGTON 98121-2387 • (206)728-0400 • FAX 06)728-�0 *BUYER* ESCROW INSTRUCTIONS IMPROVED PROPERTY TO: FIRST AMERICAN TITLE INSURANCE COMPANY Escrow No. 2101 Fourth Avenue 37973CP Seattle , Wpp8121 Commitment No. 318287_5 (206) 728-0400 Commitment Date March 14 1996 First American Title Insurance Company as escrowee,is hereby instructed by the seller and the buyer named herein to act as an independent third party in closing this transaction. In so doing, escrowee has or will select, prepare and complete certain instruments or documents, which may substantially affect your legal rights. If you have any questions regarding such documents or instruments, or your rights, you should consult an attorney of your choice,and First American Title Insurance Company recommends that you do so prior to signing such documents or instruments. I(We)fully understand that First American Title Company is not licensed to practice law and that neither it nor any of its employees are permitted to offer legal advice of any nature,nor have they done so,nor may they advise as to the merits of a transaction or the manner in which I(We)should hold title. Escrowee has been handed a copy of the Purchase and Sale Agreement or such other documents and any Addendums,as constitute the Agreement to sell and purchase this property. Acting in accordance therewith, escrowee is directed to close the transaction, and shall perform said closing in accordance with the following instructions. In the event there is a variance between the terms of the Purchase and Sale Agreement and the final terms of the sale as evidenced by the documents delivered under these or other instructions,and the closing statements agreed to by the parties,closing shall be in accordance with such documents,instructions and closing statements.All principals to this escrow acknowledge and agree that all terms and conditions of that certain Purchase and Sale Agreement dated ,and all Addendums thereto,have been met,waived,or satisfied,or will be resolved outside of escrow and escrowee shall not be responsible for same, and they are no longer to be considered as conditions to this closing.BUYER AND SELLER ACKNOWLEDGE TI TAT SELLER'S DISCLOSURE STATEMENT AS REQUIRED UNDER TITLE 64 RCW WILL.BE DFLIVF.RED OR WAIVED OUTSIDE OF ESCROW AND IS NO'I"TO BE CONSIDERED A CONDITION OF CLOSING. SELLER(S) HEREIN DEPOSIT WITH YOU THE FOLLOWING; ( X) Warranty Deed ( ) ( X) ISxcise'I'ax Affidavit Bill of Sale ( ) Deed in fulfillment of said Contract(To be returned to seller. Real Contract(To be jointly executed by buyer) s possession closing) ( X) Additional Documents: Exchange Documents prepared and sllbmittd by Exchange Facilitator Co oration executed by and between the following: Kent Centennial Limited Partnership, a Washington Limited —Partnership to The City of Kent which cover the premises fully described in the above referenced preliminary commitment for title insurance ( the "Commitment"), which document(s)you are instructed to record,file,release and/or deliver when you have all necessary funds and/or other documents as follows: Seller warrants to escrowee that if seller is an individual, seller is not a non-resident alien for purposes of U.S. income taxation, or if seller is a corporation,partnership,trust or estate,seller is not a foreign entity. TIIE FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT OF 1980 AS AMENDED BY THE TAX REFORM ACT OF 1984 PLACES SPECIAL REQUIREMENTS FOR TAX REPORTING AND WITIIIIOLDING ON THE PAR'I'IF.S TO A REAL ESTATE TRANSACTION WHERE THE TRANSFEROR(SELLER)IS A NON-RESIDENT ALIEN OR NON-DOMESTIC CORPORATION OR PARTNERSHIP OR IS A DOMES'TIC CORPORATION OR PAR'I'NERSIIIP CONTROL1.141) BY NON-RESIDENTS OR NON-RHSIDENI' C0RPORAI'IONS OR PARTNERSHIPS. IT IS UNDERSTOOD AND ACKNOWLEDGIiD By THE UNDI:RSIGNI:D THAT FIRSTAMIiRICAN TITLE INSURANCE COMPANY AND ITS ESCROW OR CLOSING OFFICER WILL NOT 'TAKE AN ACTIVE ROLE IN FITHER THEDETERMINATION OF'TIIF_NON-ALIEN STATUS OF THE SELLER 7'It'ANSFEROR OR TII1i WI'TIIIIOLDING OF ANY FUNDS AND TIIAT FIRST AMERICAN TITLE INSURANCE COMPANY AND TT'S CLOSING OFFICER MAKE NO IZEPRESENTATIONS AND THAT PARTIES TO THIS TRANSACTION ARE SEEKING AN ATI'ORNEY'S, ACCOUNTANI`S OR OTHER TAX SPECIALISI'S OPINIONS CONCERNING THE EFFECT OF THIS ACI'ON TIIIS'TRANSACIION AND ARE NOT ACI'ING ON ANY STATEMENTS MADE OR OMITTED BY THE ESCROW OR CLOSING OFFICER. Buyer herein has deposited$ 250,000.00 in U.S.funds as Earnest Money with Escrowee youh, and/ ugh thei nds re wfender ill deliver to escrowee,funds sufficient to close. Buyer further hands you,or will causeatolbe`delivered oeyoutsuch docoumetnts as may berrequ red Of them to close this transaction. You are instructed to disburse or pay out said funds when you have recorded the necessary conveying document and/or such other documents as required by this transaction,and can cause to be issued a policy of title insurance as called for in the Purchase and Sale Agreement,and as may be required by the lender, insuring title in (if by Deed) or an interest in (if by Contract), the named buycrs( ), free from encumbrance other than matters attaching by, through or nder the buyers, and the following paragraphs as set forth in the Commitment, u s which paragraph are numbered as ��2,6-1515 in theCommitment. Said policy is to further contain those insuring clauses,exceptions,exclusions,provisions and stipulations customarily contained in the printed provisions of such policy or policies. Page I of 3 Buyer and Seller acknowledge receipt of a copy of the Commitment and have agreed to the matters to remain, and have examined the legal description contained therein and acknowledge the same to be a full and correct description of the real property that is the subject of this transaction. Sellers authorize deduction and payment of all encumbrances except those to be excepted from coverage in the title insurance policy and to pay all other disbursements and charges as itemized on the estimate closing statement and/or IIUD settlement statement(the "Closing Statement"),which seller signs contemporaneously herewith. If there are underlying encumbrances being paid off which require the obtaining of a Fulfillment Deed, Reconveyance,Release or Satisfaction,you are instructed to pay the demand of the appropriate party and obtain and record such a document.Sellers approve payment of the amount of the demand, including interest and/or penalties and late charges, as shown on the Closing Statement, even if escrowee has not been able to obtain written verification of the amount claimed as due.Sellers authorize deduction and/or agree to pay forthwith any difference that may result if the final written demand is higher than that shown on the Closing Statement. 'phe undersigned acknowledge that the payoff figures on existing encumbrances may accrue daily interest and are not to be considered to be paid in full until received by the party entitled thereto and that interest will be paid to the date of anticipated receipt of funds by the entitled party. Parties hereto authorize escrowee to transmit all documents,payoffs, checks,letters and all communication by regular service through the U.S.mails,and if said items are deposited in the U.S. Mail system a minimum of five (5) working days before any deadline, escrowee shall be relieved and discharged of any and all liability, and the obligated principal shall indemnify escrowee against any and all claims resulting therefrom,and if additional funds are needed to satisfy these claims,the obligated principal shall deposit same forthwith. Buyers authorize payment of those charges and adjustments as itemized on the Closing Statement,which buyer signs contemporaneously herewith. It is understood and agreed that any Closing Statement is subject to final adjustment and audit,and may be amended to reflect actual charges and adjustments at time of closing.If any monetary error is discovered,the principal liable therefor will forthwith pay into escrow for disbursement such amounts as may be necessary. All pro-rating is to be done as of Recording of Documents , on the basis of a 365-day year. Pro-rate taxes only on real property (not personal property)base on the latest available tax figures.Principals hereby acknowledge that the taxes may be assessed on land value only.In the event after closing,the lender and/or its assigns is notified of taxes for omit improvements for said property,said principal parties will deposit on demand,their respective share of omit taxes pro-rated as of date of closing. GENERAL PROVISIONS 1.Value of fuel oil remaining on the premises is to be pro-rated and paid for outside of escrow between the buyer and seller.Esrowee is relieved of all liability for collection or payment of installation, maintenance, tap or service charges for water, sewer, metro, garbage, electricity, gas, oil, telephone or any other utility. It is understood that water and sewer bills, if unpaid,can become a lien against the real property. Sellers shall be responsible for the final billings and shall hold buyers harmless therefrom. It will be the responsibility of the buyers to advise the utility companies to change the utility billings to their name. 2. Neither the matter of possession of the property nor the condition thereof or suitability for its intended use shall be in any way an obligation of the escrowee. Seller(s)warrant that all homeowner's Association Dues and/or Assessments are paid to date and no delinquencies exist. Buyer(s) assume responsibility for all subsequent Dues and/or Assessments. 3. You are authorized to fill in the date of close of escrow and such other necessary dates on any documents which require same to correct any typing or scriveners errors on any documents delivered into escrow. Date of closing means the date on which instruments referred to herein are recorded. Recording of any instrument delivered into this escrow, if necessary or proper in the issuance of policies of title insurance called for, is hereby authorized. 4.All disbursements shall be in U.S. funds and shall be by escrowee's check, or by wire transfer. Escrow funds will be placed in an escrow account which will pay no interest to depositor unless specifically requested. Parties hereto understand and agree that all funds delivered into escrow are subject to immediate deposit, and that all checks must clear and be credited to escrowee's trust account as good and sufficient U.S. funds before closing can be completed.Any delay in clearing deposits will delay closing. 5. Coverage of the subject property with fire or any other type of hazard insurance is the sole responsibility of the buyer and escrow is relieved of any responsibility or obligation in connection therewith. IIOWEVER,when a fire/hazard insurance Binder or Policy is required as a condition of closing,it shall be submitted to escrowee and paid for,as required. 6. In the event this escrow fails to close,a sum sufficient to pay title commitment and escrow cancellation charges shall be paid,and as appropriate, may be deducted from funds held. 7. The compliance with ordinances required by any governing bodies including City or County Short Plat(Subdivision)ordinances will be the responsibility of the necessary principal parties herein and escrow is relieved of all liability in connection therewith.Any and all charges for building permits or assessed charges in connection therewith will be handled outside of escrow. 8.You are to furnish a copy of these instructions,amendments thereto,closing statements and/or any other documents deposited in this escrow to the lender or lenders,the real estate broker or brokers and/or the attorney or attorneys involved in this transaction upon request of such lenders, brokers,or attorneys. 9. In the event any dispute shall arise involving a party to this escrow concerning the property covered by these instructions, or in the event conflicting demands or claims are made with respect to this escrow or the rights of any of the parties hereto, it is expressly agreed that escrowee shall have the absolute right, at its election, to do any, or all of the following; Withhold and slop all further proceedings in performance of this escrow; file suit in interpleader and obtain an order from the court requiring the parties to interplead and litigate their claims and rights among themselves;or issue a check to either seller or buyer made payable jointly to seller and buyer in the amount of the sums in dispute. In the event an interpleader suit is brought,escrowee shall be immediately fully released and discharged from all obligations to further perform any and all duties or obligations imposed upon it in this escrow.Buyer agrees jointly and severally with seller to pay escrowee all costs,damages,judgments and expenses suffered,expended or incurred by escrowee in connection with or arising out of this escrow,including,but not limited to,reasonable attorneys'fees. 10. Any additional instructions given to the escrowee herein shall be presented in writing. Buyer and seller further understand that contemporaneously herewith there may be instructions by third parties which are necessary for the completion of this escrow and are, therefore, made a part hereof; namely, such instructions as may be received from a lender, grantor, vendor, or others, affecting the property which is the subject of this escrow. 11.These escrow instructions,and amendments hereto, may be executed in one or more counterparts, each of which independently shall have the same effect as if it were the original,and all of which taken together shall constitute one and the same instruction. 12.Title to equipment, fixtures,personal property or encumbrances or liens thereon or personal property tax or sales tax associated therewith are not a part of this escrow and will be handled outside of escrow. 13.We have been afforded adequate time and opportunity to read,understand and approve these escrow Instructions and all documents referred to herein. Page 2 of 3 14. The parties hereto authorizes you to destroy these instructions and all records of this escrow, regardless of date of same, at any time after seven(7)years from dale of these instructions without liability on your part,or need of further notice to or from us. 15. Internal Revenue Code Section 6109(h) imposes requirements for furnishing, disclosing, and including taxpayer identification number in lax returns on the parties to a residential real estate transaction involving seller-provided financing.The parties understand that the disclosure reporting requirements are exclusive obligations between the parties to this transaction and that First American Title Insurance Company is not obligated to transmit the taxpayer identification numbers to the Internal Revenue Service or to the parties. First American Title Insurance Company is not rendering an opinion concerning the effect of this law on the transaction,and the parties are not acting on any statements made or omitted by the escrow or closing officer. To facilitate compliance with this law, the parties to this escrow hereby authorize First American Title Insurance Company to release any partys taxpayer identification number to any requesting party who is a party to this transaction. The requesting party shall deliver a written request to escrow. The parties hereto waive all rights confidentiality regarding their respective taxpayer identification numbers and agree to hold First American Title Insurance Company harmless against any fees, costs, or judgments incurred and/or awarded in connection with the release of taxpayer identification numbers. ADDITIONAL INSTRUCTIONS: See Attached Exhibit A Subject to the provisions of Paragraph No.5 of the GENERAL PROVISIONS herein,these instructions shall be irrevocable by the undersigned for a period of(30)days from the date of last execution hereof and shall be performed with said period or thereafter until written demand is made upon you for the cancellation thereof. Dated Dated Seller Buyer The Cily of Kent Seller Buyer / �� G rent McFall, Director Operations Seller Buyer Seller Buyer Address Address 220 4th Avenue South,3rd Floor Kent , WA)8032 "Telephone "Telephone SELLERS INSTRUCI'IONS RECEIVED TIIIS DAY OF BUYERS INS'I'RUC-HONS RECEIVED TIIIS DAY OF ,19 AT O'CLOCK. ,19 AT O'CLOCK. PROCEEDS CHECK: ( � Picked up by Sellers ( ) Call When Ready ( ) Mailed to Sellers(Give new address if available) Page 3of3 Exhibit A It is agreed by the undersigned parties that First American Title Insurance Company, its Officers and/or its employees, have provided no advice with respect to the structuring of this transaction as a tax- deferred exchange under I.R.C. Section 1031. In complying with these Escrow Instructions, Escrow Agent shall not be deemed to warrant or assure the desired tax Consequences of the transactions contemplated herein. The Parties represent that they have consulted with such independent legal counsel and/or tax advisors as they deem advisable to determine the tax and legal consequences of this transaction and that they are not relying on the Escrow Agent, its Officers and/or employees for such advice. It is understood and agreed by the undersigned parties that no representations, warranties, or assurances have been made by the Escrow Agent, its officers and/or employees to any of the undersigned parties which are not expressed in the Escrow Instructions and this addendum. Each of the undersigned parties are relying upon his or her own judgment and/or the advice of an attorney, tax advisor or real estate consultant in executing these instructions and the related documents in this transaction. BARBARA A.WII_SON PHILLIPS LAW OFFICES McCULLOUGH MARKET PLACE TOWER WILSON SUITE IT30 R E C E I V D HILL & 5 ` zoz FIRST AVENUE FIKSO SEATTLE,WASHINGTON JUL"Iel 1996 APROFESSIONAL 9812I-2100 SERVICE CORPORATION (2o6)448-T8i8 OFFICE Ur I tir-MAYOR FAX:(2o6)448-3444 July 11, 1996 VIA OVERNIGHT COURIER Douglas W. Klappenbach Sound Ventures, Inc. 400 West Gowe, Suite 204 Kent, WA 98032 Re: Sale of Kent Centennial Dear Doug: Enclosed please find a binder of closing documents for this transaction. By a copy of this letter, binders are also being sent to Brent McFall at the City of Kent, Steve Sherman, and Jack Strother. Your binder contains the originals of the following documents: * Assignment and Assumption of Leases * Assignment of Service Contracts Temporary License Agreement for Artwork * Assignment Agreement(1031 Exchange) * Exchange Agreement (1031 Exchange) * Qualified Escrow Agreement (1031 Exchange * Corporate Resolutions Douglas W. Klappenbach July 11, 1996 Page 2 The owner's title policy (Item 18 in the binder) should be issued soon. We will send you a copy. Very truly yours, Barbara A. Wilson BAW:kc Enclosures cc (w/enc): Steve Sherman Brent McFall Jack Strother- CLOSING BOOK KENT CENTENNIAL LIMITED PARTNERSHIP CITY OF KENT SALE OF CENTENNIAL CENTER BUILDING JULY 1, 1996 1. Agreement of Purchase and Sale 2. Statutory Warranty Deed 3. Assignment and Assumption of Leases 4. Assignment of Service Contracts 5. Temporary License Agreement for Artwork 6. FIRPTA Certificate 7. Seller's Closing Statement 8. Buyer's Closing Statement 9. Seller's Escrow Instructions 10. Tenant Notification Letter It. Exchange Facilitator Corporation Escrow Instructions 12. Assignment Agreement 13. Exchange Agreement 14. Qualified Escrow Agreement 15. Resolution of Kent Centennial Limited Partnership 16. Resolution of Centennial Venture Limited Partnership 17. Opinion Letter For City of Kent Authority 18. Owner's Policy of Title Insurance G:\SOUND\CLBK.030 AGREEMENT OF"PURCI4ASE AND SALE between KENT CENTENNIAL LIMITED PARTNERSHIP SELLER and THE CITY OF KENT BUYER April , 1996 CENTENNIAL CENTER KENT, WASHINGTON \S\PS.030 THIS AGREEMENT entered into this v day of April, 1996,by KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation, ("Buyer"),hereby agree as follows: ARTICLE I TERMS AND DEFINITIONS In addition to the other terms herein defined,the following terms shall have the meanings set forth in this Article I,unless the context otherwise requires: Section 1.1 Buildings. The buildings commonly known as: (a) Centennial Center, located generally at 400 West Gowe Street,Kent, WA, 98032, containing approximately 75,000 square feet of office building and a 361 stall parking garage ("Centennial Center"); and(b) Municipal Court Building located at 302 West Gowe Street, Kent, WA, 98032, containing approximately 4,100 gross square feet of rentable office space. Section 1.2 Closing. The consummation of the sale and purchase of the Property pursuant to this Agreement. Section 1.3 Earnest Money. The amount of Two Hundred Fifty Thousand Dollars ($250,000) in accordance with the provisions of Section 4 herein. Section 1.4 Effective Date. The date of execution of this Agreement by both Buyer and Seller. Section 1.5 Hazardous Substances. Any substance, chemical,waste or material that is or becomes regulated by any federal, state or local governmental authority because of its toxicity, infectiousness, radioactivity, explosiveness, ignitabiltiy, corrosiveness or reactivity, including, without limitation, asbestos,petroleum derivatives, polychlorinated biphenyls, flammable explosives and those substances regulated by the Hazardous Substances Laws, in quantities which exceed levels allowed under Hazardous Substances Laws. Hazardous Substances Laws shall mean any currently effective federal, State of Washington, or other applicable law, rule, regulation, permit, agreement, order or other binding determination of any governmental authority having jurisdiction over and affecting all or any part of the Real Property or Improvements relating to Hazardous Substances. Section 1.6 Improvements. All improvements located on the Real Property, including the Buildings, Parking and all amenities and appurtenances thereto. Section 1.7 Intangible Personal Property. All of Seller's right, title and interest in any intangible property now or hereafter owned by Seller and used in connection with the Real Property, Improvements and Personal Property, including without limitation all of Seller's rights under all governmental approvals, and applications therefore, claims, contracts, licenses, permits, plans, studies, warranties, utility arrangements and other agreements relating to the ownership, operation or occupancy of the Property and the name "Centennial Center"or other trade name associated with the Improvements. Section 1.8 Leases. All of Seller's right, title and interest in all leases and occupancy agreements covering space in the Improvements, including without limitation, those certain Leases identified on the Rent Roll dated as of March 1, 1996, attached hereto as Exhibit A. _ 2 _ /SAS\PS.030 Section 1.9 Parking. All of the parking available to the Buildings, including a 361 stall parking garage within the Centennial Center Building, and surface parking stalls located on the Real Property. Section 1.10 Permitted Exceptions. Those exceptions to title to the Property attached hereto as Exhibit B and any others determined to be acceptable to Buyer in accordance with the provisions of Section 6.2. Section 1.11 Personal Property. The personal property owned by Seller located on the Real Property and used in connection with the ownership, operation or occupancy of the Real Property or the Improvements identified on Exhibit C attached hereto. Section 1.12 Propea. The Real Property, Improvements, Personal Property, and Intangible Personal Property. Section 1.13 Pro e�rty Information. All information in Seller's possession, or which Seller has access to or caused to be prepared relating to the Property as more particularly described in Exhibit D. Section 1.14 Proposed Lease Transactions. Those proposed transactions for leases of vacant space within the Buildings, or extensions of expansions of existing Leases within the Buildings, all as more particularly shown on Exhibit E attached hereto. Section 1.15 Purchase Price. The Purchase Price shall be specified in Section 3. Section 1.16 Real Property. The real property located in the City of Kent, State of Washington, at 400 West Gowe Street and 302 West Gowe Street,more particularly described in Exhibit F attached hereto and by this reference made a part hereof,together with all rights and privileges, easements and appurtenances thereto. Section 1.17 Service Contracts. All those service contracts, operating agreements, janitorial contracts, and maintenance agreements, including elevator and HVAC maintenance, relating to the operation of the Buildings. Section 1.18 Title Commitment. The commitment for issuance of an Owner's Policy of Title Insurance (extended coverage) issued by Title Company, Order No. 318287-5, and delivered to Buyer within five (5) days of the Effective Date, with coverage in the full amount of the Purchase Price together with legible copies of all exceptions shown therein. Section 1.19 Title Company. First American Title Insurance Company, 2101 Fourth Avenue, Suite 800, Seattle, Washington, 98121. Section 1.20 Title Policy. The Owner's Policy of Title Insurance (extended coverage) issued by Title Company with coverage in the full amount of the Purchase Price, subject to the Permitted Exceptions. Section 1.21 Warranties. All those certain warranties and guarantees in effect with respect to the Property, as disclosed to Buyer as a part of the Property Information. ARTICLE II PURCHASE AND SALE Section 2.1 Purchase and Sale. Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller,the Property, subject to the terms and conditions set forth herein. - 3 - rsns\rs.o3o ARTICLE III PURCHASE PRICE Section 3.1 Purchase Price. The Purchase Price for the Property shall be ELEVEN MILLION SEVEN HUNDRED TWELVE THOUSAND SIX HUNDRED AND NO/100 DOLLARS ($11,712,600.00). The Purchase Price shall be paid in all cash, at Closing,via wire transfer or other immediately available funds. ARTICLE IV EARNEST MONEY Section 4.1 Earnest Money. Not later than two (2) business days after the Effective Date, Buyer shall deposit the Earnest Money with Title Company.. In the event of Closing, Buyer shall receive a credit against the Purchase Price for the amount of the Earnest Money and interest accrued thereon. The Earnest Money shall be held by Title Company in an interest bearing account, with interest accruing for the benefit of the party entitled to receive the Earnest Money hereunder. The Earnest Money shall be non-refundable to Buyer, except in the event of the following circumstances: 4.1.1 Termination of this Agreement in accordance with the provisions of Section 5.1; or 4.1.2 Seller's failure, without legal excuse,to close the transaction contemplated by this Agreement, including without limitation, conveyance of title to the Property to Buyer. ARTICLE V INSPECTION PERIOD: INSPECTIONS Section 5.1 Inspection Period. Buyer shall have until expiration of forty five(45) days after the Effective Date(the"Inspection Period")within which to complete those studies, examinations and inspections desired by Buyer in order to determine whether there exists Hazardous Substances in,under or on the Property, and whether the structure and plumbing, electrical and other systems of Centennial Center are sound ("Inspections"). If the Inspections disclose the presence of Hazardous Substances under, in or on the Property, or a structural or systems deficiency in Centennial Center including its 361 stall parking garage, Buyer shall so notify Seller, in detail, including providing Seller with a copy of any written report or investigation, on or before the expiration of the Inspection Period ("Inspections Notice"). Buyer's failure to issue the Inspections Notice shall be deemed to mean that all matters related to the Inspections are satisfactory to Buyer. If Buyer issues the Inspections Notice, Seller shall respond to Buyer within fifteen(15) days of receipt of the Inspections Notice as to whether Seller shall effect a remediation or correction of any matter disclosed in the Inspections Notice ("Response Notice"). If Seller elects to remediate or correct any matter contained in the Inspections Notice, Seller shall proceed to do so, at Seller's expense and in the manner recommended by Seller's consultants, on or before the Closing Date, and the parties shall proceed to Closing as provided in this Agreement. If Seller elects not to remediate or correction any matter disclosed in the Inspections Notice, this Agreement may, at Buyer's election not later than five (5) business days after Buyer's receipt of the Response Notice, be terminated by written - 4 - /S/AS1PS.030 notice to Seller, and the parties shall have no further obligations hereunder,the Earnest Money and all interest then accrued thereon shall be refunded by Title Company to Buyer; or,Buyer may accept such condition of the Property and elect to proceed to Closing in accordance with the terms of this Agreement. If, after the Response Notice, Buyer fails to terminate the Agreement in accordance with this Section ,Buyer shall be deemed to have elected to proceed to Closing. Section 5.2 Propea Information. Seller shall provide to Buyer the Property Information on or before that date which is ten(10) days after the Effective Date. Section 5.3 Access. Seller shall cause access and entry on the Property to be afforded to Buyer, its agents, consultants,representatives and employees, for inspection and investigation during the Inspection Period, provided that such investigation and inspection shall occur at Buyer's sole cost and expense. Buyer shall be responsible for all costs and expenses arising out of the Inspections and Buyer's entry on the Property. ARTICLE VI TITLE REVIEW AND TITLE POLICY Section 6.1 Title Policy. At the time of Closing, Seller shall cause the Title Company to issue the Title Policy to Buyer in the amount of the Purchase Price against any loss or damage by reason of defect in Seller's title to the Property, other than the Permitted Exceptions as determined hereunder. Seller shall deliver to Title Company such instruments, documents, payments, indemnities,releases and agreements(including an owner's affidavit and the like) and shall perform such other acts as Title Company shall reasonably require in order to issue the Title Policy. Section 6.2 Title Review. Within five (5) days following the Effective Date, Buyer shall be furnished with the Title Commitment. Within fifteen(15) days of Buyer's receipt of the Commitment, Buyer shall notify Seller in writing("Buyer's Notice ) of Buyers approval of such exceptions or defects shown in the Commitment; provided, however,that Buyer agrees that the Permitted Exceptions shown on Exhibit B, shall have been approved by Buyer on the Effective Date. Within ten(10) days of receipt of Buyer's Notice, Seller shall notify Buyer which exceptions to the title Seller shall agree to have eliminated or cured on or before the Closing Date ("Seller's Notice"). If,however, Seller shall not have agreed to eliminate or cure each of the exceptions not listed as Permitted Exceptions in Buyer's Notice,Buyer may elect to terminate this Agreement by sending Seller written notice of such termination within five (5) days of receipt of Seller's Notice; in which event,the Earnest Money together with accrued interest, shall be returned and paid to Buyer and neither party shall have any right or remedy against the other. Alternatively,Buyer may, at its sole option, accept any exceptions that Seller did not agree to eliminate, as a Permitted Exception; in which event,the Agreement shall remain in full force and effect. If, after a determination of the Permitted Exceptions in accordance with the foregoing, title is not insurable subject only to the Permitted Exceptions and cannot be made so insurable by the Closing Date,Buyer may, as its sole remedy,terminate this Agreement, whereupon the Earnest Money,together with interest accrued thereon, if any, shall be returned to Buyer or Buyer may waive its prior disapproval and elect to approve such exceptions as a Permitted - 5 - /sns\rs.o3o Exception, whereupon the Agreement shall remain in full force and effect. If Buyer elects to terminate this Agreement in accordance with the foregoing, Seller shall pay any cancellation fee charged by the Title Company for the Commitment. ARTICLE VII CLOSING Section 7.1 C1in . Closing shall be held at the offices of the Title Company on or before 5:00 p.m. Seattle Time, on July 1, 1996 (the"Original Closing Date"). Buyer shall be entitled to extend the Original Closing Date to August 1, 1996 (the"Extended Closing Date"),by providing written notice to Seller of such extension,together with payment to Seller in the amount of One Hundred Ten Thousand Five Hundred Dollars($110,500)(the"Closing Extension Fee"),which Closing Extension Fee shall be non-refundable to Buyer under any circumstances and shall not apply to Buyer's payment of the Purchase Price. ARTICLE VIII ESCROW CLOSING MATTERS Section 8.1 EscrQw. At Closing, each of the parties shall take such actions and execute and deliver to the other and to escrow such documents, instruments, opinions and agreements as may be required pursuant to the terms hereof, including,but not limited to,the following: 8.1.1 Title to the Property shall be conveyed to Buyer in fee simple by Statutory Warranty Deed, subject only to Permitted Exceptions. 8.1.2 Upon Closing, effective as of the Closing Date, Seller shall assign and Buyer shall assume Seller's rights, interest and obligations as lessor under the Leases, pursuant to execution of the Assignment and Assumption of Leases, attached hereto as Exhibit and Seller shall deliver to Buyer a Rent Roll effective not more than five (5) business days prior to the Closing Date. 8.1.3 Upon Closing, effective as of the Closing Date, Seller shall assign and Buyer shall assume Seller's rights, interest and obligations under those certain Service Contracts,pursuant to execution of the Assignment of Service Contracts, attached hereto as Exhibit H. 8.1.4 Upon Closing, effective as of the Closing, Seller shall assign to Buyer all Seller's right,title and interest in any Warranties in effect for the Property pursuant to execution of the Assignment of Warranties, attached hereto as E2jhibi I. 8.1.5 Upon Closing, effective as of the Closing, Seller shall assign and Buyer shall assume Seller's rights, interest and obligations under all Intangible Personal Property. 8.1.6 Seller shall execute and deliver a warranty Bill of Sale conveying to Buyer that portion of the Property which is Personal Property. 8.1.7 Upon Closing, Seller shall execute and deliver to Buyer a non-foreign affidavit as required by the Foreign Investment and Real Property Tax Act, IRS Section 1445 (b) (2), as amended. /sns\rs.030 8.1.8 Upon Closing, Seller shall deliver to Buyer originals (or,to the extent originals are not available, certified copies)of the Leases, Service Contracts, subcontractor and supplier lists,operations and maintenance manuals,heating and air conditioning(HVAC) software,and such other information and materials as may be reasonably be requested by Buyer affecting the Property not theretofore delivered by Seller. 8.1.9 Upon mutual execution of this Agreement, Buyer shall deliver to Seller the opinion of Buyer's counsel stating that Buyer's entry into this Agreement and the performance of Buyer's obligations hereunder have been fully authorized by Buyer pursuant to all appropriate governmental actions. Section 8.2 Seller shall be responsible for the title premium and sales tax thereon for the portion of the Policy relaxing to standard owner's coverage and sales tax thereon;real estate excise taxes; and one-half the Title Company's escrow fee and sales tax thereon. Buyer shall be responsible for the portion of the Policy relating to the difference between standard and extended owner's coverage and sales tax thereon any retail sales, transfer or use tax applicable to the conveyance of Personal Property;recording fees; and one-half(1/2) the Title Company's escrow fee and sales tax thereon. Section 8.3 Prorationc and Adjustments. The following prorations shall be made between Seller and Buyer on the Closwg Date, computed as of the Closing Date,with income and expenses for the Closing Date itself being allocated to Buyer: 8.3.1 Actually received rental and parking income,common area/operating expense reimbursement and other payments payable by tenants and other persons occupying or using the Property or any part thereof,for or in connection with such use or occupancy. However, Seller shall not be obligated to make any payment or give any credit to Buyer on account of or by reason of any rental or other payments which are unpaid as of the Closing Date. All payments received by Buyer from a tenant or such other person shall be applied against the most delinquent obligation or obligations of the payor,and any rental or other income accrued prior to the Closing Date shall be paid by Buyer to Seller,when received. Any checks received by Seller with respect to the Property shall be endorsed by Seller without recourse and promptly forwarded to Buyer, who shall apply the proceeds thereof in accordance with the foregoing. 83.2 Real property taxes and assessments,personal property taxes. 8.3.3 The amount of the security deposits and prepaid rents,if any, shall be credited against the Purchase Price. 8.3.4 Seller shall pay all gas, water, electricity,heat, fuel,sewer and other utilities relating to the Property up to the Closing Date (excluding those that are separately contracted for by,billed directly to and paid directly by tenants under the Leases or those which constitute any part of the Operating Expenses for the Property). If meters are not read on the Closing Date,the bills for such utilities will be prorated. It shall be assumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. 