HomeMy WebLinkAboutCAG1988-0127 - Original - Sound Ventures, Inc. - Various Lots from Block 8 & Block 13 Yesler's First Addition to the Town of Kent - 11/30/1988 REAL ESTATE PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made by and between SOUND VENTURES,
INC. , a Washington corporation, ("Buyer") , and THE CITY OF
KENT, a municipal corporation ("Seller") . Seller is the
owner of certain real property in the City of Kent, King
County, Washington, described in Exhibit A attached hereto
and incorporated herein by this reference located in Kent,
Washington, (the "Land") , including, without limitation, the
building thereon and all fixtures affixed thereto, and all
other interests, rights, easements, agreements and that
certain LID No. 313 in an approximate amount as of the date
of this Agreement of $20, 000. 00, appurtenant and beneficial
thereto. The real property and the building and all fix-
tures affixed thereto together with all other interests,
rights, easements, agreements and that certain LID No. 313
in an approximate amount of $20, 000. 00, appurtenant and
beneficial to the Land are referred to collectively as the
"Property. "
1. Agreement. Seller agrees to sell the Property to
Buyer in accordance with the terms of this Agreement. Buyer
agrees to purchase the Property subject to and in accordance
with the terms and conditions set forth in this Agreement.
2 . Purchase Price. The total purchase price for the
Property shall be the "Appraised Value" (on a per square
foot basis) times the actual square footage of the Land, all
determined in accordance with the provisions of this para-
graph. The total square footage of the Land is currently
estimated to be approximately 100, 000 square feet; however,
the actual total square footage of Land shall be determined
by an ALTA Survey conducted in accordance with paragraph 20
herein. The actual price per square foot shall be the
Appraised Value determined in accordance with the following
appraisal procedure:
a. Appraised Value. The Appraised Value shall
mean a current appraisal of the fair market value of
the Land. The Appraised Value shall be determined in
accordance with the following procedures:
(1) Designation of Appraiser. Seller and
Buyer shall each, within five (5) days after the
date of this Agreement, designate an MAI
appraiser. Within five (5) days after the desig-
nation of appraisers by Seller and Buyer, the two
MAI appraisers so selected shall designate a third
appraiser; provided, however, that if Seller and
Buyer designate the same appraiser, then the
second party so designating shall designate
another appraiser. In the event of the failure of
Seller or Buyer to select an MAI appraiser within
the time provided or in the event of the failure
of the two MAI appraisers to select a third MAI
appraiser, either party shall have the right to
apply to the Superior Court of King County of the
State of Washington ("Court") to designate an MAI
appraiser(s) . Such application to Court shall
occur within seven (7) days following the five (5)
day time periods set forth above. The parties
hereto agree to proceed in good faith and with due
diligence to obtain a prompt determination of the
MAI appraiser.
(2) Appraiser Qualifications. All
appraisers designated under this Agreement shall
have offices in the greater Seattle area, shall be
MAI certified, and shall be members of the
American Institute of Real Estate Appraisers or
any comparable successor certifying organization
if such Institute is not then in existence. Such
appraisers shall be familiar with fair market
value in the greater Seattle area, and, specifi-
cally, the Kent area, for properties substantially
similar to the Land.
(3) Appraisal Standards. Appraisal stan-
dards of the American Institute of Real Estate
Appraisers shall be adhered to by the appraisers
in determining the fair market value for the Land.
The Land shall be valued subject to the provisions
of paragraph (2) (d) below without regard to the
existence of this Agreement based only upon the
fair market value of the Land as determined by
such appraisers in the exercise of their profes-
sional judgment and employing normal appraisal
techniques for determining fair market value for
real properties of comparable use and location.
The parties agree and the appraiser shall be so
instructed that the fair market value of the Land
shall take into account and be reduced by the
outstanding unpaid balance (and interest to
accrue) of LID No. 313 as set forth in paragraph
ll.a. (2) .
(4) Appraisal Costs. The costs of the
appraiser appointed by each party shall be paid
for by that party and the remaining costs of the
appraisal procedure set forth herein shall be
borne equally by the parties.
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(5) Determination of Appraised Value. If
either the highest or the lowest appraised fair
market value is more than 10% different than the
middle of the three appraised fair market values,
or if two appraised fair market values are iden-
tical, the third appraisal is more than 10%
different than the other two appraisals, then each
highest or lowest appraised fair market value
which exceeds the 10% limit shall not be con-
sidered further. After eliminating any appraised
fair market value as required in the preceding
sentence, if any, the average of the remaining
appraised fair market values shall be the fair
market value of the Land. The parties agree and
the appraiser shall be so instructed that, the
fair market value of the Land so determined shall
be reduced by an amount equal to five percent (5%)
of such then determined fair market value of the
Land, in order to reflect the "net" fair market
value of the Land as if a real estate commission
were applicable. The then-reduced fair market
value of the Land shall constitute the "Appraised
Value" of the Land for purposes of this Agreement
and shall be final and binding on the parties.
The Appraised Value shall be determined on the
basis of dollars per square foot of Land.
(6) Completion of Appraisal. The parties
shall exert their best and diligent efforts to
cause the appraisal process to be completed and
determine the Appraised Value within 30 days of
this Agreement; and, in any event, the completion
of the appraisal process and determination of
Appraised Value shall be completed no later than
forty-five (45) days following the date of this
Agreement.
b. Manner of Payment. The purchase price as
determined in paragraphs 2 .a. and 8 herein, shall be
paid by Buyer in all cash on the date of Closing by
cashier's check or bank wire transfer.
C. Earnest Money Applicable. Any and all
Earnest Money paid by Buyer shall be a part of such
Purchase Price in accordance with this Agreement.
d. Buildi . The parties acknowledge the exis-
tence of an operational building occupied and currently
used by Seller located on the Land, and owned by the
Seller ("Building") . The parties also acknowledge and
agree that Buyer's contemplated development of the
Property includes eventual demolition of the Building
and, as a result, the appraisers shall not consider the
fair market value of the Building in determining the
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purchase price as set forth in paragraph 2 .a. The
Building shall be conveyed to Buyer at Closing as a
part of the Property, provided, however, Buyer, as
landlord, and Seller, as tenant, shall enter into a
lease, (the form of which shall be agreed upon by Buyer
and Seller prior to Buyer' s and Seller's removal of the
Contingencies set forth in paragraphs 11 and 12) , under
which Buyer shall lease the Building to Seller rent
free, such rent to be the consideration for the
purchase of the Building by Buyer, until such time as
the Premises to be leased to Buyer under the Lease set
forth in paragraph 10 are ready and available for
occupancy by Buyer ("Building Lease") . Buyer shall
notify Seller in writing 90 days in advance of termi-
nation of the Building Lease. Seller shall, during the
term of the Building Lease, pay all costs associated
with or arising out of the maintenance and operation of
the Building.
3 . Earnest Money; Default. Buyer shall deposit with
Transamerica Title Insurance Company ("Transamerica") its
promissory note in the sum of Fifteen Thousand and No/100
Dollars ($15, 000. 00) ("Earnest Money Note") . The Earnest
Money Note shall be held by Transamerica for the benefit of
the party to receive the Earnest Money Note pursuant to the
terms of this Agreement. The Earnest Money Note shall be
immediately due and payable upon removal or waiver of the
Contingencies set forth in paragraph 11 and 12 or in the
event of breach of this Agreement by Buyer. Any sum paid
pursuant to the Earnest Money Note or otherwise under this
Agreement shall constitute Earnest Money. The Earnest Money
shall be held by Transamerica in an interest-bearing account
for the benefit of the party to receive the Earnest Money
pursuant to the terms and conditions of this Agreement. In
the event of breach of this Agreement by Buyer, Seller may
terminate this Agreement and receive the Earnest Money Note,
which shall be immediately due and owing or Earnest Money,
as the case may be, as liquidated damages and as its sole
remedy for such breach, such election constituting Seller' s
waiver of any other remedies which it may have at law or in
equity. In the event of any breach of this Agreement by
Seller, the Earnest Money Note or Earnest Money, as the case
may be, shall be returned to Buyer and Buyer may maintain
actions for specific performance and damages.
4 . Conveyance of Title. Upon Closing, Seller shall
execute and deliver to Buyer a Statutory Warranty Deed
conveying good and marketable fee title to the Property
subject only to the Permitted Exceptions, if any, approved
by Buyer in accordance with paragraph 5 and the terms and
conditions of this Agreement. Monetary encumbrances to be
discharged by Seller may be paid out of the Purchase Price
at Closing.
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5. Title Insurance. At Closing Seller shall furnish
to Buyer an ALTA Standard Coverage Owner's Policy of Title
Insurance issued by Transamerica, insuring 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
("Policy") . No later than fifteen (15) days following the
date of this Agreement, Buyer shall be furnished with a
preliminary commitment to such Policy (the "Commitment")
together with full copies of any exceptions set forth
therein. Within thirty (30) days of Buyer's receipt of
Commitment, Buyer shall notify Seller in writing of Buyer' s
approval of any exceptions or other defects shown in the
Commitment ("Permitted Exceptions") . Seller shall exert its
best efforts to eliminate all exceptions to title other than
the Permitted Exceptions within thirty (30) days of Seller' s
receipt of such notice from Buyer. If title is not insur-
able as provided above and cannot be made so insurable by
the Closing date, Buyer may, at its sole option:
a. Extension. Extend the Closing date for up to
thirty (30) days by giving notice of such extension to
Seller prior to the Closing date. During that exten-
sion of time, Seller shall continue to exert its best
efforts to remove such exceptions; or
b. Termination. Terminate this Agreement where-
upon the Earnest Money Note shall be returned to Buyer
and no party shall have any right or remedy against the
other; or
C. Waiver. Waive its prior disapproval and
elect to purchase the Property. Failure of Buyer to
disapprove any exceptions within the aforementioned
time limit shall be deemed an approval of the
Commitment.
Seller agrees, during the term of this Agreement, not
to execute or enter into any lease of the Property or
contract effecting the Property without first obtaining the
written consent of Buyer.
6. Condemnation. In the event that the Property is
or becomes the subject of a condemnation proceeding prior to
Closing, and Buyer elects to waive the contingency relating
to condemnation, the Purchase Price for the Property shall
be reduced by the total of any awards or other proceeds
received by Seller at or prior to Closing with respect to
any taking; whereupon, at Closing, Seller shall assign to
Buyer all rights of Seller in and to any awards or other
proceeds payable by reason of any taking. Seller agrees to
notify Buyer in writing of eminent domain proceedings within
five (5) days after Seller learns thereof.
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7 . Risk of Loss. Seller shall bear all risk of loss
to the Building prior to Closing.
8 . Closing.
a. Escrow. This sale shall be closed in escrow
in the office of Transamerica on that date which is
thirty (30) days from the written waiver of all Contin-
gencies by Buyer and Seller as set forth in paragraphs
5, 11 and 12 herein or as soon thereafter as possible,
but in any event not later than September 1, 1989,
which will be the termination date, unless the parties
agree, in writing, to further extend the closing/
termination date. The parties may by mutual agreement,
agree to extend the closing/termination date should
legal and administrative procedures necessitated by
Buyer's contemplated development of the Property, such
as street vacation, environmental review processes or
other matters outside the sole control of Seller in its
capacity under this Agreement, or appeals thereof,
render it impossible for Buyer and Seller to meet the
deadlines set forth herein. Buyer and Seller shall
deposit in escrow with Transamerica all instruments and
monies necessary to complete the sale in accordance
with this Agreement.
b. Prorations. General real property taxes and
special public assessments for the current year, rents,
water, and other utilities constituting liens, insur-
ance premiums on policies to be assigned to Buyer, if
any, and other items of income and direct expense
relating to the Property, excluding the Building, which
expenses Seller shall continue to pay under the Build-
ing Lease, shall be prorated as of the date of Closing.
Seller shall be responsible for any taxes or other
charges that may be assessed against the Property prior
to the date of closing based on the fact that it has
been omitted from the tax rolls for years prior to the
date of Closing and Seller shall pay any such taxes or
charges if and when they become due. Subject to the
provisions of paragraphs 2 .d. , 11, and 12 , Buyer shall
be entitled to possession on Closing.
c. Costs. Seller shall pay the premium for the
Policy, State of Washington real estate excise taxes,
if any, and one-half Transamerica's escrow fee. Buyer
shall pay the cost of recording the Statutory Warranty
Deed and one-half Transamerica's escrow fee.
9 . Seller' s Representations and Warranties. In addi-
tion to other representations herein and warranties set
forth in this Agreement, Seller represents and warrants to
Buyer that as of the date hereof and on the closing date,
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Seller owns the Property and has good and marketable title
and full power to convey it, and that:
a. Liens. All persons and entities supplying
labor, materials, and equipment to the Property have
been paid, and there are no claims of liens and there
are no service contracts applicable to the Property;
b. Violations. To the Seller's actual knowledge,
the Property is not in violation of any applicable
laws, regulations, or ordinances;
c. Assessments. There are no currently due and
payable assessments for public improvements against the
Property other than those shown on Exhibit B; and to
the Seller' s actual knowledge, there is no local
improvement district or other taxing authority in the
process of formation that would create a lien on the
Property at the date of signing this Agreement.
d. Litigation. There is no action in the nature
of litigation, claim, or other proceeding, to the
Seller' s actual knowledge, actually pending against the
Seller as to the Property;
e. Subdivided. The Property consists of one
contiguous parcel and has been or will, by the Closing
date at Seller' s expense, have been lawfully
subdivided;
f. Access. The Property has legal access to all
streets adjoining the Property except those that may be
vacated; and
g. Hazardous Substances. To the best of Seller's
actual knowledge, there exists no hazardous substance
in reportable quantities of any kind in, on or emanat-
ing from or onto the Property. Seller agrees to
execute the Affidavit in a form substantially equiva-
lent to that attached hereto as Exhibit C; and
h. Leases. There are no leases or tenancies or
parties in possession of the Property or any part
thereof and no claims arising out of any earlier such
occupancies.
The representations and warranties made by Seller shall
be true and correct as of the date of this Agreement and
shall be deemed automatically reaffirmed by Seller at the
date of Closing as true and correct.
10. Lease. Concurrently with Closing, Seller, as
tenant, and Buyer, as landlord, shall enter into a Lease of
the Property but excluding the Building in the form attached
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hereto as Exhibit D and incorporated herein by this refer-
ence ("Lease") . The parties acknowledge and agree that
minor revisions to Lease which act to effectuate or clarify
the terms of the Lease shall be acceptable.
11. Buyer's Contingencies. Buyer' s obligation to
close this transaction is conditioned upon and subject to
Buyer's satisfaction or Buyer's waiver of each and all of
the following Contingencies. Buyer shall use all due dili-
gence and reasonable best efforts to reach a determination
as to the Contingencies.
a. Feasibility Contingencies.
