HomeMy WebLinkAboutAD05-332 - Other - Springboard Holdings, LLC - Replacement Parking Agreement - Municipal Lot B - 10/12/2005 R ecords Man-a-"_'�-'g ''
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KENT = Document
WASHINGTOM
CONTRACT COVER SHEET
This is to be completed by the Contract Manager prior to submission to City Clerks Office. All
portions are to be completed, if you have questions, please contact City Clerks Office.
SPD'I-P*BoQf1_>7 L-LG
Vendor Name: SFCar� AVb QF�L C<,7qT LLG Vendor Number:
JD Edwards Number
Contract Number: t7�D�" 3 3 Z—
This is assigned by Deputy City Clerk
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II Detail: Canxlf: n A(E Of ci N I link )Y) e?'- 6r - �f rAP [Gv coei't-il ( L
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T f O H6 In PeAmIrl sWOPIre
Project Name: PT41YIf D )4k/1afd
Contract Effective Date: QC tAtIZ I Z, 2.0 0S Termination Date: N/ A
Contract Renewal Notice (Days): NIA
Number of days required notice for termination or renewal or amendment
Contract Manager: N Q 4 aii TOYgF 1 S rn Department: N d ro l
Abstract:
S Pubhc\RecordsManagement\Forms\ContractCover\ADCL7832 07102
ORIGINAL
REPLACEMENT PARKING AGREEMENT
TABLE OF CONTENTS
Page
1. Incorporation of Recitals; Definitions..............................................................................2
2. Project Springboard Development Project.. .. ............. ... ...... ............... ........................2
2.1 Project Elements............. ....... ............. .... ................... .. ..................................2
2.2 General Parking Requirements .. .........................................................................3
2.3 Parking Garage, Minimum Design Criteria..........................................................3
3. Acquisition of Property................ ....... .. .... .. .. ... ....................................................4
3.1 Contribution of SPI Land.............. .. .. . . .. .. .. .... ............. ................. .. ..........4
3.2 Exchange of Harrison Property ........ . ............. .... .. .. ............ . ... .................4
3.3 Disposition of Replacement Parking Site; Public Parking Easement ....................4
3.4 Description of Public Parking Easement ... .. . .. . . .. .. .... .... ..................4
4. Fair Value Determination of Replacement Parking Site; Public Parking Easement..........5
4.1 Fair Value Determination of Exchange Properties... ....................... ....................5
4.2 Security, City Mortgage; First Lien on Property...... .. ............................... .........5
43 Terms of City Mortgage............................... .......................................................5
4.4 Acceptance of Public Parking Easement Upon Final Completion of
Parking Garage-, Satisfaction of City Mortgage ........ .. ...... ..............................6
4.5 Escrow Agent . . . ..... .......... . .... .. .. .. . .......................... ..................... 6
5. Design Development of Project Springboard Improvements and the Parking
Garage ............ ................ .......... .. .. ............ . ..... .......................... ............... ...........6
5.1 Construction of Project Springboard Improvements and Parking Garage . ...........6
52 Construction Drawings and Detailed Specifications for Parking Garage... ...........6
5.3 Resubmittals. .. .. .. ... .... 7
54 Design Development for Remainder of Project Springboard Improvements... .. ..7
5 5 Construction in Phases . ..... ... .. ........... ..... .. ........ ......... .......... ............ ...7
5.6 Permits-, Costs, Compliance with Legal Requirements ...................................... ..7
6 Title to Replacement Property Site ....... . .... .. .. ... . ... .. .. .............................. ......8
6.1 Title to Replacement Parking Site. ... ... .. .. .. .. .......... .. ....................... ..........8
6.2 Title Insurance. ............ .. . . .... . .. . . .. .... .. ................................................8
6.3 Title Review . .... .. ......... . .......... .. .... ..... ....... ................................................8
6.3 1 Developer's Notice................................ ................................................8
6.3.2 City's Notice... . . . . .... ..... . . .. ... .. ....... .. .................................9
6.33 Developer's Election.. .... . ..........................9
6.34 Survey ... ....9
- .. . ....... ..............