8.3.5 Payments under Service Contracts(excluding those that are separately contracted for by, billed directly to,and paid directly by,the tenants under the Leases). Section 8.4 Prol?osed Lease Transactions. Upon Closing, Seller shall be reimbursed for the cost of any and all tenant improvements and leasing commissions paid by Seller with - 7 - ISASIPS.030 respect to any Proposed Lease Transactions which are entered into by Seller as"landlord" and "tenant",prior to the Closing Date,provided, however, such amount shall not exceed One Hundred Thousand Dollars($100,000), in the aggregate,unless the Proposed Lease Transactions causing such tenant improvements and leasing commissions to exceed $100,000, in the aggregate,have been approved by Buyer. Buyer shall be solely responsible for any and all tenant improvements and leasing commissions arising out of any Proposed Lease Transactions which are entered into after the Closing Date. Section 8.5 Procedures for Proration. The prorations and payments to be made at Closing under the foregoing Sections 8.3 and 8.4 shall be made on the basis of a written statement or statements to Buyer from Seller,based upon actual amounts when known, and when not known,based upon Seller's estimates and the operating history of the Property. To the extent that not all information is complete on the Closing Date, Buyer and Seller shall adjust the prorations set forth in this Section based upon actual amounts as soon as the same are known, and no later than thirty(30) days after the Closing Date. Section 8.6 Post-Closing Pavmen� t for Sup 1p.ies• Within thirty (30) days after Closing, Buyer and Seller shall inventory the janitorial and similar supplies of the Buildings, such as light bulbs, cleaning equipment,bathroom supplies, etc.,the value of which shall be the actual cost paid by Seller for such items; whereupon Buyer shall pay to Seller for said items within five(5) business days of determination of value. ARTICLE IX SELLER'S REPRESENTATIONS AND WARRANTIES- Section 9.1 Due Authorization. Seller has legal power,right and authority to enter in to this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby, and this Agreement constitutes the legal,valid and binding agreement and obligations of Seller enforceable against Seller in accordance with its terms. Section 9.2 Bankruptcy. Seller is not the subject of any bankruptcy proceedings, insolvency or other similar insolvency proceedings. Section 9.3 Default. Seller has received no notice of any alleged default in respect of any of its obligations or liabilities pertaining to the Property. Section 9.4 Litigation; Condemnation. There are no actions, suits or proceedings pending or,to the best knowledge of Seller,threatened, before or by any judicial, administrative or union body, any arbiter or any governmental authority, against or affecting Seller of the Property (or any portion thereof). To the best knowledge of Seller,there is no existing, proposed or contemplated eminent domain or similar proceeding which would affect the Real Property or Improvements in anyway whatsoever. Section 9.5 Leases. Exhibit A is a full, true and correct lease summary for the Buildings as of the date hereof which sets forth all leases, agreements, or understandings (whether written or oral)with any and all tenants, concessionaires or licensees of the Buildings. Seller has not received a written default notice from any tenant under a current Lease which default remains uncured, and except as set forth on the Rent Roll,there are no tenants in default of their rent payments under the Leases. Section 9.6 Operation and Compliance. To the actual knowledge of Seller,the Property and the operation thereof are in compliance in all material respects with applicable federal, state and local laws, ordinances,rules, regulations and order of any governmental entity having jurisdiction over the Property. - 8 - /SnS\PS.030 Section 9.7 Hazardous Substances. Except as otherwise disclosed to Buyer in writing nr ac Ruver may become aware through Buyer's investigation of the Property, there is not present ARTICLE XII SELLER'S COVENANTS Section 12.1 Seller's Obligation. From the Effective Date until Closing, Seller covenants as follows: 12.1.1 Seller shall exert its reasonable best efforts to operate and manage the Property in a normal, business manner in accordance with the Property's current operation by Seller, including, without limitation, leasing of vacant space and extensions of existing leases in the Buildings at lease rates in excess of $17.00 per square foot of rentable space per year; 12.1.2 Buyer shall be entitled to review and comment upon Proposed Lease Transactions during the term of this Agreement, and Seller shall provide Buyer with a copy of the terms applicable to the Proposed Lease Transactions and any revisions thereto. All Proposed Lease Transactions shall be documented on Seller's standard form Lease Agreement, modified to meet the requirements of the applicable Proposed Lease Transaction. ARTICLE XIII BROKERS Section 13.1 Commission. Buyer and Seller each acknowledge and agree that there is no brokerage commission payable under this transaction. Buyer and Seller hereby indemnify each other against and agree to defend and hold each other harmless from any and all claims for any other real estate commission or similar fees arising out of or in any way connected with any claimed agency relationship with the indemnitor. ARTICLE XIV NOTICES Section 14.1 Notice . All notices consents, approvals and other communications provided for herein or given in connection herewith shall be validly given, made, delivered or served if in writing and delivered personally or sent by registered, certified mail, or receipted overnight service, postage prepaid, or by facsimile to: BUYER AT: The City of Kent 220 4th Avenue South Kent, WA 98032 Attn: J. Brent. McFall Roger Lubovich Fax: (206) 813-2067 SELLER AT: Kent Centennial Limited Partnership 200 - 112th Avenue NE, Suite 205 Bellevue, WA 98004 Attn: Douglas W. Klappenbach Fax: (206) 453-1712 or to such other addresses as either party hereto may from time to time designate in writing and deliver in a like manner. -10- isns\rs.030 401 Notices, consents, approvals and communications given by mail shall be deemed delivered upon the earlier of receipt or seventy-two (72) hours after deposit in the United States mail in the manner provided above. Notices, consents, approvals and communications given by facsimile shall be deemed delivered upon the receipt by sender of a confirmed received statement as printed by the sender's facsimile machine. Originals of the facsimile transmittals shall, on the same day as the facsimile transmittal was sent, be mailed or personally delivered to the recipient of the facsimile transmittal. ARTICLE XV REMEDIES Section 15.1 Default. In the event of breach of this Agreement by Buyer of its obligations hereunder, Seller shall be entitled to elect either to: (a) terminate this Agreement and receive the Earnest Money as liquidated damages, together with the interest thereon, and retain the Closing Extension Fee, the receipt of the Earnest Money and Closing Extension Fee being Seller's sole and exclusive remedy and waiver of any other remedies which it may have at law or in equity, and as its sole and exclusive remedy against Buyer, or (b) pursue all remedies available to it at law and in equity as may be afforded by the laws of the State of Washington including, without limitation, specific enforcement of this Agreement. In the event of breach of this Agreement by Seller, Buyer shall have available to it such remedies at law or in equity as may be afforded to it by the laws of the State of Washington, including, without limitation, specific performance of the provisions hereof. Section 15.2 Attorneys' Fees. The prevailing party in an action or proceeding brought under this Agreement shall be entitled to recover from the nonprevailing party all of its reasonable attorney's fees and costs, including but not limited to expert witness fees. This entitlement survives the entry of judgment and encompasses all appeal and judgment enforcement activity. Section 15.3 Waiver. No delay in exercising any right or remedy shall constitute a waiver thereof, and no waiver by Seller or Buyer of the breach of any covenant of this Agreement shall be construed as a waiver of any preceding or succeeding breach of the same or any other covenant or condition of this Agreement. ARTICLE XVI GENERAL Section 16.1 Time. Time is of the essence in the performance of the respective obligations of the parties contained in this Agreement. Section 16.2 Successors and Assigns. Except as herein otherwise provided, this Agreement and all of the terms and provisions hereof shall insure to the benefit of and be binding upon the heirs, executors, personal representatives, successors and assigns of the parties hereto. Section 16.3 Entire Agreement. This Agreement, together with the Exhibits hereto, represents the entire agreement between the parties covering everything agreed upon or understood in this transaction. There are no oral promises, conditions, representations, understandings, interpretations or terms of any kind as conditions or inducements to the execution hereof or in effect between the parties, except as may otherwise be provided herein. No change or addition is to be made to this Agreement except by a written agreement executed by the parties. /sns\rs.030 `` Section 16.4 Jurisdiction. This Agreement and the rights of the parties hereto shall be governed and construed in accordance with the laws of the State of Washington. Venue shall be in King County Superior Court. Section 16.5 Headings. The descriptive headings of the Articles of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 16.6 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 16.7 Construction. The parties acknowledged that each party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or Exhibits hereto. Section 16.8 Possession. Full possession of the Property shall be delivered to Buyer by Seller at Closing, subject to the tenants in occupancy and the terms of the Leases thereunder and subject to the Permitted Exceptions. Section 16.9 Mutual Indemnification. Seller hereby indemnifies and agrees to hold Buyer harmless (including reasonable attorneys' fees) from claims of third parties arising from or related to the negligent acts or omissions or willful misconduct of Seller, its agents, contractors or employees arising from or related to the Property prior to the Closing Date. Buyer hereby indemnifies and agrees to hold Seller harmless (including reasonable attorneys' fees) from claims of third parties arising from or related to the negligent acts or omissions or willful misconduct of Buyer, its agents, contractors or employees arising from or related to the Property on and after the Closing Date Section 16.10 Buyer's Acknowledgment. Buyer acknowledges for Buyer and Buyer's successors and assigns (a) that Buyer is being afforded a reasonable opportunity to inspect and investigate the Property, all improvements thereon and all aspects relating thereto, either independently or through agents and experts of Buyer's choosing, and (b) that Buyer is acquiring the Property based solely upon Buyer's own investigation and inspection thereof, and (c) the provisions of this Section 16.10 shall survive Closing and not be merged therein. EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 9, SELLER AND BUYER AGREE THAT THE PROPERTY SHALL BE SOLD AND THAT BUYER SHALL ACCEPT POSSESSION OF THE PROPERTY ON THE CLOSING DATE "AS IS, WHERE IS, WITH ALL FAULTS", WITH NO RIGHT OF SETOFF OR REDUCTION IN THE PURCHASE PRICE, AND THAT EXCEPT AS EXPLICITLY SET FORTH IN THIS AGREEMENT, SUCH SALE SHALL BE WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTY OF INCOME, POTENTIAL, OPERATING EXPENSES, USES, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE (BUT SPECIFICALLY EXCLUDING THE WARRANTY OF TITLE GIVEN IN THE DEED AND OTHER CONVEYANCE DOCUMENTS), AND SELLER DOES HEREBY DISCLAIMS AND RENOUNCE ANY SUCH REPRESENTATION OR WARRANTY EXCEPT AS SET FORTH IN SECTION 9. BUYER SPECIFICALLY ACKNOWLEDGES THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, OTHER AGENTS OR BROKERS AS TO ANY MATTER CONCERNING OR RELATED TO THE PROPERTY (EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS EXPRESSLY SET FORTH HEREIN AND THE WARRANTY OF TITLE SET FORTH IN THE DEED), INCLUDING WITHOUT LIMITATION: (i) THE CONDITION OR SAFETY -12- isns\rs.oso Is OF THE PROPERTY OR ANY IMPROVEMENTS THEREON, INCLUDING, BUT NOT LIMITED TO, PLUMBING, SEWER, HEATING AND ELECTRICAL SYSTEMS, ROOFING, AIR CONDITIONING, IF ANY, FOUNDATIONS, SOILS AND GEOLOGY INCLUDING HAZARDOUS SUBSTANCES, LOT SIZE, OR SUITABILITY OF THE PROPERTY OR ITS IMPROVEMENTS FOR A PARTICULAR PURPOSE (ii) WHETHER THE PLUMBING AND UTILITIES ARE IN WORKING ORDER, (iii) THE HABITABILITY OR SUITABILITY FOR OCCUPANCY OF ANY STRUCTURE AND THE QUALITY OF ITS CONSTRUCTION; (iv) WHETHER THE IMPROVEMENTS ARE STRUCTURALLY SOUND, IN GOOD CONDITION, OR IN COMPLIANCE WITH APPLICABLE CITY, COUNTY, STATE OR FEDERAL STATUTES, CODES OR ORDINANCES; OR (v) MATTERS RELATED TO THE LEASES OR THE TENANTS. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT EXCEPT AS SET FORTH HEREIN, IT IS RELYING SOLELY UPON ITS OWN INSPECTION OF THE PROPERTY, REVIEW OF THE LEASES AND INVESTIGATIONS CONCERNING THE TENANTS AND NOT UPON ANY REPRESENTATIONS MADE TO IT BY SELLER, ITS PARTNER, OFFICERS, DIRECTORS, CONTRACTORS, MANAGERS OR EMPLOYEES NOR ANY PERSON WHOMSOEVER. ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE TO BE THE SOLE RESPONSIBILITY OF BUYER AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE PARTY OF SELLER TO MAKE ANY CHANGES, ALTERATIONS, OR REPAIRS TO THE PROPERTY SUBSEQUENT TO CLOSING, EXCEPT TO THE EXTENT THAT SUCH ALTERATIONS OR REPAIRS ARE NECESSITATED BY A BREACH OF ANY OF SELLER'S WARRANTIES SET FORTH IN SECTION 9. Section 16.11 Survival. The provisions of the Agreement and particularly the representations, warranties and indemnities of the parties hereto shall survive the Closing and shall not be deemed merged in any instrument of conveyance. ARTICLE XVII TAX DEFERRED EXCHANGE Section 17.1 Tax Deferred Exchange. At Closing, Seller may elect to structure this transaction and Seller's receipt of the Purchase Price hereunder as part of a 1031 Tax Deferred Exchange. Buyer shall cooperate with Seller in its efforts to effect a Tax Deferred Exchange, provided that Buyer shall incur no liability with respect to such Tax Deferred Exchange, nor shall Buyer hold title to any property other than the Property, nor shall the Closing Date be delayed as a result of such Tax Deferred Exchange. BUYER: THE CITY OF KENT By: Its yor Date: -13- Ij l /sns\rs.030 AEST: mey Date: `� c SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner LBy: /'• Doug W. KlappenbdoE Its G W. Partner Date 24/ -14- /sns\Ps.o3o Exhibits Attached Hereto: Exhibit A Leases/Rent Roll Exhibit B Permitted Exceptions Exhibit C Personal Property Exhibit D Property Information Exhibit E Proposed Lease Transactions Exhibit F Legal Description Exhibit G Assignment and Assumption of Leases Exhibit H Assignment of Service Contracts Exhibit I Assignment of Warranties /SAS1PS.030 0" EXHIBIT A LEASES/RENT ROLL G:1S\PS.030 It . Parking Lease Agreement by and between The Corporation of Catholic Archbishop of Seattle as Tenant, dated January 23, 1990. A-2 GASTS_030 N Mlb A C n 7 (D l0 Z '(D'O On M d 7 (n 7 G (D G -b p�j _ 41 O O O W (D (D (D to (D (D (D (D 0) O) O) 0) m 0) O) O) 0 w 0 W _I (7 � l I d V 4A(169(A�61V)4A�4,4A�� V V V V V V V V V V V O) N w CD m Z `G (D 3 co A w w A A W W W w W- Z X O (O (D 0 (D .A �A .P 0 0 1�, N O C_ -i O N (D W V W N N N N N N (n W" M N (D A N Na O O O (O 00 00 00 c w m 7 i inM--��-4MM0:-4V0ca(n Z D r 69 O N wwww Wwwwwwwwwr— A i N N N N N N N N N N N N O n 8 m -co) co C)0)OO)0)0)0)C) W w(u O� Wp Wp ? A wp WA J� � � ? (ND � w -a Z (D ,000 A A t0 0 0 0 0 0 0 0 0 0 0 0 0 0 e 0 m i 0 0 0 0 0 0 0 0 0 0 0 0 0 <A g � A A A A A A A A A A N r= N m z co N 0) A A A A ,p A A A A A C N A A A A A A A Al -Al A N ((n m A 0 ,A 0 0 0 0 0 0 0 0 0 0 0 0 (D W O a r coo 1wwwwwwwwww�o r- O A A A A �. A A A A A A A r a O w (D N N N N tJ N N tJ N N N N m z A A A A A A A A A A A E i O 0) A O O) . .. D) D) .. I (CD -O S1, to O) V V V V V V V V V V V V V v CD V O W W W W W W W W W W W W r w N rn rn rn rn rn rn rn rn rn rn rn rn D Z O O O O O o O O O O O O O O O = d o 0 0 O 0 0 0 0 0 0 0 0 0 0 0 0 0m i i i i r w o (D N O> >> O O O O O O O O O (D (n A---o00000000N -�` i W N N N ul (n (n (n (n al ch m U1 (p w w V V V V V V V V V A 69 i o A A A A A A A A A A A? (D a� O i O O O O O O O O O O C) N (D ,! N O (D (D cD (D (D (D (D (D (D (D (D D, A A A A� A A A (n cD rn o 00000000000 -, m o 0 0 0 0 0 0 0 0 0 0 0 0 0 iL O N N to N N N N IV N N IV ON) � 0 J i (D �- CVJI i i i i i i i i i i 00 V V V V V V V V V V V cn �? cn cn Ul cn vl vl Cn cn (n cn (n m x WE EXHIBIT B PERMITTED EXCEPTIONS B--1 GASTS.030 UNRECORDED LEASEHOLDS, IF ANY, RIGHTS OF VENDORS AND SECURITY AGREEMENTS ON PERSONAL PROPERTY AND RIGHTS OF TENANTS AND SECURED PARTIES TO REMOVE TRADE FIXTURES AT THE EXPIRATION OF THE TERM. EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: JANUARY 30, 1980 , RECORDING NO.: 8001300413 IN FAVOR OF: CITY OF RENT, A MUNICIPAL CORPORATION FOR: UTILITIES A RECORD OF SURVEY RECORDED ON FEBRUARY 16, 1989 UNDER RECORDING NO. 8902169001. B-2 TERMS, COVENANTS, CONDITIONS AND RESTRICTIONS AS CONTAINED IN LOT LINE ADJUSTMENT: n NO.: LL89-36 RECORDED: JANUARY 24, 1990 v RECORDING NO.: 9001240759 ` AGREEMENT AND THE TERMS AND CONDITIONS THEREOF BETWEEN: CITY OF KENT, A MUNICIPAL CORPORATION AND: KENT CENTENNIAL LIMITED PARTNERSHIP RECORDED: FEBRUARY 9, 1990 RECORDING NO.: 9002090976 PURPOSE: ENVIRONMENTAL MITIGATION EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: MARCH 30, 1990 RECORDING NO.: 9003300960 IN FAVOR OF: WASHINGTON NATURAL GAS COMPANY FOR: GAS PIPELINE OR PIPELINES EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: SEPTEMBER 25, 1990 RECORDING NO.: 900§251075 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: SANITARY SEWER EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: OCTOBER 1, 1990 RECORDING NO.: 9010010461 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: WATERLINE TERMS, COVENANTS, CONDITIONS AND/OR PROVISIONS CONTAINED IN A EMERGENCY ACCESS EASEMENT SERVING SAID PREMISES, AS CONTAINED IN DOCUMENT: RECORDED: NOVEMBER 9, 1990 RECORDING NO.(S): 9011091191 i� M . AGREEMENT AND THE TERMS AND CONDITIONS THEREOF BETWEEN: THE CITY OF RENT, A MUNICIPAL CORPORATION AND: RENT CENTENNIAL LIMITED PARTNERSHIP, A WASHINGTON LIMITED PARTNERSHIP DATED: OCTOBER 22, 1990 RECORDED: JANUARY 25, 1991 RECORDING NO.: 9101251105 PURPOSE: EMERGENCY ACCESS EASEMENT EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: JUNE 25, 1991 RECORDING NO.: 9106251686 IN FAVOR OF: PUGET SOUND POWER AND LIGHT COMPANY FOR: AN UNDERGROUND ELECTRIC TRANSMISSION AND/OR DISTRIBUTION SYSTEM m EXHIBIT C PERSONAL PROPERTY [NONE] C--1 G:\S1PS.030 _ i EXHIBIT D PROPERTY INFORMATION 1. Copies of all Leases and amendments thereto. 2. Copies of all those service contracts, operating agreements, janitorial contracts, and maintenance agreements, including elevator and HVAC maintenance, relating to the operation of the Buildings. 3. All those certain environmental assessments relating to the presence of existence of Hazardous Substances on the Property. 4. Any and all as -built plans, specifications, drawings, surveys architectural drawings and matters of a similar nature relating to the Property. 5. ALTA survey of the Real Property and Improvements. 6. Copies of all soils tests and analysis affecting the Property. 7. Copies of all warranties and guarantees in effect at the Property, if any. 8. Copies of all current contracts, if any, relating to construction and installation of any tenant improvements or items of the Buildings' maintenance. D-1 G:1STS.030 EXHIBIT E PROPOSED LEASE TRANSACTIONS E-1 GASTS.030 EXHIBIT E Proposed Lease Transactions 31-Mar-96 PROPOSED ESTIMATED AREA RATE T.I. COST TENANT 930 $19.38 $2,000 NLK Expansion into Delmonte space 504 $12,000 Panalpina Expansion into adjacent Vacant Space .$18.00 $18.25 $6,000 Christian Church Administrative Offices part of suite 204 735 to for the Accused Public Defenders west end of 3rd floor 10,000 $18.00 $80,000 $100,000 y TOTALS 12,169 E-2 EXHIBIT F LEGAL DESCRIPTION F-1 GASTS.030 THE LAND REFERRED TO IN THIS COMMITMENT IS SITUATED IN THE STATE OF WASHINGTON, COUNTY OF KING AND IS DESCRIBED AS FOLLOWS: PARCEL A: LOTS 4, 5, 6, 7, 8 AND 9, BLOCK 8 AND THE EAST 20 FEET OF LOTS 4, 5 AND 6, BLOCK 13, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (A PORTION OF PARCEL A IS ALSO KNOWN AS LOT A OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) PARCEL B: LOTS 10, 11 AND 12, BLOCK 8, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (ALSO KNOWN AS LOT B OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) BOTH SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON. F - 2 0 EXHIBIT G ASSIGNMENT AND ASSUMPTION OF LEASES THIS ASSIGNMENT AND ASSUMPTION OF LEASES is made this day of , 199 , by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation,(`Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996, (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign and Buyer has agreed to assume all of Seller's right, title and interest in, and Seller's obligations under, all leases affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good *and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: AGREEMENTS 1. Seller hereby assigns, transfers and conveys to Buyer all of Seller's right, title and interest in and to, and all of its obligations under, the leases listed on Exhibit A attached hereto and incorporated herein by this reference (the "Leases"). 2. Buyer hereby assumes all of Seller's right, title and interest in, and agrees to fully perform all of Seller's obligations under, the Leases from and after the date hereof. 3. Seller agrees to indemnify Buyer against and hold Buyer harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Seller's obligations under the Leases prior to the date of this Assignment Agreement. Seller shall, from and after the date hereof, be relieved of any liability or obligation under the Leases. 4. Buyer agrees to indemnify Seller against and hold Seller harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Buyer's obligations under the Leases from and after the date of this Assignment Agreement. DATED as of the day and year first above written. G-1 {� G:\S\PS.030 �l/ BUYER: THE CITY OF KENT By: Date: Its Mayor ATTEST: City Attorney Date: SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner Date STATE OF WASHINGTON COUNTY OF KING By: Douglas W. Klappenbach Its General Partner On this day personally appeared before me Douglas W. Klappenbach to me known to be the General Partner of Centennial Venture Limited Partnership, General Partner of Kent Centennial Limited Partnership, the partnership that executed the within and foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of said partnership for the uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the partnership. G--2 �a / G:1S1PS.030 �"' IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of . 199 NOTARY PUBLIC in and for the State of Washington, residing at My commission expires: STATE OF WASHINGTON ) COUNTY OF KING ) On this day personally appeared before me to me known to be the of THE CITY OF KENT, a Washington municipal corporation„ the corporation that executed the within and foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of said corporation for the uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the corporation. IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of , 199_ G-3 GASTS.030 NOTARY PUBLIC in and for the State of Washington, residing at My commission expires: 33 EXHIBIT H ASSIGNMENT OF SERVICE CONTRACTS THIS ASSIGNMENT is made this day of , 199 , by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation,("Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996 (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign and Buyer has agreed to assume all of Seller's right, title and interest in, and Seller's obligations under, all service contracts affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: AGREEMENTS 1. Seller hereby assigns, transfers and conveys to Buyer all of Seller's right, title and interest in and to, and all of its obligations under, the service contracts listed on Exhibit A attached hereto and incorporated herein by this reference (the "Service Contracts"). 2. Buyer hereby assumes all of Seller's right, title and interest in, and agrees to fully perform all of Seller's obligations under, the Service Contracts from and after the date hereof. 3. Seller agrees to indemnify Buyer against and hold Buyer harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Seller's obligations under the Service Contracts prior to the date of this Assignment Agreement. Seller shall, from and after the date hereof, be relieved of any Iiability or obligation under the Service Contracts. 4. Buyer agrees to indemnify Seller against and hold Seller harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Buyer's obligations under the Service Contracts from and after the date of this Assignment Agreement. DATED as of the day and year first above written. H-1 e GASTS.030 BUYER: THE CITY OF KENT By: Its Mayor Date: ATTEST: City Attorney Date: SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: Douglas W. Klappenbach Its General Partner Date H-2 GASTS.030 ,A EXHIBIT to ExtVhi . H SERVICE-: CONTRACTS :3/310; Exterior & Interior Landscape Maintenance Janitorial HVAC Maintenance & Filter Replacement Water Treatment for Cooling Tower Fire Protection & Sprinklers Fire Alarm Monitoring Elevator Service & Repair Trash Collection H-3 Earth Enterprises Allied Building Services McKinstry Service CHEM-AQUA Fire Systems West ADT Security Systems Sound Elevator Kent Disposal EXHIBIT I ASSIGNMENT OF WARRANTIES THIS ASSIGNMENT is made this day of , 199 , by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation, ("Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996 (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign all of Seller's right, title and interest in all warranties affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt of which is hereby acknowledged, Seller hereby assigns, transfers and conveys to Buyer all of Seller's right, title and interest in and to the warranties listed on Exhibit A attached hereto and incorporated herein by this reference DATED as of the day and year first above written. BUYER: THE CITY OF KENT By: Its Mayor Date: ATTEST: City Attorney Date: I-1 GASTS.030 SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner Date GASTS.030 By: Douglas W. Klappenbach Its General Partner I--2 Office of the M tp � JUL 15 1996 FILED FOR RECORD AT THE REQUEST RECE11/E17, OF; AFTER RECORDING RETURN TO: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Brent McFall STATUTORY WARRANTY DEED THE GRANTOR, KENT CENTENNIAL LIMITED PARTNERSHIP, for and in consideration of I.R.C. Section 1031 Tax Deferred Exchange, in hand paid, conveys and warrants O to the CITY OF KENT, a Washington municipal corporation, the following described real estate, C situated in the County of King, State of Washington: fist "4 See Exhibit A attached hereto; SUBJECT TO those exceptions shown on Exhibit B attached hereto and LtJ incorporated herein. DATED this day of t 11996. FIn KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: o as W. Kl enbach Its General Partner GAS0UND\SWD.030 00'EF slid Sti�0a3a hil111Da 9HI�1 �� pO�OS�20 -tOL09 400 :.0 STATE OF WASHINGTON COUNTY OF KING On this day personally appeared before me DOUGLAS W. KLAPPENBACH, to me known to be the General Partner of CENTENNIAL VENTURE LIMITED PARTNERSHIP, the General Partner of KENT CENTENNIAL LIMITED PARTNERSHIP, the limited partnership that executed the within and foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of said partnership for the uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the partnership. "I'ay I ITNESS WHEREOF, I have hereunto set my hand and seal this aCq% of 1996. -2- NOTARY PUBLIC in and for the Washington, residing My commission expires G:AS\SWD.030 EXHIBIT A THE LAND REFERRED TO IN THIS COMMITMENT IS SITUATED IN THE STATE OF WASHINGTON, COUNTY OF KING AND IS DESCRIBED'AS FOLLOWS: PARCEL A: LOTS 4, 5, 6, 7, 8 AND 9, BLOCK 8 AND THE EAST 20 FEET OF LOTS 4, 5 AND 6, BLOCK 13, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (A PORTION OF PARCEL A IS ALSO KNOWN AS LOT A OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) PARCEL B: LOTS 101 11 AND 12, BLOCK 8, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (ALSO KNOWN AS LOT B OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) BOTH SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON_ PAGE A-1 EXHIBIT B UNRECORDED LEASEHOLDS, IF ANY, RIGHTS OF VENDORS AND SECURITY AGREEMENTS ON PERSONAL PROPERTY. AND THE RIGHTS OF TENA OF ANTS SECURED TERM. PARTIES TO REMOVE TRADE FIXTURE S AT EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: JANUARY 30, 1980 r RECORDING NO.: 8001300413 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: UTILITIES A RECORD OF SURVEY RECORDED ON FEBRUARY 16, 1989 UNDER RECORDING NO_ 8902169001. Page B-1 TERMS, COVENANTS, CONDITIONS AND RESTRICTIONS AS CONTAINED IN LOT LINE ADJUSTMENT: n NO.: LL89-36 RECORDED: JANUARY 24, 1990 � r RECORDING NO_: 9001240759 AGREEMENT AND THE TERMS AND CONDITIONS THEREOF BETWEEN: ETILELTTMUNICIPAL CORPORATION AND: KENT CENTENNIAL RECORDED: FEBRUARY 9, 1990 RECORDING NO.: 9002090976 PURPOSE: ENVIRONMENTAL MITIGATION EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: MARCH 30, 1990 RECORDING NO.: 9003300960 IN FAVOR OF: WASHINGTON NATURAL GAS COMPANY FOR: GAS PIPELINE OR PIPELINES EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: SEPTEMBER 25, 1990 RECORDING NO.: 9009251075 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: SANITARY SEWER EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: OCTOBER 1, 1990 RECORDING NO.: 9010010461 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: WATERLINE TERMS, COVENANTS, CONDITIONS AND/OR PROVISIONS CONTAINED IN A EMERGENCY ACCESS EASEMENT SERVING SAID PREMISES, AS CONTAINED IN DOCUMENT: RECORDED: NOVEMBER 9, 1990 RECORDING NO- (S): 9011091191 Page B-2 ca N V4 AGREEMENT AND THE TERMS AND CONDITIONS THEREOF . THE CITY OF KENT, A MUNICIPAL CORAPWASHIN TON LIMITED BETWEEN: CENTENNIAL LIMITED PARTNERSHIP, AND: RENT PARTNERSHIP DATED: OCTOBER 22, 1990 RECORDED: JANUARY 25, 1991 RECORDING NO.: 9101251105 PURPOSE. EMERGENCY ACCESS EASEMENT EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: DUNE 25, 1991 RECORDING NO•: PUGETSSOSUND POWER AND LIGHT COMPANY IN FAVOR OF: SMISSION AND/OR DISTRIBUTION SYSTEM FOR: AN UNDERGROUND ELECTRIC TRAN Page B-3 FILED FOR RECORD AT THE REQUEST OF; AFTER RECORDING RETURN TO: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Brent McFall STATUTORY WARRANTY DEED THE GRANTOR, KENT CENTENNIAL LIMITED PARTNERSHIP, for and in consideration of I.R.C. Section 1031 Tax Deferred Exchange, in hand paid, conveys and warrants to the CITY OF KENT, a Washington municipal corporation, the following described real estate, C,1 situated in the County of King, State of Washington: 04 V"4 See Exhibit A attached hereto; .-1 p attached hereto and t- SUBJECT TO those exceptions shown on Elbibit B oincorporated herein. � DATED this day of _ 1996. (� KENT CENTENNIAL LIMITED PARTNERSHIP Bv: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: 40alss W. kKienbach Its General Partner I hereby certify that this is a true and exact copy of the origina,. FIRS I A NMERICAN TITLE COMPANY 11 rt, MSOUNDI.SWD.030 S6�Ail 31 0'" pS�tO OZ2t-S�� gp,Et 011i 90U ffsr au+ M STATE OF WASHINGTON ) COUNTY OF KING ) On this day personally appeared before me DOUGLAS W. KLAPPENBACH, to me known to be the General Partner of CENTENNIAL VENTURE LIMITED PARTNERSHIP, the General Partner of KENT CENTENNIAL LIMITED PARTNERSHIP, the limited partnership that executed the within and foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of said partnership for the uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the partnership. R+WTNESS WHEREOF, I have hereunto set my hand and seal this �1 day of 1996. `r..•`•""',,,'��►�',� NOTARY PUBLIC in and for the State of ZWashington, residing at My commission expires: '1 i •y, 2i `\� r7-,4t=yd y; O N O GO G:Z%WD.030 • to 31: tMfiffA -2- I hereby certify that this is a true and exact copy of the crinis,al. FIRST AMERICAN TITLE CG RfF'A►Y')' I EXHIBIT A a D IN THE THE EWLAND REFERRED TTYZOFTRZNGHIS CANDIISEDESCRIBEDNT IS UASEFOLLOWS: STATE OF PARCEL A: LOTS 4, 5, 6, 7, 8 AND 9, BLOCK 8 AND THE EAST 20 FEET OF LOTS 4, 5 AND 6, BLOCK 13, YESLER'S FIRST ADDITION TO THE TOWN OF RENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. IKNOWNALSO FTHE CITY OF KENT (A PORTION LINE ADJUSTMENT OF ARCELNO.LL 89-36RECORDED UNDER RECORDING NO. 0 9001240759.) 014 PARCEL B: O LOTS 10, 11 AND 12, BLOCK 8, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF O PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; CD TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. NT LT NOWN AS B OF THE CITY OF RECORDING NO. E9001o40759E)ADJUSTMENT NO. BOTH SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON_ PAGE A-1 I herebv certify that this is a true and exact copy of the orininal. FIRST AMERICAN TITLE CUV�'A`� r KL.�.VKLIGL: Ut71.�Vl�ll♦ .,v, vv n nn�nr�ratn wtn _ enn� �nnn � � I EXHIBIT B O 0 0 CG RIGHTS OF VENDORS AND SECURITY IF ANY, RIC, SECURED UNRECORDED LEASEHOLDS TD RIGHTS OF TENANTS AND PROPERTY Al OF THE TERM. AGREEMENTS ON PERSONAL FIXTURES AT THE EXPIRATION PARTIES To REMOVE TRADE CONTAINED IN DOCUMENT- EASEmENT AND CONDITIONS RECORDED: 0 ANUARY 30, 1980 10 80()130()413 CORPORATION RECORDING I NTA MUNICIPAL IN FAVOR OF: CITY OF yF, FOR: UTILITIES A RECORD OF SURVEY RECORDED ON FE BRUARY 16, 1989 UNDER RECORDING NO. 8902169001. I hereby certify that this is a Jr,,,, and exact copy of the rxlq�rl".-, FIRST AMERICAN TITLE Page B-1 -------------- 6 unD K Tm ou" ERQl 3b 1 TERMS, COVEN, CONDITIONS AND RESTRICTIONS AS CONTAINED IN LOT LINE ADJUSTMENT: NO.: LL89-36 1990 RECORDED: JANUARI' 24, RECORDING NO.: 9001240759 AGREEMENT AND THE TERMS AND CONDITIONS THEREOF CITY OF KENT' A MUNICIPAL CORPORATION BETWEEN: TED PARTNERSHIP AND: RENT CENTENNIAL L�0 RECORDED: FEBRU 002090976 RECORDING I =RONMENTAL MITIGATION PURPOSE: ENVI EASEMENT AND CONDITIONS CONTAINED DOCUMENT: RECORDED: MARCH 30, 1990 RECORDING NO.: 9003300960 GAS COMPANY N IN FAVOR OF: WASHINGTON NATURAL' � FOR: GAS PIPELINE OR PIPELINES 0 CONDITIONS CONTAINED IN DOCUMENT: C0 EASEMENT AND (n 1990 RECORDED: NO.:9009251075 ICIPAL CORPORATION IN FAVOR OFF:, RECORDING CITY OF KENT, A MUN FOR: SANITARY SEWER EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: OCTOBER 1, 1990 RECORDING NO•: 9010010461 A MUNICIPAL CORPORATION IN FAVOR OF: CITY OF KENT• FOR: WATERLINE S CONDITIONS AND/OR PROVISIONS COAS C NTNED IN TERMS, COVENANT SERVING SAID PREMISES, EI,ERGENCY ACCESS EASEMENT DOCUMENT: NOVEMBER 9, 1990 RECORDED. RECORDING NO- CS) : 903.1091191 1 hereby certify that this iS a true and exact copy of the original. t FIRST AMERICAN TITLE COfv PA:� y Page B-2 t i t AGREEMENT AND THE TERMS AND CONDITIONS THEREOF THE CITY OF KENT, A MUNICIPAL CO �T�GTON LIMITED BETWEEN: LIMITED PARTNERSHIP.. AND: KENT CENTENNIAL PARTNERSHIP 1990 DATED: OCTOBER 22, RECORDED: JANUARY 25, 1991 RECORDING NO.: 9101251105 PURPOSE: EMERGENCY ACCESS EASEMENT EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: jUNE 25, 1991 RECORDING NO_: 9106251686 POWER AND LIGHT COMPANY IN FAVOR OF: PUGET SOUND TRANSMISSION p,ND/OR DISTRIBUTION SYSTEM FOR: AN UNDERGROUND ELECTRIC O _ C2 ' O I hereby certify that this is a true and enact copy of the original. FIRST AMERICAN TITLE COMPANY page B-3 ASSIGNMENT AND ASSUMPTION OF LEASES THIS ASSIGNMENT AND ASSUMPTION OF LEASES is made this day of 1996, by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washingion limited partnership ("Seller"), and THE CITY OF KENT, a Washington municipal corporation ("Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated April 8, 1996, (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign and Buyer has agreed to assume all of Seller's right, title and interest in, and Seller's obligations under, all leases affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: AGREEMENTS I . Seller hereby assigns, transfers and conveys to Buyer all of Seller's right, title and interest in and to, and all of its obligations under, the leases listed on Exhibit A attached hereto and incorporated herein by this reference (the "Leases"). 2. Buyer hereby assumes all of Seller's right, title and interest in, and agrees to fully perform all of Seller's obligations under, the Leases. DATED as of the day and year first above written. THE CITY OF KENT 7 Mayor Date: GASOUNMAA-L.030 ATTE ity orney Date: 6 2-4 KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: ougl ap ach Its G06ral Partner Date: STATE OF WASHINGTON COUNTY OF KING On this day personally appeared before me Douglas W. Klappenbach to me known to be the General Partner of Centennial Venture Limited Partnership, General Partner of Kent Centennial Limited Partnership, the partnership that executed the within and foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of said partnership for the uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the partnership. IN WITNESS WHEREOF, I have hereunto set my hand and seal thisday of , 1996. „%%% %I, 'I Z�; 00 .