(1) Physical Condition; Feasibility.
Receipt by Seller of Buyer' s written approval of
the physical condition of the Property and feasi-
bility of the Property for Buyer's contemplated
development of the Property at the date of signing
this Agreement. Buyer' s contemplated development
of the Property a first phase single building
totalling approximately 60, 000 square feet with
primarily Class A office space and street level
retail space, together with parking ("Project") ;
(2) Condition of Title. Buyer's approval of
the condition of title to the Property, and any
exceptions thereto, including, without limitation,
all easements, covenants, restrictions, and encum-
brances thereon and the form of the Policy to be
issued to Buyer at Closing; however, Buyer
acknowledges its acceptance of that certain
special assessment for Local Improvement District
No. 313 upon closing and, further, Buyer accepts
all conditions on the Property relating to the LID
No. 313 ;
(3) Financing. Receipt by Buyer of financ-
ing in such amounts and with such terms as are
acceptable to Buyer in the exercise of Buyer's
sole discretion. Buyer shall provide Seller with
written reports on a monthly basis as to Buyer' s
efforts to obtain such financing;
(4) Parking. Buyer' s determination, subject
to the provisions of paragraph 12 below, of the
availability of parking spaces and completion of a
lease or other agreement to provide parking space
for the benefit of the Property.
(5) Governmental Approvals; Building Permit.
Receipt by Buyer of all governmental approvals
required in connection with this Agreement and the
Project, which governmental approvals shall
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include, without limitation, street vacation,
environmental review, land use, zoning and SEPA
approvals, demolition permit, and issuance of
building permit (collectively, "Governmental
Approvals") . Buyer' s receipt of such Governmental
Approvals shall be deemed to have occurred only
when such Governmental Approvals are final with
conditions satisfactory to Buyer in the exercise
of Buyer's sole discretion, all appeal periods
have expired, and no challenge has been made, or
any appeals made have been dismissed or satisfied.
Buyer shall proceed in good faith and with due
diligence to obtain all Governmental Approvals,
and, to the extent Buyer determines it is economi-
cally feasible to proceed, Buyer shall proceed in
good faith and with due diligence to obtain
dismissals or satisfaction of all appeals.
(6) Design Approval . Buyer shall have
obtained the Design Approval of Seller with
respect to the conceptual design of the Project as
set forth in paragraph 12 .e.
(7) Non-Existence of Hazardous Substances.
Buyer' s determination that the soils of the
Property are free from any hazardous substances
whatsoever. Buyer agrees to provide Seller with a
written report obtained by Buyer regarding the
presence of hazardous substances on the Property,
which report shall also be addressed to Seller.
(8) Street Vacation. Buyer' s determination
of the acceptability and the completion of the
vacation of Third Avenue as it abuts the Property,
which street vacation Seller shall initiate and
obtain in accordance with paragraph li.c. below.
(9) City Council Approval. The Agreement
shall be approved by the City Council of the City
of Kent ("Council Approval") . Council Approval
shall occur on or before November 4, 1988 . For
each days' delay beyond November 4 , 1988, that
Council Approval is not obtained, the dates in
this Agreement as set forth in paragraphs ll.d.
and 8.a. , and the dates set forth in the Lease
shall be extended by an equal number of days;
provided, however, that if Council Approval is not
obtained by December 31, 1988, then this Agreement
may at the election of Buyer or Seller terminate.
b. Seller's obligations. Seller shall within
fifteen (15) days of the date of this Agreement deliver
to Buyer copies of all documentation or copies thereof
with respect to the management and ownership of the
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Property by Seller, which copies of such documentation
shall include, without limitation, all soils tests for
the Property, all agreements and other documentation
regarding the Corporation of the Catholic Archbishop of
Seattle and adjacent property owned by the Corporation
of the Catholic Archbishop of Seattle and used by St.
Anthony's Church, and the as-built plans and specifica-
tions (including mechanical and electrical) for the
current Kent City Hall and other documentation relevant
to the construction of the Kent City Hall to the extent
such documents exist, are under the control of Seller,
and Seller is legally permitted to release such
documents.
C. Street Vacation. Seller shall, at a time
mutually agreed by Buyer and Seller, initiate and
proceed to complete a street vacation of Third Avenue
as it abuts the Property. Such street vacation shall
be in accordance with the Design Concept reviewed and
approved by Buyer and Seller in accordance with para-
graph 12 .e. Such street vacation shall be undertaken
and completed at the expense of Seller.
d. Contingency Period. Buyer shall have until
April 30, 1989, ("Contingency Period") to approve or
disapprove in writing the Contingencies and documenta-
tion specified in such subparagraphs (1) - (8) above. In
the event Buyer fails to timely approve such Contingen-
cies or any one of them, such Contingencies shall be
deemed disapproved; whereupon this Agreement shall
terminate and be of no further force or effect, the
Earnest Money Note shall be returned to Buyer, and no
party shall have any right or remedy against the other.
However, during the Contingency Period, the Buyer shall
report in writing to Seller once every month on the
status of each of Buyer's Contingencies. During the
Contingency Period, Seller shall (i) reasonably cooper-
ate with Buyer to provide such information that Buyer
requests to the extent such documents exist, and are
under the control of Seller, and Seller is legally per-
mitted to release such documents, and (ii) grant to
Buyer the right to enter the Property at reasonable
times and reasonably inspect the same. Buyer shall
have the right to extend the Contingency Period for
three (3) periods of thirty (30) days each by paying to
Transamerica the sum of Two Thousand Dollars ($2 , 000)
as Earnest Money for each such 30-day period on or
before expiration of the Contingency Period or exten-
sion thereof, whereupon Transamerica's receipt of such
payment, the Contingency Period shall be automatically
extended. Buyer shall have the right to request,
subject to Seller' s approval, a fourth (4th) extension
of thirty (30) days on the same terms and conditions as
the previous three (3) extensions; which Seller's
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approval shall not be withheld so long as Buyer has
diligently pursued the obtaining of Governmental
Approvals. The Buyer' s Contingencies expressed here-
under exist solely for Buyer' s benefit and shall be
determined in the exercise of Buyer's sole discretion.
e. Closing Contingencies. Buyer's obligation to
close this transaction shall be further conditioned
upon and subject to the absence of the following as of
the Closing date:
(1) Violations. Any violation of federal,
state, or local laws, rules, regulations, or
ordinances affecting the use, occupancy, or condi-
tion of the Property to the extent Seller or Buyer
has actual knowledge of such violation, unless
such violation has been waived by Buyer whereupon
such waiver Buyer shall proceed to Closing;
(2) Compliance. The failure to comply with
the order of any court of governmental authority
or agency pertaining to the Property or the use,
occupancy, or condition thereof;
(3) Litigation. The pendency, or, to the
extent of Buyer's or Seller's actual knowledge,
the threat of any litigation or administrative
legal proceeding relating directly to the Property
or this Agreement; and
(4) Condemnation. The pendency, or, to the
extent of Buyer' s or Seller's actual knowledge,
the threat of any administrative legal proceeding
to condemn all or any part of the Property by an
eminent domain proceeding.
12 . Seller' s Contingencies. Seller' s obligation to
close this transaction is conditioned upon and subject to
Seller's satisfaction or Seller's waiver of each and all of
the following Seller's Contingencies:
a. Library Parking Lot. Seller's acquisition by
conveyance from the Kent/King County Library Board
or the legal entity so authorized, of full and
marketable title by statutory warranty deed of
certain real property described on Exhibit E
attached hereto and incorporated herein by this
reference ("Library Parking Lot Property") which
conveyed Library Parking Lot Property constitutes
a portion of the Property. Seller shall exert its
reasonable efforts, good faith and due diligence
to achieve the conveyance of the Library Property
to Seller at the earliest possible time and if
possible by November 15, 1988 . For each days
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delay beyond November 15, 1988, that Seller has
not acquired the Library Parking Lot Property, the
dates in this Agreement as set forth in paragraphs
ll.d. and 8.a. , and the dates set forth in the
Lease shall be extended by an equal number of
days; provided, however, if Seller has not
acquired the Library Parking Lot Property by
December 31, 1988, then this Agreement may be
terminated by Buyer. On or before that day which
is fifteen (15) days after the date of this Agree-
ment, Seller shall provide Buyer with a letter of
intent from the Kent/King County Library Board, or
other appropriate entity, stating that the inten-
tion of the Kent/King County Library Board or
appropriate entity is to convey the Library
Parking Lot Property to Seller.
b. Parking. The Project as contemplated by Buyer
shall provide available parking for the benefit of
the Property at a standard no less than two park-
ing stalls per thousand square feet of the Project
subject to the Governmental Approvals received.
C. Bond Counsel Opinion. Seller shall have received
the opinion of its Bond Counsel on or before
November 15, 1988 that Seller' s entry into this
Agreement shall not be calculated into the bond
indebtedness capacity of Seller. Seller shall
provide Buyer with written notice of the
satisfaction of this condition.
d. Building Lease. Buyer shall enter into the
Building Lease as described in paragraph 2 .d.
herein.
e. Building Development Project Description and
Conceptual Design Approval. The parties acknowl-
edge that the purpose of this Agreement and the
Project is to provide for the development of a
building with class A office space and street
level retail space, containing approximately
60, 000 square feet, and which is compatible in
design concept and materials with the existing
Kent City Hall. Buyer agrees that the concept and
design of the Project shall provide available
parking for the Project at a standard of no less
than two (2) parking stalls per one thousand
(1, 000) square feet of Project. Buyer shall
involve the Seller in the process through which a
conceptual design for the Project is developed in
order to ensure the Project meets the purposes of
this Agreement. The conceptual design, including
plans and design criteria, and all significant
revisions thereto, shall be subject to the
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approval of Seller ("Design Approval") . Seller' s
Design Approval shall not be unreasonably withheld
and shall be granted so long as the conceptual
design for the Project is consistent with the pur-
pose of this Agreement as set forth in the first
sentence of this paragraph. Seller does hereby
designate the City Administrator as its spokesman
and representative hereunder; and Buyer shall have
the right to deal with and rely on the representa-
tions of City Administrator's decisions. Seller
shall render its Design Approval within five (5)
business days of its receipt of any proposed
design concept for the Project from Buyer.
Further, Seller shall provide Buyer with detailed,
written comments as to any matters relating to the
design concept for the Project as to which Seller
disapproves. Buyer and Seller agree to exert
their best reasonable efforts to reach agreement
on design concept for the Project on or before
December 30, 1988.
13 . Documents to be Delivered at Closing. The follow-
ing instruments shall be delivered by Seller at Closing:
a. Deed. Statutory Warranty Deed;
b. Lease. That certain Lease as set forth in
paragraph 10 ;
C. Building Lease. That certain Building Lease
as set forth in paragraph 2 .d. ; and
d. Assignment. If required, an Assignment of
that certain Agreement between Seller and the
Corporation of the Catholic Archbishop of Seattle dated
as of February 21, 1984, benefitting the Property.
14 . General Provisions. Time is of the essence of
this Agreement. This is the entire agreement of the parties
with respect to the Property and supersedes all written or
oral agreements or understandings. This Agreement may be
modified only in writing signed by both parties. All war-
ranties, representations, and covenants shall not be deemed
merged into the Statutory Warranty Deed and shall survive
the Closing for a period of one (1) year thereafter, unless
any party gives the other written notice of any claim here-
under within such one (1) year period until resolution of
such claim. This Agreement shall be construed according to
the laws of the State of Washington and King county. Any
suit, action, or appeal therefrom under this Agreement shall
be brought in King County Superior Court. In any suit,
action, or appeal therefrom under this Agreement, the pre-
vailing party shall be entitled to recover its costs
incurred therein, including reasonable attorneys' fees.
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This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the parties as permitted
hereunder. Paragraph headings shall not be deemed a part of
this Agreement for any purpose. If the date for any perfor-
mance under this Agreement falls on a weekend or holiday,
the time shall be extended to the next City of Kent business
day. The date of this Agreement shall be the date upon
which all parties have executed this Agreement.
15. Notices. All notices, including approval required
or permitted to be given hereunder, shall be in writing and
shall be personally delivered or sent by United States
certified mail, return receipt requested, or by overnight
delivery through public or private service, addressed as set
forth below:
If to Seller: The City of Kent
Attn: City Administrator
220 4th Avenue South
Kent, WA 98032-5895
If to Buyer: Sound Ventures, Inc.
Key Tower, Suite 4050
1000 Second Avenue
Seattle, WA 98104
Attn: Doug Klappenbach
unless by such written notice different addresses are
designated. Notices shall be effective when received.
16. Commissions. Neither Buyer nor Seller shall be
responsible for payment of any brokerage commissions,
finder's fee ("Commission") in connection with the purchase
and sale transaction. Each party warrants and represents to
the other that there is no Commission arising out of this
transaction. Each party agrees to indemnify and hold the
other harmless from and against the claims of any and all
brokers or other intermediaries claiming to have had any
dealings or negotiations with such party in connection with
this Agreement, or the sale of the Property, and which claim
any Commission as a result arising through the actions of
the indemnifying party.
17. Assignment. This Agreement shall not be
assignable by the parties without the prior written approval
of the other; provided that Buyer may assign this Agreement
to a limited or general partnership in which Douglas W.
Klappenbach maintains managing partner status.
18. Acceptance. Seller shall have until 5: 00 P.M. ,
December 31, 1988, to accept the offer made by Buyer.
Seller shall accept this offer and be bound by the terms and
conditions of this Agreement with its signature hereunder.
- 14 -
19 . Counterpart Signatures. This Agreement may be
executed simultaneously in any number of counterparts, each
of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
20. Survey. Within thirty (30) days of the date of
this Agreement, Seller shall provide Buyer with an ALTA
Survey of the Property which Survey shall be adequate to
enable Transamerica to issue its Policy and which Survey
shall include a certification of the boundaries of the Land,
a showing of the abutting real properties, existing ease-
ments burdening and benefitting the Property, encroachments,
and a statement of the Land's square footage. The sur-
veyor's determination of the Land' s square footage shall be
binding and conclusive on the parties and shall be used to
determine the Purchase Price as set forth in paragraph 2
herein.
BUYER:
SOUND VErRTURES, INC.
By
Dou as W. a nbach
Iti President
k,
AGREED AND ACCEPTED this � day of �
1988 .
SELLER:
TY OF KENT
Cy
Its
STATE OF WASHINGTON )
ss.
COUNTY OF KING )
On this day personally appeared before me DOUGLAS W.
KLAPPENBACH, to me known to be the President of SOUND
VENTURES, INC. , 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.
15 -
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this �j�' day of N0VFM,0C-, 198QaL.