63 5 Approval of Title to Property ......... ....... .............................................9
6.4 Title to Property . . .. .... .. . .. .. . . . . . ... ... .. ................ . .. ....... ....9
7. Title to Public Parking Easement...... .... ... .. .. .. .. .. . . .. ....... .. . ... . ............. 10
7.1 Public Parking Easement ........ .. . . .... ..... . .... .. .. ....... .. . ....... .. .. .......... 10
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7.2 Title Insurance................................................................................................... 10
7.3 Initial Title Review....................... .. ....... .. ....... .............................................. 10
73.1 City's Notice .......................................... ...... .................................... 10
7.32 Developer's Notice........................ ...................................................... 11
7.3 3 City's Election .... ............................................................................... 11
7.4 New Exceptions to Title; City Approval ........ ......... ......................... .............. 11
75 Updated Title Commitment . ..... . . .......... .. ... ......................................... 11
8. Inspection and Evaluation of the Property; "AS IS Sale"............................................... 11
8.1 Due Diligence Period............................................... . .... .. ....... .. ................... 11
8.2 Property Investigation. .. ... ............................. ... ... .. .......... ................... 12
8.3 Environmental Condition of the Replacement Parking Site .......... ................ .. 12
84 "AS IS SALE" .................. ........ .. .. ......................... .................. .. .. ............. 13
8.5 Waiver of Due Diligence Period for Property....... . ....................... ................... 14
9 Operation of Replacement Parking Site Pending Closing .. . ....... ........................... 14
10. Conditions Precedent to Closing.. ...... .. .. .. ............. .............. ............. . ........ . ....... 14
10.1 Representations and Warranties........... .. ............ .. .... . .......... . .................. 14
102 Performance ............. .. ......................................... .... .................................. 14
10.3 Simultaneous Contribution of SPI Land.. .... .. .. . .. . . .. .. ....... .. . .. .. ....... .. . 14
10.4 Vacation of Alley, Completion of Boundary Line Adjustment Process .............. 15
10.5 Simultaneous Exchange of Harrison Property. ......... ....... .. ............................. 15
10.6 Application for Parking Garage Building Permits and Downtown Design
Review .... . .. .. . . . .. .. .. ... .. .. ......... 15
107 Availability of Construction and Equity Financing for Springboard................... 15
108 Title Policies.. .. .. ... .. .. .. . .. .. .. ............... .. ......... ..................................... 15
10.9 No Bankruptcy ..... .. .......... ..... .. .. ................................................................ . 15
10.10 Condition of Property............ ... . .. .. ... ........... ............................................... 16
1011 City's Right to Terminate .................................. ............................................... 16
11. City Representations ....... . ......... .. .. ... . . . ... .. .... . .. .... .. ........ .... .......... .. ...... 16
11.1 Authority.................................................................................................... ...... 16
11 2 No Litigation .................................................................................................... 16
11.3 No Condemnation.... ..... .... .. .... .. .. .. .. .. ... .... .... . ...... .. ....................... 16
114 Construction Liens... ......................... ....... ........................... ........................... 17
115 Survival . ..... ...................................................... ..................................... 17
12. Developer's Representations ......................................................................................... 17
12.1 Authority.......................... ................... ....... .............. . ..... ............ .............. 17
12.2 All Consents Obtained .. ........................................ .......................................... 17
12.3 Availability of Construction and Equity Financing for Project Springboard . ... 17
12.4 No Litigation... . .. . .. 18
12.5 No Land Speculation..... .. ...... ....... ... . .. .. .... ... ... .. ........ . . .. ....... ... 18
12.6 Survival... ............. .......... ................... ................. .......................................... 19
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13. Closing and Escrow....................................................................................................... 19
13.1 Time and Place of Closing................................................................................. 19