�C G:\SOLTND\AA-L.030 -2- NOTARY PUBLIC in and for the State of hington,3esiding My commission expires: STATE OF WASHINGTON COUNTY OF KING On this day personally appeared before me to me known to be the of THE CITY -OF KENT, a Washington municipal corporation, a orporation that executed the within and foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of said corporation for the uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the corporation. IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of 1996. IeL "-. , " �4 NOTAR PUBLIC in and for the State 9f Was `, gton, residing at T My commission -3- GASOUNMAA-L.030 EXHIBIT A CENTENN(AL CENTER RENT ROLL 625196 APPROX. JULY AUG. TENANT FLOOR AREA RENT RENT COMMENTS City of Kent 1 & 2 26,460 43,532.91 43,532.91 City of Kent Court 4.320 4.857.40 4,857.40 Puget Power 1 & 3 11,389 18.791.96 18,791.96 Beans 1 NA 90.00 90.00 Smart Corp. 2 992 1,281.00 1,281.00 Westin Engineers 2 925 1,386.73 1,386.73 Information Advantage 2 1,020 1,682.50 1.682.50 CCRS 3 1,200 850.00 850.00 NLK Engineers 4 2,517 4,065.42 5,567.54 Area expanded approx 930sf effective Aug. 1, 96 Kent Physical Therapy 4 6,320 7,558.00 7,558.00 Newport Counciling 4 753 973.00 973.00 Engineering Graphics 4 2,395 2,749.94 2,749.94 Panalpina 4 3.695 5,573.79 6,334.00 Area expansion (approx 504sf) effective Aug. 1, 96 HIDE Inc. 3 4,412 6,264.50 6,264.50 Suite 204 2 2,212 - - Vacant Fir 2 2 157 - - Storage Area Vacant fir 3 3 4,598 - - Vacant Fir 4 4 1,121 - - Westin engineers to relocate Metricom, Inc., pursuant to undated License Agreement Parking Lease Agreement by and between The Corporation of Catholic Archbishop of Seattle as Tenant, dated January 23, 1990 VCI Communications pursuant to License Agreement Page A-1 RTROLL62596 ASSIGNMENT OF SERVICE CONTRACTS � 1996, b and between THIS ASSIGNMENT is made this day of Y KENT CENTENNIAL LIMITED PARTNERSHIP, a Washingt n limited partnership ("Seller"), and THE CITY OF KENT, a Washington municipal corporation ("Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated April 8, 1996 (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign and Buyer has agreed to assume all of Seller's right, title and interest in, and Seller's obligations under, all service contracts affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: AGREEMENTS 1. Seller hereby assigns, transfers and conveys to Buyer all of Seller's right, title and interest in and to, and all of its obligations under, the service contracts listed on F hhibit A attached hereto and incorporated herein by this reference (the "Service Contracts"). 2. Buyer hereby assumes all of Seller's right, title and interest in, and agrees to fully perform all of Seller's obligations under, the Service Contracts from and after the date hereof. DATED as of the day and year first above written. THE CITY OF KENT By: Mayor Date: GAS0UNDIAA-K'S.030 ATTEST: �4ttorney Date: CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: - �k.- "A - z/1 ougl . Klapp ch Its Ge Partner Date: b4z4 -2- GASOUNMAA-K'5.030 E:XHII I �� SERVICE CONTRACTS 3/31 /96 Exterior & Interior Landscape Maintenance Janitorial HVAC Maintenance & Filter Replacement Fire protection & Sprinklers Fire Alarm Monitoring Elevator Service & Repair Page A-1 Earth Enterprises Allied Building Services McKinstry Service Fire Systems West ADT Security Systems Sound Elevator TEMPORARY LICENSE AGREEMENT FOR ARTWORK THIS TEMPORARY LICENSE AGREEMENT is made this ` day of , 1996, by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washi on limited partnership ("Kent Centennial"), and THE CITY OF KENT, a Washington municipal corporation (the "City"). WITNESSETH WHEREAS, the City is the owner of the building commonly known as 400 West Gowe Street, Kent, Washington (the "Building"), which Building the City recently acquired from Kent Centennial; and WHEREAS, certain artwork owned by Kent Centennial listed on Exhibit A, attached hereto (the "Artwork") is on display in the Building and Kent Centennial has agreed to grant the City a license to allow the Artwork to temporarily remain on display in the Building, on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the mutual promises herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: AGREEMENTS 1. Kent Centennial hereby grants to the City a temporary, revocable non-exclusive license to allow the Artwork to remain on display in the Building until this License is terminated as provided herein. 2. The City acknowledges and agrees that the Artwork is the property of Kent Centennial. Kent Centennial agrees that until July 1, 1997, Kent Centennial shall not remove the Artwork in order to allow the City to obtain replacement artwork. The City shall use its best efforts to obtain such replacement artwork on or before July 1, 1997, at which time, or at any time thereafter, Kent Centennial may remove all Artwork and this License shall terminate. 3. The City shall exercise diligent care not to damage the Artwork and to prevent individuals visiting the City offices from damaging the Artwork. In the event restoration or replacement of the Artwork is necessitated by damage or destruction occurring while the Artwork is displayed in the Building under this License Agreement, any and all costs incurred in connection with restoration and replacement of such Artwork shall be paid by the City of Kent, except to the extent such costs are incurred by damage or destruction caused by Kent Centennial. The City shall insure the Artwork against damage, theft, vandalism, and destruction in an amount equal to 100% of its appraised value and Kent Centennial shall be named as an additional insured on such insurance. 4. This License is for the uses specified herein and for no other use. Nothing herein shall be deemed to be a gift or dedication to the general public or for the general public or for any public use whatsoever. 5. In the event either party employs an attorney to enforce or interpret any of the provisions of this License Agreement, the prevailing party shall be entitled to recover its costs and reasonable attorneys' fees in connection with such action. GASOUNDTIC-ART.030 by the laws of the State of Washington. Either party's failure to enforce any provision hereof shall not constitute a waiver thereof in any future instance. If any provision hereof is held to be unenforceable, the remaining provisions shall continue in full force and effect. This License Agreement shall not be recorded nor shall it constitute a covenant running with the land or an encumbrance on any real property. DATED as of the day and year first above written. KENT CENTENNIAL LIMITED PARTNERSHIP By CENTENNIAL VENTURE LIMITED PARTNERS P, its General Partner By oYI A�� u W. Mapp6hftch ItsGWeral Partner THE LIM Attest: GASOUNMLIC-ART.030 -2- ***DO NOT SEND TO IRS*** CERTIFICATION OF NON -FOREIGN STATUS BY ENTITY TRANSFEROR 1 . Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor (seller) is a foreign person. 2. In order to inform each transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by EXCHANGE FACILITATOR CORPORATION (hereinafter referred to as "the Transferor"), the undersigned hereby certifies, and declares by means of this certification, the following on behalf of the Transferor: A. The one item marked is true and correct: XXXXXX (i) The Transferor is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as these terms are defined in the Internal Revenue Code and Income Tax Regulations). (ii) The Transferor is a corporation incorporated under the laws of a foreign jurisdiction but has elected to be treated as a U.S. Corporation under Section 897 (1) of the Internal Revenue Code, AND HAS ATTACHED TO THIS CERTIFICATION A TRUE AND GENUINE COPY OF THE ACKNOWLEDGEMENT OF SUCH ELECTION ISSUED BY THE I.R.S. B. The Transferor's employer identification number is 91-1419549. C. The Transferor's office address is 2624 Eastlake Avenue East, Seattle, Washington 98102. 3. The Transferor understands that this certificate may be disclosed to the Internal Revenue Service by the transferee and that any false statement contained in this certification may be punished by fine or imprisonment (or both). 4. The Transferor understands that each transferee is relying on this certificate in determining whether withholding is required and each transferee may face liabilities if any statement in this certificate is false. 5. The transferor hereby indemnifies each transferee, and agrees to hold each transferee harmless, from any liability or cost which such transferee may incur as a result of: (i) the Transferor's failure to pay any U.S. Federal income tax which the Transferor is required to pay under applicable U.S. law, or (ii) any false or misleading statement contained herein. UNDER PENALTIES OF PERJURY, I DECLARE THAT I HAVE EXAMINED THIS CERTIFICATION AND THAT TO THE BEST OF MY KNOWLEDGE AND BELIEF IT IS TRUE, CORRECT, AND COMPLETE: I FURTHER DECLARE THAT I HAVE AUTHORITY TO SIGN THIS DOCUMENT ON BEHALF OF THE TRANSFEROR. EXECUTED IN KING COUNTY, WASHINGTON ON (, 'L , 1996. TRANSFEROR: EXCHANGE FACILITATOR CORPORATION K& Jk By Key . Ya es, Authorized Signatory *****DO NOT SEND TO IRS***** ***BUYER MUST RETAIN FOR SIX YEARS AFTER THE TRANSACTION*** CERTIFICATION OF NON -FOREIGN STATUS BY ENTITY TRANSFEROR 1 . Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor (seller) is a foreign person. 2. In order to inform each transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by Kent Centennial Limited Partnership (hereinafter referred to as "the Transferor"), the undersigned hereby certifies, and declares by means of this certification, the following on behalf of the Transferor: A. The one item marked is true and correct: X (i) The Transferor is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as these terms are defined in the Internal Revenue Code and Income Tax Regulations). The Transferor is a corporation incorporated under the laws of a foreign jurisdiction but has elected to be treated as a U.S. Corporation under Section 897 (i) of the Internal Revenue Code, AND HAS ATTACHED TO THIS CERTIFICATION A TRUE AND GENUINE COPY OF THE ACKNOWLEDGEMENT OF SUCH ELECTION ISSUED BY THE I.R.S. B. The Transferor's employer identification number is 91-1471678 C. The Transferor's office address is 400 west Gowe, suite 204 Kent, WA 98032 3. The Transferor understands that this certificate may be disclosed to the Internal Revenue Service by the transferee and that any false statement contained in this certification may be punished by fine or imprisonment (or both). 4. The Transferor understands that each transferee is relying on this certificate in determining whether withholding is required and each transferee may face liabilities if any statement in this certificate is false. 5. The transferor hereby indemnifies each transferee, and agrees to hold each transferee harmless, from any liability or cost which such transferee may incur as a result of: (i) the Transferor's failure to pay any U.S. Federal income tax which the Transferor is required to pay under applicable U.S. law, or (ii) any false or misleading statement contained herein. UNDER PENALTIES OF PERJURY, I DECLARE THAT I HAVE EXAMINED THIS CERTIFICATION AND THAT TO THE BEST OF MY KNOWLEDGE AND BELIEF IT IS TRUE, CORRECT, AND COMPLETE: I FURTHER DECLARE THAT I HAVE AUTHORITY TO SIGN THIS DOCUMENT ON BEHALF OF THE TRANSFEROR. EXECUTED IN ON ,1996. County and State TRANSFEROR: BY: SEE ATTACHMENT FOR SIGNATURE PAGE ITS: SIGNATURE PAGE Kent Centennial Limited Partnership, a Washington Limited Partnership By: Centennial Venture Limited Partnership, a Washington Limited Partnership, its: General Partnership By: 15 o as enbach its: General Partner CERTIFICATION OF NON -FOREIGN STATUS Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the transferee that withholding of tax is not required upon a disposition of a U. S. real property interest by KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership ("Transferor"), the undersigned hereby certifies the following on behalf of Transferor: 1. Transferor is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); 2. Transferor's U.S. employer identification number is 91-1471678; and 3. Transferor's office address is: Kent Centennial Limited Partnership 400 West Gowe, Suite 204 Kent, WA 98032 Transferor understands that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement contained herein could be punished by fine, imprisonment or both. Under penalties of perjury I declare that I have examined this certification, and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Transferor. KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: ou s W. la ach Its ffeneral Partner Dated: 2 , 1996 GASTIRPTA.030 lk�45 First American Title Insurance Company 2101 FOURTH AVENUE, SUITE 800 • SEATTLE, WASHINGTON 98121-2387 • (206) 728-0400 • FAX (206) 728-7220 SELLER'S CLOSING STATEMENT Order: 318287-5 Escrow: 37973CP Date: 7/01/96 Escrow Officer: Cyndi M. Pedersen Closing Date: 7/01/96 FINAL ESCROW STATEMENT OF: Exchange Facilitator Corporation BUYER: The City of Kent Property Address: 400 West Gowe Street, Kent, WA 98032 DEBITS CREDITS ITEMS 11,712,600.00 TOTAL CONSIDERATION (6 months) 1,315.22 OTHER CONSIDERATION: Operating Expenses 840.45 OTHER CONSIDERATION: Expense Recon for Court Bldg. 11,928.48 OTHER CONSIDERATION: Leasing Commission 56,140.00 OTHF- CONSIDERATION: Tenant Improvement Costs TITLE CHARGES TO First American Title Insurance Compaq Extended Owner's Premium for $11,712,600.00 12,355.00 1,013.11 SALES TAX ESCROW CHARGES 2,000.00 Escrow Fee 164.00 SALES TAX LENDER CHARGES LOAN PAYOFF TO: Washington Capital Management, Inc. Principal Balance 8,234,817.75 PER DIEM ® $2,115.8900 FROM 6/01/96 TO 7/02/ 65,592.59 TOTAL LOAN PAYOFF ADDITIONAL DISBURSEMENTS Development Fees to Sound Ventures, Inc. Asset Management to Doug Klappenbach Construction Contract to SVI Construction Company Operating Expenses to Kent Centennial Limited Partnership Facilitator Fee to Exchange Facilitator Corporation Attorney Fees to Phillips McCullough Wilson Hill & Fikso, P.S Leasing Commission to Cushman & Wakefield Exchange Credit to Qualified Escrow Account No. 38500CP de is to THE CITY OF KENT EXC:tSE TAX TOTALS 8,300,410.34 11,489.67 36,505.90 73,174.00 52,000.00 1,082.00 13,311.74 11,928.48 3,035,486.29 50,070.40 179,202.78 $ 11,781,508.93 $ 11,781,508.93 I hereby certify that this is a true C Copy of the original. FI S 4f .�RICAN TITLE COMPANY N. C9 114 �b First American Title Insurance Company 2101 FOURTH AVENUE, SUITE 800 • SEATTLE, WASHINGTON 98121-2387 • (206) 728-0400 • FAX (206) 728-7220 BUYER'S CLOSING STATEMENT 3scrow: 37973CP 3scrow Officer: Cyndi M. Pedersen %MENDED FINAL 3SCROW STATEMENT OF: The City of Kent SELLER: Exchange Facilitator Corporation Property Address: 400 West Gowe Street, Kent, WA 98032 ITEMS TOTAL CONSIDERATION DTHER CONSIDERATION: Operating Expenses (6 months) DTHER CONSIDERATION: Expense Recon for Court Bldg. DTHER CONSIDERATION: Leasing Commission DTHF- CONSIDERATION: Tenant Improvement Costs ADDS )NAL DEPOSITS TO ESCROW INTL sT FROM SAVINGS DISBURSEMENTS TO BUYER Order: 318287-5 Date: 7/02/96 Closing Date: 7/01/96 DEBITS 11,712,600.00 840.45 11,928.48 56,140.00 1,610.04 TITLE CHARGES TO First American Title Insurance Company Extended Owner's Premium for $11,712,600.00 3,896.00 SALES TAX 319.47 Deed Recording Fee 13.45 ESCROW CHARGES Escrow Fee 2,000.00 SALES TAX 164.00 ADDITIONAL DISBURSEMENTS RECONVEYENCE FEES to Trustee of Record BALANCE DUE ESCROW 50.00 CREDITS 1,315.22 250,000.00 1,373.49 11,536,873.18 TOTALS $ 11,789,561.89 $ 11,789,561.89 PHILLIPS LAW OFFICES McCULLOUGH MARKET PLACE TOWER WILSON SUITE 1130 HILL & 2025 FIRST AVENGE FIKSO SEATTLE, WASHINGTON A PROFESSIONAL 9gI2I-2I00g SERVICE CORPORATION (206)44 1818 FAX:(2o6)448-3444 June 28, 1996 Ms Cyndi Pedersen First American Title Insurance Company 2102 Fourth Avenue, 8th Floor Seattle, WA 98121 Hand Delivered I hereby certify that this is a true and exact copy of the original. FlR ERICAN TITLE COMPANY Re: Your Escrow No. 37973 CP Title Order No. 318287-5Title Commitment") Kent Centennial Limited Partnership ("Seller") The City of Kent ('Buyer") Exchange Facilitator Corporation ("EFC") Dear Cyndi: A. Phillips McCullough Wilson Hill & Fikso, P.S. represents Seller in connection with the above -referenced n� documents executed by Seller:ed to you herewith or deposit into escrow are the following original nal docum (1) Statutory Warranty Deed; (2) Affidavit Requested by Title Company; (3) FIRPTA Certificate; (4) Assignment and Assumption of Leases (duplicate originals); (5) Assignment of Service Contracts (duplicate originals); (6) Temporary License Agreement for Artwork; (7) Escrow Instructions of Exchange Facilitator Corporation ("Exchange Instructions") (8) Assignment Agreement (duplicate originals); (9) Qualified Escrow Agreement (three originals); Cyndi Pedersen June 28, 1996 Page 2 (10) Exchange Agreement (duplicate originals); (11) Seller's Closing Statement; (12) APR 12 Disclosure Statements; (13) 1099-5 Inpute (14) Certification of Non -Foreign Status l hereby certify that this is a true ,,,exand copy of the original. actr Eli rrrn(15) Excise Tax Affidavit COMPANYB. On or before Closing, Buyer shall deposit in escrith you in cas the purchase price of Eleven Million Seven Hundred Twelve Thousand Six Hundred and 00/100 Dollars ($11,712,600.00), plus the Tenant Improvements and Leasing Commissions Deposits (defined below), plus Buyer's closing costs. Buyer has earlier deposited with you Earnest Money in the amount of $250,000, which shall apply toward the purchase price. From the purchase price, Seller shall be responsible for, and you are authorized to deduct, the following Seller's closing costs and distributions: (1) The amount necessary to release the lien of the Deed of Trust and related security instruments appearing as Exception 3 in the Title Commitment (the "Deed of Trust"); (2) One-half of the escrow fee and sales tax thereon; and (3) Real estate excise tax; (4) Title insurance premium and sales tax thereon for standard coverage owner's title insurance; (5) The following costs in connection with the closing of this transaction: (a) Commission to Cushman & Wakefield in the amount of $11,928.40 for Leasing Commissions; (b) SVI Construction Company fees and charges in the amount of $73,174 for Tenant Improvements; Cyndi Pedersen June 28, 1996 Page 4 (1) You have received for the account of Seller and are prepared to disburse the purchase price and Tenant Improvements and Leasing Commissions Deposits as instructed pursuant to these instructions; (2) You are prepared to fully comply with the Exchange Instructions and have established the Qualified Escrow Account described in connection with the Exchange; (3) You have confirmed the amount necessary to release the Deed of Trust and are prepared to release the Deed of Trust; (4) You are prepared to issue your extended coverage title insurance policy insuring fee title in Buyer in the full amount of the purchase price in conformance with the Title Commitment, including only exceptions 5 through 15 therein (the "Title Policy"); (5) You have obtained Seller's and Buyer's written approval of your closing statement; and (6) You have received advice from the undersigned to proceed. E. Then, and only then, you may take the following actions in the order indicated: (1) Date any documents not otherwise dated as of the Closing Date; (2) Record the reconveyance of the Deed of Trust; (3) Record the Statutory Warranty Deed; (4) After payment of Seller's Costs, disburse the remaining proceeds to the Qualified Escrow Account in accordance with the Exchange Instructions. (5) Issue the Title Policy to Buyer. F. Please deliver to the undersigned at your earliest convenience after Closing one original of the Assignment of Leases, Assignment of Service I hereby certify that this is a true and exact copy of the original. F) ERICAN TITLE COMPA; ' 1' Cyndi Pedersen June 28, 1996 Page 5 Contracts, Exchange Agreement, Assignment Agreement, Qualified Escrow Agreement, Temporary License Agreement as well as conformed copies of all other documents, including the recorded Statutory Warranty Deed, Closing Statement and Title Policy. The original Statutory Warranty Deed, one original of the Assignment of Leases, Assignment of Service Contracts, Temporary License Agreement, and the FIRPTA Certificate may be delivered to Buyer. Unless you are otherwise instructed, in the event these instructions have not been complied with by July 1, 1996, this escrow shall terminate and all documents and moneys shall be immediately returned to the appropriate party. Very truly yours, A4A.ilson ULLOUGH WILSON HILL & FIKSO, P.S. Attorneys for Seller BAW:kc cc: Kent Centennial Limited Partnership The undersigned acknowledges receipt of the foregoing escrow instructions and agrees to proceed in strict accordance therewith. FIRST AMERICAN TITLE INSURANCE COMPANY By: -N Cyndi Pedersen I hereby certify that this is a true. and e%RICAN py of the original. FIRS . TITLE C0MPANY I�� v JUL-9-96 TAIL - PZSound Ventures Inc. 400 Wesl Gowe Susie 412 Kent. Washington 98032 (206) 850-3076 223 90o FAx HAND DELIVERED 6/24/96 FAx June 2], 1996 Brian Cox Beans 400 West Gowe - Lobby Kent, WA 98032 Re: Centennial Center Lobby Kent, Washington Dear Brian: It is with great pride and mixed emotion that we announce the sale of Centennial Center to the City of Kent. We have great pride in this beautiful building and the healthy business environment our Centennial Center community has created. We also feel sadness in saying goodby after 6 years of on site property management. The City of Kent is prepared to manage the building beginning July 1, 1996. This week we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following. - City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, LTD PARTNERSHIP 01, Step anie Klappenbach JUL 9-96 TUE 13:52 %4 Sound Ventures Inc. C June 21, 1996 400 West Gowe Suite 412 Kent, Washinglon 98032 CERTIFIED #P 595 537 584 FAX (�) 8� 3076 RETURN RECEPIT 6/24/96 Charlie Lindsey - SENDER: s ecomptale items 1 andror 2 for additional services. I arso wish to receive the folowin9 services (for an City of Kent To a ■complete Acme 9. 4a, and 4b. ■Pdnt your name and address on the reverse of this form eo that we can return this extra fee): 220 4th Avenue So t card to you. eAtlech e,l. ton„ to e.r 6«A or the rtwlp eoe, or an IM beak It Wow do" net 1. ❑ AddrCS3eO.3 Tess � eThe Return Receipt vnT ehcyr to whom the amide was delivered and the date Consult poctmoctor for fee. Re: Centennial Ccntcr G delivered. A Arfirla Arir�rw eewrt In,4a. Artrll� a �( Spite 100 CHARLIE LINDSEY aE, Service Type ❑Registered rile Kent, Washington CITY OF KENT ❑ Express Mal ❑ Insured 220 4TH AVENUE SOUTH ❑ Retum RomV for Merclutrldse ❑ COD Dear Charlie: KENT WA 98032-5895 � �7.Daie,of peliv%ry IP o2� It is with great pride and r S. Received By: (Print Name) B. Addressee's Address (Only if r d and tee Is paid) the City of Kent. We hay environment our Centenni c 6. Signature: (Add ee or Agent) goodby after 6 years of or X Domesticjjatum Recei PS Form 3811, Dec&ber 1994 The City of Kent is preparea to manage ttie building beginning July 1, 1996. This week we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, KENT ENTENNIAL LTD. PARTNERSHIP o Kl ppenbach Step aria Klappenbach tGe artner N V JUL- 9-96 .TUE 1.3: 53 _ LI v _ z--o . Fj 14 Sound Ventures Inc. I 400 West Gave Suite 412 Kent, Washington 98032 CERTIFIED #Z 160 488 571 (206) 223-9500 RETURN RECEPIT 6/24/96 FAX J206) 850-3076 June 21, 1996 Charlie Lindsey City of Kent Municipal Court 220 4th Avenue So - SENDER: l Wish to fife Kent, WA 98032-5895 LD w .Complete Hems 1 andtor 2 for additional services. •Complete Hems 3. 4a. and 4b. iiso icesrece(for idlcu+itng services (for an ■pdrd your name and address an the reverse of Otis form so that we can return this eXtra fee): Re: Centennial Cente i card fo you. 'Altach this form to the front of the malpiece. or on "" °ack"spAO° does not 1. 0 Addressee's Address e E e'Refum Receipt Requeslad' on ft mdlplece below "w article number. ■ Wt e7he Return Receipt will show to wh m fhe article was delivered end the date 2. ❑ Restricted Delivery Consult postmaster for fee. Kent, Washingtoi o delivered. 3. Article Addressed to: 4a. Article Number Z , (-c) 0000 VJ�J ! Dear Charlie: C CHARLIE LINDSEY ab. Service Type Registered •'tiff CITY OF KENT - MUNICIPALrCOURT Express Mail p Insure It is with great pride and 220 4TH AVENUE SOUTH p Relum Reoeipl for Merdw4se 0 COD the City of Kent. We hz KENT WA 98032 ; 7. D t f D`=ej_ environment our Centetul goodby after 6 years of o; 5. Received By: (Print Name) ressee's ess(Onlylfrequeste and fee is paid) The City of Kent is prep o 6• Signature: ressee gent) we will be introducing( 4 X Domestic Return Aece tenants at Centennial Cent PS Form 3811r camber 1994 Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, LTD. PARTNERSHIP 4�hc.c1 Stepe Klapp nbach 8 fi I 1¢ d 3 b 0 d c b- JUL-. 9-96 31JE 1.3:54%djj P Owl Sound Ventures Inc. June 21, 1996 40o West Gowe suite 412 Kent. Washington 98032 CERTIFIED #P 595 537 583 FAx (2m) aso� 07e RETURN RECEPIT 6/24/96 o SENDER- a :C&Vivle hems I and/or 2 for additional services. I also wish to receive the following services (for an Jim Hall s+ Complete items 3, 4a, and 4b. . e Print your name and address on the reverse of this form so that we can relum Ihis extra fee): CRSS Constructors Inc + � hO1 ■Attachttach this form to the horrt of the rnatlpfsce, or on the beds if space does not t, ❑ Addressee's Address 400 West Gowe Suite s Retum Receipt Aepuasta; on leis mallpisce below the article number. 2. ❑ Restricted Delivery a Kent, WA 98032 ■The Retum Receipt will show to wtlom the article was delivered and the date delivered. Consult postmaster for fee. I 3. Article Addressed to: 4a• ArtiV yle Re: Centennial Centf Suite 304 JIM HALL 4b. Service Type ❑ Registered rtifiet Kent, Washingtc CRSS CONSTRUCTORS INC �... 400 WEST GOWE SUITE 304 ❑Express Mail ensured KENT WA 98032 ; ❑ Retum ReoW for Metdtardse ❑ COD Dear Jim: 7. Date or Derive 00, 5. Received By: (Print Name) 8. Qdressaefs Address (Only # requested It is with great pride and and lee is paid) the City of Kent. We rr h s. signs Add, e_ o environment our Centen goodby after 6 years of � e S Form 3811, December 1994 Domestic Return Receij -- — The City of Kent is prepared to manage the building beginning July 1, 1996. This week we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, LTD. PARTNERSHIP Steph a Mappenbach ¢ E' c P' �i c+ _b r C % June 21, 1996 Sound Ventures Inc. 400 Wesi Gowe Suite 412 Kent. Washiiiglon 98032 CERTIFIED #Z 160 488 588 223-9500 FAX(206) 850-3076 RETURN RECEPIT 6/24/96 Diane Gonzalez Engineering Graphics _ END 400 West Gowe St, Ste 4 o ■ Complete flans t and/or 2 for additional services. I also wish to twelve the aComplete items 3. aa, and Alb. following services (for an o Kent, WA 98032 •Print your name and address on the reverse of this fort so thal we can return this card to extra feel: 6Aflach this to the front of the maitplece, or an the back if space does not permit 1_ 0Addressee'5 Address 8 ar Re: Centennial Center 6 a rite Refur Reoslpf RequoWa r on the matipiece below tlw amide number. -The Return Rsceipt wfu show to wftoq}�fra article was delivered and the date 2. D Restricted Delivery Suite 402 c delivered. Consult postmaster for fee. 3. Article Addressed to: �. ArticlNumber Kent, Washingtor _ O E a DIANE GONZALEZ I 4b. Service Type Dear Diane: ENGINEERING GRAPHICS f ❑ Registered rHfledcc 400 WEST GOWE SUITE 402 i ❑ Express MallInsured 5 It is with great pride and; KENT WA 98032 i ❑ Relum Receipt for Mertftandse ❑COD 7. Date of alive the City of Kent. We ha 18. C environment our Centenn S. Received By: (Print Name) Addressee's A Tess (Only tl requested c goodby after 6 years of o� and lee is paid) e 6. Ognat : (Addressee or ) The City of Kent is prep. " we will be introducing Ps Form 3811, Decem r tssa _ _ Domestic Retum Receipt tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Ann: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, KENT CENTENL PARTERSIP o ne acpcptienbach nbto a Ge eral Partner C C JUL-.9-96 TUE 13:56 SOUND VENTURES FAX NO. 850306 & Sound Ventures Inc. 400 West Gowe Suite 412 Kent. Wash.n9lon 98032 CERTIFIED #Z 160 488 58 (206, 223-9500 RETURN RECEPIT 6/24/96 June 21, 1996 FAX (206) 850-3076 Gordon Hanson Dave Glideweil HDE Inc. 400 West Gowe Suite Y o 4 SENDER: eCamptete items 1 and/or 2 for additional services. I also wish to receive the Kent, WA 98032 e 41 •Complete items 3. 4a. and 4b. ■Pdre your name and address on the reverse of this Corm so that we can rolum fts following services (for an extra fee): card to you. aAttach this form to the front of the mailpiece, or on the back fl space does not permit. 1. ❑ Addressee's Address Re: Centennial Centei ew Recelpr Requested' on the medpiece below the snide number. 2. ❑ Restricted Delivery ■The Return Recelpt will show to whom the amide was delivered and the date Suite 300 c delivered. r Consult postmaster for fee. Kent, WashingtoI 1 3. Article Addressed to: 4a. Article Number �tt'o C6 Dear Gordon Dave E 8 GORDON HANSON & DAVE GLIDEWELL 4b. Service Type and HDE INC ❑ Registered /urfied 400 WEST GOWE SUITE 300❑Express Mail ..❑ I It is with great pride and KENT WA 98032 ❑ Return Reosipt W Merpandise ❑COD the City of Kent. We h; '171. Date of Delivery environment our Centem 5. iv By: (Print Name) , 8. Addre ee s A ress (Only if requested goodby after 6 years of c , and fee Is paid) c 6. Signs . (Addrepso AyenY)� The City of Kent is prel ; we will be introducing, P Form 3811, D8,94mber 1994 Domestic Return Receip tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, PARTNERSHIP rvC.t-� Stephanie Klappenbach I JUL- 9-96 TUE 13:57 SOUND VENTURES f-H,N; 'vu. ;_'IoIJ�,i_1 r b Sound Ventures Inc. r June 21, 1996 Kay Cook The Information Advanta; 400 West Gowe St, Ste 2( Kent, WA 98032 Re: Centennial Center Suite 200 Kent, Washington Dear Kay: It is with great pride and r the City of Kent. We ha, environment our Centenni goodby after 6 years of on 400 West Gowe Suite 412 Kent, Washmg!on 98032 (206)223.9sao lCERTIFIED #Z 160 488 572 FAX (206) M-3076 RETURN RECEPIT 6/24196 "Cnvr-n: I also wish to receive the ■CompUle Rams t andtor 2 for additional services. •Complete Items 3. 4a, and 4b. following services (for an ■ Prid your name and address on the reverse of this loam so that we can return this eta fee). earl to you. a Attach this form to the nod of the mallplec., or on the back N space does nol 1. ❑ Addressee's Address sWrite'Refum Receipt Rsqussled'on the mallpiece below the amide number. 2. ❑ Restricted Delivery ■The Return Receipt rrlll show to whore the article was denvered and the dale delivered. Consult postmaster for fee. n Article Addressed to: 4a. Article Nu"f KAY COOK THE INFORMATION ADVANTAGE 40CANEST GOWE SUITE 200 KENT WA 98032 RA Form 384f, De ,peffiber 1 7-io �� W,.: 4b. Service Type I ❑ Registered ❑ Express Mal 1 ❑ Reltmt Recut for Momhandiss ❑ OOD 7. Date o}Delivery WiAWO and fee Is paid) The City of Kent is prepared to manage the building beginning July 1, 1996. This week C we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, KENT 0 Dot appenbach Ge I Partner LTD. PARTNERSHIP Anie 1CJappenbach M — t i JUL-,9-96 TUE 13:58 SOUND VENTURES % C June 21, 1996 � 1-1 x, \ , _ J ;) _ i Sound Venture.,; Inc. 400 West GOWe Suite C2 9803:? CERTIFIED #z 160 488 58 Kent, Washington (206) 223-9500 RETURN RECEPIT 6124/96 FAX (206)850.3076 o SENDER: v ■Complete items 1 and/or 2 for additional services. o 4b. I also wish to receive the following services (for an Joel Johnson a ■Complete hems 3, 4a, and ■Print your name and address on'the reverse of Ibis form so that we can return this extra fee): Kent Orthopedics & Sport E $ card to isthe form to the front of tht! mallpiece, or on back if space does not 'gryach this 1 1. ❑ Addressee's Address 400 West Gowe St, Suite' o o , -Wrij Refum Receipt Requested' on the marlp;ece below the artice number. 2- ❑ Restricted Delivery a 98032 ■The Relum Receipt will show to whom the article was delivered and delivered' the date Consult postmaster for fee. Kent WA 3. Article Addressed to: 4a. Article Number n 2 � �� � � Re: Centennial Centel E JOEL JOHNSON 4b. Service Type Suite 4OO $ KENT ORTHOPEDICS s SPORTS YC-e ❑ Registered ed400 Kent, Washington WEST GOWE SUITE 400 1 ❑ Express Mail red c ` KENT WA 98032 O Return Receipt far Me r ddse ❑COD 7. Date of D very Dear Joel: a� a S. Received By: (Print Name) 8. Addressee's Ad rase (Only if requested Y It is with great pride and end nee is paid) � the City of Kent. We hi: 'ON s. Signature: (Addressee or ant) environment our Centenr goodby after 6 years of � PS Form 3811, December 1994 Domestic Return Receipt l- The City of Kent is prepared to manage the building beginning July 1, 1996. This week we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the Ctenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach- Sincerely, TNERSHIP AStep�eYJZp4e-nbach F&IA Sound Ventures Inc. i u C 400 Wesi Gowe Suite 412 Kent. Washington 98032 CERTIFIED #P 595 537 582 FAX (206)82 6) 850050-3076 RETURN RECEPIT 6/24/96 FAX( June 21, 1996 Beverly Underwood Newport Counseling 400 West Gowe Suite 412 Kent, WA 98032 Re: Centennial Center Suite 412 Kent, Washington Dear Beverly: It is with great pride and mixed emotion that we announce the We of Centennial Center to the City of Kent. We have great pride in this beautiful building and the healthy business environment our Centennial Center community has created. We also feel sadness in saying goodby after 6 years of on site property management. The City of Kent is prepared to manage the building beginning July 1, 1996. This week we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the tenants at Centennial Center. PIease note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, KENT ENTENNIAL LTD. PARTNERSHIP /A7 ug r ach Stepha a Mappenbach Gene 1 P r JUL- 9-96 TUE 14:00 SOUND VENTURES FAX NO. 8503076 Sound Ventures Inc. 400 West GOWe Suite 412 Kent, Washington 98032 (206) 223-95W CERTIFIED #Z 160 488 59 FAX (206) 850-3076 RETURN RECEPIT 6/24/96 June 21, 1996 o SENDER. Larry Tantelo � •Complete hems 1 and/or 2 for addidonaf seMcea. I also wish to receive the NLK Consultants, Inc. of ■P�pete Items 3. ur name and addresarid 4s on the reverse of this form so that we can ralum INS extra fee SBfV10Bs (for an extra fee): 400 West Gowe St., Ste card Iyou. •Attach this loan to the hard of the mailpiece, or on the back pe A. if space does not 1. 0 Addressee's Address Kent WA 98032 � 0 � oWdle'Refum Receipf Requesf Pon the mailpiece below the article number. ■The Return Receipt will chow to whom the article was daGvernd and the date 2. ❑Restricted Delivery f C defivared. Consult postmaster for fee. Re: Centennial Center ,o 3. Article Addressed to: _ 4a. Article Number 2 too L4 V6 S9 Suite 406 C LARRY TANTELO - 4b. Service Type Kent, Washingtot. NLK CONSULTANTS ❑ Registered fi d a f 400 WEST GOWE SUITE 406 ❑ Express Mall 101 ed Dear Larryy. KENT WA 98032 ❑ Retum Receipt for se I 7. Date of Delivery Z It is with great pride and 5. Received By. (Print Name) 8. r ee's Address (Only# requested the City of Kent. We h1 and nee Is paid) environment our Centeru c fi. S (Addressee a Agenf) goodby after 6 years of c e PS Form 3811, December 1994 Domestic Return Receint The City of Kent is prepared to manage inta vu„uurr, -.