NOTARY PU i and for the
State of Washington, residing
at 4Ci 2 VI-D�N D My
commission expires:
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day personally appeared before me ke ((,o
to me known to be the rta of City of Kent, a
Municipal Corporation, who exebuted the within and foregoing
instrument, and acknowledged the instrument to be the free
and voluntary act and deed of said Municipal Corporation for
the uses and purposes therein mentioned, and on oath stated
that he was duly authorized to execute said instrument on
behalf of said Municipal Corporation.
IN WITNESSEREOF, I have hereunto set my hand and
seal this ay of 198
I
"IPUB f the
Cftate of ashing o , residing
at ; My
commission expir s: -
- 16
EXHIBIT A
Lots 4, 5, 6, 7, 8, and 9 of Block 8, YESLER'S
FIRST ADDITION to the Town of Kent according to
Plats, recorded in Volume 5 of Plats, Page 64,
King County, Washington; and
A portion of Lots 1, 2 , 3 , 4, 5, and 6 of Block
13 , YESLER'S FIRST ADDITION to the Town of Kent
according to Plats, recorded in Volume 5 of Plats,
Page 64 , King County, Washington, together with
any and all right, title and interest in vacated
Third Avenue appurtenant to the above-described
real property;
Buyer and Seller agree that the above legal description
shall be amended upon the mutual agreement of Buyer and
Seller to conform with the Property necessary for the
Project which has received the Design Approval in accordance
with paragraph 12 .e. of the Real Estate Purchase and Sale
Agreement. Seller and• Buyer understand and agree that it
may be necessary to obtain a lot line adjustment, short plat
or other legal subdivision of the Property, if required, on
or before Closing, in order to effect a legal conveyance of
the Property. Buyer agrees to obtain such lot line
adjustment, short plat or other legal subdivision of the
Property on behalf of Seller.
EXHIBIT B
SPECIAL ASSESSMENTS
1. City of Kent LID No. 313
EXHIBIT C
ENVIRONMENTAL QUESTIONNAIRE
AND DISCLOSURE STATEMENT
In order to adequately evaluate the suitability of the
Property for our purposes, it will be necessary for you to
complete this questionnaire. Please make a diligent search
of your records and, if necessary, communicate with all
persons (including both current and former employees) who
may have knowledge of the particular areas in which informa-
tion is sought. All answers to these questions are only as
to City's actual knowledge and only to the extent of and as
of the date of the City' s ownership.
I. OFFICE PROPERTY
A. Current Uses of the Property
1. Name of current owner(s) :
City of Kent (present owner)
Catholic Archdiocese
2 . Description of current use o the Pro ggrty•
Municipal purposes: parking lot,public street f3rd Ave. . , public building
at 302 W. Gowe (Engineering Dept. ) and joint parking lot with Catholic Arch-
diocese and City, Library site-King County Library District.
3 . Date of completion of construction and
substantial renovations, if any:
Only as to Engineering Dept. building at 302 W. Gowe on or about Oct., 1981 ,
consisting of remodel of old bank building interior for Engineering Dept.
purposes.
4 . Names, addresses and telephone numbers of
previous owners and/or occupants to the City' s knowledge:
Not available at this time.
5. Description of previous uses of the Property
for time City had ownership:
Residential property; southwest corner of 3rd & Gowe was a church. Previous
occupant of the Engineering Dept. building at 302 W. Gowe was a banking
�nsti Asbestos
1. Is there asbestos currently in any of the
construction materials contained in the building?
Unknown.
EXHIBIT C - 1
2 . If so, has a survey been conducted to assess
the type, amount, location, and conditions of asbestos? (If
so, please attach a copy of survey report. )
No.
3 . Have asbestos air samples been taken? If so,
what are the results?
Unknown.
C. Polychlorinated Biphenyls ("PCBs")
1. Have polychlorinated biphenyls ("PCBs") been
used in electrical transformers, capacitors, or other
equipment at the Property?
Unknown.
2 . If so, please describe the use and quantity
of PCBs used on the Property.
D. Fuel/chemical Storage Tanks, Drums, and Pipelines
1. Are there now or have there ever been any
above ground or underground gasoline, diesel, fuel oil,
liquid fertilizer, pesticide, herbicide, or other chemical
storage tanks on the Property?
Unknown.
If so, please describe substances stored and
capacity of tanks.
2 . Have the tanks been inspected or tested for
leakage? When was the most recent test? Results?
Refer to 1 above.
3 . Are any pesticides, herbicides, liquid
fertilizer, or other chemicals stored on the Property in
drums or other containers? If so, please describe the
substances, quantities stored, and types of containers.
No.
4 . Have there been any substantial spills,
leaks, or other releases of chemicals of the Property
requiring remedial cleanup? If so, please describe the
chemicals and quantities released, any cleanup measures
EXHIBIT C - 2
taken, and the results of any soil or groundwater samples
performed to detect the presence of any chemicals spilled,
leaked, or released on the Property.
Not to City's knowledge
5. If the spill, leaks, or other releases were
reported to governmental authorities, what were the results
of such reporting?
See 4 above.
6. Please attach copies of any permits or
licenses pertaining to the use, storage, handling, or
disposal of chemicals on the Property.
E. Air Emissions
1. Describe substantial air emissions from each
source of air pollutants, including fuel burning equipment
(describe type of fuel burned) .
Auto exhaust emissions from vehicles in parking lot.
2 . Describe air pollution control equipment used
to reduce emissions for each source of air emissions.
None.
3 . Are air emissions monitored? Is so, indicate
frequency of monitoring.
See 2 above.
4 . Please attach copies of any air permits or
licenses pertaining to operations on the Property.
S e 2 above.
F. Water �ischarge; Wells
1. List all sources of waste water discharges to
land from which waste water could enter surface waters, to
surface waters directly, septic systems, or holding ponds.
None.
2 . List all sources of waste water discharges to
public sewer systems.
Municipal Office Building sewer discharge and runoff
from City;s property and parking lot.
3 . For each discharge, list the average daily
flow. Unknown.
EXHIBIT C - 3
4 . Please attach copies of any water discharge
permits, including NPDES permits, licenses, or notices of
discharge pertaining to operations on the Property.
None exist to our knowledge.
5. Are there now or have there ever been any
wells on the Property? If so, have any wells been shut
down? How were they shut down?. Where are/were they
located? None exist to our knowledge.
G. Waste Disposal
1. Describe the types of liquid hazardous wastes
(other than waste water described in Part F above) and solid
waste generated at the Property.
Same as F above.
2 . Describe how the liquid and solid wastes
generated at the Property are disposed.
Sanitary sewer system; Washington State Utilities and
Transportation System franchise hauler.
3 . Does the facility generate, store, transport,
or dispose (on site) hazardous wastein reportable quantities
according to WAC 173-303-040(39) ?
No.
4. Please attach copies of any waste disposal
permits or licenses pertaining to operations on the
Property.
II. INDUSTRIAL PROPERTY
If the Property has been or is used for industrial
purposes, the following additional information should be
provided.
A. Has the Property been used for disposal of any
liquid or solid waste? If so, describe the location of all
disposal sites, the type of wastes disposed at each site,
the results of any soil or groundwater samples taken in the
vicinity of each site, and the manner in which each site not
presently in use was closed.
Not to our knowledge.
B. Have evaporation or storage ponds been located on
the Property? If so, describe the location of all ponds,
the type of wastes placed in each pond, the results of each
EXHIBIT C - 4
The undersigned states to the Buyer that as the present
owner of the Property (or authorized representative of
owner) , the undersigned is familiar with the operations
presently conducted on the Property, has made a reasonably
diligent inquiry into the former uses of the Property since
the date the extent of the Seller's ownership hereby
declares and certifies that to its actual knowledge, the
information disclosed above is true and correct. This
affidavit is further signed and responded to on the
assumption that the Property being discussed is that which
is outlined on Exhibit A attached hereto.
DATED this day of blu� , 1988 .
\IISEL R"
EXHIBIT C - 6
4 . Please attach copies of any water discharge
permits, including NPDES permits, licenses, or notices of
discharge pertaining to operations on the Property.
None exist to our knowledge.
5. Are there now or have there ever been any
_ wells on the Property? If so, have any wells been shut
down? How were they shut down?. Where are/were they
located? None exist to our knowledge.
G. Waste Disposal
1. Describe the types of liquid hazardous wastes
(other than waste water described in Part F above) and solid
waste generated at the Property.
Same as F above.
2 . Describe how the liquid and solid wastes
generated at the Property are disposed.
Sanitary sewer system; Washington State Utilities and
Transportation System franchise hauler.
3 . Does the facility generate, store, transport,
or dispose (on site) hazardous wastein reportable quantities
according to WAC 173-303-040 (39) ?
No.
4 . Please attach copies of any waste disposal
permits or licenses pertaining to operations on the
Property.
II. INDUSTRIAL PROPERTY
If the Property has been or is used for industrial
purposes, the following additional information should be
provided.
A. Has the Property been used for disposal of any
liquid or solid waste? If so, describe the location of all
disposal sites, the type of wastes disposed at each site,
the results of any soil or groundwater samples taken in the
vicinity of each site, and the manner in which each site not
presently in use was closed.
Not to our knowledge.
B. Have evaporation or storage ponds been located on
the Property? If so, describe the location of all ponds,
the type of wastes placed in each pond, the results of each
EXHIBIT C - 4
soil or groundwater samples taken in the vicinity of each
pond, and the manner in which each pond not presently in use
was closed.
Not to our knowledge.
C. Have wastewater treatment facilities, such as acid
neutralization vaults, been located on the Property? If so,
please describe the location of all facilities, the type of
wastes treated in each facility, the result of any soil or
groundwater samples taken in the vicinity of each facility,
and the manner in which each facility not presently in use
was closed.
Unknown.
D. Are there raw chemical as defined in SARA Title
III, Community Right to Know Disclosure of Chemical updating
threshold under 40 CFR Parts 310, 355 and 372 or waste
chemical storage areas on the Property? If so, please
describe the location of all such areas, the type of
products or wastes stored in each area, the amount of
products or wastes stored in each area, the results of any
soil or groundwater samples taken in the vicinity of each
are, and the manner in which each area not presently in use
was closed.
No.
III. AGRICULTURAL PROPERTY
If the Property has been or is used for agricultural
purposes, the following additional information should be
provided.
A. Have pesticides, herbicides, or other agricultural
chemicals been applied to the Property? If so, please
describe the locations where such pesticides or chemicals
were applied, the type of pesticides or chemicals applied in
each area, and the results of any soil or groundwater
analyses performed to detect pesticides or chemicals used at
the site.
Unknown.
B. Have pesticides, herbicides, or other agricultural
chemicals been mixed, formulated, rinsed, or disposed of on
the Property? If so, please describe the locations where
such pesticides were mixed, formulated, rinsed, or disposed
of, the type of pesticides or chemicals mixed, formulated,
rinsed, or disposed of at each location, and the results of
any soil or groundwater analyses performed to detect
pesticides or chemicals mixed, formulated, rinsed, or
disposed of at the site.
Other than for gardening and property maintenance services, such as lawn
fertilizer and tree spraying, 0 y knTwledge.
The undersigned states to the Buyer that as the present
owner of the Property (or authorized representative of
owner) , the undersigned is familiar with the operations
presently conducted on the Property, has made a reasonably
diligent inquiry into the former uses of the Property since
the date the extent of the Seller's ownership hereby
declares and certifies that to its actual knowledge, the
information disclosed above is true and correct. This
affidavit is further signed and responded to on the
assumption that the Property being discussed is that which
is outlined on Exhibit A attached hereto.
DATED this day of b � , 1988.
"SEL R"
EXHIBIT C - 6
EXHIBIT D
LEASE
1. PARTIES. This Lease is entered into this day
of , 1988, by and between Centennial Venture
Limited Partnership, a Washington limited partnership
("Landlord") , and The City of Kent, a municipal corporation
("Tenant") .
2 . PREMISES. Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord upon the terms and condi-
tions herein set forth that certain class A office space
(the "Premises") , containing approximately 20, 000 square
.feet of gross leasable floor area as shown on Exhibit A
(drawing dated , 19_) attached hereto and
incorporated herein by this reference. The actual square
footage shall be determined by the final plans for Tenant
Improvements. The Premises constitute a portion of a
building (the "Building") located at
_, Kent, Washington, and situated upon the real
property legally described on Exhibit B attached hereto and
incorporated herein by this reference (the "Land") .
3 . COMMON AREAS. The following areas adjacent to or
located in or on the Premises, Building, or, Land shall
constitute Common Areas available for Tenant' s non-exclusive
use including without limitation: walkways, hallways,
lobbies, stairways, driveways, lavatories, landscaped areas
and grounds, parking areas, and all other areas used in
common by the tenants, Landlord, invitees and employees of
the Tenants of the Building. All Common Areas shall be
subject to Landlord's management and control and shall be
operated and maintained in such manner as Landlord, in its
discretion shall determine. Provided, however, that Land-
lord shall consistently maintain the Common Areas to a
standard consistent with the office buildings known as Kent
City Hall in the City of Kent. Landlord may, from time to
time in Landlord's sole discretion, alter, modify or change
the dimensions and location of the Common Areas provided
such alteration is reasonably consistent with Tenant' s use
of the Premises. Tenant and others entitled or allowed to
use the Common Areas shall be subject to and shall comply
with such reasonable rules and regulations as may be estab-
lished by Landlord from time to time, so long as Tenant, in
its capacity as a City, is legally permitted to do so. All
of the Premises and Common Areas shall be consistent with
federal, state and local laws requiring accessibility of
facilities to the handicapped.
4 . LEASE TERM AND COMMENCEMENT DATE. This Lease
shall be for a term of ten years and shall commence on
, 1989 (the "Commencement Date") and shall
end on , 1999 (the "Termination Date") ,
subject to the provisions of paragraph 28 . Landlord shall,
in accordance with the provisions of the Addendum attached
hereto and incorporated herein by this reference, complete
certain Tenant Improvements to the Premises and deliver
possession of the Premises with such Tenant Improvements
completed pursuant to the Addendum. The Commencement Date
shall be deemed to occur within three (3) business days of
that date Landlord notifies Tenant in writing that the
architect has determined that the Tenant Improvements are
substantially completed and the Premises are available for
occupancy.
Landlord shall not be liable for failure to give
possession of the Premises on the Commencement Date because
the Premises are not ready for occupancy, or due to any
other person wrongfully occupying the Premises or for any
other reason. In such event, payment of rent and other
charges hereunder shall not commence until the day that
possession is available to Tenant and the Commencement Date
shall be postponed until that day. If possession is delayed
the Termination Date shall be postponed so that the length
of the Lease term remains as provided for hereinabove.