132 Documents to be Delivered by City ..................... ..................... ...................... 19
13 3 Delivery by Developer..... .. ... . .. .....................................................................20
13.4 Other Instruments .. .. .. .. ........... .....................................................................20
13.5 Prorations. . .. ..................................................................................................20
13.6 Payment of Costs................................. .... ........................................................20
13.7 Closing of Contribution of SPI Land......... ......................... ....... ......................21
13.8 Closing Simultaneous with Other Transactions Contemplated under
Pooling Agreement .. . .. .. ... ... .. .......... .. ... ......................21
13.9 Recordation ........... . ........ . .. . .... . ........................................................21
14. Possession ................ ............................. .. ....... .......... ................ . .......... . .... .....22
15. Construction of Parking Garage.. ... ......... . . ... .. ........ ...... ... ................. ........... .....22
15.1 Construction of Parking Garage; Construction Phasing.. .................... ... .... . ..22
15.2 Commencement and Completion of Construction.................. .. ..................... ..22
153 Unavoidable Delay, Outside Completion Date ... .................................. ..........22
154 Hiring Program .... .......... ................. ..........23
15 5 Construction Staging; Remaining Building Demolition; Temporary
ParkingArea............ . .. ...................................................................................23
156 Project Manager; Construction Progress Reports . ............................................23
15 7 Changes to Parking Garage Construction Documents.........................................24
15 7.1 No Reduction in Parking Garage Capacity or Other
i
Characteristics . .. ................................................................................24
15 7 2 Changes to Construction Documents. ............................ .....................24
158 Disclaimer City Not Liable for Construction of Project Springboard
Improvements or Parking Garage....... ... .... ...... .......... .. .......... .....................24
159 Payment of Parking Garage Costs; Construction Liens .. .. .. . .. .. .....................25
15 10 Assignment of Contracts .. .. . . . ........... .. .... .. ..................25
16. Developer Financing ............. . .. .. ..... .... . ... .......... ........... ....... . .. .......... .......26
17. Indemnification ... ... ............. . . ............. . .. ....................... .. .... .. .. ............... ..26
17 1 Developer's Indemnification .. ..... . . .. . .. .... ..................... . .. ............... ..26
17.2 Notice of Claim....... . . . . . . .. .. .. . . .. ............... ..... .... .. .. ............... ..27
18. Insurance ................. ............. . .. .. .. ...... .... .. . . ................. .. .. ............... ..27
19. Completion of Parking Garage . .... .. .. ..... .. ... ..................... .. .. .. .....................27
19 1 Substantial Completion ....... .. ... .............. .. .... . .. .. ..................27
19 1 1 Architect's Certification.. .. . . .. .... . .. ...... . .. . .. .. ........ . .... .. ..27
19 1 2 Project Substantially Completed....... ............ .... . .. .....................27
19 1.3 Temporary Certiticate of Occupancy ........ ..........................................27
19 1 A Owner Acceptance ..... ... . .... .... . .................. ....... . ............. .... .....28
19 1.5 Completion of Punch List Items. ........................................................28
192 Final Completion of the Parking Garage ..........................................................28
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19.2 1 Certificate of Occupancy......... ...................... ......... .... ......................28
19.22 Contractors' Certification.... ................................................................28
19.2.3 Punch List Items Completed ............................... ................................28
19.2.4 Construction Costs Paid . .... ................................................................28
19.2.5 No Construction Liens..........................................................................28
19.2.6 Private Street Completed......................... ............... . ........................28
19.2.7 Garage Operational .. .. .... ..................... ........ .. .. . .. .......................28
20. Acceptance of Public Parking Easement; Release of City Mortgage... ..........................29
201 Conditions Precedent to City's Obligation to Accept Public Parking
Easement. . ...... .. .. .. ... .. ............. . . ................ .......................29
20.1 1 Representations and Warranties............. .... .........................................29