--, _, _ _ we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feet free to contact either Doug or Stephanie Klappenbach. Sincerely, KENT CENTENNIAL LTD, PARTNERSHIP Do appenbach Steplfanie Klappenbach G rat Partner lilt_ d qFg Ub 1111, Sound Ventures Inc. June 21, 1996 Janet Perkins Smart Corporation 400 West Gowe Suite 208 Kent, WA 98032 Re: Centennial Center Suite 208 Kent, Washington Dear Janet : 400 West Gowe KenE Washinglon 98032 HAND DELIVERED 6/24/96 (206)223.9500 FAX (206) 850-3076 It is with great pride and nixed emotion that we announce the sale of Centennial Center to the City of Kent. We have great pride in this beautiful building and the healthy business environment our Centennial Center community has created. We also feel sadness in saying goodby after 6 years of on site property management. The City of Kent is prepared to manage the building beginning July 1, 1996. This week we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, LSD. PARTNERSHIP / XW44 u - Stephfinie Klappenbach al Partner JUL- 9-96 TUE 14:02 SOUND VENTURES FAX NO. 8503076 1k4 Sound Ventures Inc. P. 1.3 C I 400 West Gowe Style 412 Kent. Washingtun 98032 CERTIFIED #Z 160 488 574 FAX(2%) 850- 076 RETURN RECEPIT 6/24/96 June 21, 1996 Rolf Altorfer Panalpina, Inc. 800 Plaza Two-8th Floor/34 Exch. Place Jersey City, N.J. 07311-3991 Re: Centennial Center Suite 414 Kent, Washington Dear Rolf: It is with great pride and mixed emotion that we announce the We of Centennial Center to the City of Kent. We have great pride in this beautiful building and the healthy business environment our Centennial Center community has created. We also feel sadness in saying goodby after 6 years of on site property management. The City of Kent is prepared to manage the building beginning July 1, 1996. This week we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, KENT ENTENNIAL LTD. PARTNERSHIP oug penbach Step�Klappenbach Gen r artner JUL- 9-96 TUE 14:03 SOUND VENTURES FAX NO. 8503076 P.14 Sound Ventures Inc. June 21, 1996 Kevin Hodgson Panalpina, Inc. 400 West Gowe Suite 414 Kent, WA 98032 Re: Centennial Center Suite 414 Kent, Washington Dear Kevin : 4DO We51 Gowe Suite 412 Kent, Washiny:on 98032 (206)223-9500 HAND DELIVERED 6/24/96 FAX (206) 850.3076 It is with great pride and mixed emotion that we announce the sale of Centennial Center to the City of Kent. We have great pride in this beautiful building and the healthy business environment our Centennial Center community has created. We also feel sadness in saying goodby after 6 years of on site property management. The City of Kent is prepared to manage the building beginning July 1, 1996. This week we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, KENT ENTENNIAL LTD. P TNERSHIP ou ppe Steph 'e Klappenbach Gen r artner JUL- 9-86 `C`'JL , F54 Sound Ventures Inc. June 21, 1996 Jack Woods Smart Corporation r 400 Wes' Gowe Suile 412 Kent, Washington 98032 (206) 223-9500 CERTIFIED #Z 160 488 570 FAX (2061 850-3076 RETURN RECEPIT 6/24/96 2201 Amapola Court SENDER: I also wish to receive the Torrance CA 90501 e •c tmpi.t. items 1 andrar 2 for additional cervices. aComplete Items 3, ad, and 4b. following services (for an o ■ Prirtt your name and address on the reverse of this form so that we can return This extra fee): t ' e card to you. ■Attach thie form to the frord of the malipiece, or on tha bade if space does not 1. ❑Addressee's Address 2 Re: Centennial Centel a parmit. a Write'Ratum Raceipf Requesfed' on the rna rlpiecs below the article number. 2, ❑Restricted Delivery �f O Suite 208 0 E eTho Return Receipt will show to whom the article was delivered and the date Consult postmaster for fee. Kent, WaShingtoi C delivered. 3. Arfide Addressed to: 4a. Article Number (� ,c� 6 Dear Jack: a JACK WOODS _ 4b. Service Type �> a 8 SMART CORP. ❑ Registered rtified a ❑ Express Mail ❑ I ured 5 It is with greatp ride and t 2201 AMAPOLA COURT ❑ Return Receipt for Merdtandse ❑ COD TORRANCE CA 90501 the City of Kent. We ha very environment our Centenri z goodby after 6 years of of 5. Received By: (Print Name) S. Addressee's Address (Only if requested uA Fc^-Oq r-.0- and lee is paid) t The City of Kent is prep;' c S Signature: (Addressee or Agent) we will be introducing C s X Domestic Return tenants at Centennial Ceir1 PS Form 3811, December 1994 Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, KENT -CENTENNIAL LTD. PARTNERSHIP rpenbach Ateph' a Klappenbach artner JUL- 9-96 TUE 14:04 SOUND VENTURES INsound ventures Inc. 40o west Gowe 5uae 412 Ken;. Washington 96032 (2D6) 223-9500 FAX (206) 850.3076 CERTIFIED #Z 160 488 573 June 21, 1996 RETURN RECEPIT 6/24/96 Lori Anderson Westin Engineering, Ing. 100 Park Center Plaza, Ste 500 San Jose, CA 95113 Re: Centennial Center Suite 224 Kent, Washington Dear Lori: It is with great pride and mixed emotion that we announce the sale of Centennial Center to the City of Kent. We have great pride in this beautiful building and the healthy business environment our Centennial Center community has created. We also feel sadness in saying goodby after 6 years of on site property management. The City of Kent is prepared to manage the building beginning July 1, 1996. This week we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, KENT NTENNIAL LTD. PARTNERSHIP ougYartner nbach &teph 4KJappenbach Genr JUL- 9-96 TUB: '. 4) 'J 5 PA Sound Ventures Inc. V - June 21, 1996 Gary Leake Doreen Monroe Westin Engineering, Ing- 400 West Gowe Suite 224 Kent, WA 98032 Re: Centennial Center Suite 224 Kent, Washington Dear Gary and Doreen: 4o0 West Gowe Kette 412 nt, Washington 98032 HAND DELIVERED 6/24/96 (206) 223-9500 FAX (206) 850-3076 It is with great pride and mixed emotion that we announce the sale of Centennial Center to the City of Kent. We have great pride in this beautiful building and the healthy business environment our Centennial Center community has created. We also feel sadness in saying goodby after 6 years of on site property management. The City of Kent is prepared to manage the building beginning July 1, 1996. This week we will be introducing Charlie Lindsey, City of Kent Facilities Manager, to all of the tenants at Centennial Center. Please note that all rent checks including July rent should be made payable to the following: City of Kent 220 4th Avenue South Kent, WA 98032 Attn: Facilities Manager If you have any questions, please feel free to contact either Doug or Stephanie Klappenbach. Sincerely, kCENTE LTD. PARTNERSHIPAdo-� penbacSteph 'e Klappenbach tner July 1, 1996 First American Title Insurance Company 2101 Fourth Avenue, Suite 800 Seattle, Washington 98121-2387 EXCHANGE FACILITATOR CORPORATION 2624 Eastlake Ave. E. • Seattle. WA 98102 (206) 324-1350 • FAX (206) 329-6801 Attention: Donna Fossen, King County Escrow Manager Re: Your Escrow Number 37973CP; Our File Number 06216 Kent Centennial Limited Partnership, a Washington limited partnership ("Exchangor") Exchange Facilitator Corporation, a Washington corporation ("EFC") The City of Kent, a Washington municipal corporation ("Buyer") The Centennial Center located at 400 West Gowe Street, Kent, Washington 98032, and the Municipal Court Building located at 302 West Gowe Street, Kent, Washington 98032, legally described in Exhibit "A" attached hereto (collectively the "Premises") Dear Donna: This letter will constitute your revised joint escrow instructions on behalf of Exchangor and EFC in connection with the closing of the exchange transaction in which Exchangor will exchange the Premises with EFC pursuant to the terms of the enclosed Exchange Agreement, and then EFC will sell the Premises to Buyer pursuant to the terms and conditions of the Agreement of Purchase and Sale dated April 8, 1996 ("Agreement"). The Premises shall be deeded from Exchangor directly to Buyer pursuant to a direct -deeding instruction of EFC contained herein. You have previously received three original Assignment Agreements in which Exchangor assigns to EFC all of Exchangor's right, title and interest under the Agreement. You are instructed to prepare your closing documents in this transaction as follows: 1. Prepare your standard form escrow instructions and your APR 12 form with Exchange Facilitator Corporation, a Washington corporation, appearing as seller, and the above -referenced party, appearing as buyer. 2. Prepare a Seller's Settlement Statement or HUD-1 form in which EFC is seller and the net proceeds generated upon the sale of the Premises less cash payable to Exchangor in the amount of $52,000.00 (the remainder is hereafter referred to as the "Exchange Proceeds") are payable to EFC. Please show a charge of $1,082.00 payable to EFC for facilitation charges and sales tax and disburse such amount to EFC by check upon closing. The Exchange Proceeds are to be transferred to First American Title Insurance Company ("Escrowee") account number 38500CP (the "Qualified Escrow Account") upon the closing of this transaction. Escrow Instructions Page 1 I hereby certify that this is a tfuc, and 7!)IICANac opy of the, origina' �1 rT1lnTUL �C}t;1=�,Ny 3. Prepare, or cause to be prepared, a Statutory Warranty Deed and Real Estate Excise Tax Affidavit in which Exchangor is Grantor and Buyer is Grantee. The following language is to be inserted as the consideration recital on the Deed: "I.R.C. Section 1031 Tax -Deferred Exchange." These instructions shall constitute your authority to prepare, or cause to be prepared, such a Direct Deed from Exchangor to Buyer in the interest of avoiding additional fees, costs and liabilities. This is also your authority to prepare, or cause to be prepared, all other real estate conveyance documents directly in favor of Buyer such as Assignments of Leases, if applicable in this transaction. 4. Prepare a closing order to the title insurance department of First American Title Insurance Company instructing it not to record the documents unless it is prepared to issue unconditionally an extended owner's policy of title insurance insuring Buyer in the amount of the purchase price in accordance with the terms of the preliminary commitment under order number 318287-5 and showing as exceptions to coverage only those exceptions permitted under the terms of the Agreement. On such closing order, instruct the title insurer to give phone confirmation of the recording numbers to Debbie of Exchange Facilitator Corporation at 206-324-1350. Please also instruct the title insurer to fax a copy of the closing order (reflecting the recording numbers and the date of closing) and take -off copies of the recorded documents to Exchange Facilitator Corporation at 206-329-6801. Please include a copy of the closing order in the documents you forward us for our review. Because the time deadlines in a delayed exchange are critical, the verbal confirmation and fax take -off confirmation of the closing date are essential. 5. Prepare a Certification of Non -Foreign Status to be executed by Exchangor with respect to the transfer to EFC. We have previously provided you with a form for your convenience. You have previously received a Certification executed by EFC. 6. Prepare an IRS 1099 Reporting Form to be executed by Exchangor. If possible, such form should be modified to reflect that Exchangor is receiving cash proceeds Of $52,000.00, but is exchanging the balance of the purchase price. Please provide a copy of such IRS reporting documents to us for our review prior to closing. 7. Prepare a photocopied set of approval copies of the escrow instructions, APR 12 form and Seller's Settlement Statement (as well as any other documents for signature by EFC to which Exchangor is not a party) for Exchangor's approval. Exchangor is to approve and accept the form and content of such documents only. You are further instructed to obtain the necessary signatures on the following documents prior to closing: I pq�rrj4?y gPrtify that this is n tr u pnd exeiet copy of the a6q,^.a1 Escrow Instructions Page 2 FI RICAN TITLEIr P a. Obtain Exchangor's signatures on the enclosed Exchange Agreements (upon ;,losing, please distribute an original to EFC and Exchangor); b. Obtain Exchangor's and Buyer's signatures on the previously supplied C, Exchangor and Assignment Agreements (upon closing, please distribute an original to EF Buyer); and C. Obtain Exchangor's and Escrowee's signatures original to EFCSIExchanlgor ied Qualified Escrow Agreements (upon closing, please distribute and Escrowee) . You are instructed to record when all th to issue is policy as sents described above et been executed and deposited with you, the title insure has agreed funds to close this forth in paragraph 4 above, Buyer has deposited with you necessary trans action and when any additional instructions of the parties or the Buyer's lender (which are not inconsistent with these instructions) have been me t. You are to record the documents in the following order: 1. Deed from Exchangor to Buyer; 2. Deed of Trust from Buyer to Lender, if any. Closing is deemed to have occurred whendisbursement. thedouents described above have been recorded and the proceeds are available for From the sums deposited into escrow by Buyer: a. Pay and satisfy all encumbrances on the Premises other than those permitted as exceptions in paragraph 4 above; proved by EFC on the Seller's Settlement b. Pay all costs and charges ap Statement; c. Pay all costs and charges approved by the Buyer on the Buyer's Settlement Statement. Following closing, transfer the Exchange Proceeds to the Qualified Escrow Account. us at After you have transferred the funds, please istructio(ns smust be authorized to in inclosing and transfer. Any amendments to the foregoingn writing by Kelly M. Yates or Dennis P. Helmick, authorized signatories for Exchange Facilitator Corporation. ritical The form of the escrow documents in a delayethaty you rred give ve us adequate te is ime to r qualifying thetransaction. ent s prepared b you therefore this transactionpriorto Exchangor or Buyer signing review all documents prepared Y tha; this is a 1 hereby cert�ty such documents. of the c,icYr- . and exact cr.py - CAN TITLE M,A Escrow Instructions Page 3 ?1�.�-�-4=- In the event of any dispute between any of the parties to this Escrow Agreement in interpreting or enforcing this Escrow Agreemeta�nce or I be negotiated a ong the s for dispugng ed breach hereof, such dispute shall, in the first ins parties in good faith. If not so resolved, the disputeconformance with the submitted and arbitration to the be conducted as quickly as possible and m co partyshall be American Arbitration Association, SeWashington including actualrreasona�leaattorneys fees and entitled to all costs incurred in the arbitration, experts fees, as well as all other recoverable costs, damages and awards. Please contact either Kelly M. Yates or Dennis P. Helmick if you have any questions regarding these instructions. Please indicate your acceptance of these instructions by signing a copy and returning the signed copy to this office prior to closing. Please have Exchangor sign these instructions prior to closing as well. - Acce ted this �day of July, 1996. Donna Fossen King County Escro Manager First American Title Insurance Company Approved by Exchangor: Kent Centennial Limited Partnership, a Washington limited partnership By: Very Truly Yours, K Ily . Yat s, House Counsel Centennial Venture Limited Partnership, a Washington limited partnership, its General Partner I hereby certify that this is a and exact copy of the oric it al FIFA A ERICAN TITLE CC' "°'�'•" 'Y Escrow Instructions Page 4 June 25, 1996 First American Title Insurance Company 2101 Fourth Avenue, Suite 800 Seattle, Washington 98121-2387 EXCHANGE FACILITATOR CORPORATION 2624 Easdake Ave. E. • Seattle. WA 98102 (206) 324-1350 0 FAX (206) 329-6801 Attention: Cyndi M. Pedersen, Escrow Supervisor/LPO Re: Your Escrow Number 37973CP; Our File Number 06216 Kent Centennial Limited Partnership, a Washington limited partnership ("Exchangor") Exchange Facilitator Corporation, a Washington corporation ("EFC") The City of Kent, a Washington municipal corporation ("Buyer") The Centennial Center located at 400 West Gowe Street, Kent, Washington 98032, and the Municipal Court Building located at 302 West Gowe Street, Kent, Washington 98032, legally described in Exhibit "A" attached hereto (collectively the "Premises") Dear Cyndi: This letter will constitute your joint escrow instructions on behalf of Exchangor and EFC in connection with the closing of the exchange transaction in which Exchangor will exchange the Premises with EFC pursuant to the terms of the enclosed Exchange Agreement, and then EFC will sell the Premises to Buyer pursuant to the terms and conditions of the Agreement of Purchase and Sale dated April 8, 1996 ("Agreement"). The Premises shall be deeded from Exchangor directly to Buyer pursuant to a direct -deeding instruction of EFC contained herein. Enclosed are three original Assignment Agreements in which Exchangor assigns to EFC all of Exchangor's right, title and interest under the Agreement. You are instructed to prepare your closing documents in this transaction as follows: 1. Prepare your standard form escrow instructions and your APR 12 form with Exchange Facilitator Corporation, a Washington corporation, appearing as seller, and the above -referenced party, appearing as buyer. 2. Prepare a Seller's Settlement Statement or HUD-1 form in which EFC is seller and the net proceeds generated upon the sale of the Premises ("Exchange Proceeds") are payable to EFC. Please show a charge of $1,082.00 payable to EFC for facilitation charges and sales tax and disburse such amount to EFC by check upon closing. The Exchange Proceeds are to be transferred to First American Title Insurance Company ("Escrowee") account number 38500CP (the "Qualified Escrow Account") upon the closing of this transaction. `. reby certify that this is a true P '. x ct of the aric�inwl FIR`. A RI ANTITLE COMPA Escrow Instructions Page 1 3. Prepare, or cause to be prepared, a Statutory Warranty Deed and Real Estate Excise Tax Affidavit in which Exchangor is Grantor and Buyer is Grantee. The following language is to be inserted as the consideration recital on the Deed: "I.R.C. Section 1031 Tax -Deferred Exchange." These instructions shall constitute your authority to prepare, or cause to be prepared, such a "Direct Deed" from Exchangor to Buyer in the interest of avoiding additional fees, costs and liabilities. This is also your authority to prepare, or cause to be prepared, all other real estate conveyance documents directly in favor of Buyer such as Assignments of Leases, if applicable in this transaction. 4. Prepare a closing order to the title insurance department of First American Title Insurance Company instructing it not to record the documents unless it is prepared to issue unconditionally an extended owner's policy of title insurance insuring Buyer in the amount of the purchase price in accordance with the terms of the preliminary commitment under order number 318287-5 and showing as exceptions to coverage only those exceptions permitted under the terms of the Agreement. On such closing order, instruct the title insurer to give phone confirmation of the recording numbers to Debbie of Exchange Facilitator Corporation at 206-324-1350. Please also instruct the title insurer to fax a copy of the closing order (reflecting the recording numbers and the date of closing) and take -off copies of the recorded documents to Exchange Facilitator Corporation at 206-329-6801. Please include a copy of the closing order in the documents you forward us for our review. Because the time deadlines in a delayed exchange are critical, the verbal confirmation and fax take -off confirmation of the closing date are essential. 5. Prepare a Certification of Non -Foreign Status to be executed by Exchangor with respect to the transfer to EFC. A form is enclosed for your convenience. Enclosed is a Certification executed by EFC. 6. Prepare an IRS 1099 Reporting Form to be executed by Exchangor. If possible, such form should be modified to reflect that Exchangor is participating in an exchange rather than a sale. Please provide a copy of such IRS reporting documents to us for our review prior to closing. 7. Prepare a photocopied set of approval copies of the escrow instructions, APR 12 form and Seller's Settlement Statement (as well as any other documents for signature by EFC to which Exchangor is not a party) for Exchangor's approval. Exchangor is to approve and accept the form and content of such documents only. You are further instructed to obtain the necessary signatures on the following documents prior to closing: Escrow Instructions Page 2 I hereby certify that this is a true '.'`. "t C Y of the original. } `'' t�A.I j TITLE COMPANY a. Obtain Exchangor's signature on the enclosed Exchange Agreements (upon closing, please distribute an original to EFC and Exchangor); b. Obtain Exchangor's and Buyer's signatures on the enclosed Assignment Agreements (upon closing, please distribute an original to EFC, Exchangor and Buyer); and c. Obtain Exchangor's and Escrowee's signatures on the enclosed Qualified Escrow Agreements (upon closing, please distribute an original to EFC, Exchangor and Escrowee). You are instructed to record when all the documents described above have been executed and deposited with you, the title insurer has agreed to issue its policy as set forth in paragraph 4 above, Buyer has deposited with you necessary funds to close this transaction and when any additional instructions of the parties or the Buyer's lender (which are not inconsistent with these instructions) have been met. You are to record the documents in the following order: 1. Deed from Exchangor to Buyer; 2. Deed of Trust from Buyer to Lender, if any. Closing is deemed to have occurred when the documents described above have been recorded and the Exchange Proceeds are available for disbursement to EFC. From the sums deposited into escrow by Buyer: a. Pay and satisfy all encumbrances on the Premises other than those permitted as exceptions in paragraph 4 above; b. Pay all costs and charges approved by EFC on the Seller's Settlement Statement; c. Pay all costs and charges approved by the Buyer on the Buyer's Settlement Statement. Following closing, transfer the Exchange Proceeds to the Qualified Escrow Account. After you have transferred the funds, please call us at (206) 324-1350 to confirm closing and transfer. Any amendments to the foregoing instructions must be authorized in writing by Kelly M. Yates or Dennis P. Helmick, authorized signatories for Exchange Facilitator Corporation. The form of the escrow documents in a delayed tax -deferred exchange is critical in qualifying the transaction. It is therefore very important that you give us adequate time to review all documents prepared by you in this transaction prior to Exchangor or Buyer signing such documents. °`cert;" th t th i Iry a s is a true OP of the original. r �Ka Ail/ AN TITLE COMPANY Escrow Instructions Page 3 In the event of any dispute between any of the parties to this Escrow Agreement in interpreting or enforcing this Escrow Agreement, or in seeking damages for any alleged breach hereof, such dispute shall, in the first instance, be negotiated among the disputing parties in good faith. If not so resolved, the dispute shall be submitted to binding arbitration to be conducted as quickly as possible and in conformance with the rules and procedures of the American Arbitration Association, Seattle, Washington Chapter. The prevailing party shall be entitled to all costs incurred in the arbitration, including actual reasonable attorneys fees and experts fees, as well as all other recoverable costs, damages and awards. Please contact either Kelly M. Yates or Dennis P. Helmick if you have any questions regarding these instructions. Please indicate your acceptance of these instructions by signing a copy and returning the signed copy to this office prior to closing. Please have Exchangor sign these instructions prior to closing as well. Very Truly ours, K Ily . Ya es, House Counsel Accepted this , -.-- day of June, 1996. 0-'� - C 'WD Cyndi M. Pedersen Escrow Supervisor/LPO First American Title Insurance Company Approved by Exchangor: Kent Centennial Limited Partnership, a Washington limited partnership By: Centennial Venture Limited Partnership, a Washington limited partnership, its General Partner Z/ A, I /- - -, //0 /- -VU OM A%MQ 420IRK OW-9 -QE ougl s W. Klaakfi,-Gbneral Partner and e aW p'y of th Ciri: r v-IRS A I C A N TI"fi_c CO110P-�NY Escrow Instructions Page 4 UAHIB1T A SCHEDULE C THE LAND REFERRED TO IN THIS OF WASHINGTON, COUNTY OF KING PARCEL A: ORDER NO. 318287-5 COMMITMENT IS SITUATED IN THE STATE AND IS DESCRIBED AS FOLLOWS: LOTS 4, 5, 6, 7, 8 AND 9, BLOCK 8 AND THE EAST 20 FEET OF LOTS 4, 5 AND 6, BLOCK 13, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF LOTS LYING SOUTHERLY OF WEST WEST TITUS STREET PURSUANT TO KENT. VACATED THIRD AVENUE ADJOINING SAID GOWE STREET AND LYING NORTHERLY OF ORDINANCE NO. 2895 OF JTHE CITY OF (A PORTION OF PARCEL A IS ALSO KNOWN AS LOT A OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) PARCEL B: LOTS 10, 11 AND 12, BLOCK 8, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF LOTS LYING SOUTHERLY OF WEST WEST TITUS STREET PURSUANT TO KENT. VACATED THIRD AVENUE ADJOINING SAID GOWE STREET AND LYING NORTHERLY OF ORDINANCE NO. 2895 OF THE CITY OF (ALSO KNOWN AS LOT B OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) BOTH SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON. her@by db-riify that the is a truE +rand exa cOPy 4f the orioi,-, I+I Y ERICAN TITLE i ;,' This Assignment Agreement is made and effective as of the day of June, 1996, by and between Kent Centennial Limited Partnership, a Washington limited partnership ("Exchangor"), Exchange Facilitator Corporation, a Washington corporation ("Intermediary"), and the City of Kent, a Washington municipal corporation ("Buyer"), and is executed as an addendum to the Agreement of Purchase and Sale dated April 8, 1996, between Exchangor and Buyer. Recitals Exchangor and Buyer entered into the above -referenced Agreement of Purchase and Sale, a true and correct copy of which is attached hereto as Exhibit "A" ("Agreement") in which Exchangor agreed to transfer the real property described in said Agreement ("Property") to Buyer. Exchangor desires to structure the disposition of the Property to qualify as a tax -deferred exchange pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended. Contemporaneously with the execution of this Agreement, Exchangor and Intermediary are entering into an Exchange Agreement in which Exchangor will transfer the Property to Intermediary in exchange for other real property to be acquired by Intermediary and transferred to Exchangor within the deadlines of Section 1031. Exchangor and Intermediary desire that Exchangor assign to Intermediary all right, title and interest of Exchangor under the Agreement in order to facilitate the tax -deferred exchange of Exchangor. Intermediary is willing to accept such assignment. Buyer is agreeable to such assignment. Now, therefore, for good and valuable consideration, the parties hereto agree as follows: 1. Assignment. Exchangor hereby assigns and transfers to Intermediary all of its right, title and interest as seller in and under the Agreement, including the right to receive the purchase price. Intermediary hereby accepts an assignment of all of Exchangor's right, title and interest as seller in and under the Agreement. 2. Consent to Assignment. Buyer hereby consents to this assignment. 3. Direct Deed. In order to avoid duplicative recording, escrow and title fees, and other like charges, Intermediary hereby instructs Exchangor, and Exchangor hereby agrees, to execute a deed to the Property in favor of Buyer. In addition, Intermediary hereby instructs Exchangor to execute all other conveyance documents in favor of Buyer such as Assignments of Leases. 4. Continuing Obligation. Notwithstanding this Assignment Agreement, all warranties, representations, duties, and obligations of Exchangor and Buyer under the Assignment Agreement Page 1 Agreement which are intended to survive the closing of the Property shall continue in full force and effect, and neither Exchangor or Buyer shall be released from the same. 5. Counteruarts. This Assignment Agreement may be executed in counterparts and shall be binding on all the parties hereto as if one agreement has been signed. Dated as of the date set forth above. Intermediary: Exchangor: Exchange Facilitator Corporation, Kent Centennial Limited a Washington corporation Partnership, a Washington limited partnership Kelly on Ya s, House Counsel and thor ed Signatory Buyer: The City of Kent, a Washington municipal corporation Attest: By: Centennial Venture Limited Partnership, a Washington limited partnership, its General Partner k"O We las W. penral Partner Assignment Agreement Page 2 EXHIBIT A AGREEMENT OF PURC14ASE AND SALE between KENT CENTENNIAL LIMITED PARTNERSHIP SELLER and THE CITY OF KENT BUYER April ' , 1996 CENTENNIAL CENTER KENT, WASHINGTON \s\rs.030 THIS AGREEMENT entered into this (b day of April, 1996, by KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation, ("Buyer"), hereby agree as follows: ARTICLE I TERMS AND DEFINITIONS In addition to the other terms herein defined, the following terms shall have the meanings set forth in this Article I, unless the context otherwise requires: Section 1.1 ui din . The buildings commonly known as: (a) Centennial Center, located generally at 400 West Gowe Street, Kent, WA, 98032, containing approximately 75,000 square feet of office building and a 361 stall parking garage ("Centennial Center"); and (b) Municipal Court Building located at 302 West Gowe Street, Kent, WA, 98032, containing approximately 4,100 gross square feet of rentable office space. Section 1.2 C12 in . The consummation of the sale and purchase of the Property pursuant to this Agreement. Section 1.3 Earnest MoneY. The amount of Two Hundred Fifty Thousand Dollars ($250,000) in accordance with the provisions of Section 4 herein. Section 1.4 Effjctive Date. The date of execution of this Agreement by both Buyer and Seller. Section 1.5 Hazardous Substances. Any substance, chemical, waste or material that is or becomes regulated by any federal, state or local governmental authority because of its toxicity, infectiousness, radioactivity, explosiveness, ignitabiltiy, corrosiveness or reactivity, including, without limitation, asbestos, petroleum derivatives, polychlorinated biphenyls, flammable explosives and those substances regulated by the Hazardous Substances Laws, in quantities which exceed levels allowed under Hazardous Substances Laws. Hazardous Substances Laws shall mean any currently effective federal, State of Washington, or other applicable law, rule, regulation, permit, agreement, order or other binding determination of any governmental authority having jurisdiction over and affecting all or any part of the Real Property or Improvements relating to Hazardous Substances. Section 1.6 Improvements. All improvements located on the Real Property, including the Buildings, Parking and all amenities and appurtenances thereto. Section 1.7 Intangible Personal Property. All of Seller's right, title and interest in any intangible property now or hereafter owned by Seller and used in connection with the Real Property, Improvements and Personal Property, including without limitation all of Seller's rights under all governmental approvals, and applications therefore, claims, contracts, licenses, permits, plans, studies, warranties, utility arrangements and other agreements relating to the ownership, operation or occupancy of the Property and the name "Centennial Center" or other trade name associated with the Improvements. Section 1.8 Leases. All of Seller's right, title and interest in all leases and occupancy agreements covering space in the Improvements, including without limitation, those certain Leases identified on the Rent Roll dated as of March 1, 1996, attached hereto as Exhibit— -2- 0 /SASTS.030 vailable to the 361 Section l .9 Parking. All of the Center Building, and surfaced parking stalls loc ted on stall parking garage within the Centennial the Real Property. attached Section 1.10 Permitted Excetiti nns. Those o be acceptableptions to to Buyeroi the Property with the hereto as Exhibit. B and any others determine provisions of Section 6.2. Section 1.11 Per oval Pronertv. The personal prop owned by Seller ancylocated the Real the Real Property and used in connection with the ownership, operation Property or the Improvements identified on E—Xhibi—I—C attached hereto. Section 1.12 Proms• The Real Property, Improvements, Personal Property, and Intangible Personal Property. Section 1.13 Property All information in Seller's possession, or which Seller has access to or caused to be prepared relating to the Property as more particularly described in E hi it D. Section 1.14 nr^^iced i ease Transacti. Those proposed transactions for leases of ons vacant space within the Buildings, or extensions ofxpansions of hereto.existing Leases within the Buildings, all as more particularly shown oExhibit Section 1.15 Purchase Price. The Purchase Price shall be specified in Section 3. Section 1.16 Real Property. The real prop Gowe Stre t,the moreCity parti particularly described in Washington, at 400 West Gowe Street and 30 x i •t F attached hereto and by this reference made a part hereof, together with all rights and privileges, easements and appurtenances thereto. Section 1.17 Service Con eaagreements, s•lthose including elevator anservice contracts, derHVAC maintenance, janitorial contracts, and maintenance relating to the operation of the Buildings. Section 1.18 Title Commitment. The itle Coment any�O der No. 318287 r issuance of an 5, and Policy of Title Insurance (extended coverage) issued by T P delivered to Buyer within five (5) days of the Effective all Date, to exceptions shown thereithe full amount of the Purchase Price together with legible copies o P Section 1.19 Title =p y. First American Title Insurance Company, 2101 Fourth Avenue, Suite 800, Seattle, Washington, 98121. Section 1.20 Title Polic .The Owner's P�o nt oftle Insurance the Purchase (extended coverage) t he issued by Title Company with coverage in the full Permitted Exceptions. Section 1.21 W_ arr= S• All thoser el 1foguarantees effect with respect to the Property, as disclosed to Buy Part of theProperty Information. ARTICLE II PURCHAS",LAND--SALE Section 2.1 Purchase and Sale. Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller, the Property, subject to the terms and conditions set forth herein. -3- /sns\Ps.030 ARTICLE III PURCHASE PRICE Section 3.1 Purchase Price. The Purchase Price for the Property shall be ELEVEN MILLION SEVEN HUNDRED TWELVE THOUSAND SIX HUNDRED AND N01100 DOLLARS ($11,712,600.00). The Purchase Price shall be paid in all cash, at Closing, via wire transfer or other immediately available funds. ARTICLE IV EARNEST MONEY_ Section 4.1 Earnest Monev. Not later than two (2) business days after the Effective Date, Buyer shall deposit the Earnest Money with Title Company.. In the event of Closing, Buyer shall receive a credit against the Purchase Price for the amount of the Earnest Money and interest accrued thereon. The Earnest Money shall be held by Title Company in an interest bearing account, with interest accruing for the benefit of the party entitled to receive the Earnest Money hereunder. The Earnest Money shall be non-refundable to Buyer, except in the event of the following circumstances: 4.1.1 Termination of this Agreement in accordance with the provisions of Section 5.1; or 4.1.2 Seller's failure, without legal excuse, to close the transaction contemplated by this Agreement, including without limitation, conveyance of title to the Property to Buyer. ARTICLE V INSPECTION PERIOD: INSPECTIONS Section 5.1 Inspection Period. Buyer shall have until expiration of forty five (45) days after the Effective Date (the "Inspection Period") within which to complete those studies, examinations and inspections desired by Buyer in order to determine whether there exists Hazardous Substances in, under or on the Property, and whether the structure and plumbing, electrical and other systems of Centennial Center are sound ("Inspections"). If the Inspections disclose the presence of Hazardous Substances under, in or on the Property, or a structural or systems deficiency in Centennial Center including its 361 stall parking garage, Buyer shall so notify Seller, in detail, including providing Seller with a copy of any written report or investigation, on or before the expiration of the Inspection Period ("Inspections Notice"). Buyer's failure to issue the Inspections Notice shall be deemed to mean that all matters related to the Inspections are satisfactory to Buyer. If Buyer issues the Inspections Notice, Seller shall respond to Buyer within fifteen (15) days of receipt of the Inspections Notice as to whether Seller shall effect a remediation or correction of any matter disclosed in the Inspections Notice ("Response Notice"). If Seller elects to remediate or correct any matter contained in the Inspections Notice, Seller shall proceed to do so, at Seller's expense and in the manner recommended by Seller's consultants, on or before the Closing Date, and the parties shall proceed to Closing as provided in this Agreement. If Seller elects not to remediate or correction any matter disclosed in the Inspections Notice, this Agreement may, at Buyer's election not later than five (5) business days after Buyer's receipt of the Response Notice, be terminated by written -4- /SAS\VS.030 notice to Seller, and the parties shall have no further obligations hereunder, the Earnest Money and all interest then accrued thereon shall be refunded by Title Company to Buyer; or, Buyer may accept such condition of the Property and elect to proceed to Closing in accordance with the terms of this Agreement. If, after the Response Notice, Buyer fails to terminate the Agreement in accordance with this Section, Buyer shall be deemed to have elected to proceed to Closing. Section 5.2onertkInformation. Seller shall provide to Buyer the Property Information on or before that date which is ten (10) days after the Effective Date. Section 5.3 ALceu. Seller shall cause access and entry on the Property to be afforded to Buyer, its agents, consultants, representatives and employees, for inspection and investigation during the Inspection Period, provided that such investigation and inspection shall occur at Buyer's sole cost and expense. Buyer shall be responsible for all costs and expenses arising out of the Inspections and Buyer's entry on the Property. ARTICLE VI TITLE REVIEW AND TITLE POLICY Section 6.1 Title Policy. At the time of Closing, Seller shall cause the Title Company to issue the Title Policy to Buyer in the amount of the Purchase Price against any loss or damage by reason of defect in Seller's title to the Property, other than the Permitted Exceptions as determined hereunder. Seller shall deliver to Title Company such instruments, documents, payments, indemnities, releases and agreements (including an owner's affidavit and the like) and shall perform such other acts as Title Company shall reasonably require in order to issue the Title Policy. Section 6.2 Title Review. Within five (5) days following the Effective Date, Buyer shall be furnished with the Title Commitment. Within fifteen (15) days of Buyer's receipt of the Commitment, Buyer shall notify Seller in writing ("Buyer's Notice) of Buyers approval of such exceptions or defects shown in the Commitment; provided, however, that Buyer agrees that the Permitted Exceptions shown on Exhibit B, shall have been approved by Buyer on the Effective Date. Within ten (10) days of receipt of Buyer's Notice, Seller shall notify Buyer which exceptions to the title Seller shall agree to have eliminated or cured on or before the Closing Date ("Seller's Notice"). If, however, Seiler shall not have agreed to eliminate or cure each of the exceptions not listed as Permitted Exceptions in Buyer's Notice, Buyer may elect to terminate this Agreement by sending Seller written notice of such termination within five (5) days of receipt of Seller's Notice; in which event, the Earnest Money together with accrued interest, shall be returned and paid to Buyer and neither parry shall have any right or remedy against the other. Alternatively, Buyer may, at its sole option, accept any exceptions that Seller did not agree to eliminate, as a Permitted Exception; in which event, the Agreement shall remain in full force and effect. If, after a determination of the Permitted Exceptions in accordance with the foregoing, title is not insurable subject only to the Permitted Exceptions and cannot be made so insurable by the Closing Date, Buyer may, as its sole remedy, terminate this Agreement, whereupon the Earnest Money, together with interest accrued thereon, if any, shall be returned to Buyer or Buyer may waive its prior disapproval and elect to approve such exceptions as a Permitted -5- ISASTS.030 Exception, whereupon the Agreement shall remain in full force and effect. If Buyer elects t fee terminate this Agreement in accordance mforegoing, Seller shall ayany charged by the Title Company for he Commitment. ARTICLE VII CLO-SINQ Section 7.1 losing. Closing shall be held at the offices of the Title Company on or before 5:00 P.M. Seattle Time, on July l,to (the e1g199 (theinal nExDtended Closing Date' ),by er shall be entitled to extend the Original Closing Date ether with payment to Seller in the providing written notice to Seller of such extension, together P Y amount of One Hundred Ten Thousand on Fee hall beFive Hundred Dnon-refundable(00to B�"Closing uyerunderany Extension Fee"), which Closing Ext circumstances and shall not apply to Buyer's payment of the Purchase Price. ARTICLE VIII ESCROW C OSING 1vlATTERS Section 8.1 1 scrow. At Closing, each of the parties shall take such actions and ch inions and execute and deliver to the other and to to the terms hereof,includiscrow sut ng butsnoplimited to, the agreements as may be required pursuant following: 8.1.1 Title to the PrAo pP �htted Ex eptiond to Buyer in fee simple by Statutory Warranty Deed, subject only s. 8.1.2 Upon Closing, effective as of the Closing Date, Seller shall assign and Buyer shall assume n of thest and and Assuigations as lessor under the mption on of Leases, ttached heretoas pursuant to execution of th Exhi it and Seller shall deliver to Buyer a Rent Roll effective not more than five (5) business days prior to the Closing Date. 8.1.3 Upon Closing, effective as of the and obligations ations under Seller tho e certain Service Buyer shall assume Seller's rights, interestg ution of the Assignment of Service Contracts, attached hereto Contracts, pursuant to exec as E&hibit H. 8.1.4 Upon Closing, effective as of the Closing, Seller shall assign to Buyer all Seller's right, title and interest f Warranties,� ties in effect ttached heretooas�e hrort Ili pursuant to execution of the Assignment 8.1.5 Upon Closing, effective as of the Closing, Seller shall assign and Buyer shall assume Seller's rights, interest and obligations under all Intangible Personal Property. 