Notwithstanding the foregoing, if Landlord shall not have
delivered possession of the Premises within two hundred ten
(210) days from the Commencement Date, Tenant may, at its
option, by notice in writing to Landlord within ten (10)
days thereafter, cancel this Lease. If Tenant cancels the
Lease as herein provided, the Landlord shall return any and
all monies previously deposited or paid by Tenant and the
parties shall each be discharged and released from all obli-
gations hereunder without liability to the other. If Tenant
elects not to cancel this Lease, Tenant may specifically
enforce this Lease against Landlord. Landlord acknowledges
and agrees that Tenant is relying on Landlord' s performance
of its obligations under this Lease and all exhibits and
addendums hereto.
5. RENT,*.. ADDITIONAL RENT.
5. 1 Monthly Rent. Tenant agrees to pay Landlord
as Rent, without notice or demand, the sum of:
Months 1-60 at $ per month ($16. 00/square
foot/year) ; Months 61-120 at $ per month
($18.40/square foot/year) , ("Monthly Rent") in advance,
on or before the first day of the first full calendar
month of the term hereof and a like sum on or before
the first day of each and every successive calendar
month thereafter during the term hereof. Monthly Rent
for any period during the term hereof which is for less
than one month shall be a prorated portion of the
Monthly Rent herein, based upon a thirty (30) day
month. The Monthly Rent payable hereunder shall be
2 -
subject to adjustment as hereinafter provided in
subparagraph 5.2, and Tenant agrees to pay as addi-
tional rental, the amount of the rental adjustments and
other charges required by this Lease. All Rent shall
be paid to Landlord at the address to which notices to
Landlord are to be given, in accordance with paragraph
27 . 17 herein, without deduction or offset in lawful
money of the United States of America, or to such other
persons or at such other place as Landlord may from
time to time designate in writing.
5. 2 Monthly Rent Adjustment; Additional Rent. It
is agreed that the Monthly Rent called for in subparagraph
5. 1 above. includes Tenant' s Share of "Operating Expenses. "
The amount of annual Operating Expenses which Landlord has
included within the Monthly Rent at the commencement of the
Lease term is four dollars ($4 . 00) per square foot per year
(or _/100 Dollars ($. ) per square foot per month)
("Operating Expenses Base") .
5. 2 . 1 Operating Expenses. Operating
Expenses include any and all costs and expenses
directly related to and incurred by Landlord in connec-
tion with the repair, operation, and maintenance of the
Building, including interior and exterior maintenance,
all costs to maintain, repair, and replace Common
Areas, including covered and uncovered parking areas,
elevators, sidewalks, driveways, exterior walls
(including periodic painting thereof) , roofs, and all
other areas used in common by tenants of the Building
and, in addition, the structural parts including the
foundation, bearing, and exterior walls (including
glass and doors) , flooring and subflooring, and all
reasonable costs to supervise, manage, and administer
the maintenance of the Building and the Land, including
the Common Areas, and such fees as may be paid to a
third party in connection with such supervision and
management or a fee to Landlord or Landlord's designee
to supervise and administer the maintenance of the
Building and the Land, including the Common Areas,
including wages, salaries, and benefits of personnel
engaged in the management, operation, maintenance, or
repair of the Building and the Land; the costs of the
annual determination of the operating expenses, the
amortization of capital investments made to reduce
operating costs and the amortization of extraordinary
repairs made to extend the life of the Building in
accordance with generally accepted operational and
maintenance procedures, and all costs of services
furnished by Landlord, including janitorial, security,
gardening, landscaping, and related costs and expenses,
licenses, permits, and inspection fees, the cost of
supplies, materials, equipment, and tools used in
connection with the maintenance, operation, or repair
- 3 -
of the Building and Land, and all other costs and
expenses directly related to the operation, main-
tenance, and repair of the Building, Land and Common
Areas, together with Real Estate taxes and insurance
defined as follows:
Real estate taxes. All real estate taxes, includ-
ing, without limitation, any installments payable
for any improvement assessments, personal property
taxes, and any and all other governmental charges,
general or special, ordinary or extraordinary, of
any kind and nature whatsoever, including without
limitation, surcharges levied upon or assessed
upon parking spaces or areas, and payments to
public transit or carpooling facilities required
by any governmental agency; and
Insurance. Any and all insurance premiums includ-
ing fire, extended coverage, public liability,
boiler, elevator, D.I.C. , property damage, and
other insurance premiums as such amounts relate to
the Premises, the Building, and the Land on which
the Premises are located.
5.2 .2 Tenant's Share of operating Expenses.
Tenant's Share of Operating Expenses shall equal its
prorated share of the total Operating Expenses calcu-
lated by dividing the actual square foot area of the
Premises by the actual total leasable area in the
Building containing the Premises. As of the date of
this Lease, it is estimated that Tenant's Share will be
%. Operating Expenses covering a period not within
the term of this Lease shall be prorated.
5.2 . 3 Adjustment. For purposes of Tenant' s
paying its share of Operating Expenses, Tenant and
Landlord agree that the Monthly Rent called for in
subparagraph 5. 1 above is subject to adjustment at the
beginning of each calendar year for the term hereof.
The Monthly Rent shall be adjusted to include Tenant's
Share of Operating Expenses in excess of the Operating
Expenses Base of four dollars ($4 . 00) per square foot
per year (or $. per square foot per month) . If
Tenant' s Share of the Operating Expenses paid or
incurred by Landlord for any calendar year exceeds the
Operating Expenses Base included in Tenant' s Monthly
Rent, then Tenant shall pay such excess as additional
rent.
On March 1 after the beginning of each calen-
dar year of the term hereof, Landlord shall give to
Tenant a statement of any additional rent payable by
Tenant hereunder for the previous year, which shall be
due and payable within thirty (30) days of Tenant's
- 4 -
receipt of said statement. In addition, Tenant shall
pay Tenant' s Share of Landlord' s estimate of the amount
by which the Operating Expenses shall exceed the Oper-
ating Expenses Base. This estimated amount shall be
divided into twelve (12) equal monthly installments.
Tenant shall pay to Landlord, concurrently with the
regular Monthly Rent payment next due following the
receipt of such statement, an amount equal to one (1)
monthly installment multiplied by the number of months
from January in the calendar year in which said state-
ment is submitted to the month of such payment, both
months inclusive. Subsequent installments shall be
payable concurrently with the regular Monthly Rent
payments for the balance of that calendar year and
shall continue until the next calendar year's statement
is rendered.
If, in any calendar year the actual amount of
Tenant' s Share of actual Operating Expenses. which is in
excess of the Operating Expenses Base is less than the
payments made by Tenant during that year, then upon
receipt of Landlord' s statement, Landlord shall, pay
the excess to Tenant at the time Landlord furnishes
said statement, or credit the excess toward Tenant's
payments of Tenant's Share of. Operating Expenses in the
next succeeding calendar year, at Tenant' s sole elec-
t1on. However, in no event shall Tenant be credited
for any amount which will cause Tenant's rent to be
reduced below the Monthly Rent established in paragraph
5. 1 above.
Even though the term is expired and Tenant
has vacated the Premises, when the final determination
is made of Tenant' s Share of Operating Expenses for the
year in which this Lease terminates, Tenant shall imme-
diately pay any increase due over the estimated Operat-
ing Expenses paid and, conversely, any overpayment made
in the event said Operating Expenses decrease shall be
immediately rebated by Landlord to Tenant.
5. 3 Late Charges. In the event that any rent,
either minimum or additional rent, is not paid when due,
interest at the rate of three percent (3%) per annum above
the publicly announced prime rate charged by Rainier
National Bank, Main Branch, from time to time shall accrue
from the date due until all rent and interest has been paid
in full. Acceptance by Landlord of partial payment of rent
and/or interest thereon shall not constitute a waiver of any
remaining unpaid rent and/or interest.
5. 4 Change in Method of Taxation. If, at any
time during the term of this Lease, the present method of
taxation is changed to that in lieu of or in addition to the
whole or part of any taxes, assessments, or charges levied,
- 5 -
assessed, or imposed upon real estate and the improvements
thereon, there is levied, assessed, or imposed on Landlord a
capital levy, or other tax directly on the rents received or
a franchise tax assessment, levy, or charge measured by or
based, in whole or in part, upon such rents for the present
or any future building or buildings on the Land or any other
tax or assessment, levied or assessed in lieu of or in addi-
tion to present taxes, assessments or charges, then all such
other or additional taxes, assessments, levies, or charges
will be deemed to be included within the term "real estate
taxes" for the purposes hereof.
6. SECURITY DEPOSIT. Tenant has deposited with Land-
lord the sum of Twenty-six Thousand Six Hundred Sixty-six
and No/100 Dollars ($26, 666. 00) (which sum is equal to one
month's Monthly Rent) as of the date of execution of this
Lease. Said sum shall be held by Landlord as security for
the faithful performance by Tenant of all the terms,
covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant
defaults with respect to any provision of this Lease,
including, but not limited to, the provisions relating to
payment of rent, Landlord may (but shall not be required to)
use, apply, or retain all or any part of this security
deposit for payment of any rent or any other sum in default
or for- the payment of any amount which Landlord may spend or
become obligated to spend by reason of Tenant' s default or
to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant' s default. If any
portion of said deposit is so used or applied, Tenant shall,
within five (5) days after written demand thereof, deposit
cash with Landlord in an amount sufficient to restore the
security deposit to its original amount and Tenant' s failure
to do so shall be a default under this Lease. Landlord
shall not be required to keep the security deposit separate
from its general funds. Landlord shall receive any and all
interest accruing on such deposit. If Tenant shall fully
and faithfully perform every provision of this Lease to be
performed by it, the security deposit shall be returned to
Tenant within 10 days following expiration of the Lease
term. In the event of termination of Landlord' s interest in
this Lease, Landlord shall transfer said deposit to Land-
lord' s successor in interest. The use by Landlord of all or
a portion of the security deposit shall not constitute a
limitation on damages for which Tenant may be liable as a
result of its nonperformance hereunder.
7. USE OF PREMISES. Tenant' s use and occupancy of
the Premises shall be for general municipal office purposes
and uses incidental thereto. Tenant shall not use or permit
the Premises to be used for any other purpose without the
prior written consent of Landlord. In connection with such
uses, Tenant may be permitted to occupy a portion of the
Common Areas to be agreed upon by Landlord and Tenant for
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purposes such as, but not limited to, an information stand
or public kiosk; provided, however, Tenant shall be
exclusively responsible for maintenance of such area.
7 . 1 Uses Prohibited. Except as is normal and
customary for the City of Kent, no retail sales shall be
made on the Premises. Tenant shall not do or permit any-
thing to be done in or about the Premises nor bring or keep
anything therein which will in any way increase the existing
rate of or affect any fire or other insurance upon the
Building or any of its contents or cause a cancellation of
any insurance policy covering the Building or any part
thereof or any of its contents. Tenant shall not do or
permit anything to be done in or about the Premises which
will unreasonably obstruct or interfere with the rights of
other tenants or occupants of the Building nor shall Tenant
allow the Premises to be used for any unlawful purpose, nor
shall Tenant cause, maintain, or continue any nuisance in,
on, or about the Premises. Tenant shall not commit or allow
to be committed any waste in or upon the Premises.
7 .2 Compliance With Law. Tenant shall not use or
permit the use of the Premises in any way in violation of
any applicable law or regulation. Tenant shall, at its sole
cost, promptly comply with all such laws and regulations and
with the requirements of any board of fire underwriters
other similar bodies now or hereafter constituted relating
to the condition, use or occupancy of the Premises. The
judgment of any court of competent jurisdiction or the
admission of Tenant in any action against Tenant that Tenant
has violated any applicable law or regulation, whether or
not Landlord is a party, shall be conclusive of that fact as
between Landlord and Tenant.
7. 3 Use of Parking Areas. Parking areas shall be
used for vehicle parking only and not for general storage,
except as provided below, and garbage and refuse awaiting
collection shall be stored only in dumpster-type containers
which shall be placed in areas away from public view. No
long term, intentional storage of City of Kent vehicles
shall be allowed in the parking areas; however, Landlord
acknowledges and agrees that certain municipal cars, light
duty trucks and trailers may be parked by Tenant within the
parking areas overnight and on weekends. Landlord and
Tenant may elect to designate mutually acceptable portions
of the parking areas for municipal employees and
overnight/weekend parking of City of Kent vehicles.
8 . ALTERATIONS AND ADDITIONS. Tenant shall not make
or allow to be made any major alterations, major improve-
ments, or major changes to or of the Premises or any part
thereof without the prior written consent of Landlord, and
all improvements, alterations, or changes so made shall
become a part of the leased Premises and shall belong to
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Landlord upon expiration or sooner termination of this
Lease. As used herein, "major" alterations, improvements
and changes shall mean those alterations, improvements and
changes individually or in the aggregate which exceed $5000
in cost per year; provided, however, that all alterations,
improvements or changes permitted hereunder including, with-
out limitation, major and non-major alterations, improve-
ments or changes, shall be subject to Tenant' s compliance
with the following criteria:
8 . 1 Tenant shall have obtained all required
governmental approvals;
8 .2 Tenant shall have complied with all appli-
cable laws, rules, regulations, conditions of any govern-
mental approvals and the requirements of Landlord's lender;
8. 3 Tenant shall not damage or reduce the
structural or design integrity of the Building;
8 . 4 Such alterations, improvements or changes
shall not reduce or impair the value or marketability of the
Premises or Building;
8 . 5 Such alterations, improvements or changes
shall be completed at Tenant' s expense, free of any lien
whatsoever, or claim of lien.
Except as Landlord and Tenant may otherwise agree, in
the event Landlord consents to the making of any alter-
ations, additions, or improvements to the Premises by
Tenant, the same shall be made by Tenant at Tenant' s sole
cost and expense.
9 . MAINTENANCE AND REPAIRS. Responsibility for
maintenance and repairs shall be allocated between Landlord
and Tenant as follows:
9. 1 Tenant's Obligations. By taking possession
of the Premises, Tenant shall be deemed to have accepted the
Premises as being clean and in good order, condition, and
repair. Tenant shall, at Tenant's sole cost and expense,
keep the interior of the Premises and every part thereof in
good condition and repair, except as hereinafter provided
with respect to Landlord's obligations. Tenant shall, upon
the expiration or sooner termination of this Lease, surren-
der the Premises to Landlord in good condition, broom clean,
ordinary wear and tear excepted. Damage caused by Tenant' s
use of the Premises or Building shall be repaired at the
sole cost and expense of Tenant.
9 . 1. 1 Subrogation rights. In the event the
Premises or any portion of the Building should require
any repairs which Landlord determines are subject to
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cure by contractors' bonds or other warranties avail-
able to Landlord, Tenant shall have the following
subrogation rights with respect to any such warranties:
if such repairs are those to be performed by Tenant,
full rights; if such repairs are to be performed by
Landlord and reimbursed by Tenant, pro rata rights with
other affected tenants. Otherwise, responsibility for
repairs shall be as provided in this Lease.