20.1.2 Performance....................................................... ....................... .. ......29
20.1.3 Approval of Condominium Documentation .................. .. ............. ...29
20.1.4 Title Policy .. .. .. .. . ........... ..... ................. . .................................29
20.1 5 No Bankruptcy................................................................................. .. 29
20.1 6 Additional Construction Agreements............ ... ......... .. . .. .................30
20.1 7 No Casualty of Condemnation. . .... .... . .... .... ....... ..... ..............30
20.1.8 Project Springboard Improvement Building Permits.............................30
20.1.9 Simultaneous Closing of Construction Financing for Remainder
of Project Springboard Improvements.... . .. ........................................30
20.1.10 City Right to Terminate .. .... ... .........................................................30
20.2 Documents to be Delivered by Developer ........................ ....................... .. .. ..30
203 Documents to be Delivered by City .... ..............................................................31
204 Other Instruments...... . .. ... . . ..................... ... ............................. ................31
205 Prorations, Payment of Costs. ............ ........ ...... .. .... .. .... ............... .............31
20.6 Recordation . .. ..... ........................................................................................31
21. Damage, Destruction or Condemnation Prior to Closing........ . ............ .......... .............32
22. Damage, Destruction or Condemnation After Closing, but Prior to Final
Completion of the Parking Garage . ....... ......... .................................... .....................32
22.1 Damage or Destruction .... .. .................................. .. .. . . .... . .. .....................32
222 Condemnation ...... ... ............................ ........... .... .. . . . .... .... .....................33
23. Restrictions on Transfers...... .. . ....... .... ....................... .. .. .... .. ... . ..................33
23 1 No Transfer of Rights under Agreement .... ........................... ..................... .. .33
232 Restrictions on Transfer of Interests in Developer. ....... .... . . .... ......................33
23 3 Definition of Transfer . ....... .. ............33
234 No Transfer of Replacement Parking Site During Construction of Parking
Garage . .......................... . ............ .......... ................. ....................... ............33
24. Events of Default Prior to Closing Date, Remedies ......... .. ... . .. .... ... .. . . ............34
24.1 City's Default... ..................... . .......................................................................34
242 Developer's Default .................. .... ..................................................................34
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25. Developer Events of Default Following Closing Date; Remedies ..................................34
25.1 Developer Default .... ..... ..................................................................................34
252 City Remedies upon Developer Event of Default...............................................35
26. City Events of Default Following Closing Date, Remedies...................... .. ..................35
27. Rights and Remedies Cumulative............ ...... ..............................................................35
28. Notices..........................................................................................................................36
29. Survival of Representations and Warranties ..................................................................37
30. Brokerage Fees ....... .. .. ....................... .................................................. .. .................37
31. Miscellaneous ....... ... ......... .. ... . . . .................. .. ...... ................................... . ......37
31.1 Burden and Benefit. .. .. .... ..............................................................................37
312 No Continuing Waiver........................................... ...........................................38
31.3 Nondiscrimination ............................................... .................... ......................38
31.4 Neutral Authorship ........................................................................................ ..38
31.5 Terminology .. ................ .............. ... . ... . ................. ... ....... . .. .............38
31.6 Complete Agreement; Amendment.. .............. ................. ............................. ..38
31.7 Severability . ..... . . .. . . . ........................................................................38
31.8 Relationship of Parties.... ....................... ............................ .............................38
31 9 No Third Party Rights.......... .................................. .... ............... .. ..................38