8.1.6 Seller shall execute which is Personal liver a warranty a Property. ty Bill of Sale conveying to Buyer that portion of the Property 8.1.7 Upon Closing, Seller shall execute and deliver to Buyer a non -foreign affidavit as required by the Foreign Investment and Real Property Tax Act, IRS Section 1445 (b) (2), as amended. Q /sns\rs.030 8.1.8 Upon Closing, Seller shall deliver to Buyer originals (or, to the extent originals are not available, certified copies) of the Leases, Service Contracts, subcontractor and supplier lists, operations and maintenance manuals, heating and air conditioning (HVAC) software, and such other information and materials as may be reasonably be requested by Buyer affecting the Property not theretofore delivered by Seller. 8.1.9 Upon mutual execution of this Agreement, Buyer shall deliver to Seller the opinion of Buyer's counsel stating that Buyer's entry into this Agreement and the performance of Buyer' liationshereunder have been fully authorized by Buyer pursuant to all appropriategovernmental s. Section 8.2 Ctnsine Costs. Seller shall be responsible for the title premium and sales tax thereon for the portion of the Policy relating to standard owner's coverage and sales tax thereon; real estate excise taxes; and one-half the Title Company's escrow fee and sales tax thereon. Buyer shall be responsible for the portion of the Policy relating to the difference between standard and extended owner's coverage and sales tax ctheII fees; and one-halail sales, (transfer2) or use tax applicable to the conveyance of Personal Property; g the Title Company's escrow fee and sales tax thereon. Section 8.3 Prnr a_nd The following prorations shall be made between Seller and Buyer on the Closing Date, computed as of the Closing Date, with income and expenses for the Closing Date itself being allocated to Buyer: 8.3.1 Actually received rental and parking income, common area/operating expense reimbursement and other payments payable by tenants and other persons occupying or using the Property or any Part thereof, for or in connection with such use or occupancy. However, Seller shall not be obligated to make any payment or give any credit to Buyer on account of or by reason of any rental or other payments which are unpaid as of the Closing Date. All payments received by Buyer from a tenant or such other person shall be applied against the most delinquent obligation or obligations of the payor, and any rental or other income accrued prior to the Closing Date shall be paid by Buyer to Seller, when received. Any checks received by Seller with respect to the Property shall be endorsed thereof in accordance with the forcgoing���d to Buyer, who shall apply the proceeds 8.3.2 Real property taxes and assessments, personal property taxes. 8.3.3 The amount of the security deposits and prepaid rents, if any, shall be credited against the Purchase Price. 8.3.4 Seller shall pay all gas, water, electricity, heat, fuel, sewer and other utilities relating to the Property up to the Closing Date (excluding those that are separately contracted for by, billed directly to and paid directly by tenants under the Leases or those which constitute any part of the Operating Expenses for the Property). If meters are not read on the Closing Date, the bills for such utilities will be prorated- rit in shall be assumed that utility charges were uniformly incurred during the billing p which the Closing Date occurs. 8.3.5 Payments under Service Contracts (excluding those that are separately contracted for by, billed directly to, and paid directly by, the tenants under the Leases). Section 8.4 Proposed Lease Transactions. Upon Closing, Seller shall be reimbursed for the cost of any and all tenant improvements and leasing commissions paid by Seller with -7- ISASTS.030 respect to any Proposed Lease Transactions which are entered into by Seller as "landlord" and "tenant", prior to the Closing Date, provided, however, such amount shall not exceed One Hundred Thousand Dollars ($100,000), in the aggregate, unless the Proposed Lease Transactions causing such tenant improvements and leasing commissions to exceed $100,000, in the aggregate, have been approved by Buyer. Buyer shall be solely responsible for any and all tenant improvements and leasing commissions arising out of any Proposed Lease Transactions which are entered into after the Closing Date. Section 8.5 Procedures for Proration. The prorations and payments to be made at Closing under the foregoing Sections 8.3 and 8.4 shall be made on the basis of a written statement or statements to Buyer from Seller, based upon actual amounts when known, and when not known, based upon Seller's estimates and the operating history of the Property. To the extent that not all information is complete on the Closing Date, Buyer and Seller shall adjust the prorations set forth in this Section based upon actual amounts as soon as the same are known, and no later than thirty (30) days after the Closing Date. Section 8.6 Pot to inavment for Supplies. Within thirty (30) days after Closing, Buyer and Seller shall inventory the janitorial and similar supplies of the Buildings, such as light bulbs, cleaning equipment, bathroom supplies, etc., the value of which shall be the actual cost paid by Seller for such items; whereupon Buyer shall pay to Seller for said items within five (5) business days of determination of value. ARTICLE IX .. TTIU 1115-1 Section 9.1 pile Authorization. Seller has legal power, right and authority to enter in to this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby, and this Agreement constitutes the legal, valid and binding agreement and obligations of Seller enforceable against Seller in accordance with its terms. Section 9.2 Bankruptcy. Seller is not the subject of any bankruptcy proceedings, insolvency or other similar insolvency proceedings. Section 9.3 Default. Seller has received no notice of any alleged default in respect of any of its obligations or liabilities pertaining to the Property. Section 9.4 Litigation- onderanati- n. There are no actions, suits or proceedings pending or, to the best knowledge of Seller, threatened, before or by any judicial, administrative or union body, any arbiter or any governmental authority, agairist or affecting Seller of the Property (or any portion thereof). To the best knowledge of Seller, there is no existing, proposed or contemplated eminent domain or similar proceeding which would affect the Real Property or Improvements in anyway whatsoever. Section 9.5 Leases. ExhibitA is a full, true and correct lease summary for the Buildings as of the date hereof which sets forth all leases, agreements, or understandings (whether written or oral) with any and all tenants, concessionaires or licensees of the Buildings. Seller has not received a written default notice from any tenant under a current Lease which default remains uncured, and except as set forth on the Rent Roll, there are no tenants in default of their rent payments under the Leases. Section 9.6 Operation and Compliance. To the actual knowledge of Seller, the Property and the operation thereof are in compliance in all material respects with applicable federal, state and local laws, ordinances, rules, regulations and order of any governmental entity having jurisdiction over the Property. 9:0 isnsTs.030 Section 9.7 Hazardous Substances. Except as otherwise disclosed to Buyer in writing or as Buyer may become aware through Buyer's investigation of the Property, there is not present upon and Seller has not participated in or approved any production, installation, disposal or storage on the Property of any Hazardous Substances, and no such Hazardous Substances in excess of legally permitted levels exist within or on the Property (above or beneath the surface), nor is there currently any proceeding or inquiry by any governmental authority with respect to the presence of such Hazardous Substances in excess of legally permitted levels on the Property or the migration thereof from or to an adjoining property. Section 9.8 urvival. The representations and warranties made by Seller in this Agreement shall survive the Closing and shall not be merged in any deed of conveyance or other instrument. IMIA .. • � sue• Section 10.1 Due Authorization. Buyer has legal power, right and authority to enter in to this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby, and this Agreement constitutes the legal, valid and binding agreement and obligations of Buyer enforceable against Buyer in accordance with its terms. Section 10.2 Survival. The representations and warranties made by Buyer in this Agreement shall survive the Closing and shall not be merged in any deed of conveyance or other instrument. Section 11.1 Fire or Casualty. Risk of loss to the Property from fire or other casualty shall be borne by Seller until Closing. If the Property in its entirety or such portion thereof which exceeds $500,000 in cost to repair, is damaged or destroyed by fire or other casualty prior to the Closing, Buyer may (a) elect to proceed with the transaction contemplated herein, in which event Buyer shall be entitled to such insurance as is paid on the claim of loss; or (b) elect to terminate this Agreement, in which event this Agreement shall be so terminated and the Earnest Money together with interest accrued thereon, shall be returned to Buyer, and, neither party shall have any further obligations or liabilities under this Agreement. If Buyer elects to terminate this Agreement, it shall notify Seller in writing within five (5) business days after Buyer has received written notice of such damage or destruction from Seller. If Buyer does not elect to terminate this Agreement, or if such damage does not exceed $500,000 in cost to repair, Seller shall proceed to restore the Property as nearly as possible to that condition existing prior to such damage or destruction, whereupon the date for Closing as described in Article VII herein shall be extended for such time as is adequate for such repair to be completed. Section 11.2 Condemnation. In the event that all or any portion of the Property becomes the subject of a condemnation proceeding or threat thereof by a public or quasi -public authority having the power of eminent domain prior to the Closing, Seller shall immediately notify Buyer thereof in writing and Buyer may (a) elect to proceed with the transaction contemplated herein, in which event Buyer shall be entitled to receive all proceeds of any award or payment in lieu thereof resulting from such proceeding or threat thereof, or, (b) elect to terminate this Agreement, in which event this Agreement shall be so terminated and the Earnest Monev together with interest accrued thereon, shall be returned to Buyer, and above, neither party shall have any further obligations or liabilities under this Agreement. If Buyer elects to terminate this Agreement, it shall so notify Seller within five (5) business days after Buyer has received written notice of such proceedings from Seller_ -9- /SAS\PS.030 3 ARTICLE XII SELLER'S COVENANTS Section 12.1 Seller's Obligation. From the Effective Date until Closing, Seller covenants as follows: 12.1.1 Seller shall exert its reasonable best efforts to operate and manage the Property in a normal, business manner in accordance with the Property's current operation by Seller, including, without limitation, leasing of vacant space and extensions of existing leases in the Buildings at lease rates in excess of $17.00 per square foot of rentable space per year; 12.1.2 Buyer shall be entitled to review and comment upon Proposed Lease Transactions during the term of this Agreement, and Seller shall provide Buyer with a copy of the terms applicable to the Proposed Lease Transactions and any revisions thereto. All Proposed Lease Transactions shall be documented on Seller's standard form Lease Agreement, modified to meet the requirements of the applicable Proposed Lease Transaction. ARTICLE XIII BROKERS Section 13.1 Commission. Buyer and Seller each acknowledge and agree that there is no brokerage commission payable under this transaction. Buyer and Seller hereby indemnify each other against and agree to defend and hold each other harmless from any and all claims for any other real estate commission or similar fees arising out of or in any way connected with any claimed agency relationship with the indemnitor. ARTICLE XIV NOTICES Section 14.1 Notices. All notices consents, approvals and other communications provided for herein or given in connection herewith shall be validly given, made, delivered or served if in writing and delivered personally or sent by registered, certified mail, or receipted overnight service, postage prepaid, or by facsimile to: BUYER AT: The City of Kent 220 4th Avenue South Kent, WA 98032 Attn: J. Brent. McFall Roger Lubovich Fax: (206) 813-2067 SELLER AT: Kent Centennial Limited Partnership 200 - 112th Avenue NE, Suite 205 Bellevue, WA 98004 Attn: Douglas W. Klappenbach Fax: (206) 453-1712 or to such other addresses as either party hereto may from time to time designate in writing and deliver in a like manner. -10- isnsTs.o3o 401 Notices, consents, approvals and communications given by mail shall be deemed delivered upon the earlier of receipt or seventy-two (72) hours after deposit in the United States mail in the manner provided above. Notices, consents, approvals and communications given by facsimile shall be deemed delivered upon the receipt by sender of a confirmed received statement as printed by the sender's facsimile machine. Originals of the facsimile transmittals shall, on the same day as the facsimile transmittal was sent, be mailed or personally delivered to the recipient of the facsimile transmittal. ARTICLE XV REMEDIES Section 15.1 Default. In the event of breach of this Agreement by Buyer of its obligations hereunder, Seller shall be entitled to elect either to: (a) terminate this Agreement and receive the Earnest Money as liquidated damages, together with the interest thereon, and retain the Closing Extension Fee, the receipt of the Earnest Money and Closing Extension Fee being Seller's sole and exclusive remedy and waiver of any other remedies which it may have at law or in equity, and as its sole and exclusive remedy against Buyer, or (b) pursue all remedies available to it at law and in equity as may be afforded by the laws of the State of Washington including, without limitation, specific enforcement of this Agreement. In the event of breach of this Agreement by Seller, Buyer shall have available to it such remedies at law or in equity as may be afforded to it by the laws of the State of Washington, including, without limitation, specific performance of the provisions hereof. Section 15.2 Attomeys' Fees. The prevailing party in an action or proceeding brought under this Agreement shall be entitled to recover from the nonprevailing party all of its reasonable attorney's fees and costs, including but not limited to expert witness fees. This entitlement survives the entry of judgment and encompasses all appeal and judgment enforcement activity. Section 15.3 Waiver. No delay in exercising any right or remedy shall constitute a waiver thereof, and no waiver by Seller or Buyer of the breach of any covenant of this Agreement shall be construed as a waiver of any preceding or succeeding breach of the same or any other covenant or condition of this Agreement. ARTICLE XVI GENERAL Section 16.1 Time. Time is of the essence in the performance of the respective obligations of the parties contained in this Agreement. Section 16.2 Successors and Assigns. Except as herein otherwise provided, this Agreement and all of the terms and provisions hereof shall insure to the benefit of and be binding upon the heirs, executors, personal representatives, successors and assigns of the parties hereto. Section 16.3 Entire Agreement. This Agreement, together with the Exhibits hereto, represents the entire agreement between the parties covering everything agreed upon or understood in this transaction. There are no oral promises, conditions, representations, understandings, interpretations or terms of any kind as conditions or inducements to the execution hereof or in effect between the parties, except as may otherwise be provided herein. No change or addition is to be made to this Agreement except by a written agreement executed by the parties. -11- isns\rs.o3o Section 16.4 Jurisdiction. This Agreement and the rights of the parties hereto shall be governed and construed in accordance with the laws of the State of Washington. Venue shall be in King County Superior Court. Section 16.5 Headings. The descriptive headings of the Articles of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 16.6 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 16.7 Construction. The parties acknowledged that each parry and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting parry shall not be employed in the interpretation of this Agreement or any amendments or Exhibits hereto. Section 16.8 Possession. Full possession of the Property shall be delivered to Buyer by Seller at Closing, subject to the tenants in occupancy and the terms of the Leases thereunder and subject to the Permitted Exceptions. Section 16.9 Mutual Indemnification. Seller hereby indemnifies and agrees to hold Buyer harmless (including reasonable attorneys' fees) from claims of third parties arising from or related to the negligent acts or omissions or willful misconduct of Seller, its agents, contractors or employees arising from or related to the Property prior to the Closing Date. Buyer hereby indemnifies and agrees to hold Seller harmless (including reasonable attorneys' fees) from claims of third parties arising from or related to the negligent acts or omissions or willful misconduct of Buyer, its agents, contractors or employees arising from or related to the Property on and after the Closing Date Section 16.10 Buver's Acknowledgment. Buyer acknowledges for Buyer and Buyer's successors and assigns (a) that Buyer is being afforded a reasonable opportunity to inspect and investigate the Property, all improvements thereon and all aspects relating thereto, either independently or through agents and experts of Buyer's choosing, and (b) that Buyer is acquiring the Property based solely upon Buyer's own investigation and inspection thereof, and (c) the provisions of this Section 16.10 shall survive Closing and not be merged therein. EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 9, SELLER AND BUYER AGREE THAT THE PROPERTY SHALL BE SOLD AND THAT BUYER SHALL ACCEPT POSSESSION OF THE PROPERTY ON THE CLOSING DATE "AS IS, WHERE IS, WITH ALL FAULTS", WITH NO RIGHT OF SETOFF OR REDUCTION IN THE PURCHASE PRICE, AND THAT EXCEPT AS EXPLICITLY SET FORTH IN THIS AGREEMENT, SUCH SALE SHALL BE WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTY OF INCOME, POTENTIAL, OPERATING EXPENSES, USES, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE (BUT SPECIFICALLY EXCLUDING THE WARRANTY OF TITLE GIVEN IN THE DEED AND OTHER CONVEYANCE DOCUMENTS), AND SELLER DOES HEREBY DISCLAIMS AND RENOUNCE ANY SUCH REPRESENTATION OR WARRANTY EXCEPT AS SET FORTH IN SECTION 9. BUYER SPECIFICALLY ACKNOWLEDGES THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, OTHER AGENTS OR BROKERS AS TO ANY MATTER CONCERNING OR RELATED TO THE PROPERTY (EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS EXPRESSLY SET FORTH HEREIN AND THE WARRANTY OF TITLE SET FORTH IN THE DEED), INCLUDING WITHOUT LIMITATION: (1) THE CONDITION OR SAFETY /SASTS.030 Or OF THE PROPERTY OR ANY IMPROVEMENTS THEREON, INCLUDING, BUT NOT LIMITED TO, PLUMBING, SEWER, HEATING AND ELECTRICAL SYSTEMS, ROOFING, AIR CONDITIONING, IF ANY, FOUNDATIONS, SOILS AND GEOLOGY INCLUDING HAZARDOUS SUBSTANCES, LOT SIZE, OR SUITABILITY OF THE PROPERTY OR ITS IMPROVEMENTS FOR A PARTICULAR PURPOSE (ii) WHETHER THE PLUMBING AND UTILITIES ARE IN WORKING ORDER, (iii) THE HABITABILITY OR SUITABILITY FOR OCCUPANCY OF ANY STRUCTURE AND THE QUALITY OF ITS CONSTRUCTION; (iv) WHETHER THE IMPROVEMENTS ARE STRUCTURALLY SOUND, IN GOOD CONDITION, OR IN COMPLIANCE WITH APPLICABLE CITY, COUNTY, STATE OR FEDERAL STATUTES, CODES OR ORDINANCES; OR (v) MATTERS RELATED TO THE LEASES OR THE TENANTS. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT EXCEPT AS SET FORTH HEREIN, IT IS RELYING SOLELY UPON ITS OWN INSPECTION OF THE PROPERTY, REVIEW OF THE LEASES AND INVESTIGATIONS CONCERNING THE TENANTS AND NOT UPON ANY REPRESENTATIONS MADE TO IT BY SELLER, ITS PARTNER, OFFICERS, DIRECTORS, CONTRACTORS, MANAGERS OR EMPLOYEES NOR ANY PERSON WHOMSOEVER. ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE TO BE THE SOLE RESPONSIBILITY OF BUYER AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE PARTY OF SELLER TO MAKE ANY CHANGES, ALTERATIONS, OR REPAIRS TO THE PROPERTY SUBSEQUENT TO CLOSING, EXCEPT TO THE EXTENT THAT SUCH ALTERATIONS OR REPAIRS ARE NECESSITATED BY A BREACH OF ANY OF SELLER'S WARRANTIES SET FORTH IN SECTION 9. Section 16.11 Survival. The provisions of the Agreement and particularly the representations, warranties and indemnities of the parties hereto shall survive the Closing and shall not be deemed merged in any instrument of conveyance. ARTICLE XVII TAX DEFERRED EXCHANGE Section 17.1 Tax Deferred Exchange. At Closing, Seller may elect to structure this transaction and Seller's receipt of the Purchase Price hereunder as part of a 1031 Tax Deferred Exchange. Buyer shall cooperate with Seller in its efforts to effect a Tax Deferred Exchange, provided that Buyer shall incur no liability with respect to such Tax Deferred Exchange, nor shall Buyer hold title to any property other than the Property, nor shall the Closing Date be delayed as a result of such Tax Deferred Exchange. THE CITY OF KENT By: Its yor Date: �r- -13- /sAslPs.o30 A EST: ity A rney i)/ Date: c KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: f'Y• Doug W. Klappenbbf Its G eral Partner ! Date 2-1-f s -14- /sns\Ps.a3o Exhibits Attached Hereto: Exhibit A Leases/Rent Roll Exhibit B Permitted Exceptions Exhibit C Personal Property Exhibit D Property Information Exhibit E Proposed Lease Transactions Exhibit F Legal Description Exhibit G Assignment and Assumption of Leases Exhibit H Assignment of Service Contracts Exhibit I Assignment of Warranties -15- /snsUTs. 0 3o al ) EXHIBIT A LEASES/RENT ROLL G:\S\PS.030 Parking Lease Agreement by and between The Corporation of Catholic Archbishop of Seattle as Tenant, dated January 23, 1990. A-2 G:\STS.030 EXHIBIT B PERMITTED EXCEPTIONS B--1 GASTS.030 c ^ -i O o m c c off) $ m m n Q n< v (o � a-, Y }' Y rn rn rn rn rn rn rn rn rn s rn rn w N WJ v v v V J v v V J J v 0) m a w w a a w w w w w Z., (o 3 to O m (O to W a d a CT a a j CD N O7 V W N N N N N N Vt W tD a N N O O O t0 4D W O) (n cm J J m m W j v N w (D (O N 0) 0) a N a Q) a. W (D W W W W W W W W W W W W O N N N N N N N IJ N N N N co o) m m rn rn rn rn rn rn m rn rn rn W (D a la a a 0 0 0 0 0 0 0 '0 0 0 0 0 o 0 0 0 O O 0 O O o O O O En to a W a a a a a a a a a a N co N N a a a a a a a .P a. N M a a o 0 0 0 0 0 0 0 0 0 0 0 m (r O a a a a a a a a a t A a 0�7 o N N N N N N N N N N N N o a. a a. a a O o /n W O) m O) O Q7 D7 a) V T W W b V) Cl) N 0) 0) W 0) O W 0 0) C) O 0) 0)0 O O O O O o 0 O 0 O O O O O 0 0 0 0 0 0 0 0 0 0 0 C. 0 CD 0 0 0 0 0 0 0 0 0 0 0 0 0 t' c 1 0) 7, Q N � � N W .O 7 7 0 0O O O O o 0 U7 a 2 O O O O O O O O O d Kc Ln W V J J J V V V J V ID �w Cpe .A. O " O o 0 0 0 0 0 0 0 0 0 d (0 N o (D 1D O ID tD to to V O p A a a a A a a a a A A (D (n (D O O O O O O O O O O O O (o 0)0 o O O O O O O O O O O o 2° 401 �, 4 -s o a)a)rnrnrnrnrnrnrnrnD) � a, J O V J J V J J V V V V V (j N O m LA (n U) (I) (n (n N Cn 0) N M W A a Sa a a W W W W W W W to r O o to D) O) N O O CD CD O O O W (�� N N N N N N N N N N N N N f" O> W t0 to tD tD tD V 7-4 V V V V V� C) N N N N N N O Nto m (A W o Ib o 01 O O Q) O O T N ' 0 W W 4-1 (D0) Di a N N N d tU R) J J. -1 0 o O _ _ ID s w OJ N N N (c a` m iA (n to a o N (D a a a a a a a a A A a a O A o (D to to tD (D(O (D to tD fD tD T O O o 0 0 0 0 0 0 0 0 0 0 0 d m o 00000000000001. g a° N y, m j - T 1 J V J V V J V J J V V J �° wJ a N N N N N N N N N N N coy.) w iD O O o 0 0 0 0 0 0 0 0 0 0 Q A O O O O o o 0 o 0 0 o 0 o w O rnaaa� � Aaawwwwt-� wW 00 0 N fD 0 0 0 0o 0 0 0 00 0 0 0 0 0 N '` N O N A 0 (D m M W W C. OD W o W W tD O a N O W N N W O N 0 O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 � W Np a b)r'(78 (D N W W W W W W W W W W W W (D (D 0 (n to (n to (I) to (n N to (n (I) (J) N U) ('L+ to O N N N N W N N (n N N (n to -� ... O 0 0 0 0 0 0 0 0 0 0 0 0 0 v O 0 0 0 0 0 0 0 0 0 0 0 0 0 a^ V (A Z W O V V 0) O 0) 0) W m m m1 R O N i m N N V a) 0) O) w 0) 0) c d .D A A A p N N N N N N N N toCODO O (n O O (n O O O O O O O O O O W O O W 0 0 0 0 0 0 0 0 0 TN m Z --I n m Z m z Z D r m Z m �7 m Z O r r m O (D tD r� A-3 UNRECORDED LEASEHOLDS, IF ANY, RIGHTS OF VENDORS AND SECURITY AGREEMENTS ON PERSONAL PROPERTY -AND RIGHTS OF TENANTS AND SECURED PARTIES TO REMOVE TRADE FIXTURES AT THE EXPIRATION OF THE TERM. EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: ' RECORDED: JANUARY 30, 1980 , RECORDING NO.: 8001300413 IN FAVOR OF: CITY OF RENT, A MUNICIPAL CORPORATION FOR: UTILITIES A RECORD OF SURVEY RECORDED ON FEBRUARY 16, 1989 UNDER RECORDING NO. 8902169001. B-2 0 TERMS, COVENANTS, CONDITIONS AND RESTRICTIONS AS CONTAINED IN LOT LINE ADJUSTMENT: n NO.: LL89-36 RECORDED: JANUARY 24, 1990 RECORDING NO.: 9001240759 AGREEMENT AND THE TERMS AND CONDITIONS THEREOF BETWEEN: CITY OF KENT, A MUNICIPAL CORPORATION AND: KENT CENTENNIAL LIMITED PARTNERSHIP RECORDED: FEBRUARY 9, 1990 RECORDING NO.: 9002090976 PURPOSE: ENVIRONMENTAL MITIGATION EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: MARCH 30, 1990 RECORDING NO.: 9003300960 IN FAVOR OF: WASHINGTON NATURAL GAS COMPANY FOR: GAS PIPELINE OR PIPELINES EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: SEPTEMBER 25, 1990 RECORDING NO.: 900§251075 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: SANITARY SEWER EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: OCTOBER 1, 1990 RECORDING NO.: 9010010461 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: WATERLINE TERMS, COVENANTS, CONDITIONS AND/OR PROVISIONS CONTAINED IN A EMERGENCY ACCESS EASEMENT SERVING SAID PREMISES, AS CONTAINED IN DOCUMENT: RECORDED: NOVEMBER 9, 1990 RECORDING NO. (S): 9011091191 AGREEMENT AND THE TERMS AND CONDITIONS THEREOF BETWEEN: THE CITY OF RENT, A MUNICIPAL CORPORATION AND: RENT CENTENNIAL LIMITED PARTNERSHIP, A WASHINGTON LIMITED PARTNERSHIP DATED: OCTOBER 22, 1990 RECORDED: JANUARY 25, 1991 RECORDING NO.: 9101251105 PURPOSE: EMERGENCY ACCESS EASEMENT EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: JUNE 25, 1991 RECORDING NO.: 9106251686 IN FAVOR OF: PUGET SOUND POWER AND LIGHT COMPANY FOR: AN UNDERGROUND ELECTRIC TRANSMISSION AND/OR DISTRIBUTION SYSTEM am no EXHIBIT C PERSONAL PROPERTY [NONE] C--1 GASTS.030 EXHIBIT D PROPERTY INFORMATION 1. Copies of all Leases and amendments thereto. 2. Copies of all those service contracts, operating agreements, janitorial contracts, and maintenance agreements, including elevator and HVAC maintenance, relating to the operation of the Buildings. 3. All those certain environmental assessments relating to the presence of existence of Hazardous Substances on the Property. 4. Any and all as -built plans, specifications, drawings, surveys architectural drawings and matters of a similar nature relating to the Property. 5. ALTA survey of the Real Property and Improvements. 6. Copies of all soils tests and analysis affecting the Property. 7. Copies of all warranties and guarantees in effect at the Property, if any. 8. Copies of all current contracts, if any, relating to construction and installation of any tenant improvements or items of the Buildings' maintenance. D-1 EXHIBIT E PROPOSED LEASE TRANSACTIONS E-1 GAsTs.o3o EXHIBIT E Proposed Lease Transactions 31-Mar-96 PROPOSED ESTIMATED TENANT AREA RATE T.I. COST NLK Expansion into Delmonte space .930 $19.38 $2,000 Panalpina Expansion into adjacent Vacant Space 504 .$18.00 $12,000 Christian Church Administrative Offices part of suite 204 735 $18.25 $6,000 Society for the Accused (Public Defenders) west end of 3rd floor 10,000 $18.00 $80,000 Tr,rA1 c 12,169 $100,000 E-2 EXHIBIT F LEGAL DESCRIPTION F-1 GASTS.030 q THE LAND REFERRED TO IN THIS COMMITMENT IS SITUATED IN THE STATE OF WASHINGTON, COUNTY OF KING AND IS DESCRIBED AS FOLLOWS: PARCEL A: LOTS 4, 5, 6, 7, 8 AND 9, BLOCK 8 AND THE EAST 20 FEET OF LOTS 4, 5 AND 6, BLOCK 13, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (A PORTION OF PARCEL A IS ALSO KNOWN AS LOT A OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) PARCEL B: LOTS 10, 11 AND 12, BLOCK 8, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (ALSO KNOWN AS LOT B OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) BOTH SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON. F - 2 0 EXHIBIT G ASSIGNMENT AND ASSUMPTION OF LEASES THIS ASSIGNMENT AND ASSUMPTION between KENTOCENTEES is made this _ I�NIAL LIMITED day of 199 , by and bw PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation,( "Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996, (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign and Buyer has agreed to assume all of Seller's right, title and interest in, and Seller's obligations under, all leases affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: AGREEMENTS 1. Seller hereby assigns, transfers and conveys to Buyer all of Seller's right, title and interest in and to, and all of its obligations under, the leases listed on xhibit A attached hereto and incorporated herein by this reference (the "Leases"). 2. Buyer hereby assumes all of Seller's right, title and interest in, and agrees to fully perform all of Seller's obligations under, the Leases from and after the date hereof. 3. Seller agrees to indemnify Buyer against and hold Buyer harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Seller's obligations under eases prior to the date of this hereof, be relieved Assignment Agreement. Seller shall, from and after the date of any liability or obligation under the Leases. 4. Buyer agrees to indemnify Seller against and hold Seller harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Buyer's obligations under the Leases from and after the date of this Assignment Agreement. DATED as of the day and year first above written_ G-1 0 GASTS.030 BUYS: THE CITY OF KENT By: Its Mayor Date: ATTEST: City Attorney Date: ELL R: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: _ Douglas W. Klappenbach Its General Partner Date STATE OF WASHINGTON ) COUNTY OF KING ) On this day personally appeared before me Douglas W. Klappenbach to me known to be the General Partner of Centennial Venture Limited Partnership, General Partner of Kent Centennial Limited Partnership, the partnership that executed the within and foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of said partnership for the uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the partnership. GASTS.030 IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of , 199 NOTARY PUBLIC in and for the State of Washington, residing at My commission expires: STATE OF WASHINGTON ) COUNTY OF KING ) On this day personally appeared before me to me known to be the of THE CITY OF KENT, a Washington municipal corporation„ the corporation that executed the d voluntary a� t and need oregoing ffs d corporation for the and acknowledged the instrument to be the free an uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the corporation. IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of 199 G-3 NOTARY PUBLIC in and for the State of Washington, residing at My commission expires: 1 GASTS.030 EXHIBIT H ASSIGNMENT OF SERVICE CONTRACTS THIS ASSIGNMENT is made this day of , 199 , by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation,(`Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996 (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign and Buyer has agreed to assume all of Seller's right, title and interest in, and Seller's obligations under, all service contracts affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: AGREEMENTS 1. Seller hereby assigns, transfers and conveys to Buyer all of Seller's right, title and interest in and to, and all of its obligations under, the service contracts listed on Exhibit A attached hereto and incorporated herein by this reference (the "Service Contracts"). 2. Buyer hereby assumes all of Seller's right, title and interest in, and agrees to fully perform all of Seller's obligations under, the Service Contracts from and after the date hereof. 3. Seller agrees to indemnify Buyer against and hold Buyer harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Seller's obligations under the Service Contracts prior to the date of this Assignment Agreement. Seller shall, from and after the date hereof, be relieved of any liability or obligation under the Service Contracts. 