9 .2 Landlord' s Obligations. Landlord shall main-
tain or cause to be maintained in reasonably good order and
condition, the Premises, Building and Common Area, including
lobbies, stairs, elevators, restrooms, the central heating,
air conditioning and ventilation systems, water, sewer, fire
protection and mechanical and electrical distribution
systems and equipment serving the Building and the struc-
tural portions of the Building. In the event the Building
of which the Premises are a part is occupied by third
parties, in addition to Tenant, and in the event such main-
tenance and repairs are necessitated in whole or in part by
the acts, neglect, fault, or omission of any duty by Tenant,
its agents, servants, employees, invitees, Tenant shall pay
to Landlord the entire cost of such maintenance and repairs
as necessitated in whole or in part, rather than a prorated
portion thereof as provided in paragraph 5. 2 .2 . Any injury
to or interference with Tenant' s business arising from the
making of any repairs, alterations, or improvements in or to
any portion of the Building, Common Areas or the Premises
or in or to fixtures, appurtenances, and equipment shall not
be deemed to be an eviction of Tenant or relieve Tenant of
any of its obligations hereunder, it being agreed that such
repairs, maintenance, alterations and improvements shall be
accomplished with as little inconvenience to Tenant as
possible, and with prior notice to Tenant and Tenant's
agreement as to the timing of such repairs.
10. LIENS. Tenant shall keep the Premises and the
Land on which the Premises are situated free from any liens
arising out of any work performed, materials furnished, or
obligations incurred by Tenant. Landlord may require, at
Landlord's sole option, that Tenant shall provide Landlord,
at Tenant' s sole cost and expense, a lien bond in an amount
equal to one and one-half (1-1/2) times the amount of the
claim of lien, if any, directly arising out of the improve-
ments, additions, or alterations in the Premises which
Tenant solely makes with Landlord's prior consent, and to
insure Landlord against any liability from mechanics' and
materialmen's liens, if Tenant shall dispute any claim of
lien made. On final determination of the lien and claim for
lien by settlement or by final determination of a court of
competent jurisdiction, Tenant shall immediately pay any
judgment rendered, together with all proper costs and
- 9 -
charges, and shall have the lien released or judgment satis-
fied at no cost to Landlord to the extent of Tenant' s
liability under such final determination.
11. HOLD HARMLESS.
11. 1 No liability shall attach to Tenant or Land-
lord by reason of entering into this Lease, except as
expressly provided in accordance with the Lease terms.
11. 2 Subject to the limitations set forth below,
Landlord agrees to indemnify and hold Tenant, its elected
officials, officers, employees and agents harmless from any
and all claims, demands, losses, actions and liabilities to
or by any and all persons or entities, including without
limitation, their respective agents, licensees, or represen-
tatives arising from, resulting from, or connected with this
Lease to the extent caused by the negligent acts, errors or
omissions of Landlord, its agents, employees, contractors,
or representatives, or by Landlord' s breach of this Lease.
11. 3 Subject to the limitations set forth below,
Tenant agrees to indemnify and hold Landlord, its partners,
officers, employees and agents harmless from any and all
claims, demands, losses, actions and liabilities to or by
any and all persons or entities, including without limita-
tion, their respective agents, licensees, or representatives
arising from, resulting from, or connected with this Lease
to the extent caused by the negligent acts, errors, or
omissions of Tenant, its agents, employees, contractors, or
representatives, or Tenant' s breach of this Lease.
11.4 Landlord' s duty to defend and indemnify
Tenant shall not apply to liability for damages arising out
of bodily injury to persons or damage to property, if deter-
mined by a court that such injury or damage was caused by or
resulted from the sole negligence of Tenant, its agents,
employees or representatives.
11.5 Tenant' s duty to defend and indemnify Land-
lord shall not apply to liability for damages arising out of
bodily injury to persons or damage to property, if deter-
mined by a court that such injury or damage was caused by or
resulted from the sole negligence of Landlord, its agents,
employees or representatives.
11. 6 Landlord specifically and expressly waives
any immunity that may be granted it under the Washington
State Industrial Insurance Act, Title 51 RCW. Further, the
indemnification obligation under this Lease shall not be
limited in any way by any limitation on the amount or type
of damages, compensation or benefits payable to or for any
third party under worker' s compensation acts, disability
benefits acts, or other employee benefits acts. This
- 10 -
promise of indemnity specifically applies in the case of
injuries to Landlord's own employees.
11.7 Landlord's and Tenant's duty to defend,
indemnify, and hold the other harmless shall include, as to
all claims, demands, losses, actions and liability to which
it applies, the other party' s personnel related costs,
reasonable attorneys ' fees, court costs, and all other claim
related expenses, including attorneys ' fees and other costs
incurred by the other party to enforce and establish its
rights.
11. 8 Notwithstanding the foregoing, Landlord
shall not indemnify Tenant for claims, costs, and liabili-
ties arising solely from the negligence or wrongful acts of
the other tenants.
11. 9 Tenant shall give immediate written notice
to Landlord in case of casualty or accidents in the Premises
that are reported to Tenant, or of which Tenant is aware.
Failure to give notice, however, shall not affect any rights
or obligations of the parties under this paragraph.
11. 10 The provisions of this paragraph 11 shall
survive the expiration or termination of this Lease with
respect to any events occurring prior to such expiration or
termination.
12 . SUBROGATION. As long as their respective insurers
so permit, Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any
loss insured by fire, extended coverage, and other property
insurance policies existing for the benefit of the respec-
tive parties. Each party shall apply to their insurers to
obtain said waivers. Each party shall obtain any special
endorsements, if required by their insurer, to evidence
compliance with the aforementioned waiver.
13 . LIABILITY INSURANCE. Tenant shall, at Tenant's
expense, obtain and keep in force during the term of this
Lease a policy of comprehensive public liability insurance
insuring Landlord and Tenant against any liability arising
out of the ownership, use, occupancy, or maintenance of the
Premises and all areas appurtenant thereto. Such insurance
shall be in amount not less than $1, 000, 000 Combined Single
Limit with respect to injuries to or death of persons,
and/or destruction of or damage to property. The limit of
any such insurance shall not, however, limit the liability
of Tenant hereunder. Tenant may provide this insurance
under a blanket policy provided said insurance shall have a
landlord's protective liability endorsement attached
thereto. If Tenant shall fail to procure and maintain said
insurance, Landlord may, but shall not be required to,
procure and maintain the same at the expense of Tenant.
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Tenant shall deliver to Landlord, prior to right of entry,
letters evidencing the existence and amounts of such insur-
ance. No policy shall be cancelable or subject to reduction
of coverage without prior written notice to Landlord, pro-
vided, if such insurance or policy is cancelled or reduced,
Tenant shall replace the same immediately with coverage
which complies with the provisions of this paragraph. All
such policies shall be written as primary policies not
contributing with and not only in excess of coverage which
Landlord may carry.
14 . SERVICES AND UTILITIES. Provided that Tenant is
not in default hereunder, Landlord agrees to furnish to the
Premises during reasonable hours of generally recognized
business days, to be agreed to by Tenant and Landlord, and
during non-business hours and non-business days, 24 hours a
day, 7 days a week, on an access and override basis, and
subject to the reasonable rules and regulations of the
Building of which the Premises are a part, the following
services: (a) electricity for normal lighting and frac-
tional horsepower office machines, (b) heat and air condi-
tioning required in Landlord' s judgment for the comfortable
use and occupation of the Premises; (c) janitorial services
unless Tenant advises Landlord of Tenant' s desire to provide
its own janitorial services; and (d) water in quantities
reasonably used by Tenant. Landlord shall also maintain and
keep lighted the common stairs, common entries and toilet
rooms in the Building of which the Premises are a part.
Landlord shall not be liable for, and Tenant shall not be
entitled to, any reduction of rent by reason of Landlord's
failure to furnish any of the foregoing when such failure is
caused by accident, breakage, repairs, strikes, lockouts or
other labor disturbances or labor disputes of any character,
or by any other cause, similar or dissimilar, beyond the
reasonable control of Landlord. Landlord shall not be
liable under any circumstances for a loss of or injury to
property, however occurring, through or in connection with
or incidental to failure to furnish any of the foregoing,
except to the extent such loss or injury is directly caused
by Landlord. Wherever heat generating machines or equipment
are used by Tenant in the Premises which affect the tempera-
ture otherwise maintained by the air conditioning system,
Landlord reserves the right to install supplementary air
conditioning units in the Premises and the cost thereof,
including the cost of installation, and the cost of opera-
tion and maintenance thereof shall be paid by Tenant to
Landlord upon demand by Landlord.
Tenant will not, without written consent of Landlord,
use any apparatus or device in the Premises, including
machines which require electricity in excess of that
normally used by office machines such as photocopiers and
mini computers, which will in any way increase the amount of
electricity usually furnished or supplied for the use of the
- 12 -
Premises as municipal office space; nor connect with elec-
tric current except through existing electrical outlets in
the Premises as agreed to in Tenant Improvements, any
apparatus or device, for the purpose of using electric
current. If Tenant shall require water or electric current
in excess of that usually furnished or supplied for the use
of the Premises as general office space, Tenant shall first
procure the written consent of Landlord, which consent shall
not be unreasonably withheld, to the use thereof and
Landlord may cause a water meter or electrical current meter
to be installed in the Premises, so as to measure the excess
amount of water and electric current consumed for any such
use. The cost of any such meters and of installation, main-
tenance and repair thereof shall be paid for by Tenant and
Tenant agrees to pay to Landlord promptly upon demand,
therefor by Landlord, for all such water and electric
current consumed as shown by said meters, at the rate
charged for such services by the local public utility
furnishing the same, plus any additional expense incurred in
keeping account of the water and electric current so
consumed. If a separate meter is not installed, such excess
cost for such water and electric current will be established
by an estimate made by a utility company or electrical
engineer.
15. PERSONAL PROPERTY TAXES. Tenant shall pay or
cause to be paid before delinquency any and all taxes levied
or assessed and which become payable during the term hereof
upon all Tenants' leasehold improvements, equipment, furni-
ture, fixtures, and any other personal property, located in
the Premises. In the event any or all of the Tenants'
leasehold improvements, equipment, furniture, fixtures, and
any other personal property shall be assessed and taxed with
the real property, Tenant shall pay to Landlord its share of
such taxes within ten (10) days after delivery to Tenant by
Landlord of a statement in writing setting forth the amount
of such taxes applicable to Tenant's property.
16. ENTRY BY LANDLORD. At any and all reasonable
times during regular business hours, upon one (1) day's
prior notice to Tenant, Landlord reserves and shall have the
right to enter the Premises to inspect the same a reasonable
number of times, to submit the Premises to prospective
purchasers or tenants, to repair the Premises and any
portion of the Building that Landlord may deem necessary or
desirable, without abatement of rent unless otherwise pro-
vided herein, and may for that purpose erect scaffolding and
other necessary structures where reasonably required by the
character of the work to be performed, always providing that
the entrance to the Premises shall not be blocked thereby
and further providing that the business of Tenant shall con-
tinue to occur with only minimal interruption of Tenant' s
business. Tenant hereby waives any claim for damages or for
any injury or inconvenience to or interference with Tenant' s
- 13 -
business or any loss of occupancy or quiet enjoyment of the
Premises, subject to the provisions of paragraph 11 here-
under. Landlord shall have the right to use any and all
means which Landlord may deem proper to open any doors or
otherwise obtain access to the Premises in an emergency,
without liability to Tenant except for any failure to exer-
cise due care for Tenant' s property, and any entry to the
Premises obtained by Landlord by any of said means or other-
wise shall not under any circumstances be construed or
deemed to be a forcible or unlawful entry into or a detainer
of the Premises or an eviction of Tenant from the Premises
or any portion thereof.
17 . ASSIGNMENT AND SUBLETTING. It is understood and
agreed that Landlord may fully assign its interest in this
Lease as Landlord; provided, however, that for a period of
one (1) year after the Commencement Date, Landlord shall not
be released from its obligations hereunder upon such assign-
ment without first obtaining Tenant' s prior written
approval. It is understood by the parties hereto that
Tenant is entering into this Lease in reliance on Landlord,
or an entity including Douglas W. Klappenbach as managing
general partner, remaining the Landlord for this one year
period. Tenant shall not either voluntarily or by operation
of law assign, transfer, mortgage, pledge, hypothecate, or
encumber this Lease or any interest therein and shall not
sublet the Premises or any part thereof or any right or
privilege appurtenant thereto or allow any person (the
employees, agents, servants, and invitees of Tenant
excepted) to occupy or use the Premises or any portion
thereof without the prior written consent of Landlord, which
consent shall not be unreasonably withheld. Landlord
reserves the right to recapture the Premises, or applicable
portions thereof, in lieu of giving its consent by notice
given to Tenant within twenty (20) days after receipt of
Tenant's request for assignment or subletting and delivery
of all reasonable information on any such assignee or
subtenant as requested by Landlord. Such recapture shall
terminate this Lease as to the applicable space effective on
the prospective date of assignment or subletting, which
shall be the last day of a calendar month and not earlier
than sixty (60) days after receipt of Tenant's request for
assignment or subletting and delivery of all reasonable
information on any such assignee or subtenant as requested
by Landlord. If Landlord elects not to recapture and there-
after gives its consent, Landlord and Tenant agree that
Landlord may charge Tenant a reasonable sum to reimburse
Landlord for legal costs actually incurred in connection
with such consent; and that from the date of such assignment
or sublease of this Lease, Landlord shall receive any
rental, fees, and other proceeds payable by such subtenant
or assignee in excess of the rent to be paid to Landlord
under the terms of this Lease. Any such assignment or sub-
letting without compliance with the terms of this paragraph
- 14 -
shall be void and shall, at the option of Landlord, consti-
tute a default under the terms of this Lease. A consent to
one assignment, subletting, occupation, or use by any other
person shall not be deemed to be a consent to any subsequent
assignment, subletting, occupation, or use by another
person. Consent to any such assignment or subletting shall
in no way relieve Tenant of any liability under this Lease.
Landlord may assign the rental herein provided to any
person, partnership, corporation, or bank, and Tenant agrees
when notified in advance in writing by the assignee of such
assignment to make the rental payments to assignee under the
terms of said assignment so long as such terms are
consistent with those set out in this Lease.
18. HOLDING OVER. If Tenant remains in possession of
the Premises or any part thereof after the expiration of the
term of this Lease and any extension of the term of this
Lease, with the express written consent of Landlord, such
occupancy shall be a tenancy from month to month at a rental
in the amount of 150% of the last monthly minimum rent, plus
all other charges payable hereunder, and upon all the terms
hereof applicable to a month-to-month tenancy.
19 . TENANT'S DEFAULT. The occurrence of any one or
more of the following events shall constitute a default and
breach of this Lease by Tenant.