31 10 Non Waiver of Governmental Rights...................... ............ ............................39
31.11 Captions ... ... . . . . .... .. . .......................................................... ....39
31.12 Counterparts .... ........ ............................................ ....... .. ...............................39
31.13 Further Assurance...... . ......... .. . ........................... . ... .................. ...............39
3114 Authoritv . .. ... .. .. .... ... .... ................... ......... ............................I........ .39
31 15 Time Is of the Essence .. ....................................................................................39
31.16 Memorandum of Agreement... ........................ ............ ... . . .. .......................39
31.17 Attorneys' Fees . . .... .. .................................................... ............................39
31.18 Waiver of Jury Trial .......................................................................... ..............39
31 19 Exhibits . .. ....... ..... ....... .................................................................. . ............40
31 20 Conflicts of Interests . .... .... .... .... . ......... .. ..... ... .................... ..... .. ...........40
3121 Non-Liability of City Officials Employees, and Agents ............... .. . ..............40
31.22 Applicable Law ............... ........ .... ........... .. ...................................................40
ARTICLE I COVENANTS
101. Performance of Replacement Parking Agreement and Deed of Trust ............... ..7
1.02. Warranty of Title.................................................................................... ............7
1 03 Tax Deposits [Intentionally Deleted].............. .. .... . . . .... ................................8
1.04 Taxes, Liens and Other Charges.... ................... .... .... .. .....................................8
1.05 [Intentionally Deleted] . . .... ............................................. .............................9
1.06 Insurance. . ... . .......... ........ .... ........... . ..... .............. .. 9
1.07 Restoration ....... .. . ......... .... ........................ ....... ............ ....... .... .. .. ....... 11
1 08 Condemnation .......... .. ...... ................................ ......................... . .......... .. 13
1 09 Care of the Property ........................................................................................ 13
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I.I0. Further Assurances............................................................................................ 14
1.11. Leases and Other Agreements Affecting the Property........................................ 14
1.12. Expenses ...................... .................................................................................... 15
1.13. Inspection of Property . .................................................................................... 15
1.14. Performance by Grantor .............................................................................. ..... 15
1.15. Assignment of Rents ... . .................................... ............................................ 16
1.16. Collection of Rents ........... ............................................................................ 16
1.17 Suits to Protect Property.. ....................... ......................................................... 17
1.18. Beneficiary's Right to Defend Action and Cure Certain Defaults..................... .. 17
ARTICLE II DEFAULTS AND REMEDIES
2.01 Events of Default...... .... ................................................................................... 18
2.02 Discontinuance of Proceedings .........................................................................20
203 Beneficiary Statement... ... .................................... ...........................................20
2.04. Remedies Upon Default......................................... ......................................... .20
2.05 Foreclosure Sale ... .... .............. .. ...................................................................21
2.06. Sale of Property Pursuant to a Foreclosure....................... .. .... .... .. ................22
2.07. Appointment of Receiver .................................... .............. ......................... ...22
ARTICLE III GENERAL COVENANTS
3.01. No Waiver .......... ..... ...... ...............................................................................22
3 02. Remedies Cumulative . ....................................................................................22
3.03. Plats, Easements and Other Agreements ............................................................22
3.04. Recordation . .. . .. . ..... . ......... . ..................................................................23
3 05. Substitution of Trustee.. .. ... .............................................................................23
306. Notices ....... . . ........................................... ....23
...........................