4. Buyer agrees to indemnify Seller against and hold Seller harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Buyer's obligations under the Service Contracts from and after the date of this Assignment Agreement. DATED as of the day and year first above written. H-1 e GASTS.030 BUYER: THE CITY OF KENT In Its Mayor Date: ATTEST: City Attorney Date: SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner Date By: Douglas W. Klappenbach Its General Partner H-2 GASTS.030 N EXHIBIT A to Exhibit H SERVICE CONTRACTS 3/31 /96 Exterior & Interior Landscape Maintenance Earth Enterprises Janitorial Allied Building Services HVAC Maintenance & Filter Replacement - Water Treatment for Cooling Tower Fire Protection & Sprinklers Fire Alarm Monitoring Elevator Service & Repair Trash Collection H-3 McKinstry Service CHEM-AQUA Fire Systems West ADT Security Systems Sound Elevator Kent Disposal EXHIBIT I ASSIGNMENT OF WARRANTIES THIS ASSIGNMENT is made this day of , 199 , by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporatign, ("Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996 (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign all of Seller's right, title and interest in all warranties affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt of which is hereby acknowledged, Seller hereby assigns, transfers and conveys to Buyer all of Seller's right, title and interest in and to the warranties listed on Exhibit A attached hereto and incorporated herein by this reference DATED as of the day and year first above written. THE CITY OF KENT By: Date: Its Mayor ATTEST: City Attorney Date: I-1 GASTS.030 y SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner Date GASTS.030 By: Douglas W. Klappenbach Its General Partner I-2 IN This Exchange Agreement (this "Agreement") is made and effective as of the 1st day of July, 1996, by and between Kent Centennial Limited Partnership, a Washington limited partnership ("Exchangor") and Exchange Facilitator Corporation, a Washington corporation ("Intermediary"). Exchangor is the fee title owner of that certain real property commonly known as the Centennial Center located at 400 West Gowe Street, Kent, Washington 98032, and the Municipal Court Building located at 302 West Gowe Street, Kent, Washington 98032, legally described in Exhibit "A" (collectively the "Relinquished Property") which Exchangor has held for investment or for productive use in trade or business. Exchangor desires to transfer the Relinquished Property to Intermediary in consideration of and in exchange for the transfer by Intermediary to Exchangor of like kind property or properties to be held by Exchangor for investment or for productive use in trade or business (the "Replacement Property") in accordance with the provisions of Section 1031 of the Internal Revenue Code of 1986, as now or hereafter amended. Intermediary is willing to assist Exchangor in structuring the transfers of the Relinquished Property and the Replacement Property as a tax -deferred exchange for the benefit of Exchangor. Accordingly, in consideration of the mutual conditions, covenants, and agreements set forth herein, Intermediary and Exchangor agree as follows: Section 1. Exchange o� ems. In order to accomplish the intended exchange of properties, Exchangor shall transfer the Relinquished Property to Intermediary. Upon acquiring the Relinquished Property, Intermediary shall simultaneously sell the Relinquished Property to the City of Kent, a Washington municipal corporation ("Buyer"), pursuant to the terms and conditions of the Agreement of Purchase and Sale for the Relinquished Property dated April 8, 1996, a copy of which is attached hereto as Exhibit "B" (the "Sale Agreement"). Prior to the end of the Exchange Period as defined in Subsection 2.2.2, Intermediary shall purchase the Replacement Property and shall transfer the Replacement Property to Exchangor in exchange for the transfer of the Relinquished Property to Intermediary. Each of the above transfers is part of an integrated plan intended to effectuate a deferred exchange by Exchangor of like kind properties pursuant to and in accordance with the provisions of Internal Revenue Code Section 1031, as now or hereafter amended, and the Final Regulations issued thereunder. In order to avoid additional transactional costs such as recording, escrow and title insurance charges, Intermediary shall cause the deed for the Relinquished Property to run directly from Exchangor to Buyer and the deed for the Replacement Property to run from the seller thereof directly to Exchangor. Intermediary, however, shall still enter into the contracts for the sale of the Relinquished Property and the purchase of the Replacement Property and shall acquire the Relinquished Property from Exchangor for transfer to Buyer and acquire the Replacement Property from the seller thereof for transfer to Exchangor. Section 2. Escrows: Exchange Credit: Conditions of Transfer. Exchange Agreement Page 1 2.1.1 Sale of Relinquished Prooerty. Intermediary shall accept an assignment of the contractual obligation to sell the Relinquished Property to Buyer pursuant to the terms and conditions of an Assignment Agreement between Exchangor, Intermediary and Buyer. Intermediary shall acquire the Relinquished Property from Exchangor and shall simultaneously sell the Relinquished Property to Buyer. Intermediary shall not be required to assume any liabilities or obligations under the Sale Agreement which would impose any lasting personal liability upon Intermediary beyond the transfer of the Relinquished Property to Buyer. Exchangor agrees to transfer the Relinquished Property to Intermediary on the same date Intermediary is required to transfer the Relinquished Property to Buyer. 2.1.2 Escrow: Closing. The escrow for closing the transfer of the Relinquished Property shall be handled by Donna Fossen, King County Escrow Manager, First American Title Insurance Company, 2101 Fourth Avenue, Suite 800, Seattle, Washington 98121-2387. Exchangor shall not be a party to the sale escrow between Intermediary and Buyer. All escrow and closing costs will be paid and prorations made pursuant to the terms of the Sale Agreement. 2.1.3 Exchange Credit. The gross exchange value of the Relinquished Property is $11,712,600.00. The "Exchange Credit" shall equal the gross exchange value plus the growth factor set forth in section 4 hereof, minus: (i) all transactional items relating to the disposition of the Relinquished Property which appear under local standards in the typical closing statement as the responsibility of seller, such as commissions, prorated taxes, transfer or recording fees, and title or escrow company fees; (ii) the remaining principal and interest balance of all debts secured by liens against or relating to the Relinquished Property as of the transfer to Intermediary; (iii) $52,000.00 in cash proceeds paid directly to Exchangor by the closing agent of the Relinquished Property; and (iv) Intermediary's fee paid pursuant to Section 5. Intermediary shall deposit the Exchange Credit with First American Title Insurance Company, pursuant to a Qualified Escrow Agreement executed by and among Exchangor, Intermediary, and First American Title Insurance Company. The Exchange Credit shall only be withdrawn by Intermediary to purchase the Replacement Property as provided in Section 2.2, or, if applicable, for delivery to Exchangor according to Section 2.4. In no event shall Exchangor withdraw the Exchange Credit, nor have any right to receive, pledge, borrow, or otherwise obtain the benefits of the Exchange Credit prior to the circumstances specified in Section 2.4. 2.2.1 Identification. Beginning on the date Exchangor transfers the Relinquished Property and ending at midnight on the 45th day thereafter (the "Identification Period"), Exchangor shall identify the Replacement Property in a written notice to Intermediary. Such notice shall be signed by Exchangor and hand delivered, mailed, Exchange Agreement Page 2 telecopied, or otherwise sent to Intermediary prior to the end of the Identification Period. The Replacement Property shall be designated in the notice as Replacement Property and shall contain an unambiguous legal description, street address or distinguishable name. If the Replacement Property is to be improved, Exchangor shall provide as much detail as is practicable regarding the construction of the improvements at the time the identification is made. Exchangor may identify alternative and multiple Replacement Properties; rovided the maximum number of Replacement Properties Exchangor may identify is: (i) three properties without regard to the fair market value of the properties; or (ii) any number of properties as long as their aggregate fair market value as of the end of the Identification Period does not exceed 200% of the aggregate fair market value of all the Relinquished Properties as of the date the Relinquished Properties were transferred by Exchangor to Intermediary. If, at the end of the Identification Period, Exchangor has identified more properties than permitted above, Exchangor is treated as if no Replacement Property had been identified. However, an identification will be considered made with respect to: (1) any Replacement Property received by Exchangor before the end of the Identification Period, and (2) any Replacement Property identified before the end of the Identification Period and received by Exchangor before the end of the Exchange Period, as defined in Subsection 2.2.2, but only if Exchangor receives before the end of the Exchange Period identified Replacement Property the fair market value of which is at least 95% of the aggregate fair market value of all identified Replacement Properties. For this purpose, the fair market value of each identified Replacement Property is determined as of the earlier of the date the property is received by Exchangor or the last day of the Exchange Period. Exchangor acknowledges that it is Exchangor's sole responsibility and obligation to identify Replacement Property at set forth above. 2.2.2 Acquisition. Intermediary shall accept an assignment of the contractual obligation to purchase the Replacement Property pursuant to the terms and conditions of an Assignment Agreement between Exchangor, Intermediary and the seller thereof. On or before the earlier of: (i) the day that is 180 days after the date on which Exchangor transferred the Relinquished Property, or (ii) the due date (including extensions) of Exchangor's tax return for the taxable year in which the transfer of the Relinquished Property occurred (the "Exchange Period"), Intermediary shall acquire the Replacement Property and shall cause the transfer of title thereof to Exchangor. In no event shall Intermediary be required to make a cash payment for the Replacement Property, including all costs and expenses of such acquisition, in excess of the Exchange Credit, as defined in Subsection 2.1.3. Additionally, Intermediary shall not be required to assume any obligations under the contract for the acquisition of the Replacement Property or under a loan secured by the Replacement Property to be so acquired by Intermediary, or to execute any promissory note or other evidence of indebtedness in connection with such acquisition, which would impose any lasting personal liability upon Intermediary beyond the transfer of the Replacement Property to Exchangor. 2.2.3 Escrow: Closing. The escrow for closing the transfer of the Replacement Property from the seller thereof to Intermediary and all payments of escrow and closing costs and prorations shall be determined pursuant to the terms of the contract for the acquisition of the Replacement Property. Exchangor shall not be a party to the purchase escrow between Intermediary and the seller of the Replacement Property. Exchange Agreement Page 3 2.3 Credit to Intermediary. To the extent Intermediary expends the Exchange Credit in acquiring Replacement Property pursuant to this Agreement, Intermediary shall receive a credit against the Exchange Credit. n / jai -r r-� men a' rr - -s r i it r r eA r 1 r tt i business day after the earliest of the following to occur: (i) the end of the Identification Period if Exchangor has not identified Replacement Property; (ii) if Exchangor has identified RPnlnrPmant Prnnarty tha raraint by Fxrhnnnnr of all tha Ranlaramant Prnnarty to whirrh 7.1 Time. Time is of the essence in this Agreement and in each covenant and condition to be performed hereunder. 7.2 Execution of Additional Documents. The parties hereto agree to execute any and all additional documents and/or instruments necessary to carry out the terms of this Agreement. 7.3 Arbitration. In the event of any dispute between any of the parties to this Exchange Agreement in interpreting or enforcing this Exchange Agreement, or in seeking damages for any alleged breach hereof, such dispute shall, in the first instance, be negotiated among the disputing parties in good faith. If not so resolved, the dispute shall be submitted to binding arbitration to be conducted as quickly as possible and in conformance with the rules and procedures of the American Arbitration Association, Seattle, Washington Chapter. The prevailing party shall be entitled to all costs incurred in the arbitration, including actual reasonable attorneys fees and experts fees, as well as all other recoverable costs, damages and awards. 7.4 Counterparts. This Agreement may be executed in counterparts and shall be binding on all the parties hereto as if one Agreement had been signed. 7.5 Binding. This Agreement shall inure to and be binding on both parties, their estates, heirs, personal representatives, successors in interest and assigns. 7.6 Survival. The terms of this Agreement shall survive the close of escrow and the delivery of the deeds and other considerations described herein. 7.7 Construction. This Agreement is intended to comply with the requirements of Internal Revenue Code Section 1031, as amended, and the Regulations promulgated thereunder, and any ambiguity or inconsistency shall be interpreted in a manner so as to permit the transfers of the Relinquished Property and the Replacement Property to qualify for nonrecognition of gain or loss. 7.8 Notices. All notices or other communications made pursuant to this Agreement shall be in writing, signed by the party giving the notice and given to the other party at the following address: If to Exchangor: Kent Centennial Limited Partnership c/o Douglas W. Klappenbach 11245 Northeast 37th Place Bellevue, Washington 98004 Phone: 206-223-9500 (Work) With a copy to: Barbara A. Wilson, Esq. Phillips, McCullough, Wilson, Hill & Fikso, Attorneys 2025 First Avenue, Suite 1130 Seattle, Washington 98121 Phone: 206-448-1818 Fax: 206-448-3444 Exchange Agreement Page 5 If to Intermediary: Exchange Facilitator Corporation 2624 Eastlake Avenue East Seattle, Washington 98102 Phone: 206-324-1350 Fax: 206-329-6801 7.9 Disclosure of Status of Attorneys. Exchangor acknowledges having been informed that although Kelly M. Yates and Dennis P. Helmick are attorneys licensed to practice law, they are acting as attorneys for Intermediary, not Exchangor, in this exchange transaction. Exchangor further acknowledges having been informed that Exchangor has the right, and is urged, to seek independent legal and/or tax counsel regarding the legal and tax consequences of this exchange transaction, including all related documents and agreements produced by Intermediary. 7.10 ARRlicable Law. This Agreement shall be construed and interpreted under, and governed and enforced according to, the laws of the State of Washington. IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first set forth above. Intermediary: Exchange Facilitator Corporation, a Washington corporation — 4��U Kelly . Y s, H use Counsel and Authorized ignatory Exchange Agreement Page 6 Exchangor: Kent Centennial Limited Partnership, a Washington limited partnership By: Centennial Venture Limited Partnership, a Washington limited partnerAip, its General Partner =�M Pa Tax Identification Number: cI-(q--�-1((,)� , General SCHEDULE C EXHIBIT A ORDER NO. 318287-5 THE LAND REFERRED TO IN THIS COMMITMENT IS SITUATED IN THE STATE OF WASHINGTON, COUNTY OF KING AND IS DESCRIBED AS FOLLOWS: PARCEL A: LOTS 4, 5, 6, 7, 8 AND 9, BLOCK 8 AND THE EAST 20 FEET OF LOTS.4, 5 AND 6, BLOCK 13, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (A PORTION OF PARCEL A IS ALSO KNOWN AS LOT A OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) PARCEL B: LOTS 10, 11 AND 12, BLOCK 8, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (ALSO KNOWN AS LOT B OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) BOTH SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON. AGREEMENT OF PURCI4ASE AND SALE between KENT CENTENNIAL LIMITED PARTNERSHIP SELLER on THE CITY OF KENT BUYER April 0 , 1996 CENTENNIAL CENTER KENT, WASHINGTON EXHIBIT B 1S\PS.030 THIS AGREEMENT entered into this t� day of April, 1996, by KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation, ("Buyer"), hereby agree as follows: ARTICLE I TERMS AND DEFINITIONS In addition to the other terms herein defined, the following terms shall have the meanings set forth in this Article I, unless the context otherwise requires: Section 1.1 Buildin Z. The buildings commonly known as: (a) Centennial Center, located generally at 400 West Gowe Street, Kent, WA, 98032, containing approximately 75,000 square feet of office building and a 361 stall parking garage ("Centennial Center"); and (b) Municipal Court Building located at 302 West Gowe Street, Kent, WA, 98032, containing approximately 4,100 gross square feet of rentable office space. Section 1.2 QLin . The consummation of the sale and purchase of the Property pursuant to this Agreement. Section 1.3 Eamest Money. The amount of Two Hundred Fifty Thousand Dollars ($250,000) in accordance with the provisions of Section 4 herein. Section 1.4 Affective Date. The date of execution of this Agreement by both Buyer and Seller. Section 1.5 Hazardous Substances. Any substance, chemical, waste or material that is or becomes regulated by any federal, state or local governmental authority because of its toxicity, infectiousness, radioactivity, explosiveness, ignitabiltiy, corrosiveness or reactivity, including, without limitation, asbestos, petroleum derivatives, polychlorinated biphenyls, flammable explosives and those substances regulated by the Hazardous Substances Laws, in quantities which exceed levels allowed under Hazardous Substances Laws. Hazardous Substances Laws shall mean any currently effective federal, State of Washington, or other applicable law, rule, regulation, permit, agreement, order or other binding determination of any governmental authority having jurisdiction over and affecting all or any part of the Real Property or Improvements relating to Hazardous Substances. Section 1.6 Imp_rovements. All improvements located on the Real Property, including the Buildings, Parking and all amenities and appurtenances thereto. Section 1.7 Intansible Personal Property. All of Seller's right, title and interest in any intangible property now or hereafter owned by Seller and used in connection with the Real Property, Improvements and Personal Property, including without limitation all of Seller's rights under all governmental approvals, and applications therefore, claims, contracts, licenses, permits, plans, studies, warranties, utility arrangements and other agreements relating to the ownership, operation or occupancy of the Property and the name "Centennial Center" or other trade name associated with the Improvements. Section 1.8 Leases. All of Seller's right, title and interest in all leases and occupancy agreements covering space in the Improvements, including without limitation, those certain Leases identified on the Rent Roll dated as of March 1, 1996, attached hereto as i t -2- /sAS%Ps.030 Parking. All of the Section 1.9 thin the Centennial Center Build Building surface parking stalls located on stall parking garage wto the Buildings, including a 361 the Real Property. Section 1.10 Permitted Exceptions. Those exceptions to title to the Property attached hereto as Exhibit B and any others determined to be acceptable to Buyer in accordance with the provisions of Section 6.2. Section 1.11 Per onal PrODertY. The personal property owned by Seller located on the Real Property and used in connection with the ownership, operation or occupancy of the Real Property or the Improvements identified on ENWbit C attached hereto. Section 1.12 Proms• The Real Property, Improvements, Personal Property, and Intangible Personal Property. Section 1.13 Property Information. All information in Seller's possession, or which Seller has access to or caused to be prepared relating to the Property as more particularly described in E 'hi it D. Section 1.14 Proposed Lease Transactions. Those proposed transactions for leases of vacant space within the Buildings, or extensions of expansions of existing Leases within the Buildings, all as more particularly shown on Exhibit E attached hereto. Section 1.15 Purchase Price. The Purchase Price shall be specified in Section 3. Section 1.16 deal PrQp j1y• The real property located in the City of Kent, State of . Washington, at 400 West Gowe Street efeCe icularly described nmade a part hereof, togeth2 West Gowe Street, more er with all rights and in Exhibit F attached hereto and by this privileges, easements and appurtenances thereto. Section 1.17 Service Contracts. All those service contracts, operating agreements, janitorial contracts, and maintenance agreements, including elevator and HVAC maintenance, relating to the operation of the Buildings. Section 1.18 Title Commitment. The commitment for issuance of an Owner's Policy of Title Insurance (extended coverage) issued by Title Company, Order No. 318287-5, and delivered to Buyer within five (5) days of the Effective Date, with coverage in the full amount of the Purchase Price together with legible copies of all exceptions shown therein. Section 1.19 Title Cpmpany. First American Title Insurance Company, 2101 Fourth Avenue, Suite 800, Seattle, Washington, 98121. Section 1.20 Title Policy. The Owner's Policy of Title Insurance (extended coverage) issued by Title Company with coverage in the full amount of the Purchase Price, subject to the Permitted Exceptions. Section 1.21 Warranties. f those Buyer asapart of thein 1es and Property Information. ees in ARTICLE isns\Ps.030 ARTICLE III PURCHASE PRICE Section 3.1 Purchase Price. The Purchase Price for the Property shall be ELEVEN MILLION SEVEN HUNDRED TWELVE THOUSAND SIX HUNDRED AND NOI100 DOLLARS ($11,712,600.00). The Purchase Price shall be paid in all cash, at Closing, via wire transfer or other immediately available funds. ARTICLE IV EARNEST MONEY Section 4.1 Earnest Money. Not later than two (2) business days after the Effective Date, Buyer shall deposit the Earnest Money with Title Company.. In the event of Closing, Buyer shall receive a credit against the Purchase Price for the amount of the Earnest Money and interest accrued thereon. The Earnest Money shall be held by Title Company in an interest bearing account, with interest accruing for the benefit of the party entitled to receive the Earnest Money hereunder. The Earnest Money shall be non-refundable to Buyer, except in the event of the following circumstances: 4.1.1 Termination of this Agreement in accordance with the provisions of Section 5.1; or 4.1.2 Seller's failure, without legal excuse, to close the transaction contemplated by this Agreement, including without limitation, conveyance of title to the Property to Buyer. ARTICLE V INSPECTION PERIOD* INSPECTIONS Section 5.1 Inspection Period. Buyer shall have until expiration of forty five (45) days after the Effective Date (the "Inspection Period") within which to complete those studies, examinations and inspections desired by Buyer in order to determine whether there exists Hazardous Substances in, under or on the Property, and whether the structure and plumbing, electrical and other systems of Centennial Center are sound ("Inspections"). If the Inspections disclose the presence of Hazardous Substances under, in or on the Property, or a structural or systems deficiency in Centennial Center including its 361 stall parking garage, Buyer shall so notify Seller, in detail, including providing Seller with a copy of any written report or investigation, on or before the expiration of the Inspection Period ("Inspections Notice"). Buyer's failure to issue the Inspections Notice shall be deemed to mean that all matters related to the Inspections are satisfactory to Buyer. If Buyer issues the Inspections Notice, Seller shall respond to Buyer within fifteen (15) days of receipt of the Inspections Notice as to whether Seller shall effect a remediation or correction of any matter disclosed in the Inspections Notice ("Response Notice"). If Seller elects to remediate or correct any matter contained in the Inspections Notice, Seller shall proceed to do so, at Seller's expense and in the manner recommended by Seller's consultants, on or before the Closing Date, and the parties shall proceed to Closing as provided in this Agreement. If Seller elects not to remediate or correction any matter disclosed in the Inspections Notice, this Agreement may, at Buyer's election not later than five (5) business days after Buyer's receipt of the Response Notice, be terminated by written -4- /SAS\PS.030 notice to Seller, and the parties shall have no further obligations hereunder, the Earnest Money and all interest then accrued thereon shall be refunded by Title Company to Buyer; or, Buyer may accept such condition of the Property and elect to proceed to Closing in accordance with the terms of this Agreement. If, after the Response Notice, Buyer fails to terminate the Agreement in accordance with this Section, Buyer shall be deemed to have elected to proceed to Closing. Section 5.2 Property Information. Seller shall provide to Buyer the Property Information on or before that date which is ten (10) days after the Effective Date. Section 5.3 Access. Seller shall cause access and entry on the Property to be afforded to Buyer, its agents, consultants, representatives and employees, for inspection and investigation during the Inspection Period, provided that such investigation and inspection shall occur at Buyer's sole cost and expense. Buyer shall be responsible for all costs and expenses arising out of the Inspections and Buyer's entry on the Property. ARTICLE VI TITLE REVIEW AND TITLE POLICV Section 6.1 Title Policy. At the time of Closing, Seller shall cause the Title Company to issue the Title Policy to Buyer in the amount of the Purchase Price against any loss or damage by reason of defect in Seller's title to the Property, other than the Permitted Exceptions as determined hereunder. Seller shall deliver to Title Company such instruments, documents, payments, indemnities, releases and agreements (including an owner's affidavit and the like) and shall perform such other acts as Title Company shall reasonably require in order to issue the Title Policy. Section 6.2 Title Review. Within five (5) days following the Effective Date, Buyer shall be furnished with the Title Commitment. Within fifteen (15) days of Buyer's receipt of the Commitment, Buyer shall notify Seller in writing ("Buyer's Notice") of Buyer's approval of such exceptions or defects shown in the Commitment; provided, however, that Buyer agrees that the Permitted Exceptions shown on xhi it , shall have been approved by Buyer on the Effective Date. Within ten (10) days of receipt of Buyer's Notice, Seller shall notify Buyer which exceptions to the title Seller shall agree to have eliminated or cured on or before the Closing Date ("Seller's Notice"). If, however, Seller shall not have agreed to eliminate or cure each of the exceptions not listed as Permitted Exceptions in Buyer's Notice, Buyer may elect to terminate this Agreement by sending Seller written notice of such termination within five (5) days of receipt of Seller's Notice; in which event, the Earnest Money together with accrued interest, shall be returned and paid to Buyer and neither party shall have any right or remedy against the other. Alternatively, Buyer may, at its sole option, accept any exceptions that Seller did not agree to eliminate, as a Permitted Exception; in which event, the Agreement shall remain in full force and effect. If, after a determination of the Permitted Exceptions in accordance with the foregoing, title is not insurable subject only to the Permitted Exceptions and cannot be made so insurable by the Closing Date, Buyer may, as its sole remedy, terminate this Agreement, whereupon the Earnest Money, together with interest accrued thereon, if any, shall be returned to Buyer or Buyer may waive its prior disapproval and elect to approve such exceptions as a Permitted are ISASTs.030 Exception, whereupon the Agreement shall remain in full force and effect. If Buyer elects to terminate this Agreement in accordance with the foregoing, Seller shall pay any cancellation fee charged by the Title Company for the Commitment. ARTICLE VII I O IN Section 7.1 C1 sin . Closing shall be held at the offices of the Title Company on or before 5:00 p.m. Seattle Time, on July 1, 1996 (the "Original Closing Date"). Buyer shall be entitled to extend the Original Closing Date to August 1, 1996 (the "Extended Closing Date"),by providing written notice to Seller of such extension, together with payment to Seller in the amount of One Hundred Ten Thousand Five Hundred Dollars ($110,500) (the "Closing Extension Fee"any dwhich shall not apply tosing ension Fee Buyer's paymll be ent of the Purchase Price. dable toBuyer under any circumstances ARTICLE VIII ESCROW CLOSING MATTERS Section 8.1 EjcrQw, At Closing, each of the parties shall take such actions and execute and deliver to the other and to escrow such documents, instruments, opinions and agreements as may be required pursuant to the terms hereof, including, but not limited to, the following: 8.1.1 Title to the Property shall be conveyed to Buyer in fee simple by Statutory Warranty Deed, subject only to Permitted Exceptions. 8.1.2 Upon Closing, effective as of the Closing Date, Seller shall assign and Buyer shall assume Seller's rights, interest and obligations as lessor under the Leases, pursuant to execution of the Assignment and Assumption of Leases, attached hereto as Exhibit and Seller shall deliver to Buyer a Rent Roll effective not more than five (5) business days prior to the Closing Date. 8.1.3 Upon Closing, effective as of the Closing Date, Seller shall assign and Buyer shall assume Seller's rights, interest and obligations under those certain Service Contracts, pursuant to execution of the Assignment of Service Contracts, attached hereto as Exhibit H. 8.1.4 Upon Closing, effective as of the Closing, Seller shall assign to Buyer all Seller's right, title and interest in any Warranties in effect for the Property pursuant to execution of the Assigmnent of Warranties, attached hereto as i it I. 8.1.5 Upon Closing, effective as of the Closing, Seller shall assign and Buyer shall assume Seller's rights, interest and obligations under all Intangible Personal Property. 8.1.6 Seller shall execute and deliver a warranty Bill of Sale conveying to Buyer that portion of the Property which is Personal Property. 8.1.7 Upon Closing, Seller shall execute and deliver to Buyer a non -foreign affidavit as required by the Foreign Investment and Real Property Tax Act, IRS Section 1445 (b) (2), as amended. M M.Nw, /sns\Ps.030 8.1.8 Upon Closing, Seller shall deliver to Buyer originals (or, to the extent originals are not available, certified copies) of the Leases, Service Contracts, subcontractor and supplier lists, operations and maintenance manuals, heating and air conditioning (HVAC) software, and such other information and materials as may be reasonably be requested by Buyer affecting the Property not theretofore delivered by Seller. 8.1.9 Upon mutual execution of this Agreement, Buyer shall deliver to Seller the opinion of Buyer's counsel stating that Buyer's entry into this Agreement and the performance of Buyer's obligations hereunder have been fully authorized by Buyer pursuant to all appropriate governmental actions. Section 8.2 rlosin 7 Costs. Seller shall be responsible for the title premium and sales tax thereon for the portion of the Policy relating to standard owner's coverage and sales tax thereon; real estate excise taxes; and one-half the Title Company's escrow fee and sales tax thereon. Buyer shall be responsible for the portion of the Policy relating to the difference between standard and extended owner's coverage and sales tax thereon any retail sales, transfer or use tax applicable to the conveyance of Personal Property; recording fees; and one-half (1/2) the Title Company's escrow fee and sales tax thereon. Section 8.3 Prorations and Adjustments. The following proration shall be made between Seller and Buyer on the Closing Date, computed as of the Closing Date, with income and expenses for the Closing Date itself being allocated to Buyer: 8.3.1 Actually received rental and parking income, common area/operating expense reimbursement and other payments payable by tenants and other persons occupying or using the Property or any part thereof, for or in connection with such use or occupancy. However, Seller shall not be obligated to make any payment or give any credit to Buyer on account of or by reason of any rental or other payments which are unpaid as of the Closing Date. All payments received by Buyer from a tenant or such other person shall be applied against the most delinquent obligation or obligations of the payor, and any rental or other income accrued prior to the Closing Date shall be paid by Buyer to Seller, when received. Any checks received by Seller with respect to the Property shall be endorsed by Seller without recourse and promptly forwarded to Buyer, who shall apply the proceeds thereof in accordance with the foregoing. 8.3.2 Real property taxes and assessments, personal property taxes. 8.3.3 The amount of the security deposits and prepaid rents, if any, shall be credited against the Purchase Price. 8.3.4 Seller shall pay all gas, water, electricity, heat, fuel, sewer and other utilities relating to the Property up to the Closing Date (excluding those that are separately contracted for by, billed directly to and paid directly by tenants under the Leases or those which constitute any part of the Operating Expenses for the Property). If meters are not read on the Closing Date, the bills for such utilities will be prorated. It shall be assumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. 