19. 1 Abandonment. Tenant vacates or abandons the
Premises;
19.2 Failure to Pay Rent. Tenant fails to make
any payment of rent or any other payment required to be made
by Tenant hereunder, as and when due;
19. 3 Failure to Observe Other Covenants. Tenant
fails to observe or perform any of the covenants, condi-
tions, or provisions of this Lease to be observed or
performed by Tenant, other than described in subparagraph
20. 1 below, where such failure shall continue for a period
of thirty (30) days after written notice thereof by Landlord
to Tenant; provided, however, that if the nature of Tenant's
default is such that more than thirty (30) days are reason-
ably required for such cure, then Tenant shall not be deemed
to be in default if Tenant commences such cure within said
thirty (30) days and thereafter, diligently prosecutes such
cure to completion;
19.4 Insolvency. Tenant makes any general
assignment or general arrangement for the benefit of
creditors or the filing by or against Tenant of a petition
to have Tenant adjusted a bankrupt, or a petition to reorga-
nization or arrangement under any law relating to bankruptcy
(unless, in the case of a petition filed against Tenant, the
same is dismissed within sixty (60) days) or the appointment
- 15 -
of a trustee or a receiver to take possession of substan-
tially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not
restored to Tenant within thirty (30) days or the attach-
ment, execution, or other judicial seizure of substantially
all of Tenant's assets located at the Premises or of
Tenant's interests in this Lease where such seizure is not
discharged within thirty (30) days:
19 . 5 Misrepresentation. Tenant makes or has made
or furnishes or has furnished any warranty, representation
or statement to Landlord in connection with this Lease, or
any other agreement to which Tenant and Landlord are
parties, which is or was false or misleading in any material
respect when made or furnished; or
20. REMEDIES ON DEFAULT. In the event of any uncured
default or breach by Tenant, Landlord may, at any time
following Tenant's failure to timely cure such default or
breach, with prior notice or demand as set forth in this
Lease in the exercise of a right or remedy which Landlord
may have by reason of such default or breach, terminate this
Lease by written notice to Tenant, revoke the Tenant' s right
to any free rent, reenter and take possession of the
Premises without termination of this Lease, or pursue any
remedy allowed by law. Tenant agrees to pay Landlord the
cost of recovering possession of the Premises, the expenses
of reletting, and any other costs or damages arising out of
Tenant' s default including, without limitation, the costs of
removing persons and property from the Premises, the costs
of repairing or altering the Premises for reletting,
brokers' commissions, and legal expenses and fees. Notwith-
standing any termination, reentry, or reletting, the liabil-
ity of Tenant for the rent and additional rent for the
balance of the term of this Lease shall not be extinguished
and Tenant shall pay and Landlord may recover from Tenant at
the time of termination, reentry, or reletting, the excess,
if any, of the amount of the rent reserved in this Lease for
the balance of the term hereof over the then reasonable
rental value of the Premises for the same period. Reason-
able rental value shall mean the amount of rental which
Landlord does or could reasonably be expected to obtain as
rent for the remaining balance of the Lease term. In the
event that Landlord relets the Premises or any part thereof
without first terminating Tenant's right to possession pur-
suant to this Lease, Landlord reserves the right, at any
time thereafter, to elect to terminate Tenant's right to
possession to that portion of the Premises for the default
that originally resulted in the reletting.
20. 1 Remedies Cumulative. The remedies here-
inafter described shall be cumulative and Landlord or Tenant
- 16 -
shall be entitled to pursue any other remedy now or here-
after available to Landlord or Tenant under the law or
judicial decisions of the State of Washington.
20. 2 Removal of Personal Property. In the event
of a retaking of possession of the Premises by Landlord,
Tenant shall remove all personal property located thereon
within thirty (30) days or sooner if reasonably possible and
upon failure to do so upon written demand of Landlord,
Landlord may remove and store the same in any place selected
by Landlord, including but not limited to a public ware-
house, at the expense and risk of Tenant. If Tenant shall
fail to pay the cost of storing any such property after it
has been stored for a period of thirty (30) days or more,
Landlord may sell any or all of such property at a public or
private sale and shall apply the proceeds of such sale first
to the cost of such sale, secondly to the payment of the
charges for storage, if any, and thirdly to the payment of
any other sums of money which may be due from Tenant to
Landlord under the terms of this Lease, and the balance, if
any, to Tenant. Tenant hereby waives all claims for damages
that may be caused by Landlord' s lawfully reentering and
taking possession of the Premises or lawfully removing and
storing the property of Tenant as herein provided and will
save Landlord harmless from loss or damages occasioned by
Landlord thereby, whether such lawful reentry shall be
considered or construed to be a forcible entry, except to
the extent such damages are caused by Landlord.
21. DAMAGE AND RECONSTRUCTION. Should the Premises be
damaged during the term of this Lease, Tenant shall notify
Landlord within three (3) business days of Tenant' s knowl-
edge -of such damage, and the rights and responsibilities of
Landlord and Tenant shall be as follows:
21. 1 Insured Damage. In the event the Premises
are damaged by fire or other perils covered by extended
coverage insurance, Landlord agrees to forthwith commence
repair of the same to the extent of insurance proceeds
available and this Lease shall remain in full force and
effect, except that Tenant shall be entitled to a propor-
tionate reduction of the minimum Monthly Rent from the date
of such damage and while such repairs are being made until
such repairs are substantially completed, such proportionate
reduction to be based upon the extent to which the damage
and making of such repairs shall unreasonably interfere with
the business carried on by Tenant in the Premises. If the
damage is due solely to the fault or neglect of Tenant or
its employees, there shall be no abatement of rent.
21. 2 Other Damage. In the event the Premises are
damaged as the result of any cause other than the perils
covered by fire and extended coverage insurance, then
Landlord shall forthwith commence repair of the same,
- 17 -
provided the extent of the destruction is less than ten
percent (10%) of the then full replacement cost of the
Premises. In the event the destruction of the Premises is
to an extent of ten percent (10%) or more of the full
replacement cost, then Landlord shall have the option (a) to
repair or restore such damage, this Lease continuing in full
force and effect, but the minimum Monthly Rent to be propor-
tionately reduced as hereinabove provided as of the date of
such damage and while such repairs are being made until such
repairs are substantially completed, or (b) to give notice
to Tenant at any time within sixty (60) days after such
damage, terminating this Lease as of the date specified by
Landlord.
21. 3 Damage During Last Twelve Months. Notwith-
standing anything to the contrary contained in this para-
graph, Landlord shall not have any obligation whatsoever to
repair, reconstruct, or restore the Premises when the damage
resulting from any casualty covered under this paragraph
occurs during the last twelve (12) months of the term of
this Lease or any extension thereof. In such event, except
as provided in the next sentence of this paragraph, Landlord
may at Landlord' s option: (a) terminate this Lease in the
manner provided in subparagraph 21. 2 above; or (b) reduce
the minimum Monthly Rent by a proportion equal to the
extent', if any, the damage interferes with the business
carried on by Tenant in the Premises in the manner provided
in subparagraph 21. 2 above. If, however, damage occurs to
the Premises from any casualty covered under this paragraph
during the last twelve (12) months of the Lease term, or
extension thereof, and if Tenant agrees to extend the then
Lease term for a period of five (5) additional years from
the expiration of the then Lease term at the Option Period
rental which would otherwise next be applicable, or if no
such Option Period rental is applicable, then at the then
applicable fair market rental; then the provisions of para-
graphs 21. 1 and 21.2 hereunder shall be fully applicable.
Tenant shall advise Landlord, in writing, of its agreement
to extend the Lease term within twenty (20) days of such
damage occurring.
21.4 Damage to Tenant' s Property. Landlord shall
not be required to repair any injury or damage by fire or
other cause or to make any repairs or replacements of any
leasehold improvements, fixtures, or other personal property
of Tenant.
22 . EMINENT DOMAIN.
22 . 1 Taking. If twenty-five percent (25%) or
more of the Premises shall be taken or appropriated by any
public or quasi-public authority under the power of eminent
domain, either party hereto shall have the right at its
- 18 -
option within sixty (60) days after said taking to terminate
this Lease upon thirty (30) days' written notice.
22 . 2 Partial Taking. If less than twenty-five
percent (25%) of the Premises are taken (or 25% or more of
the Premises are taken and neither party elects to terminate
as herein provided) the minimum Monthly Rent thereafter to
be paid shall be equitably reduced. If any part of the
Building of which the Premises are a part may be so taken or
appropriated, Landlord shall within sixty (60) days of said
taking have the right at its option to terminate this Lease
upon sixty (60) days written notice to Tenant.
22 .3 Award. In the event of any taking, Landlord
shall be entitled to any and all awards or settlements which
may be given and Tenant shall have no claim against the
condemning authority or Landlord for the value of any
unexpired term of this Lease. Nothing contained herein
shall be deemed to give Landlord any interest in or to
require Tenant to assign to Landlord any award made to
Tenant for the taking of personal property or fixtures
belonging to Tenant or for the interruption of or damage to
Tenant' s business or for Tenant' s moving expenses.
23 . SIGNS.
23 . 1 Tenant Signs. Tenant may, at Tenant's sole
expense, place external and internal directional, informa-
tional signs on the Premises provided such signs conform
with the sign criteria attached hereto as Exhibit C and
provided such signs do not violate any applicable statute or
regulation existing during the term of this Lease. Tenant
shall pay the costs of removal of such signs upon termina-
tion of the Lease and such signs shall be the property of
Tenant.
23 . 2 For Lease or Sale Signs. At any time within
one hundred eighty (180) days prior to the expiration of
this Lease, Landlord may place upon the Premises "for lease"
signs. Landlord may place "for sale" signs on the Premises
at any time during the Lease term and any such signage by
Landlord shall be tasteful and consistent with other signage
in the Building.
24 . SUBORDINATION AND MODIFICATION BY LENDER. Tenant
agrees that this Lease shall be subordinate to any mortgage
or deed of trust that may hereafter be placed upon the
Premises or the Building and to any and all advances to be
made thereunder, to the interest thereon, and all renewals,
replacements, and extensions thereof; provided, the mort-
gagee or trustee named in such mortgage or deed of trust
shall agree in writing to recognize and agree to comply with
the terms and conditions of the Lease of Tenant in the event
of foreclosure, if Tenant is not in default. In the event
- 19 -
any mortgagee or trustee elects to have the Lease a prior
lien to its mortgage or deed of trust, then in such event,
upon such mortgagee or trustee notifying Tenant to that
effect, this Lease shall be deemed prior in lien to the said
mortgage or deed of trust whether or not this Lease is dated
prior to or subsequent to the date of said mortgage or trust
deed. Within fifteen (15) days of presentation, Tenant
agrees to execute any documents which such mortgagee or
trustee may require to effectuate the provisions of this
paragraph so long as Tenant, as a city, is legally permitted
to do so. Tenant further agrees that, if in connection with
obtaining financing for the Land, Building, or Premises, a
lender shall request modification of this Lease as a condi-
tion to such financing, Tenant shall not withhold, delay or
defer its consent thereto, provided that such modifications
do not increase the financial obligations of Tenant here-
under, alter the terms and conditions of this Lease or
otherwise materially adversely affect the leasehold interest
hereby created; and further provided that Tenant is legally
permitted to so modify this Lease.
25. TENANT'S STATEMENT. Tenant shall at any time and
from time to time upon not less than three (3) days' prior
written notice from Landlord execute, acknowledge, and
deliver to Landlord a statement in writing (a) certifying
that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification
and certifying that this Lease as so modified is in full
force and effect) and the date to which the rental and other
charges are paid in advance, if any, and (b) acknowledging
that there are, to Tenant' s knowledge, any uncured defaults
on the part of Landlord hereunder, or specifying such
defaults if any are claimed, and (c) setting forth the date
of commencement of rents and expiration of the term hereof.
Any such statement may be relied upon by any prospective
purchaser or encumbrancer of the Land, Building, or Premises
without recourse to Tenant unless Tenant has misrepresented
the matters exclusively within Tenant' s control as set forth
hereinabove.
26. HAZARDOUS SUBSTANCES. Tenant shall not, without
first obtaining Landlord' s prior written approval, generate,
release, spill, store, deposit, transport, or dispose of
(collectively "Release") any hazardous substances, sewage,
petroleum products, radioactive substances, medicinal,
bacteriological, or disease-producing substances, hazardous
materials, toxic substances or any pollutants or substances
defined as hazardous or toxic in accordance with applicable
federal, state, and local laws and regulations in any
reportable quantities ("Hazardous Substances") in, on or
about the Premises. In the event, and only in the event,
Landlord approves such Release of Hazardous Substances on
the Premises, Tenant agrees that such Release shall occur
safely and in compliance with all applicable federal, state,
- 20 -
and local laws and regulations. Tenant shall indemnify,
hold harmless and defend Landlord from any and all claims,
liabilities, losses, damages, cleanup costs, response costs,
and expenses, including reasonable attorneys' fees arising
out of or in any way related to the Release by Tenant, or
any of its agents, representatives, or employees, or the
presence of such Hazardous Substances in, on or about the
Premises occurring at any time after the Commencement Date
to the full extent of Tenant' s liability therefore.
27 . GENERAL PROVISIONS. Landlord and Tenant agree to
the following general provisions:
27. 1 Waiver. The waiver by Landlord or Tenant of
any term, covenant, or condition herein contained shall not
be deemed to be the waiver of such term, covenant, or condi-
tion upon any subsequent breach of the same or of any other
term, covenant, or condition herein contained. The subse-
quent acceptance of rent hereunder by Landlord shall not be
deemed to be a waiver of any preceding default by Tenant of
any term, covenant, or condition of this Lease other than
the failure of Tenant to pay the particular rental so
accepted, regardless of Landlord' s knowledge of such preced-
ing default at the time of the acceptance of such rent.
27 .2 Joint Obligation. If there be more than one
Tenant, the obligations hereunder imposed shall be joint and
several.
27 . 3 Time. Time is of the essence of this Lease
and each and all of its provisions in which performance is a
factor.
27.4 Paragraph Headings. The paragraph headings
of this Lease are not a part of this Lease and shall have no.
effect upon the construction or interpretation of any part
hereof.
27.5 Successors and Assigns. The covenants and
conditions herein contained, subject to the provisions as to
assignment, apply to and bind the heirs, successors, execu-
tors, administrators, and assigns of the parties hereto.
27.6 Recordation. Neither Landlord nor Tenant
shall record this Lease, but a short form memorandum hereof
may be recorded at the request of Landlord or Tenant.