307. Heirs and Assigns; Terminology................................ ............................ ..........24
308. Severability .. ....... ................ .................................................. .......................24
3.09. Time is of the Essence ...................................................................... .. ............25
3.10. Captions .. .. .... ...................................................... ....................................25
3 11 Irrevocable Trust ...............................................................................................25
3.12. Conveyance of Property; Change of Ownership ............... ........... ............... ....25
3.13 Secondary Financing .. .... ......... .................. ....................... .... .. ............ ....25
3.14 Effect of Security Agreement................................................... .... .. ....... .........26
3.15. Covenants Regarding Environmental Compliance ............................................28
3.16. Non-Agricultural Use ........ ....................... ... . . ........... .. .... ............... .........29
3.17. Commercial Purposes; Time of Essence .... ... ..... ............ ..... ....................... .29
3 18. Washington State Law Governs.. .... ............................ .......................... .... .30
Exhibits
Exhibit A-1 Legal Description for City-Owned Town Square Plaza Site
Exhibit A-2 Legal Description for City-Owned Replacement Parking Site
Exhibit A-3 Legal Description for Harrison Exchange Property
Exhibit B Legal Description for Private Land
Exhibit B-1 Legal Description for Harrison Property
I
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Exhibit B-2 Legal Description for SPI Land (following completion of boundary line
adjustment and alley vacation)
Exhibit C-1 Legal Description for Property (SPI Land plus City-Owned Replacement Parking
Site)
Exhibit C-2 Legal Description for Harrison Exchange Property
Exhibit D Preliminary Site Plan for Project Springboard Improvements
Exhibit E Parking Garage Design Standards
Exhibit F Public Parking Easement
Exhibit G City Mortgage
Exhibit H Bargain and Sale Deed Replacement Parking Site
Exhibit I Definitions
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REPLACEMENT PARKING AGREEMENT
THIS REPLACEMENT PARKING AGREEMENT (the "Agreement') is dated as of the
day of October, 2005 by and among CITY OF KENT, a Washington municipal
corporation ("City"), SPRINGBOARD HOLDINGS, L.L.0 , a Washington limited liability
company ("Developer"), and Second Avenue Real Estate LLC, a Washington limited liability
company ("Second Avenue") with reference to the following facts-
RECITALS
A. City is the owner of certain real property more particularly described in
Exhibit A-1, Exhibit A-2 and Exhibit A-3 attached hereto and by this reference incorporated
herein (collectively, the "City Property") The real property legally described on Exhibit A-1 is
hereinafter referred to as the "Town Square Plaza Site" The real property legally described on
Exhibit A-2 is hereinafter referred to as the "Replacement Parking Site". The real property
legally described on Exhibit A-3 is hereinafter referred to as the "Harrison Exchange Property".
B. City, MBA Harrison Square I LLC, a Washington limited liability company and
MBA Harrison Square 11 LLC, a Washington limited liability company (collectively,
"Harrison"), Meeker Street Law Building LLC, a Washington limited liability company
("Meeker Street") and Springboard Properties Investment LLC, a Washington limited liability
company ("SPI") are the owners of certain real property located in the City of Kent bordered on
the north by Smith Street, on the west by Fourth Avenue, on the South by Harrison Street and on
the east by Second Avenue. The real property owned by Harrison, Meeker Street and SPI is
more particularly described on Exhibit B attached hereto and by this reference incorporated
herein (collectively, the "Private Land") Harrison and Meeker Street are hereinafter referred to
collectively as "Anderson' The real property owned by Harrison described in Exhibit B-1 is
hereinafter referred to as the "Harrison Property". Anderson and SPI are hereinafter referred to
collectively as "Private Owners".
C. Pursuant to the Pooling Agreement by and among City, Private Owners and
Developer ("Pooling Agreement'), the parties to the Pooling Agreement have each agreed to
participate in the boundary line adjustment and alley vacation described therein, provided,
however, Anderson will not participate in any joint development of the Property (defined below).
Anderson will exchange the Harrison Property for the Harrison Exchange Property as described
to the Pooling Agreement and will continue to own the same quantity of land following such
exchange in a different configuration (hereinafter, the "Anderson Property") subject to the
restrictive covenant described in the Pooling Agreement The property described on Exhibit B-2
that will be owned by SPI following the boundary line adjustment is hereinafter referred to as the
"SPI Land" The SPI Land and the Replacement Parking Site are more particularly described on
Exhibit C-1 attached hereto and by this reference incorporated herein and are hereinafter referred
to collectively as the "Property" or the "Project Site".
D City is interested in redeveloping the Town Square Plaza Site with an
approximately 34,000 square foot town square plaza and Developer is interested in acquiring the
Project Site for redevelopment with a privately owned mixed-use development, including an
above grade parking garage with a minimum of three hundred fifty (350) parking stalls, each as
more particularly described below.