8.3.5 Payments under Service Contracts (excluding those that are separately contracted for by, billed directly to, and paid directly by, the tenants under the Leases). Section 8.4 Proposed Lease Transactions. Upon Closing, Seller shall be reimbursed for the cost of any and all tenant improvements and leasing commissions paid by Seller with -7- /SAS\PS.030 {`1 respect to any Proposed Lease Transactions which are entered into by Seller as "landlord" and "tenant", prior to the Closing Date, provided, however, such amount shall not exceed One Hundred Thousand Dollars ($100,000), in the aggregate, unless the Proposed Lease Transactions causing such tenant improvements and leasing commissions to exceed $100,000, in the aggregate, have been approved by Buyer. Buyer shall be solely responsible for any and all tenant improvements and leasing commissions arising out of any Proposed Lease Transactions which are entered into after the Closing Date. Section 8.5 Procedures for Proration. The prorations and payments to be made at Closing under the foregoing Sections 8.3 and 8.4 shall be made on the basis of a written statement or statements to Buyer from Seller, based upon actual amounts when known, and when not known, based upon Seller's estimates and the operating history of the Property. To the extent that not all information is complete on the Closing Date, Buyer and Seller shall adjust the prorations set forth in this Section based upon actual amounts as soon as the same are known, and no later than thirty (30) days after the Closing Date. Section 8.6 Post -Closing PUment for Supplies. Within thirty (30) days after Closing, Buyer and Seller shall inventory the janitorial and similar supplies of the Buildings, such as light bulbs, cleaning equipment, bathroom supplies, etc., the value of which shall be the actual cost paid by Seller for such items; whereupon Buyer shall pay to Seller for said items within five (5) business days of determination of value. A. • • Section 9.1 Due Authorization. Seller has legal power, right and authority to enter in to this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby, and this Agreement constitutes the legal, valid and binding agreement and obligations of Seller enforceable against Seller in accordance with its terms. Section 9.2 Bankruptcy. Seller is not the subject of any bankruptcy proceedings, insolvency or other similar insolvency proceedings. Section 9.3 Default. Seller has received no notice of any alleged default in respect of any of its obligations or liabilities pertaining to the Property. Section 9.4 Litigation: Condemnation. There are no actions, suits or proceedings pending or, to the best knowledge of Seller, threatened, before or by any judicial, administrative or union body, any arbiter or any governmental authority, agairist or affecting Seller of the Property (or any portion thereof). To the best knowledge of Seller, there is no existing, proposed or contemplated eminent domain or similar proceeding which would affect the Real Property or Improvements in anyway whatsoever. Section 9.5 Leases. Exhibit A is a full, true and correct lease summary for the Buildings as of the date hereof which sets forth all leases, agreements, or understandings (whether written or oral) with any and all tenants, concessionaires or licensees of the Buildings. Seller has not received a written default notice from any tenant under a current Lease which default remains uncured, and except as set forth on the Rent Roll, there are no tenants in default of their rent payments under the Leases. Section 9.6 Operation and Compliance. To the actual knowledge of Seller, the Property and the operation thereof are in compliance in all material respects with applicable federal, state and local laws, ordinances, rules, regulations and order of any governmental entity having jurisdiction over the Property. -8- isnsTs.o3o Section 9.7 Hazardous Substances. Except as otherwise disclosed to Buyer in writing or as Buyer may become aware through Buyer's investigation of the Property, there is not present upon and Seller has not participated in or approved any production, installation, disposal or storage on the Property of any Hazardous Substances, and no such Hazardous Substances in excess of legally permitted levels exist within or on the Property (above or beneath the surface), nor is there currently any proceeding or inquiry by any governmental authority with respect to the presence of such Hazardous Substances in excess of legally permitted levels on the Property or the migration thereof from or to an adjoining property. Section 9.8 52mdval. The representations and warranties made by Seller in this Agreement shall survive the Closing and shall not be merged in any deed of conveyance or other instrument. Section 10.1 Due Authorization. Buyer has legal power, right and authority to enter in to this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby, and this Agreement constitutes the legal, valid and binding agreement and obligations of Buyer enforceable against Buyer in accordance with its terms. Section 10.2 Survival. The representations and warranties made by Buyer in this Agreement shall survive the Closing and shall not be merged in any deed of conveyance or other instrument. ARTICLE XI DAMAGE DESTRUCTION OR CONDEMNATION Section 11.1 Fire or Casualty. Risk of loss to the Property from fire or other casualty shall be borne by Seller until Closing. If the Property in its entirety or such portion thereof which exceeds $500,000 in cost to repair, is damaged or destroyed by fire or other casualty prior to the Closing, Buyer may (a) elect to proceed with the transaction contemplated herein, in which event Buyer shall be entitled to such insurance as is paid on the claim of loss; or (b) elect to terminate this Agreement, in which event this Agreement shall be so terminated and the Earnest Money together with interest accrued thereon, shall be returned to Buyer, and, neither party shall have any further obligations or liabilities under this Agreement. If Buyer elects to terminate this Agreement, it shall notify Seller in writing within five (5) business days after Buyer has received written notice of such damage or destruction from Seller. If Buyer does not elect to terminate this Agreement, or if such damage does not exceed $500,000 in cost to repair, Seller shall proceed to restore the Property as nearly as possible to that condition existing prior to such damage or destruction, whereupon the date for Closing as described in Article VII herein shall be extended for such time as is adequate for such repair to be completed. Section 11.2 Condemnation. In the event that all or any portion of the Property becomes the subject of a condemnation proceeding or threat thereof by a public or quasi -public authority having the power of eminent domain prior to the Closing, Seller shall immediately notify Buyer thereof in writing and Buyer may (a) elect to proceed with the transaction contemplated herein, in which event Buyer shall be entitled to receive all proceeds of any award or payment in lieu thereof resulting from such proceeding or threat thereof, or, (b) elect to terminate this Agreement, in which event this Agreement shall be so terminated and the Earnest Money together with interest accrued thereon, shall be returned to Buyer, and above, neither party shall have any further obligations or liabilities under this Agreement. If Buyer elects to terminate this Agreement, it shall so notify Seller within five (5) business days after Buyer has received written notice of such proceedings from Seller. -9- /snsTs.o3o 3 ARTICLE XII SELLER'S COVENANTS Section 12.1 Seller's Obligation. From the Effective Date until Closing, Seller covenants as follows: 12.1.1 Seller shall exert its reasonable best efforts to operate and manage the Property in a normal, business manner in accordance with the Property's current operation by Seller, including, without limitation, leasing of vacant space and extensions of existing leases in the Buildings at lease rates in excess of $17.00 per square foot of rentable space per year; 12.1.2 Buyer shall be entitled to review and comment upon Proposed Lease Transactions during the term of this Agreement, and Seller shall provide Buyer with a copy of the terms applicable to the Proposed Lease Transactions and any revisions thereto. All Proposed Lease Transactions shall be documented on Seller's standard form Lease Agreement, modified to meet the requirements of the applicable Proposed Lease Transaction. ARTICLE XIII BROKERS Section 13.1 Commission. Buyer and Seller each acknowledge and agree that there is no brokerage commission payable under this transaction. Buyer and Seller hereby indemnify each other against and agree to defend and hold each other harmless from any and all claims for any other real estate commission or similar fees arising out of or in any way connected with any claimed agency relationship with the indemnitor. ARTICLE XIV TI Section 14.1 Notices. All notices consents, approvals and other communications provided for herein or given in connection herewith shall be validly given, made, delivered or served if in writing and delivered personally or sent by registered, certified mail, or receipted overnight service, postage prepaid, or by facsimile to: BUYER AT: The City of Kent 220 4th Avenue South Kent, WA 98032 Attn: J. Brent. McFall Roger Lubovich Fax: (206) 813-2067 SELLER AT: Kent Centennial Limited Partnership 200 - 112th Avenue NE, Suite 205 Bellevue, WA 98004 Attn: Douglas W. Klappenbach Fax: (206) 453-1712 or to such other addresses as either party hereto may from time to time designate in writing and deliver in a like manner. -10- /SAS\PS.030 Notices, consents, approvals and communications given by mail shall be deemed delivered upon the earlier of receipt or seventy-two (72) hours after deposit in the United States mail in the manner provided above. Notices, consents, approvals and communications given by facsimile shall be deemed delivered upon the receipt by sender of a confirmed received statement as printed by the sender's facsimile machine. Originals of the facsimile transmittals shall, on the same day as the facsimile transmittal was sent, be mailed or personally delivered to the recipient of the facsimile transmittal. ARTICLE XV REMEDIES Section 15.1 Default. In the event of breach of this Agreement by Buyer of its obligations hereunder, Seller shall be entitled to elect either to: (a) terminate this Agreement and receive the Earnest Money as liquidated damages, together with the interest thereon, and retain the Closing Extension Fee, the receipt of the Earnest Money and Closing Extension Fee being Seller's sole and exclusive remedy and waiver of any other remedies which it may have at law or in equity, and as its sole and exclusive remedy against Buyer, or (b) pursue all remedies available to it at law and in equity as may be afforded by the laws of the State of Washington including, without limitation, specific enforcement of this Agreement. In the event of breach of this Agreement by Seller, Buyer shall have available to it such remedies at law or in equity as may be afforded to it by the laws of the State of Washington, including, without limitation, specific performance of the provisions hereof. Section 15.2 Attorneys' Fees. The prevailing party in an action or proceeding brought under this Agreement shall be entitled to recover from the nonprevailing party all of its reasonable attorney's fees and costs, including but not limited to expert witness fees. This entitlement survives the entry of judgment and encompasses all appeal and judgment enforcement activity. Section 15.3 Waiver. No delay in exercising any right or remedy shall constitute a waiver thereof, and no waiver by Seller or Buyer of the breach of any covenant of this Agreement shall be construed as a waiver of any preceding or succeeding breach of the same or any other covenant or condition of this Agreement. ARTICLE XVI GENERAL Section 16.1 Time. Time is of the essence in the performance of the respective obligations of the parties contained in this Agreement. Section 16.2 Successors and Assigns. Except as herein otherwise provided, this Agreement and all of the terms and provisions hereof shall insure to the benefit of and be binding upon the heirs, executors, personal representatives, successors and assigns of the parties hereto. Section 16.3 Entire Agreement. This Agreement, together with the Exhibits hereto, represents the entire agreement between the parties covering everything agreed upon or understood in this transaction. There are no oral promises, conditions, representations, understandings, interpretations or terms of any kind as conditions or inducements to the execution hereof or in effect between the parties, except as may otherwise be provided herein. No change or addition is to be made to this Agreement except by a written agreement executed by the parties. -11- isns\rs.030 I Section 16.4 .iurisdiction. This Agreement and the rights of the parties hereto shall be governed and construed in accordance with the laws of the State of Washington. Venue shall be in King County Superior Court. Section 16.5 Hea ' The descriptive headings of the Articles of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 16.6 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 16.7 Construction. The parties acknowledged that each party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or Exhibits hereto. Section 16.8 Possession. Full possession of the Property shall be delivered to Buyer by Seller at Closing, subject to the tenants in occupancy and the terms of the Leases thereunder and subject to the Permitted Exceptions. Section 16.9 Mutual Indemnification. Seller hereby indemnifies and agrees to hold Buyer harmless (including reasonable attorneys' fees) from claims of third parties arising from or related to the negligent acts or omissions or willful misconduct of Seller, its agents, contractors or employees arising from or related to the Property prior to the Closing Date. Buyer hereby indemnifies and agrees to hold Seller harmless (including reasonable attorneys' fees) from claims of third parties arising from or related to the negligent acts or omissions or willful misconduct of Buyer, its agents, contractors or employees arising from or related to the Property on and after the Closing Date Section 16.10 Buyer's Acknowledgment. Buyer acknowledges for Buyer and Buyer's successors and assigns (a) that Buyer is being afforded a reasonable opportunity to inspect and investigate the Property, all improvements thereon and all aspects relating thereto, either independently or through agents and experts of Buyer's choosing, and (b) that Buyer is acquiring the Property based solely upon Buyer's own investigation and inspection thereof, and (c) the provisions of this Section 16.10 shall survive Closing and not be merged therein. EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 9, SELLER AND BUYER AGREE THAT THE PROPERTY SHALL BE SOLD AND THAT BUYER SHALL ACCEPT POSSESSION OF THE PROPERTY ON THE CLOSING DATE "AS IS, WHERE IS, WITH ALL FAULTS", WITH NO RIGHT OF SETOFF OR REDUCTION IN THE PURCHASE PRICE, AND THAT EXCEPT AS EXPLICITLY SET FORTH IN THIS AGREEMENT, SUCH SALE SHALL BE WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTY OF INCOME, POTENTIAL, OPERATING EXPENSES, USES, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE (BUT SPECIFICALLY EXCLUDING THE WARRANTY OF TITLE GIVEN IN THE DEED AND OTHER CONVEYANCE DOCUMENTS), AND SELLER DOES HEREBY DISCLAIMS AND RENOUNCE ANY SUCH REPRESENTATION OR WARRANTY EXCEPT AS SET FORTH IN SECTION 9. BUYER SPECIFICALLY ACKNOWLEDGES THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, OTHER AGENTS OR BROKERS AS TO ANY MATTER CONCERNING OR RELATED TO THE PROPERTY (EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS EXPRESSLY SET FORTH HEREIN AND THE WARRANTY OF TITLE SET FORTH IN THE DEED), INCLUDING WITHOUT LIMITATION: (1) THE CONDITION OR SAFETY -12- /SASTS.030 01 OF THE PROPERTY OR ANY IMPROVEMENTS THEREON, INCLUDING, BUT NOT LIMITED TO, PLUMBING, SEWER, HEATING AND ELECTRICAL SYSTEMS, ROOFING, AIR CONDITIONING, IF ANY, FOUNDATIONS, SOILS AND GEOLOGY INCLUDING HAZARDOUS SUBSTANCES, LOT SIZE, OR SUITABILITY OF THE PROPERTY OR ITS IMPROVEMENTS FOR A PARTICULAR PURPOSE (ii) WHETHER THE PLUMBING AND UTILITIES ARE IN WORKING ORDER, (iii) THE HABITABILITY OR SUITABILITY FOR OCCUPANCY OF ANY STRUCTURE AND THE QUALITY OF ITS CONSTRUCTION; (iv) WHETHER THE IMPROVEMENTS ARE STRUCTURALLY SOUND, IN GOOD CONDITION, OR IN COMPLIANCE WITH APPLICABLE CITY, COUNTY, STATE OR FEDERAL STATUTES, CODES OR ORDINANCES; OR (v) MATTERS RELATED TO THE LEASES OR THE TENANTS. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT EXCEPT AS SET FORTH HEREIN, IT IS RELYING SOLELY UPON ITS OWN INSPECTION OF THE PROPERTY, REVIEW OF THE LEASES AND INVESTIGATIONS CONCERNING THE TENANTS AND NOT UPON ANY REPRESENTATIONS MADE TO IT BY SELLER, ITS PARTNER, OFFICERS, DIRECTORS, CONTRACTORS, MANAGERS OR EMPLOYEES NOR ANY PERSON WHOMSOEVER. ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE TO BE THE SOLE RESPONSIBILITY OF BUYER AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE PARTY OF SELLER TO MAKE ANY CHANGES, ALTERATIONS, OR REPAIRS TO THE PROPERTY SUBSEQUENT TO CLOSING, EXCEPT TO THE EXTENT THAT SUCH ALTERATIONS OR REPAIRS ARE NECESSITATED BY A BREACH OF ANY OF SELLER'S WARRANTIES SET FORTH IN SECTION 9. Section 16.11 Survival. The provisions of the Agreement and particularly the representations, warranties and indemnities of the parties hereto shall survive the Closing and shall not be deemed merged in any instrument of conveyance. ARTICLE XVII TAX DEFERRED EXCHANGE Section 17.1 Tax Deferred Exchange. At Closing, Seller may elect to structure this transaction and Seller's receipt of the Purchase Price hereunder as part of a 1031 Tax Deferred Exchange. Buyer shall cooperate with Seller in its efforts to effect a Tax Deferred Exchange, provided that Buyer shall incur no liability with respect to such Tax Deferred Exchange, nor shall Buyer hold title to any property other than the Property, nor shall the Closing Date be delayed as a result of such Tax Deferred Exchange. THE CITY OF KENT By: Its y'o/r Date: -13- /sAs\Ps.030 N PEST:A rney: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: r'' oug W. Klappen Its G eral Partner Date ��9G -14- /sns\Ps.o3o Exhibits Attached Hereto: Exhibit A Leases/Rent Roll Exhibit B Permitted Exceptions Exhibit C Personal Property Exhibit D Property Information Exhibit E Proposed Lease Transactions Exhibit F Legal Description Exhibit G Assignment and Assumption of Leases Exhibit H Assignment of Service Contracts Exhibit I Assignment of Warranties -15- Tt isnsv�s.o3o EXHIBIT A LEASES/RENT ROLL G:1S1PS.030 14 Parking Lease Agreement by and between The Corporation of Catholic Archbishop of Seattle as Tenant, dated January 23, 1990. A-2 GASTS.030 01 EXHIBIT B PERMITTED EXCEPTIONS B--1 GASTS.030 M( M tD z= a 0z0CnD�DKm0 --1(p -4 CI C C 0) -0 61 M N 7 Cn 7 n O A< n U (0 C 7 `< 7• 7 ET7 (D 0 0 0 to (D 0 w (0 (D to (0 n Z rn rn rn rn rn rn rn rn rn rn rn rn n 00 VI V1 V, 0 V1 0 bl w V, V) v) 01 7 N J V V J V V V J J J V j M N N f `G (D a W W A a W W W W w O< (0 3 O o o O o o A A A (n 0) a 7 7 O N V W N N N Ili N N cn W co a N N 0 0 0 cD W N W r N b a W (No N OVi OJ) a 0) 1 rn .NP W 7 a 7 01) N O O O N N N N N N N N N N N N (7 W A !O Q) O 01 Q) O O O 0) O 01 D1 d 0 N (0 O W W W W W W W W W W W w 3 CO w a A D. A A A A A A A A N ' vo00o00o0 U3 00o0 " O ' O 0 o 0 0 00 o 0 0 0 0 C. 00 0 N N � o O Ol A a A A A .t a A a A N c N N A a a A A A a A A A a IIJJ 4A a A O O O O o 0 0 0 0 0 0 0 cNp O N a is a A A A A A a A 1 0 w 00 'AO A A A A A A A A A a a A C- C a O o N N N N N N N N N Pa N N m ?• 0) a A A a A A A a a A A a o H n Ornrnrnrnrna)olrnrnrnrnrn(c-o m. 0) V J J V V v V J J J V N V O W W W W W W W W W W W W r w nJi rn rn rn rn rn rn rn rn rn rn 0) 0) D 0 e 0 0 0 0 0 0 0 0 0 0 o O O o w 0 00000000000003 o 0 0 0 0 0 0 0 0 0 0 0 0 0 D 6n rn w O D` 7 0 0 o O O o 0 0 0 m CD A o 0 0 0 0 0 0 0 0 0) N N cn cn cn 1J, cn N (71 N eb m 7 D) W V V J V J C q A (OD A A A A a a d d a a A A. (0 O O O CD CD O O O O O O d (0 N O (D co co w (D c0 co c0 cD tDD t0 to V (b p A a A A la a A A l> A O O 0 0 0 0 0 o 0 0 0 0 0 0) O o 0 0 0 0 0 0 0 0 o 0 o s y V, N - N N N N N N N N N 0, N D CJi, o 1 -4 --4 Ji, < X (n to cn cn (n cn N N Cn cn N fn A b Ni W A A A A A W W W W W (J W O w 0, (n cn U, N 0 0 0 0 0 0 0 V W ((,�,,1f N K.) N K.) N N N N N to h.)N r W 0) lD ID lD O V V v V J V V ;r N N N N N N N N 0) N O CO w Co O W 0) 01 0) O O CA a'• M i5 CO c°Ji,Z�7 w ZZZ—t Ab, fDi W m d m m m m m m w m w � �.� 0 0 u 0'p 0) N ( ND a a A A A A a A a A A d a ? o W A (D (0 W (D (D 0 (0 W (D 0 (D W v s . . . . . . . . . . m n_ O O O o 0 0 0 0 0 0 0 0 0 0 Ng m O O O O O O O O O O O O O O m a° N rn y± N _ _ _ _ _ _ _ ((D V J J J -Q 4� -p4� V J V J --J V C m a O O) O N N N N N NNN J A N N N tD 0 0 0 0 0 0 0 0 0 0 0 0 0 Q 2e A O O O O O O O O O O O O O w �' rnA�.Aa� AaapwwV,w�0tC-a N t,gaaaagg.A A.�?w 07 A O to (D . b- ID c0 fD (D (D O O O O N N a cD W 01 01 0 0 N cD W 0 0 m 0 0 0 a 0 O 0 0 0 0 0 0 0 0 N a` C, r 3 N A (n t(D W CD 1p W CO (b Cb O DD OD CD ID Lu o a N 01 W CO 00 O O CO 00 CO 2' O O CD O 0 0 O CD CD 00 O -V (n N a a N W W W W W W W W W W W W (D (n to to cn l 0 p (n U1 to7, N M N L(n (r V) U) (l, V, mo (cnn ... O 0 0 0 0 0 0 0 0 0 0 0 0 0 v O 0 0 0 0 0 0 0 0 0 0 0 0 0 a^ V � N N0 r z N_ j O J V 0) 0) 0) 0) 0) (M 0) W W 0 A A A Co N N N NNN NNN o O (n 0 0 cn 0 0 0 0 0 0 0 0 0 a, O w O 0 W 0 0 0 0 0 0 0 0 0 A-3 71 m z n m z m z z D r n m z --i m X m z O r r m O CD (D (n X �J tf ._,:D, IF ANY, RIGHTS OF VENDORS AND SECURITY 'ivTS ON PERSONAL PROPERTY -AND RIGHTS OF TENANTS AND SECURED PARTIES TO REMOVE TRADE FIXTURES AT THE EXPIRATION OF THE TERM. EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: ' RECORDED: JANUARY 30, 1980 , RECORDING NO.: 8001300413 IN FAVOR OF: CITY OF RENT, A MUNICIPAL CORPORATION FOR: UTILITIES A RECORD OF SURVEY RECORDED ON FEBRUARY 16, 1989 UNDER RECORDING NO. 8902169001. 0 TERMS, COVENANTS, CONDITIONS AND RESTRICTIONS AS CONTAINED IN LOT LINE ADJUSTMENT: n NO.: LL89-36 RECORDED: JANUARY 24, 1990 Y RECORDING NO.: 9001240759 AGREEMENT AND THE TERMS AND CONDITIONS THEREOF BETWEEN: CITY OF KENT, A MUNICIPAL CORPORATION AND: KENT CENTENNIAL LIMITED PARTNERSHIP RECORDED: FEBRUARY 9, 1990 RECORDING NO.: 9002090976 PURPOSE: ENVIRONMENTAL MITIGATION EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: MARCH 30, 1990 RECORDING NO.: 9003300960 IN FAVOR OF: WASHINGTON NATURAL GAS COMPANY FOR: GAS PIPELINE OR PIPELINES EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: SEPTEMBER 25, 1990 RECORDING NO_: 900§251075 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: SANITARY SEWER EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: OCTOBER 1, 1990 RECORDING NO.: 9010010461 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: WATERLINE TERMS, COVENANTS, CONDITIONS AND/OR PROVISIONS CONTAINED IN A EMERGENCY ACCESS EASEMENT SERVING SAID PREMISES, AS CONTAINED IN DOCUMENT: RECORDED: NOVEMBER 9, 1990 RECORDING NO. (S): 9011091191 Im Es . AGREEMENT AND THE TERMS AND CONDITIONS THEREOF BETWEEN: THE CITY OF RENT, A MUNICIPAL CORPORATION AND: KENT CENTENNIAL LIMITED PARTNERSHIP, A WASHINGTON LIMITED PARTNERSHIP DATED: OCTOBER 22, 1990 RECORDED: JANUARY 25, 1991 RECORDING NO.: 9101251105 PURPOSE: EMERGENCY ACCESS EASEMENT EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: JUKE 25, 1991 RECORDING NO.: 9106251686 IN FAVOR OF: PUGET SOUND POWER AND LIGHT COMPANY FOR: AN UNDERGROUND ELECTRIC TRANSMISSION AND/OR DISTRIBUTION SYSTEM B-4 WTI flu EXHIBIT C PERSONAL PROPERTY [NONE] C--1 GASTS.030 EXHIBIT D PROPERTY INFORMATION Copies of all Leases and amendments thereto. 2. Copies of all those service contracts, operating agreements, janitorial contracts, and maintenance agreements, including elevator and HVAC maintenance, relating to the operation of the Buildings. 3. All those certain environmental assessments relating to the presence of existence of Hazardous Substances on the Property. 4. Any and all as -built plans, specifications, drawings, surveys architectural drawings and matters of a similar nature relating to the Property. 5. ALTA survey of the Real Property and Improvements. 6. Copies of all soils tests and analysis affecting the Property. 7. Copies of all warranties and guarantees in effect at the Property, if any. 8. Copies of all current contracts, if any, relating to construction and installation of any tenant improvements or items of the Buildings' maintenance. D-1 cAsTs.030 � EXHIBIT E PROPOSED LEASE TRANSACTIONS E-1 GASTS.030 EXHIBIT E Proposed Lease Transactions 31-Mar-96 PROPOSED ESTIMATED TENANT AREA RATE T.I. COST NLK Expansion into Delmonte space 930 504 $19.38 $2,000 $12,000 Panalpina Expansion into adjacent Vacant Space .$18.00 Christian Church Administrative Offices part of suite 204 735 $18.25 $6,000 Society for the Accused (Public Defenders) west end of 3rd floor 10,000 $18.00 $80,000 TOTALS 12,169 $100,000 E-2 EXHIBIT F LEGAL DESCRIPTION F-1 G:1S1PS.030 THE LAND REFERRED TO IN THIS* COMMITMENT IS SITUATED IN THE STATE OF WASHINGTON, COUNTY OF KING AND IS DESCRIBED AS FOLLOWS: PARCEL A: LOTS 4, 5, 6, 7, 8 AND 9, BLOCK 8 AND THE EAST 20 FEET OF LOTS 4, 5 AND 6, BLOCK 13, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (A PORTION OF PARCEL A IS ALSO KNOWN AS LOT A OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) PARCEL B: LOTS 101 11 AND 12, BLOCK 8, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (ALSO KNOWN AS LOT B OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) BOTH SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON. F - 2 0 EXHIBIT G ASSIGNMENT AND ASSUMPTION OF LEASES THIS ASSIGNMENT AND ASSUMPTION OF LEASES is made this day of 199 , by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation,("Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996, (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign and Buyer has agreed to assume all of Seller's right, title and interest in, and Seller's obligations under, all leases affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: AGREEMENTS 1. Seller hereby assigns, transfers and conveys to Buyer all of Seller's right, title and interest in and to, and all of its obligations under, the leases listed on Exhibit A attached hereto and incorporated herein by this reference (the "Leases"). 2. Buyer hereby assumes all of Seller's right, title and interest in, and agrees to fully ZD perform all of Seller's obligations under, the Leases from and after the date hereof. 3. Seller agrees to indemnify Buyer against and hold Buyer harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Seller's obligations under the Leases prior to the date of this Assignment Agreement. Seller shall, from and after the date hereof, be relieved of any liability or obligation under the Leases. 4. Buyer agrees to indemnify Seller against and hold Seller harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Buyer's obligations under the Leases from and after the date of this Assignment Agreement. DATED as of the day and year first above written. G-1 Qv GASTS.030 BUYER: THE CITY OF KENT By: Its Mayor Date: ATTEST: City Attorney Date: SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner By: Douglas W. Klappenbach Its General Partner Date STATE OF WASHINGTON ) COUNTY OF KING ) On this day personally appeared before me Douglas W. Klappenbach to me known to be the General Partner of Centennial Venture Limited Partnership, General Partner of Kent Centennial Limited Partnership, the partnership that executed the within and foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of said partnership for the uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the partnership. G-2 V-11" G:�.S1PS.030 IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of , 199_ NOTARY PUBLIC in and for the State of Washington, residing at My commission expires: STATE OF WASHINGTON ) COUNTY OF KING ) On this day personally appeared before me to me known to be the of THE CITY OF KENT, a Washington municipal corporation„ the corporation that executed the within and foregoing instrument, and acknowledged the instrument to be the free and voluntary act and deed of said corporation for the uses and purposes therein mentioned, and on oath stated that he was duly authorized to execute said instrument on behalf of the corporation. IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of , 199_ G-3 NOTARY PUBLIC in and for the State of Washington, residing at My commission expires: IN GASTS.030 EXHIBIT H ASSIGNMENT OF SERVICE CONTRACTS THIS ASSIGNMENT is made this day of , 199 , by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation,("Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996 (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign and Buyer has agreed to assume all of Seller's right, title and interest in, and Seller's obligations under, all service contracts affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: AGREEMENTS. 1. Seller hereby assigns, transfers and conveys to Buyer all of Seller's right, title and interest in and to, and all of its obligations under, the service contracts listed on Exhibit A attached hereto and incorporated herein by this reference (the "Service Contracts"). 2. Buyer hereby assumes all of Seller's right, title and interest in, and agrees to fully perform all of Seller's obligations under, the Service Contracts from and after the date hereof. 3. Seller agrees to indemnify Buyer against and hold Buyer harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Seller's obligations under the Service Contracts prior to the date of this Assignment Agreement. Seller shall, from and after the date hereof, be relieved of any liability or obligation under the Service Contracts. 4. Buyer agrees to indemnify Seller against and hold Seller harmless for and from any and all liabilities, losses, damages and expenses, including without limitation, reasonable attorneys' fees, arising out of Buyer's obligations under the Service Contracts from and after the date of this Assignment Agreement. DATED as of the day and year first above written. H-1 G:1S\PS.030 4� I THE CITY OF KENT By: Date: Its Mayor ATTEST: City Attorney Date: EI ER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner Date By: Douglas W. Klappenbach Its General Partner G:1S\PS.030 H-2 '► X R (EXHIBIT A to Exhibit H SERVICE CONTRACTS 3/31 /96 Exterior & Interior Landscape Maintenance Earth Enterprises Janitorial Allied Building Services HVAC Maintenance & Filter Replacement - Water Treatment for Cooling Tower Fire Protection & Sprinklers Fire Alarm Monitoring Elevator Service & Repair Trash Collection H- 3 McKinstry Service CHEM-AQUA Fire Systems West ADT Security Systems Sound Elevator Kent Disposal EXHIBIT I ASSIGNMENT OF WARRANTIES THIS ASSIGNMENT is made this day of 5199 , by and between KENT CENTENNIAL LIMITED PARTNERSHIP, a Washington limited partnership, ("Seller"), and THE CITY OF KENT, a Washington municipal corporation, ("Buyer"). RECITALS WHEREAS, Seller and Buyer have entered into that certain Real Estate Purchase and Sale Agreement dated , 1996 (the "Agreement"), whereby Seller agreed to sell and Buyer agreed to purchase certain real property described therein (the "Property"); and WHEREAS, pursuant to the Agreement, Seller has agreed to assign all of Seller's right, title and interest in all warranties affecting the Property; NOW, THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt of which is hereby acknowledged, Seller hereby assigns, transfers and conveys to Buyer all of Seller's right, title and interest in and to the warranties listed on Exhibit A attached hereto and incorporated herein by this reference DATED as of the day and year first above written. THE CITY OF KENT Its Mayor Date: ATTEST: City Attorney Date: GASTS.030 In, a GASTS.030 SELLER: KENT CENTENNIAL LIMITED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner Date By: Douglas W. Klappenbach Its General Partner I-2 IS QUALIFIED ESCROW AGREEMENT This Agreement is made and entered into this day of June, 1996, by and between First American Title Insurance Company ("Escrowee"), Exchange Facilitator Corporation, a Washington corporation ("Intermediary"), and Kent Centennial Limited Partnership, a Washington limited partnership ("Exchangor"). A. Exchangor desires to exchange properties in a transaction qualifying for nonrecognition of gain or loss under Section 1031 of the U.S. Internal Revenue Code of 1986 ("the Code") and the regulations published thereunder ("the Regulations"). B. Subject to the terms and conditions of an Exchange Agreement, Exchangor has employed Intermediary to act as a Qualified Intermediary as defined in Regulations Section 1.1031(k)-1(g)(4) with respect to the exchange of properties. C. Subject to the terms and conditions set forth herein, Intermediary and Exchangor desire to employ Escrowee to act as the holder of a Qualified Escrow Account as defined in Regulations Section 1.1031 (k)-1(g) (3) (ii) with respect to the exchange of properties and Escrowee desires to be employed in such capacity. D. Subject to the terms and conditions set forth herein, Intermediary desires to provide an investment vehicle into which may be placed the proceeds from the sale of the Relinquished Property. E. The purpose of this Agreement is to establish a Qualified Escrow Account and to provide instructions to Escrowee in maintaining and administering such Qualified Escrow Account. Now, Therefore, the parties agree as follows: 1. Definitions. As used herein, the following words and phrases shall have the following meanings: 1.1 "Escrow Assets" shall mean the "Exchange Credit" as defined in the Exchange Agreement. 1.2 "Escrow Account" shall mean the account maintained by Escrowee in which the Escrow Assets are held. 1.3 "Exchange Period" means the period beginning on the date the Exchangor transfers the Relinquished Property and ending at midnight on the earlier of the 180th day thereafter or the due date (including extensions) for the Exchangor's return of the tax imposed by Chapter 1 of Subtitle A of the Code for the taxable year in which the transfer of the Relinquished Property occurs as provided in Regulations Section 1. 1031 (k)-1 (b) (2) (ii-iv). 1.4 "Identification Period" means the period beginning on the date the Exchangor transfers the Relinquished Property and ending at midnight on the 45th day thereafter as provided in Regulations Section 1. 1031 (k)- 1 (b) (2) (i). 1.5 "Disqualified Person" means a person bearing a relationship to the Exchangor described in Regulations Section 1.1031(k)-1(k). QUALIFIED ESCROW AGREEMENT PAGE 1 1.6 "Relinquished Property" means the property described in the Exchange Agreement which Exchangor now owns and wishes to dispose of by exchanging for Replacement Property. 1.7 "Replacement Property" means the property or properties which the Exchangor wishes to acquire in exchange for the Relinquished Property and which is identified pursuant to Regulations Section 1. 1031 (k)-1 (c) and/or (e). 1.8 "Replacement Property Escrow" shall mean the escrow(s) established between Intermediary and the Replacement Property Seller. While Exchangor may not be a party to the Replacement Property Escrow, Exchangor may be required to pay costs, expenses and fees related to the acquisition of the Replacement Property. 1.9 "Exchange Agreement" shall mean the agreement entered into between Exchangor and Intermediary for the transfer of the Relinquished Property and acquisition of the Replacement Property. 2. Escrow Assets. Intermediary shall secure its Exchange Agreement obligations to Exchangor by depositing all Escrow Assets in the Escrow Account maintained by Escrowee. A fully executed copy of this Agreement shall be delivered to Escrowee and Escrowee shall act as the escrow holder with respect to the Escrow Account. 2.1 The Escrow Assets shall be held and invested by Escrowee until a written request to release funds pursuant to the terms of this Agreement is delivered to the Escrowee. 2.2 The Escrow Assets shall be invested by Escrowee in repurchase agreements secured by U.S. Treasury obligations in Seattle First National Bank. The Escrow Assets will be invested by Escrowee no later than one (1) working day after receipt. The Escrow Account will be in the name of Escrowee as escrow holder under this Agreement. 2.3 All interest earned on the Escrow Assets shall belong to Exchangor. Exchangor shall provide a tax identification number and any and all other information as may be necessary for the establishment of the Escrow Account. 3. Exchangor's Rights to Escrow Assets. Exchangor shall have no right to receive, pledge, borrow or otherwise obtain the benefits of any of the Escrow Assets (including interest earned thereon) before the first to occur of the events provided in paragraph (g)(6) of Regulations Section 1.1031(k)-1 (herein called a "(g)(6) event"). Upon the occurrence of such a (g)(6) event and written demand by Exchangor, Escrowee shall deliver to Exchangor all remaining Escrow Assets within three (3) business days of such demand. 4. Withdrawal. 4.1 Notice to withdraw Escrow Assets from the Escrow Account ("Withdrawal Notice") shall be by written request signed and delivered to Escrowee by Intermediary. Each Withdrawal Notice shall state the amount requested, to whom payment should be made, the purpose of the payment, and the date the payment is needed. Each Withdrawal Notice shall have attached to it a written approval signed by Exchangor. QUALIFIED ESCROW AGREEMENT PAGE 2 4.1.1 If the Withdrawal Notice is submitted to make payments on expenses authorized under the Exchange Agreement, there shall be attached a copy of the itemized statement for such costs or expenses. 4.1.2 If the Withdrawal Notice is submitted to pay the purchase price of the Replacement Property, there shall be attached a written confirmation from Intermediary confirming that the Replacement Property to be acquired has been designated by Exchangor, and the name of the escrow agent to whom the funds are to be transferred. 4.1.3 Escrowee shall have no obligation to verify the genuineness of any signatures on any documents (including any Withdrawal Notice) submitted to it pursuant to this Agreement. 4.2 Escrowee shall make withdrawals from the Escrow Account in sufficient time to make disbursements requested by Withdrawal Notice. 5. Compliance With Regulations Section 1.1031(k)-1(g). This Agreement is intended to comply with the requirements of Regulations Section 1. 1031 (k)-1 (g) and any ambiguity or inconsistency shall be interpreted in a manner so as to permit the Escrow Account to be treated as a Qualified Escrow Account and the transfer of the Relinquished Property to qualify for nonrecognition of gain or loss under Code Section 1031 and the Regulations published thereunder. 6. Security Interest. Intermediary and Exchangor hereby appoint Escrowee to act as holder of a Qualified Escrow Account as defined in Regulations Section 1.1031 (k)-1 (g)(3)(ii) with respect to the exchange of properties. Escrowee hereby accepts such appointment and agrees to hold, invest and disburse all Escrow Assets strictly in accordance with the terms of this Agreement. Intermediary and Exchangor hereby agree and Escrowee acknowledges that Exchangor has a security interest in all Escrow Assets and that Escrowee constitutes a "bailee" as described under RCW 62A.9-305. 7. No Liability of Escrowee. Escrowee shall not have any liability of any kind or nature by reason of any failure to consummate any property transactions except if such failure is caused by Escrowee's breach of any of its duties and obligations or its negligent act or omission; Escrowee's duties and obligations are strictly limited to those expressly set forth in this Agreement and any other written Agreement signed by Escrowee. Escrowee hereby agrees to perform all express rights, duties and obligations required of it hereunder in good faith in accordance with the terms of the provisions of this Agreement. 8. Governing Law. The Escrow Account hereby created shall be administered within the State of Washington, and shall be governed by and construed in accordance with the laws of the State of Washington, including all matters of construction and performance, regardless of the laws that might otherwise govern under principles of conflicts of law applicable thereto. 9. Escrowee's Fee. Escrowee's fee for acting hereunder shall be in the amount of $250.00 plus $25.00 for each disbursement from the Escrow Account except the final disbursement which shall be made at no additional charge. 10. Disputes. In the event of a dispute between Intermediary and Exchangor regarding this Agreement or the disbursement or application of funds from the Escrow QUALIFIED ESCROW AGREEMENT PAGE 3 Account, Escrowee may, at its option, either take no action whatsoever, or interplead the parties in a proceeding to resolve such dispute, in either case, without liability to Escrowee. 