• 27 . 7 Ouiet Possession. Upon Tenant paying the
rent reserved hereunder and performing all of the covenants,
conditions, and provisions on Tenant' s part to be observed
and performed hereunder, Tenant shall have quiet possession
of the Premises for the entire term hereof, subject to all
the provisions of this Lease. The Premises are leased
subject to any and all existing encumbrances, conditions,
- 21 -
rights, covenants, easements, restrictions, rights-of-way,
and any matters of record, applicable zoning and building
laws, and such matters as may be disclosed by inspection or
survey.
27. 8 Overdue Rent. Unpaid installments of the
minimum monthly rent, Additional Rent, or other sums due
hereunder shall, if not timely paid, bear interest from the
date due at the publicly announced prime rate for commercial
borrowers of Rainier National Bank, Main Branch, plus three
percent (3%) . Tenant hereby further agrees to pay any
attorneys ' fees and expenses incurred by Landlord to collect
such sums by reason of Tenant's failure to pay rent,
additional rent, or other charges when due hereunder.
27 .9 Prior Agreements. This Lease contains all
of the agreements of the parties hereto with respect to any
matter covered or mentioned in this Lease and no prior
agreements or understandings pertaining to any such matters
shal•1 be effective for any purpose. No provision of this
Lease may be amended or added to except by agreement in
writing signed by the parties hereto or their respective
successors in interest. This Lease shall not be effective
or binding upon any party until fully executed by both
parties hereto.
27. 10 Inability to Perform. This Lease and the
obligations of Tenant or Landlord hereunder shall not be
affected or impaired because Tenant or Landlord is unable to
fulfill any of its obligations hereunder or is delayed in
doing so, if such inability or delay is caused by reason of
strike, embargos, labor troubles, acts of God, war or other
strife, or any other cause beyond the reasonable control of
Landlord or Tenant.
27. 11 Partial Invalidity. Any provisions of this
Lease which shall prove to be invalid, void, or illegal
shall in no way affect, impair, or invalidate any other
provision hereof and such other provision shall remain in
full force and effect.
27. 12 Cumulative Remedies. No remedy or election
hereunder shall be deemed exclusive but shall whenever
possible be cumulative with all other remedies at law or in
equity.
27 . 13 Choice of Law. This Lease shall be
governed by the laws of the State of Washington and shall be
enforceable in the Superior Court of King County,
Washington.
27. 14 Attorneys' Fees. In the event of any
action or proceeding brought by either party against the
other under this Lease, the prevailing party shall be
- 22 -
entitled to recover for the fees of its attorneys in such
action or proceeding, including costs of appeal, if any, in
such amount as the court may adjudge reasonable as
attorneys' fees. For the purposes of this provision, the
terms "action" or "proceeding" shall include arbitration,
administrative, bankruptcy, and judicial proceedings
including appeals therefrom.
27. 15 Real Estate Commission. Tenant and
Landlord warrant that no real estate broker or agent has
been employed by Tenant or is entitled to receive any
commission or fee with respect to this transaction other
than the brokers or agents to whom Landlord has consented by
written agreement. Each party shall indemnify and save the
other harmless from the claims of any real estate brokers or
agents with whom either party may have dealt with respect to
this transaction, other than as so consented to by Landlord.
27 . 16 Execution. This Lease may be executed in
several counterparts, each of which shall be deemed an
original instrument.
27 . 17 Notices. All notices to be given hereunder
shall be deemed to have been given when given in writing .and
hand delivered or by depositing the same in the U.S. Postal
Service or with Federal Express, or other overnight delivery
service, delivery charge prepaid, and addressed to the party
at the respective mailing address as herein set forth.
To Landlord at:
Centennial Venture Limited Partnership
c/o Sound Ventures Management Company
Key Tower, Suite 4050
1000 Second Avenue
Seattle, Washington 98104
To Tenant at:
The City of Kent
Attn: City Administrator
220 4th Avenue S.
Kent, Washington 98032-5895
It is understood that each party may change the address to
which notices may be sent by giving a thirty (30) day
written notice of such change to the other party hereto in
the manner herein provided.
27 . 18 Municipal Authority. Tenant represents and
warrants that the individual executing this Lease on behalf
of Tenant is duly authorized to execute and deliver this
Lease on behalf of the municipal corporation known as the
City of Kent, in accordance with its applicable ordinances
- 23 -
and regulations, and that this Lease is binding upon the
City of Kent in accordance with its terms.
27 . 19 Limited Partnerships. If the Landlord
herein is a limited partnership, it is understood and agreed
that any claims by Tenant on Landlord shall be limited to
the assets of the limited partnership, and furthermore,
Tenant expressly waives any and all rights to proceed
against the individual partners or the officers, directors,
or shareholders of any corporate partner, except to the
extent of their interest in said limited partnership.
27 .20 Measurement Standard. All measurements to
be made under this Lease of area shall be completed pursuant
to the standards promulgated by the Building Owners &
Managers Association ("BOMA") .
27 .21 Anti-Discrimination. In all services or
activities, and all hiring or employment made possible by or
resulting from this Lease there shall be no discrimination
against any employees or applicant for employment because of
sex, age (except minimum age and retirement provisions) ,
race, color, creed, national origin, marital status or the
presence of any sensory, mental, or .physical handicap,
unless based upon a bona fide occupational qualification.
This requirement shall apply but not be limited to the
following: employment, advertising, lay-off or' termination,
rates of pay or other forms of compensation, and selection
for training; including apprenticeship. Landlord and Tenant
shall not violate any of the terms of RCW 49 . 60, Title VII
of the Civil Rights Act of 1964 , or any other applicable
federal, state, or local law or regulation regarding non-
discrimination. Any violation of this provision shall be
grounds for cancellation, termination, or suspension, in
whole or in part, of the Lease by Tenant or Landlord and, in
the case of Landlord's breach, may result in ineligibility
for further City of Kent agreements. Landlord and Tenant
will also comply with other anti-discrimination laws or
requirements on any and all jurisdictions having authority.
27 . 22 Consent. Whenever the consent of either
party is requested herein, such consent shall not be
unreasonably withheld.
28. CONTINGENCIES. Landlord' s obligations hereunder
shall be contingent upon and subject to satisfaction of the
following matters to Landlord's satisfaction, in the exer-
cise of Landlord's sole discretion, on or before June 15,
1989:
28 . 1 Receipt of Landlord' s lender' s approval as
to the terms of this Lease; and
24 -
28 . 2 Mutual agreement as to approved final plans
and specifications for the Tenant Improvements in the
Premises.
In the event any one of the above contingencies are not
satisfied by June 15, 1989, then the Commencement Date of
this Lease shall be extended one (1) day for each one (1)
day' s delay until the above contingencies are fully
satisfied.
29. OPTION TO EXTEND.
29. 1 Option Exercise. Tenant is given the option
to extend the term on all provisions contained in this
Lease, for two (2) five-year periods ("Option Period")
following expiration of the initial 10-year term by giving
notice of exercise of the option ("Option Notice") to
Landlord at least ninety (90) days before the expiration of
the initial 10-year term or any Option Period, provided that
if Tenant is in default on the date of giving Option Notice,
the Option Notice shall be ineffective unless Tenant timely
cures such default in accordance with the terms of this
Lease, or if Tenant is in default on the date the Option
. Period is to commence unless Tenant timely cures such
default in accordance with the terms of this Lease, the
Option Period shall not commence and this Lease shall expire
at the end of the then current term. Tenant shall have no
other right to extend the term beyond the Option Periods,
unless the parties otherwise agree in writing.
29. 2 Option Period Rent. Monthly Rent for the
first Option Period shall be $ per month
($17.25/square foot per year plus the Operating Expenses
Base of $4 . 00/square foot per year as then adjusted pursuant
to Section 5) . Monthly Rent for the second Option Period
shall be $ per month ($20. 70/square foot per year plus
the Operating Expenses Base of $4 . 00/square foot per year as
then adjusted pursuant to Section 5) .
30. PURCHASE OPTION. Landlord grants to Tenant the
option to purchase the Building and Land (collectively, the
"Project") , subject to the terms of all leases applicable
thereto at the end of the initial Lease Term, and at the end
of the second Option Period, if the Lease is so extended in
accordance with paragraph 29, provided Tenant is not in
default at the time the Tenant exercises the purchase option
unless Tenant timely cures such default as provided herein.
Tenant shall have the right to exercise the purchase option
hereunder during the tenth year of the Lease term and during
the twentieth year of the Lease term, if the Lease term is
so extended.
Tenant shall exercise the option by giving to Landlord
at any time during the first six months of the tenth year of
- 25 -
the Lease term written notice of Tenant's exercise of the
purchase option ("Option Exercise Notice") . The Option
Exercise Notice shall be accompanied by an earnest money
deposit ("Deposit") of Fifty Thousand Dollars ($50, 000) .
Such Deposit shall be applied to the purchase price at
closing if Tenant purchases the Project. The Deposit shall
be held by the Title Company in an interest-bearing account
for the benefit of the party to receive the Deposit in
accordance with this paragraph 30. In the event of breach
of this paragraph by Tenant, Landlord may terminate the
provisions of this paragraph and receive the Deposit and all
interest accrued thereon as liquidated damages and as its
sole remedy for such breach, such election constituting
Landlord' s waiver of any other remedies it may have at law
or in equity. In the event of any breach of this paragraph
by Landlord, the Deposit and all interest thereon shall be
returned to Tenant, and Tenant may maintain actions for
specific performance and/or damages.
• Closing shall occur thirty (30) days after the parties '
agreement or determination of the purchase price as set
forth herein, but under no circumstances later than thirty
(30) days prior to expiration of the intial Lease term or
the expiration of the second Option Period, if the Lease
term is so extended. Unless the parties mutually agree to
extend the closing date, if, for any reason closing does not
timely occur, in addition to the rights and remedies for the
parties set forth in this paragraph, Tenant shall be deemed
to have exercised its first option to extend the Lease term
through the first Option Period, this Lease shall remain in
full force and effect, Tenant's Purchase Option hereunder
shall have expired, and the Monthly Rent for the first
Option Period as set forth in paragraph 29 .2 shall be
applicable.
The parties shall have thirty (30) days after Landlord
receives the Option Exercise Notice in which to agree on the
purchase price for and other terms and conditions of the
purchase of the Project. If the parties are unable to agree
on a purchase price within that period, then within ten (10)
days of the expiration of the 30-day period, the parties
will initiate an appraisal process outlined in Exhibit D to
this Lease.
After the purchase price for the Project has been set,
the appraiser shall immediately notify the parties. The
purchase price as determined by the appraisal shall be
binding on the parties.
The purchase price shall be payable in cash to Landlord
by Tenant at closing in accordance with all the terms and
conditions of the purchase.
26 -
To the extent that there exists on the Closing Date,
any existing tenant which is in a period of free rent or
there exists any vacant space, Landlord shall master lease
from tenant the vacant space for a period not to exceed 12
months until such vacant space is rented at the monthly rent
assumed by the appraisers in their determination of the
Appraised Value; and Landlord shall master lease from tenant
the space occupied by the existing tenants then paying no
rent until such tenant's free rent period expires at a
monthly rent equal to such tenant' s stabilized monthly rent
over the term of such tenant' s lease.
Promptly on or after the exercise of Tenant' s option
pursuant to this paragraph 30, Landlord shall request
Transamerica Title Insurance Company, or its successor, or
another title company then mutually agreed upon by Landlord
and Tenant, ("Title Company") to issue to Tenant, at
Landlord' s expense, a preliminary title report ("Title
Report") relating to the Project, which report shall commit
Title Company to issue to Tenant at the time of closing its
standard owner' s policy of title insurance or, at Tenant' s
option, an extended owner' s policy of title insurance,
insuring Tenant in an amount equal to the Purchase Price of
the Project. The Title Report shall include copies of all
exceptions noted therein.
Title to the Project shall be subject only to those
matters approved or waived by Tenant in writing
(collectively "Permitted Exceptions") . In the event the
Title Report contains exceptions (other than the Permitted
Exceptions contained in the Title Report) Tenant shall
provide notice to Landlord within thirty (30) days after
receipt of the Title Report which of such exceptions are not
acceptable to Tenant (such unsatisfactory exceptions to be
hereinafter called "Unpermitted Exceptions") . Landlord
shall cure all monetary Unpermitted Exceptions, except
public assessments then made which Tenant shall assume as of
the date of closing. Landlord shall be responsible for such
assessments prior to the date of Closing. Landlord shall
use its reasonable efforts to cure all other Unpermitted
Exceptions to Tenant' s satisfaction, except that Landlord
shall not be required to cure any exceptions of record on or
after the date of this Lease and nonmonetary exceptions of
record on or after the date of this Lease that do not
materially adversely affect the use and enjoyment of the
Project by Tenant, as reasonably determined by Tenant. In
the event that Landlord determines not to cure any Unper-
mitted Exceptions, Landlord shall promptly notify Tenant, in
which event Tenant' s exercise of its option may immediately
terminate and be of no further force or effect upon the sole
determination of Tenant; provided, that Tenant shall have
the right to waive such exceptions and to exercise its
option under this Lease Section 30 by notice of such waiver
to Landlord. Any encumbrances, taxes, assessments or
- 27 -
closing costs to be discharged by Landlord shall be paid
from purchase money at closing.
Building or use restrictions general to the district in
which the Project is located, zoning and land use regula-
tions or specific provisions applicable to the Project, real
estate taxes as of the date of closing for the year in which
closing occurs which are not paid as of closing and excep-
tions created by Tenant shall not be deemed exceptions
within the meaning of the preceding paragraph.
Upon closing, Landlord shall execute and deliver to
Tenant a Statutory Warranty Deed conveying the Project to
Tenant subject only to the Permitted Exceptions.
The procedure for closing shall be in accordance with
closing instructions agreed to by Landlord and Tenant which
shall include the following:
(a) Closing shall occur at the Seattle,
Washington, offices of Title Company. All funds, documents
and instruments required for closing shall be delivered to
Title Company on the closing date. Tenant' s payment of the
Purchase Price shall be by certified check or wire transfer.
Tenant's closing funds shall be invested as reasonably
instructed by Tenant upon deposit into escrow and interest
shall accrue for the benefit of Tenant.
(b) Title Company shall close the escrow by (i)
recording the Deed, advising Tenant that Title Company will
insure title as provided herein, and subsequently delivering
the Deed and the policy of title insurance to Tenant, (ii)
paying the Purchase Price with all deductions for Landlord's
costs of closing hereunder, to Landlord in accordance with
instruction from Landlord and (iii) paying interest from the
escrowed funds to Tenant in accordance with instruction from
Tenant.
(c) Real estate taxes for the Project shall be
prorated as of closing. Other expenses shall be paid as
follows:
(i) Landlord shall pay the real estate
excise tax on the Purchase Price; one-half (1/2) of all
escrow fees and sales tax applicable to such fees; Land-
lord's legal costs (including document preparation) ; and the
premium for standard form title insurance and sales tax on
such premium.