11. Indemnity and Hold Harmless. Exchangor agrees to indemnify and hold Escrowee harmless from and against any loss, damage, costs, charges, judgments, attorney fees or other sums that Escrowee may suffer, incur or pay, arising out of or in connection with the execution and/or performance of this Agreement, except to the extent that such loss, damage, costs, charges, judgments attorney fees or other sums are due to Escrowee's breach of the terms of this Agreement or its negligent act or omission. Exchangor shall at its expense defend any action or proceeding instituted against Escrowee that relates, directly or indirectly, to the subject matter of this Agreement except to the extent it relates to the breach of this Agreement by Escrowee or Escrowee's negligent act or omission. 12. Notices. All notices and other communications required or permitted to be given or delivered hereunder shall be in writing, and shall be delivered (a) personally, (b) by first class mail, registered or certified with postage prepaid, or (c) by facsimile transmission, addressed to the party intended at the address set forth below, or such other address as may be designated by such party by notice given to the other parties in the same manner. All notices and other communications delivered by mail shall be deemed to have been delivered to and received by the addressee on the third (3rd) day following the day on which the notice or communication was deposited in the United States mail. All notices and other communications delivered to a party personally or by facsimile transmission shall be deemed to have been delivered to and received by such party on the date of such personal delivery or facsimile transmission, if delivered before close of business, and on the next business day if delivered after close of business. 13. Miscellaneous. 13.1 No Representations. Exchangor hereby agrees and acknowledges that there have been no representations, express or implied, and that no representations are being made, by Escrowee or the Intermediary, their officers, employees, agents or attorneys, regarding the tax consequences which may occur in connection with the subject matter of this Agreement. 13.2 Amendment. This Agreement may not be amended or modified in any respect whatsoever except by an instrument in writing signed and executed by all the parties hereto. 13.3 Entire Agreement. This Agreement constitutes the entire agreement between and among the parties with respect to the subject matter hereof. 13.4 Attorney Fees. If any party hereto brings suit to enforce or declare the meaning of any provision of this Agreement, the prevailing party, in addition to any other relief, shall be entitled to recover reasonable attorneys' fees and costs, including any on appeal. 13.5 Invalid Provisions. Should any provision of this Agreement be or become invalid or unenforceable, the remaining provisions of this Agreement shall be and constitute to be fully effective. QUALIFIED ESCROW AGREEMENT PAGE 4 14. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same agreement. Address: 2101 Fourth Avenue, Suite 800 Seattle, Washington 98121-2387 Address: 2624 Eastlake Avenue East Seattle, Washington 98102 Escrowee: First American Title Insurance Company By: Cyndi M. Pedersen Its: Escrow Supervisor/LPO Intermediary: Exchange Facilitator Corporation, a Washington corporation By: Ily . Yate Its: H use IQDunsel and Authorized Signatory Exchangor: Address: Kent Centennial Limited Partnership, a Washington c/o Douglas W. Klappenbach limited partnership 11245 Northeast 37th Place Bellevue, Washington 98004 By: Centennial Venture Limited Partnership, a Washington limited partnership, its General Partner /w.nZ L ou s W. KlaplWnbach, General Partner With a copy to: Barbara A. Wilson, Esq. Phillips, McCullough, Wilson, Hill & Fikso, Attorneys 2025 First Avenue, Suite 1130 Seattle, Washington 98121 QUALIFIED ESCROW AGREEMENT PAGE 5 RESOLUTION OF KENT CENTENNIAL LIMITED PARTNERSHIP The undersigned, CENTENNIAL VENTURE LIMITED PARTNERSHIP, being the sole general partner of Kent Centennial Limited Partnership ("Partnership"), and STEVEN L. SHERMAN, being the sole limited partner of the Partnership, hereby resolve and agree as follows: RESOLVED, THAT the Partnership shall sell the Partnership property known as Kent Centennial Center to the City of Kent pursuant to the Agreement of Purchase and Sale dated April 8, 1996 (the "Agreement"); and FURTHER RESOLVED, THAT the Partnership does hereby authorize Douglas W. Klappenbach, General Partner of Centennial Venture Limited Partnership, to execute and deliver such conveyances and other documents and instruments and take such other further actions as may be necessary or desirable to carry out the transaction contemplated in the Agreement; and FURTHER RESOLVED, THAT with respect to the transaction contemplated by the Agreement, the Partnership may proceed to affect a Deferred Exchange pursuant to Section 1031 of the Internal Revenue Code, as amended, by and through a qualified intermediary exchange with Exchange Facilitators, Inc. (the "Exchange"), under which a qualified escrow account shall be established for the sale proceeds payable to the Partnership in accordance with the Agreement and a replacement property may be selected and determined by the Partnership in accordance with all applicable laws and procedures necessary to achieve such Deferred Exchange; and FURTHER RESOLVED, THAT the partners agree that if the partners of the Partnership cannot agree by unanimous decision as to the selection of a replacement property as required in order to complete the Exchange, either partner may, at his sole discretion, upon five (5) business days written notice to the other, terminate the qualified escrow account and direct that the proceeds be disbursed to the partners as if the qualified escrow account had not been established. j:\c02915\m 14060\00401 DATED as of the 261h day of June, 1996. KENT CENTENNIAL LMTED PARTNERSHIP By: CENTENNIAL VENTURE LIMITED PARTNERSHIP, its General Partner M. Douglas W. Klappenbach Its General Partner CENTENNIAL VENTURE LIMITED PARTNERSHIP By: Douglas W. Klappenbach Its General Partner ST4NL.RMAN 2 j Ac02915\m 1 4060\00401 JLl 1 a� MI N 4 DAT ) as of the 2e day of June,1996. KENT CLWTENIUAL LIMI= PARTNERSHIP Bp: CENTUNNiAL VENTURE LUAaED P ileMS t SW4060\00401 L. MI V�Wl M 6) 111:10 f 1 By: Its S'IEVENL. 2 Panuer C000 smiLNSA Qb![lOS 4-4-4- YYd BZ:80 NOR 961MLO RESOLUTION OF CENTENNIAL VENTURE LIMITED PARTNERSHIP The undersigned, Douglas W. Klappenbach, being the sole General Partner of Centennial Venture Limited Partnership (the "Partnership") and James Julian Klappenbach and Laura Kinnunen, being all of the limited partners of the Partnership hereby resolve as follows: RESOLVED, THAT, the Partnership shall agree to and authorize Kent Centennial Limited Partnership, of which it is the sole general partner, to sell the property known as Kent Centennial Center to the City of Kent pursuant to the Agreement of Purchase and Sale dated April 8, 1996 (the "Agreement"); and FURTHER, RESOLVED THAT, with respect to the transaction contemplated by the Agreement, the Partnership shall agree to and authorize Kent Centennial Limited Partnership to proceed to affect a Deferred Exchange pursuant to Section 1031 of the Internal Revenue Code, as amended, by and through a qualified intermediary exchange with Exchange Facilitators, Inc. (the `Exchange"), under which a qualified escrow account shall be established for the sale proceeds payable to Kent Centennial Limited Partnership in accordance with the Agreement and a replacement property will be selected and determined by Kent Centennial Limited Partnership in accordance with all applicable laws and procedures necessary to achieve such Deferred Exchange; and FURTHER RESOLVED, THAT, the Partnership does hereby authorize Douglas W. Klappenbach to execute and deliver such conveyances and other documents and instruments and take such other further actions as may be necessary or desirable to carry out the transaction contemplated in the Agreement on behalf of the Partnership and with respect to the Exchange on behalf of the Partnership. DATED as of the i.. day of June, 1996. 4U- .7b. rl Laura Kinnunen GASOUNMRES.030 FOSTER PEPPER & SHEFELMAN A LAW PARTNERSHIP INCLUDING PROFESSIONAL SERVICE CORPORATIONS INTERNET ADDRESS CIEVG@FOSTER.COM DIRECT DIAL 206-447-4692 April 4, 1996 VIA FACSIMILE Douglas Klappenbach General Partner Kent Centennial Limited Partnership 200 112th Ave. N.E., #205 Bellevue, WA 98004 Re: Centennial Center Dear Doug: At your request, the City of Kent (the "City") asked us to provide our opinion on whether the City was required to follow any particular statutory procedures in order to approve the Proposed Agreement of Purchase and Sale Between Kent Centennial Limited Partnership, Seller and the City of Kent, Buyer. As discussed below, it does not appear that there are any specific state statutory provisions governing the City's approval of purchase and sale agreements. Therefore, it appears that as long as the City Council takes official action to approve a purchase and sale agreement and the Mayor executes the purchase and sale agreement, an otherwise valid purchase and sale agreement would be binding on the City. Under RCW 35A.11.020, the City Council generally has the authority to organize and regulate the City's internal affairs. We are not aware of any specific provisions in Title 35A RCW that would require the City Council to follow specific procedures to approve a purchase and sale agreement. Therefore, as discussed above, as long as the City Council approves a purchase and sale agreement with an official legislative act (e.g., a motion, the existence of which is recorded in minutes of the City Council meeting), an otherwise valid purchase and sale agreement would be binding on the City, assuming that the City has complied with all other applicable legal requirements. 1 1 11 THIRD AVENUE SWTE 3400 SEATTLE, WASHINGTON 98101-3299 TEL. 206-447-4400 FACSIMILE 206 447-9700 ANCHORAGE, ALASKA BELLEVUE, WASHING70N PORTLAND. OREGON SEATTLE, WASHINGTON Douglas Klappenbach April 4, 1996 Page 2 We trust the foregoing will be of assistance to you. Please do not hesitate to call if you have questions. Very truly yours, FOSTER PEPPER & Gr GEC:tmm 40180290. W P ►DECEIVED S=° 3 0 1996 i HE MAYOR FrrstArwrYcan Title Insurance Company 2101 FOURTH AVENUE, SUITE 800 * SEATTLE, WASHINGTON 98121-9977 TO: CITY OF KENT 220 - 4TH AVENUE SOUTH KENT, WASHINGTON 98032 ATTN: BRENT McFALL t1jr Aanj Shy We appreciate the opportunity to be of service ATTACHED IS POLICY NO. 318287-5 Form No. 11402.92 (10/17/92) ALTA Owner's Policy POLICY OF TITLE INSURANCE 1 A M F k ISSI'ED BY First American Title Insurance Company SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, herein called the Company, insures, as of Date of Policy shown in Schedule A, against loss or damage, not exceeding the Amount of Insurance stated in Schedule A, sustained or incurred by the insured by reason of: 1. Tide to the estate or interest described in Schedule A being vested other than as stated therein; 2. Any defect in or lien or encumbrance on the title; 3. Unmarketability of the tide; 4. Lack of a right of access to and from the land. The Company will also pay the costs, attorneys' fees and expenses incurred in defense of the tide, as insured, but only to the extent provided in the Conditions and Stipulations. First American Title Insurance Company I'A s a, 0 & tt BY PRESIDENT 578 — pp ATTEST A�4 SECRETARY J 5 7 ©3 r 0 SCHEDULE A POLICY NO. 318287-5 AMOUNT OF INSURANCE: $11,712,600.00 PREMIUM: $17,624.00 DATE OF POLICY: JULY 11, 1996 AT 2:50 P.M. 1. NAME OF INSURED: CITY OF KENT 2. THE ESTATE OR INTEREST IN THE LAND WHICH IS COVERED BY THIS POLICY IS: FEE SIMPLE ESTATE 3. TITLE TO THE ESTATE OR INTEREST IN THE LAND IS VESTED IN: CITY OF KENT, A WASHINGTON MUNICIPAL CORPORATION 4. THE LAND REFERRED TO IN THIS POLICY IS DESCRIBED ON SCHEDULE A-4 ATTACHED. PAGE 1 OF 5 SCHEDULE B POLICY NO. 318287-5 THIS POLICY DOES NOT INSURE AGAINST LOSS OR DAMAGE (AND THE COMPANY WILL NOT PAY COSTS, ATTORNEYS' FEES OR EXPENSES) WHICH ARISE BY REASON OF: 1. GENERAL TAXES. THE FIRST HALF BECOMES DELINQUENT AFTER APRIL 30TH. THE SECOND HALF BECOMES DELINQUENT AFTER OCTOBER 31ST. YEAR: 1996 AMOUNT BILLED: $99,122.59 AMOUNT PAID: $49,561.29 AMOUNT DUE: $49,561.30, PLUS INTEREST AND PENALTY, IF DELINQUENT ASSESSED VALUE OF LAND: $603,000.00 ASSESSED VALUE OF IMPROVEMENTS: $5,627,700.00 TAX ACCOUNT NO.: 982570-0566-05 CHARGES/ASSESSMENTS IN ADDITION TO THE ABOVE GENERAL TAXES AS FOLLOWS: A. 1996 DRAINAGE DISTRICT CHARGE OF $103.60 OF WHICH $51.80 HAS BEEN PAID. B. 1996 CONSERVATION DISTRICT FEE OF $1.25, OF WHICH $.63 HAS BEEN PAID. THE ABOVE CHARGES ARE DUE AND PAYABLE WITH THE GENERAL TAXES. 2. EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: JANUARY 30, 1980 RECORDING NO.: 8001300413 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: UTILITIES AFFECTS: PORTION OF LOTS 4, 5, 6, 7 AND 8, BLOCK 8 3. A RECORD OF SURVEY RECORDED ON FEBRUARY 16, 1989 UNDER RECORDING NO. 8902169001. 4. TERMS, COVENANTS, CONDITIONS AND RESTRICTIONS AS CONTAINED IN LOT LINE ADJUSTMENT: NO.: LL89-36 RECORDED: JANUARY 24, 1990 RECORDING NO.: 9001240759 PAGE 2 OF 5 SCHEDULE B - CONT. POLICY NO. 318287-5 5. AGREEMENT AND THE TERMS AND CONDITIONS THEREOF BETWEEN: CITY OF KENT, A MUNICIPAL CORPORATION AND: KENT CENTENNIAL LIMITED PARTNERSHIP RECORDED: FEBRUARY 9, 1990 RECORDING NO.: 9002090976 PURPOSE: ENVIRONMENTAL MITIGATION 6. EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: MARCH 30, 1990 RECORDING NO.: 9003300960 IN FAVOR OF: WASHINGTON NATURAL GAS COMPANY FOR: GAS PIPELINE OR PIPELINES AFFECTS: A PORTION OF LOTS 4, 5 AND 6, BLOCK 13, AND A PORTION OF VACATED STREET ADJACENT 7. EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: SEPTEMBER 25, 1990 RECORDING NO.: 9009251075 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: SANITARY SEWER AFFECTS: EASTERLY PORTION OF LOTS 7 THROUGH 12, BLOCK 8 8. EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: OCTOBER 1, 1990 RECORDING NO.: 9010010461 IN FAVOR OF: CITY OF KENT, A MUNICIPAL CORPORATION FOR: WATERLINE AFFECTS: PORTION OF LOTS 4, 5 AND 6, BLOCK 13 9. TERMS, COVENANTS, CONDITIONS AND/OR PROVISIONS CONTAINED IN A EMERGENCY ACCESS EASEMENT SERVING SAID PREMISES, AS CONTAINED IN DOCUMENT: RECORDED: NOVEMBER 9, 1990 RECORDING NO.(S): 9011091191 PAGE 3 OF 5 SCHEDULE B - CONT. POLICY NO. 318287-5 10. AGREEMENT AND THE TERMS AND CONDITIONS THEREOF BETWEEN: THE CITY OF KENT, A MUNICIPAL CORPORATION AND: KENT CENTENNIAL LIMITED PARTNERSHIP, A WASHINGTON LIMITED PARTNERSHIP DATED: OCTOBER 22, 1990 RECORDED: JANUARY 25, 1991 RECORDING NO.: 9101251105 PURPOSE: EMERGENCY ACCESS EASEMENT 11. EASEMENT AND CONDITIONS CONTAINED IN DOCUMENT: RECORDED: JUNE 25, 1991 RECORDING NO.: 9106251686 IN FAVOR OF: PUGET SOUND POWER AND LIGHT COMPANY FOR: AN UNDERGROUND ELECTRIC TRANSMISSION AND/OR DISTRIBUTION SYSTEM AFFECTS: PORTION OF LOTS 4 THROUGH 9, BLOCK 8 END OF SCHEDULE B PAGE 4 OF 5 SCHEDULE A-4 POLICY NO. 318287-5 THE LAND REFERRED TO IN THIS POLICY IS SITUATED IN THE STATE OF WASHINGTON, COUNTY OF KING AND IS DESCRIBED AS FOLLOWS: PARCEL A: LOTS 4, 5, 6, 7, 8 AND 9, BLOCK 8 AND THE EAST 20 FEET OF LOTS 4, 5 AND 6, BLOCK 13, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (A PORTION OF PARCEL A IS ALSO KNOWN AS LOT A OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) PARCEL B: LOTS 10, 11 AND 12, BLOCK 8, YESLER'S FIRST ADDITION TO THE TOWN OF KENT, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 5 OF PLATS, PAGE 64, RECORDS OF KING COUNTY, WASHINGTON; TOGETHER WITH THAT PORTION OF VACATED THIRD AVENUE ADJOINING SAID LOTS LYING SOUTHERLY OF WEST GOWE STREET AND LYING NORTHERLY OF WEST TITUS STREET PURSUANT TO ORDINANCE NO. 2895 OF THE CITY OF KENT. (ALSO KNOWN AS LOT B OF THE CITY OF KENT LOT LINE ADJUSTMENT NO. LL-89-36 RECORDED UNDER RECORDING NO. 9001240759.) BOTH SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON. J-10/92 PAGE 5 OF 5 NOTICE This Sketch is furnished as a courtesy only by First American Title Insurance Company and it is NOT a part of any title commitment or policy of title insurance. This sketch -is furnished solely for the purpose of assisting in locating the premises and does not purport to show all highways, roads, or easements affecting the property. No reliance should be placed upon this sketch for the location or dimensions of the property and no liability is assumed for the correctness thereof. 0 v0 IZ II I °+O L� 7 MEEKER 3 17 a 9 04 I O ` 12 II �G VOWS JP -u•sos 5 4 ORDER NO. 1- b-7 VOLUME 'S PAGE b q-- N � C W E S 5"vp RR 000�0 -Titi i 60 + T I P& A ST. it rc#.s `& ! T 1304.00 l8 Its o a /s0 11••• �c /10 9 orb 10 U� II + �q �i 12 Di4,4002 Iz T 9 EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy. 4. Any claim, which arises out of the transaction vesting in the Insured the estate or interest insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on: (i) the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance or fraudulent transfer; or (ii) the transaction creating the estate or interest insured by this policy being deemed a preferential transfer except where the preferential transfer results from the failure: (a) to timely record the instrument of transfer; or (b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. CONDITIONS AND STIPULATIONS 1. DEFINITION OF TERMS. The following terms when used in this policy mean: (a) "insured": the insured named in Schedule A, and, subject to any rights or defenses the Company would have had against the named insured, those who succeed to the interest of the named insured by operation of law as distinguished from purchase including, but not limited to, heirs, distributees, devisees, survivors, personal representa- tives, next of kin, or corporate or fiduciary successors. (b) "insured claimant": an insured claiming loss or damage. (c) "knowledge" or "known": actual knowledge, not constructive knowledge or notice which may be imputed to an insured by reason of the public records as defined in this policy or any other records which impart constructive notice of matters affecting the land. (d) "land": the land described or referred to in Schedule (A), and improvements affixed thereto which by law constitute real property. The term "land" does not include any property beyond the lines of the area described or referred to in Schedule (A), nor any right, title, interest, estate or easement in abutting streets, roads, avenues, alleys, lanes, ways or waterways, but nothing herein shall modify or limit the extent to which a right of access to and from the land is insured by this policy. (e) "mortgage": mortgage, deed of trust, trust deed, or other security instrument. (f) "public records": records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge. With respect to Section 1(a)(Iv) of the Exclusions From Coverage, "public records" shall also incude environmental protection liens filed in the records of the clerk of the United States district court for the district in which the land is located. (g) "unmarketability of the title": an alleged or apparent matter affecting the title to the land, not excluded or excepted from coverage, which would entitle a purchaser of the estate or interest described in Schedule A to be released from the obligation to purchase by virtue of a contractual condition requiring the delivery of marketable title. 2. CONTINUATION OF INSURANCE AFTER CONVEYANCE OF TITLE. The coverage of this policy shall continue in force as of bate of Policy in savor of an insured only so long as the insured retains an estate or interest in the land, or holds an indebtedness secured by a purchase money mortgage given by n niirrh2enr from fho inmirorl nr nnly en Innn — tho by this policy which constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. If the Company is prejudiced by the failure of the insured claimant to provide the required proof of loss or damage, the Company's obligations to the insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, with regard to the matter or matters requiring such proof of loss or damage. In addition, the insured claimant may reasonably be required to submit to examination under oath by any authorized representative of the Company and shall produce for examination, inspection and copying, at such reasonable times and places as may be designated by any authorized representative of the Company, all records, books, ledgers, checks, correspondence and memoranda, whether bearing a date before or after Date of Policy, which reasonably pertain to the loss or damage. Further, if requested by any authorized representative of the Company, the insured claimant shall grant its permission, in writing, for any authorized rep- resentative of the Company to examine, inspect and copy all records, books, ledgers, checks, correspondence and mem- oranda in the custody or control of a third party, which reasonably pertain to the loss or damage. All information designated as confidential by the insured claimant provided to the Company pursuant to this Section shall not be disclosed to others unless, in the reasonable judgment of the Company, it is necessary in the administration of the claim. Failure of the insured claimant to submit for examination under oath, produce other reasonably requested information or grant permission to secure reasonably necessary informa- tion from third parties as required in this paragraph, unless prohibited by law or governmental regulation, shall terminate any liability of the Company under this policy as to that claim. 6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY. In case of a claim under this policy, the Company shall have the following additional options: (a) To Pay or Tender Payment of the Amount of Insurance. To pay or tender payment of the amount of insurance under this policy together with any costs, attorneys' fees and expenses incurred by the insured claimant, which were authorized by the Company, up to the time of payment or tender of payment and which the Company is obligated to pay. Upon the exercise by the Company of this option, all liability and obligations to the insured under this policy, other than to make the payment required, shall terminate, including any liability or obligation to defend, prosecute, or continue for any loss or damage caused thereby. (b) In the event of any litigation, including litigation by the Company or with the Company's consent, the Company shall have no liability for loss or damage until there has been a final determination by a court of competent jurisdiction, and disposition of all appeals therefrom, adverse to the title as insured. (c) The Company shall not be liable for loss or damage to any insured for liability voluntarily assumed by the insured in settling any claim or suit without the prior written consent of the Company. 10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF LIABILITY. All payments under this policy, except payments made for costs, attorneys' fees and expenses, shall reduce the amount of the insurance pro tanto. 11. LIABILITY NONCUMULATIVE. it is expressly understood that the Amount of In- surance under this policy shall be reduced by any amount the Company may pay under any policy insuring a mortgage to which exception is taken in Schedule B or to which the insured has agreed, assumed, or taken subject, or which is hereafter executed by an insured and which is a charge or lien on the estate or interest described or referred to in Schedule A, and the amount so paid shall be deemed a payment under this policy to the insured owner. 12. PAYMENT OF LOSS. (a) No payment shall be made without producing this policy for endorsement of the payment unless the policy has been lost or destroyed, in which case proof of loss or destruction shall be furnished to the satisfaction of the Company. (b) When liability and the extent of loss or damage has been definitely fixed in accordance with these Conditions and Stipulations, the loss or damage shall be payable within 30 days thereafter. 13. SUBROGATION UPON PAYMENT OR SETTLEMENT. (a) The Company's Right of Subrogation. Whenever the Company shall have settled and paid a claim under this policy, air right of subrogation shall vest in the Company unaffected by any act of the insured claimant. The Company shall be subrogated to and be entitled to all A.10M onrl -A- , hinh ♦hn hovn �11',�JLTI'TGT']n?"C�' [TJ ZTIC..- insure shall haveliability y reason o�coven� warranty � � had against any person or property in respect to the claim Company for cancellation. made by the insured in any transfer or conveyance of the had this policy not been issued. If requested by the Company, estate or interest. This policy shall not cgntigue in force in favgr of any purchaser from the insured of either (i) an estate or interest to the land, or (ii) an indebtedness secured by a purchase money mortgage given to the insured. 3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT. The insured shall notify the Company promptly in writing (i) in case of any litigation as set forth in Section 4(a) below, (ii) in case knowledge shall come to an insured hereunder of any claim of title or interest which is adverse to the title to the estate or interest, as insured, and which might cause loss or damage for which the Company may be liable by virtue of this policy, or (III) if title to the estate or interest, as insured, is rejected as unmarketable. If prompt notice shall not be given to the Company, then as to the insured all liability of the Company shall terminate with regard to the matter or matters for which prompt notice is required; provided, howevef, that failure to notify the Company shall in no case prejudice the rights of any insured under this policy unless the Company shall be prejudiced by the failure and then only to the extent of the prejudice. 4. DEFENSE AND PROSECUTION OF ACTIONS; DUTY OF INSURED CLAIMANT TO COOPERATE. (a) Upon written request by the insured and subject to the options contained in Section 6 of these Conditions and Stipulations, the Company, at its own cost and without unreasonable delay, shall provide for the defense of an insured in litigation in which any third party asserts a claim adverse to the title or interest as insured, but only as to those stated causes of action alleging a defect, lien or en- cumbrance or other matter insured against by this policy. The Company shall have the right to select counsel of its choice (subject to the right of the insured to object for reasonable cause) to represent the insured as to those stated causes of action and shall not be liable for and will not pay the fees of any other counsel. The Company will not pay any fees, costs or expenses incurred by the insured in the defense of those causes of action which allege matters not insured against by this policy. (b) The Company shall have the right, at its own cost, to institute and prosecute any action or proceeding or to do any other act which in its opinion may be necessary or desirable to establish the title to the estate or interest, as insured, or to prevent or reduce loss or damage to the insured. The Company may take any appropriate action under the terms of this policy, whether or not it shall be liable hereunder, and shall not thereby concede liability or waive any provision of this policy. If the Company shall exercise its rights under this paragraph, it shall do so diligently. (c) Whenever the Company shall have brought an action or interposed a defense as required or permitted by the provisions of this policy, the Company may pursue any litigation to final determination by a court of competent jurisdiction and expressly reserves the right, in its sole discretion, to appeal from any adverse judgment or order. (d) In all cases where this policy permits or requires the Company to prosecute or provide for the defense of any action or proceeding, the insured shall secure to the Company the right to so prosecute or provide defense in the action or proceeding, and all appeals therein, and permit the Company to use, at its option, the name of the insured for this purpose. Whenever requested by the Company, the insured, at the Company's expense, shall give the Company all reasonable aid (i) in any action or proceeding, securing evidence, obtaining witnesses, prosecuting or defending the action or proceeding, or effecting settlement, and (ii) in any other lawful act which in the opinion of the Company may be necessary or desirable to establish the title to the estate or interest as insured. If the Company is prejudiced by the failure of the insured to furnish the required cooperation, the Company's obligations to the insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, with regard to the matter or matters requiring such cooperation. 5. PROOF OF LOSS OR DAMAGE. In addition to and after the notices required under Section 3 of these Conditions and Stipulations have been provided the Company, a proof of loss or damage signed and sworn to by the insured claimant shall be furnished to the Company within 90 days after the insured claimant shall ascertain the facts giving rise to the loss or damage. The proof of loss or damage shall describe the defect in, or lien or encumbrance on the title, or other matter insured against (b) To Pay or Otherwise Settle With Parties Other than the Insured or With the Insured Claimant. (i) to pay or otherwise settle with other parties for or in the name of an insured claimant any claim insured against under this policy, together with any costs, attorneys' fees and expenses incurred by the insured claimant which were authorized by the Company up to the time of payment and which the Company is obligated to pay; or (ii) to pay or otherwise settle with the insured claimant the loss or damage provided for under this policy, together with any costs, attorneys' fees and expenses incurred by the insured claimant which were authorized by the Company up to the time of payment and which the Company is obligated to pay. Upon the exercise by the Company of either of the options provided for in paragraphs (b)(i) or (ii), the Com- pany's obligations to the insured under this policy for the claimed loss or damage, other than the payments required to be made, shall terminate, including any liability or obligation to defend, prosecute or continue any litigation. DETERMINATION, EXTENT OF LIABILITY AND COINSURANCE. This policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the insured claimant who has suffered loss or damage by reason of matters insured against by this policy and only to the extent herein described. (a) The liability of the Company under this policy shall not exceed the least of: (i) the Amount of Insurance stated in Schedule A; (ii) the difference between the value of the insured estate or interest as insured and the value of the insured estate or interest subject to the defect, lien or encumbrance insured against by this policy. (b) In the event the Amount of Insurance stated in Schedule A at the Date of Policy is less than 80 percent of the value of the insured estate or interest or the full consideration paid for the land, whichever is less, or if subsequent to the Date of Policy an improvement is erected on the land which increases the value of the insured estate or interest by at least 20 percent over the Amount of Insurance stated in Schedule A, then this Policy is subject to the following: (i) where no subsequent improvement has been made, as to any partial loss, the Company shall only pay the loss pro rata in the proportion that the Amount of Insurance at Date of Policy bears to the total value of the insured estate or interest at Date of Policy; or (ii) where a subsequent improvement has been made, as to any partial loss, the Company shall only pay the loss pro rata in the proportion that 120 percent of the Amount of Insurance stated in Schedule A bears to the sum of the Amount of Insurance stated in Schedule A and the amount expended for the improvement. The provisions of this paragraph shall not apply to costs, attorneys' fees and expenses for which the Company is liable under this policy, and shall only apply to that portion of any loss which exceeds, in the aggregate, 10 percent of the Amount of Insurance stated in Schedule A. (c) The Company will pay only those costs, attorneys' fees and expenses incurred in accordance with Section 4 of these Conditions and Stipulations. 8. APPORTIONMENT. If the land described in Schedule (A)(C) consists of two or more parcels which are not used as a single site, and a loss is established affecting one or more of the parcels but not all, the loss shall be computed and settled on a pro rata basis as if the Amount of Insurance under this policy was divided pro rata as to the value on Date of Policy of each separate parcel to the whole, exclusive of any improvements made sub- sequent to Date of Policy, unless a liability or value has otherwise been agreed upon as to each parcel by the Company and the insured at the time of the issuance of this policy and shown by an express statement or by an endorsement attached to this policy. 9. LIMITATION OF LIABILITY. (a) If the Company establishes the title, or removes the alleged defect, lien or encumbrance, or cures the lack of a right of access to or from the land, or cures the claim of unmarketability of title, all as insured, in a reasonably diligent manner by any method, including litigation and the comple- tion of any appeals therefrom, it shall have fully performed its obligations with respect to that matter and shall not be liable the insured claimant shall transfer to the Company all rights and remedies against any person or property necessary in order to perfect this right of subrogation. The insured claimant shall permit the Company to sue, compromise or settle in the name of the insured claimant and to use the name of the insured claimant in any transaction or litigation involving these rights or remedies. If a payment on account of a claim does not fully cover the loss of the insured claimant, the Company shall be subrogated to these rights and remedies in the proportion which the Company's payment bears to the whole amount of the loss. If loss should result from any act of the insured claimant, as stated above, that act shall not void this policy, but the Company, in that event, shall be required to pay only that part of any losses insured against by this policy which shall exceed the amount, if any, lost to the Company by reason of the impairment by the insured claimant of the Company's right of subrogation. (b) The Company's Rights Against non-insured Obligors. The Company's right of subrogation against non- insured obligors shall exist and shall include, without limitation, the rights of the insured to indemnities, guaranties, other policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments which provide for subrogation rights by reason of this policy. 14. ARBITRATION. Unless prohibited by applicable law, either the Com- pany or the insured may demand arbitration pursuant to the Title Insurance Arbitration Rules of the American Arbitration Association. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. All arbitrable matters when the Amount of Insurance is $1,000,000 or less shall be arbitrated at the option of either the Company or the insured. All arbitrable matters when the Amount of Insurance is in excess of $1,000,000 shall be arbitrated only when agreed to by both the Company and the insured. Arbitration pursuant to this policy and under the Rules in effect on the date the demand for arbitration is made or, at the option of the insured, the Rules in effect at Date of Policy shall be binding upon the parties. The award may include attorneys' fees only if the laws of the state in which the land is located permit a court to award attorneys' fees to a prevailing party. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof. The law of the situs of the land shall apply to an arbitration under the Title Insurance Arbitration Rules. A copy of the Rules may be obtained from the Company upon request. 15. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT. (a) This policy together with all endorsements, if any, attached hereto by the Company is the entire policy and contract between the insured and the Company. In interpret- ing any provision of this policy, this policy shall be construed as a whole. (b) Any claim of loss or damage, whether or not based on negligence, and which arises out of the status of the title to the estate or interest covered hereby or by any action asserting such claim, shall be restricted to this policy. (c) No amendment of or endorsement to this policy can be made except by a writing endorsed hereon or attached hereto signed by either the President, a Vice President, the Secretary, an Assistant Secretary, or validating officer or authorized signatory of the Company. 16. SEVERABILITY. In the event any provision of the policy is held invalid or unenforceable under applicable law, the policy shall be deemed not to include that provision and all other provisions shall remain in full force and effect. 17. NOTICES, WHERE SENT. All notices required to be given the Company and any statement in writing required to be furnished the Company shall include the number of this policy and shall be addressed to the Company at 114 East fifth Street, Santa Ana, California 92701, or to the office which issued this policy. qw N