(ii) Tenant shall pay one-half (1/2) of all
escrow fees and sales tax applicable to such fees; Tenant' s
financing costs, if any; Tenant' s legal costs; the
additional portion of the title insurance policy premium, if
any, charges for ALTA extended coverage, or any endorsements
- 28 -
beyond standard title insurance coverage, and sales tax on
the premium for any such additional portion of title insur-
ance or endorsements, and costs of any associated surveys,
reports, etc. required by Title Company to issue an extended
coverage policy.
All assessments for local improvements shall be
prorated as of closing.
IN WITNESS WHEREOF, the parties hereto have executed
this Lease the day and year first above written.
Tenant Landlord
THE CITY OF KENT CENTENNIAL VENTURE LIMITED
PARTNERSHIP
By By
Mayor of the City of Kent Its
Attest:
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day personally appeared before me ,
to me known to be the of the City of Kent,
the municipal corporation that executed the within and fore-
going instrument, and acknowledged the instrument to be the
free and voluntary act and deed of said municipal corpora-
tion for the uses and purposes therein mentioned, and on
oath stated that he was duly authorized to execute said
instrument on behalf of the municipal corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this day of , 1988 .
NOTARY PUBLIC in and for the
State of Washington, residing
at My
commission expires:
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day personally appeared before me
to me known to be the
- 29 -
of Centennial Venture 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 this day of , 1988 •
NOTARY PUBLIC in and for the
State of Washington, residing
at My
commission expires:
30 -
EXHIBIT A TO THE LEASE
SKETCH OF PREMISES
EXHIBIT B TO THE LEASE
LEGAL DESCRIPTION OF LAND
Lots 4, 5, 6, 7 , 8, and 9 of Block 8, YESLER'S
FIRST ADDITION to the Town of Kent according to
Plats, recorded in Volume 5 of Plats, Page 64 ,
King County, Washington; and
A portion of Lots 1, 2 , 3 , 4, 5, and 6 of Block
13 , YESLER'S FIRST ADDITION to the Town of Kent
according to Plats, recorded in Volume 5 of Plats,
Page 64, King County, Washington, together with
any and all right, title and interest in vacated
Third Avenue appurtenant to the above-described
real property;
Buyer and Seller agree that the above legal description
shall be amended upon the mutual agreement of. Buyer and
Seller to conform with the Property necessary for the
Project which has received the Design Approval in accordance
with paragraph 12 .e. of the Real Estate Purchase and Sale.
Agreement. Seller and Buyer understand and agree that it
may be necessary to obtain a lot line adjustment, short plat
or other legal subdivision of the Property, if required, on
or before Closing, in order to effect a legal conveyance of
the Property. Buyer agrees to obtain such lot line
adjustment, short plat or other legal subdivision of the
Property on behalf of Seller.
EXHIBIT C TO THE LEASE
SIGN CRITERIA
1. Landlord shall provide a building identification sign
on the exterior of the Building or on a monument sign.
No other exterior signage shall be permitted unless
approved by Landlord.
2 . Landlord shall provide a lobby directory sign system.
3 . Each tenant shall be entitled to a single suite
identification sign. Landlord shall provide a building
standard sign with tenant' s name and suite number.
Tenant may provide alternate tenant suite signage at
tenant ' s expense with Landlord' s prior approval.
4 . With respect to Tenant' s Permit Center, the following
shall apply.
a. Landlord shall provide exterior signage
identifying the City of Kent Permit Center.
b. Landlord shall provide four separate building
standard suite identification signs (one for each
of the four departments) .
C. Landlord shall permit the installation of a kiosk
in the Permit Center lobby, design and location to
be subject to approval by Landlord.
EXHIBIT D TO THE LEASE
APPRAISAL PROCESS
The purchase price for the Project shall be the
"Appraised Value" . The Appraised Value as determined by the
following appraisal procedure:
a. Appraised Value. The Appraised Value shall mean a
current appraisal of the fair market value of the Project.
The Appraised Value shall be determined in accordance with
the following procedures:
(1) Designation of Appraiser. Landlord and
Tenant shall each, within five (5) days after the date
of the Option Exercise Notice, designate- an MAI
appraiser. Within five (5) days after the designation .
of appraisers by Landlord and Tenant, the two MAI
appraisers so selected shall designate a third .
appraiser; provided, however, that if Landlord and
Tenant designate the same appraiser, then the second
party so .designating shall designate another appraiser.
In the event of the failure of Landlord or Tenant to
select an MAI appraiser within the time provided or in
the event of the failure of the two MAI appraisers to
select a third MAI appraiser, either party shall have
the right to apply to the Superior Court of King County
of the State of Washington ("Court") to designate an
MAI appraiser(s) . Such application to Court shall
occur within seven (7.) days following the five (5) day
time periods set forth above. The parties hereto agree
to proceed in good faith and with due diligence to
obtain a prompt determination of the MAI appraiser.
(2) Appraiser Qualifications. All appraisers
designated under this Agreement shall have offices in
the greater Seattle area, shall be MAI certified, and
shall be members of the American Institute of Real
Estate Appraisers or any comparable successor
certifying organization if such Institute is not then
in existence. Such appraisers shall be familiar with
fair market value in the greater Seattle area, and,
specifically, the Kent area, for properties
substantially similar to the Project
(3) Appraisal Standards. Appraisal standards of
the American Institute of Real Estate Appraisers shall
be adhered to by the appraisers in determining the fair
market Appraised Value for the Project. The Project
shall be valued, and the appraiser shall be so
instructed, to assume the "Net Operating Income" (NOI)
for the Project based upon: (a) the llth year
projected rentals of the Building and assuming 100%
occupancy (less 5% vacancy factor) if the purchase
option is exercised by Tenant in the loth Lease year;
or (b) the 21st year projected rentals of the Building
and assuming 100% occupancy (less 5% vacancy factor) ,
if the purchase option is exercised by Tenant in the
20th Lease year. For example, if the purchase option
is exercised by Tenant in the loth Lease year, the
Monthly Rent to be assumed for this Lease shall be the
Monthly Rent to be paid during the first Option Period;
for existing other tenants the monthly rent to be
assumed by the appraiser shall be the stabilized rent
from such tenant (excluding any periods of free rent)
and for vacant space the monthly rent shall be assumed
to be the then market, asking rent. If the purchase
option is exercised by Tenant in the 20th Lease year,
then the Monthly Rent to be assumed for this Lease
shall be $ ; for existing other tenants the
monthly rent to be assumed by the appraiser shall be
the stabilized rent from such tenant (excluding any
periods of free rent) and for vacant space, the monthly
rent shall be assumed to be the then market, asking
rent. Accordingly, the fair market value of the
Project shall be determined by the appraisers in the
exercise of their professional judgment and employing
normal appraisal techniques for determining fair market
value for real properties of comparable use and
location.
(4) Appraisal Costs. The costs of the appraiser
appointed by each party shall be paid for by that party
and the remaining costs of the appraisal procedure set
forth herein shall be borne equally by the parties.
(5) Determination of Appraised Value. If either
the highest or the lowest appraised fair market value
is more than 10% different than the middle of the three
appraised fair market values (or if two appraised fair
market values are identical, the third appraisal is
more than 10% different than the other two appraisals) ,
each highest or lowest appraised fair market value
which exceeds the 10% limit shall not be considered
further. After eliminating any appraised fair market
value as required in the preceding sentence, if any,
the average of the remaining appraised fair market
values shall be the "Appraised Value" of the Project
for purposes of this Agreement and shall be final and
binding on the parties.
(6) Completion of Appraisal. The parties shall
exert their best and diligent efforts to complete the
appraised process and determine the Appraised Value
within 85 days of the Option Exercise Notice; and, in
any event, the completion of appraisal process and
determination of Appraised Value shall be completed no
later than one hundred (100) days following the date of
the Option Exercise Notice.
ADDENDUM
TO LEASE MADE
1989
between
CENTENNIAL VENTURE LIMITED PARTNERSHIP ("LANDLORD")
and
THE CITY OF KENT ("TENANT")
1. Prior to the .Commencement ,Date, Landlord shall furnish
and install within the Premises the tenant improvements
in accordance with final plans and specifications to be
prepared by Landlord according to Tenant' s directions
and approved by Tenant. . Landlord has provided said
final plans and specifications, attached to the Lease
as Exhibit A,and Tenant shall approve the same on or
before June 15, 1989 . Following approval by Tenant of
such final plans and specifications, Landlord shall
complete the tenant improvements shown thereon, unless
otherwise indicated, such that the Premises are
improved for occupancy in accordance with the final
plans and specifications.
2 . Landlord shall provide $10. 00 per square foot of the
Premises (approximately $200, 000) , toward the cost of
the Tenant Improvements. Any increase in the cost of
the Tenant Improvements over and above the allowance
shall be paid by Tenant, and, in addition, all change
orders initiated by Tenant that add to overall cost at
the end of the Tenant Improvements or all other costs
arising out of all work not shown within the Tenant
Improvements described above, such as the furnishing
and installing of furniture, telephone equipment, and
office equipment, shall be furnished and installed by
the Tenant or at Tenant's expense. Tenant shall adopt
a schedule in conformance with the schedule of
Landlord' s contractor and conduct its work in such a
manner as to maintain harmonious labor relations and
not as to unreasonably interfere with or delay the work
of Landlord' s contractor. All said work and the labor
to be performed by Tenant shall be subject to the
administrative supervision of the Landlord' s general
contractor, but at no expense to Tenant for such
administrative service.
3 . Landlord shall give to Tenant and Tenant' s contractors
and subcontractors access and entry to the Premises,
reasonable use of the Building facilities, including
loading platforms, lifts, freight elevators, temporary
power, facilities for storage and protection of
materials and all other facilities available to
subcontractors of Landlord's general contractor to the
same extent and upon the same terms and conditions as
such facilities are available for the use of
subcontractors of the Landlord's general contractor, in
order to allow the Tenant to adapt the Premises for
Tenant' s use.
4 . Any and all costs for working drawings or nonstandard
improvements and/or any changes to the floor plan
requested by Tenant after the date of execution of this
Lease shall be paid for by the Tenant so long as the
final plans and specifications have been agreed to by
the Tenant at the time of execution.
5. Tenant shall in no event be allowed to install
plumbing, mechanical work, or electrical wiring or
fixtures without the prior written .approval. of
Landlord.
6. Landlord shall proceed diligently and use its
reasonable efforts, subject to extensions of time
necessary because of the actions or omissions of Tenant
or circumstances beyond Landlord' s control, to complete
construction of the Tenant Improvements on or before
, 19 , the Commencement Date as
set forth in paragraph 4 of the Lease.
Tenant Landlord
THE CITY OF KENT CENTENNIAL VENTURE LIMITED
PARTNERSHIP
B
Y B
Its y Its
EXHIBIT E
Library Property
The West 88 Feet of Lot 7 and the West 88 Feet of
the North one-half of Lot 8, Block 8 , YESLER'S
FIRST ADDITION to the Town of Kent, according to
Plats, recorded in Volume 5 of Plats, Page 64,
King County, Washington; and
the South one-half of Lot 8 and all of Lot 9 ,
Block 8, YESLER'S FIRST ADDITION 'to the Town of
Kent, according to Plats, recorded in Volume 5 of
Plats, Page 64 , King County, Washington.
C N
z#
FIRST AMENDMENT TO
REAL ESTATE PURCHASE AND SALE AGREEMENT ;
This First Amendment to Real Estate Purchase and Sale
Agreement is made by Sound Ventures, Inc. , as "Buyer" and
the City of Kent as "Seller. "
WHEREAS, Buyer and Seller entered into that certain
Real Estate Purchase and Sale Agreement dated November 29 ,
1988 ("Agreement") ; and
WHEREAS, Exhibit A to the Agreement provided that Buyer
and Seller would agree upon the amendment of the legal
description to conform with the property necessary for the
project which received design approval in accordance with
paragraph 12 .e. of the Agreement; and
WHEREAS, design approval pursuant to paragaph 12 .e. was
received on December 22 , 1988 ;
NOW, THEREFORE, Buyer and Seller agree to amend
Exhibit A to the Agreement to read as follows:
Lots 4, 5, 6, 7 , 8 and 9 of Block 8,
Yesler's First Addition to the Town of
Kent according to plats, recorded in
Volume 5 of Plats, page 64, King County,
Washington; and the easterly 20 feet of
Lots 4 , 5 and 6, Block 13 , Yesler' s
First Addition to the Town of Kent
according to plats, recorded in Volume 5
of Plats, page 64 , King County,
Washington, together with any and all
rights, title and interest in the
vacated Third Avenue appurtenant to the
real property described herein.
Except as amended herein, the provisions of the
Agreement shall remain in full force and effect.
Executed this day of , 1989 .
SELLER: BUY R•
C Y OF KENT SOUND VE URES, INC.
By
o s
By
Dan Kelleher Dug W. Klappe ch
Its Mayor Its President
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day personally appeared before me DAN KELLEHER,
to me known to be the Mayor of the CITY OF KENT, the
Municipal Corporation that executed the within and foregoing
instrument, and acknowledged the instrument to be the free
and voluntary act and deed of said municipal 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 municipal corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this _ day of 1989
�( S51ON Fto'•
NOTARY PUBLIC i N dO
Stat of Washinon:,c residing
at M `
comm ssi n expiY* —
STATE OF WASHINGTON j ss.
COUNTY OF KING
On this day personally appeared before me DOUGLAS W.
KLAPPENBACH, to me known to be the President of SOUND
VENTURES, INC. , 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 A02 . 198-!9---
NOTARY PUB in d for the
State of Washington, residing
at My
commission expires:
2 -
EARNEST MONEY NOTE
FOR VALUE RECEIVED, the undersigned promises to pay to
the order of TRANSAMERICA TITLE INSURANCE COMPANY the sum of
Fifteen Thousand and No/100 Dollars ($15, 000. 00) on the date
on which the undersigned delivers its written notice of con-
tingency removal or waived pursuant to the Real Property
Purchase and Sale Agreement by and between the City of Kent,
a municipal corporation of the State of Washington, and the
undersigned, the terms and conditions of which are incorpo-
rated herein by this reference. This Note shall not bear
interest. If this Note shall be placed in the hands of an
attorney for collection or if suit shall be brought to
collect this Note, the undersigned promises to pay all
reasonable attorneys' fees and costs.
This Note shall be construed and enforced in accordance
with the laws of the State of Washington and in the Superior
Court of King County.
SOUND VENTURES, INC.
B
Y
Dou as W. la nbach
It President
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day personally appeared before me DOUGLAS W.
KLAPPENBACH, to me known to be the President of SOUND
VENTURES, INC. , 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 3C� day of NOVet-1 OF— , 1988 -
TARY P C and for the
State of ashington, residing
at Kam_ t_ Dc i,�MY
commission expires: Ia