E. Developer desires to acquire the Replacement Parking Site from City in exchange
for a perpetual parking easement in favor of City in the parking garage to be constructed by
Developer on the Property that will provide public parking at all times for not less than seventy
(70) multi-passenger motor vehicles at all times, and in addition, grant members of the public the
right to park in any open parking stall in the parking garage on a first-come, first serve basis, at
all times, in each case, at no initial cost to either City or members of the general public on the
terms and conditions hereinafter set forth City has determined that the substantial private
investment proposed for the Property will improve the financial stability and general economic
vitality of City The proposed redevelopment will provide additional housing downtown in close
proximity to the Kent commuter rail and bus transit center, increase pedestrian activity
downtown, create additional jobs, and will expand and diversity the City's tax base The
provision of safe, convenient, accessible and attractive public parking in the downtown retail
core will increase retail activity, indirectly improve public safety, prevent traffic congestion and
improve vehicular access and circulation within the City and is a traditional and well-recognized
public purpose
NOW, THEREFORE, in consideration of the mutual covenants and conditions contained
herein, the grant of a perpetual easement for public parking in favor of City and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City
and Developer agree as follows:
AGREEMENT
1 Incorporation of Recitals; Definitions. Each recital set forth above is incorporated
into this Agreement as though fully set forth herein. All capitalized terms not otherwise defined
herein shall have the meaning set forth in Exhibit J to this Agreement.
2 Project Springboard Development Project.
2.1 Project Elements Developer intends to acquire the Property from City
and SPI and redevelop the Property with a privately owned mixed-use condominium
development (hereinafter referred to as "Project Springboard"). Project Springboard shall
consisting of condominium units created pursuant to a master declaration and survey map and
plans prepared by Developer and approved by City, which approval shall not be unreasonably
withheld, conditioned or delayed, developed with the following uses (a) an approximately
74-room hotel, including reception area, lobby, a conference center of approximately
1,600 square feet, a spa of approximately 1,000 square feet and an indoor water park of
approximately 7,000 square feet (collectively, the "Hotel Improvements"); (b) approximately 64
units of market rate residential condominiums, (c) approximately 23,000 square feet of restaurant
and retail space, (d) on-site parking for approximately four hundred (400) multi-passenger motor
vehicles to be located within the parking garage more particularly described in Subsection 2.3
below, including access to and from the public streets adjoining the Property, (e) approximately
56 units of market rate condominiums for seniors; and (f) common elements and limited
common elements as are set forth in the master condominium declaration and survey map and
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plans, including, but not limited to, a private street connecting Smith and Harrison Streets,
elevated skybridge, elevators, stairs and walkways providing for pedestrian access to and from
the various Project Springboard Improvements, including,but not limited to, the Parking Garage,
together with easements for vehicular and pedestrian access to and from the Parking Garage,
utilities, and such other easements as may be necessary or customary given the nature of the
development (collectively, the "Project Spnngboard Improvements"). Each condominium may
contain such number of separate condominium units as Developer shall determine in the
reasonable exercise of its business judgment pursuant to one of more condominium declarations
and survey map and plans prepared by Developer A preliminary site plan for the Project
Springboard Improvements is attached hereto as Exhibit D and by this reference incorporated
herein.
2.2 General Parking Requirements Developer shall provide sufficient
parking stalls on the Property (excluding parking located on public streets adjoining the
Property) to meet a minimum parking ratio of 1 0 stalls per bedroom for any residential unit, and
2.0 stalls per 1,000 rentable square feet for any portion of the Property developed for office,
commercial or retail use by constructing an above-ground structured parking garage containing a
minimum of three hundred fifty (350) parking spaces for multi-passenger motor vehicles (the
"Parking Garage") For purpose of the foregoing parking ratios, the Hotel Improvements shall
be considered a residential use and not a commercial use. In addition, Developer shall provide
an additional seventy (70) parking stalls for exclusive public parking The Parking Garage shall
be designed and operated so that all parking spaces are available for use by members of the
general public on a first come, first serve basis, twenty-four (24) hours a day, seven (7) days a
week. No parking fees shall initially be assessed to members of the general public to park in the
Parking Garage. No parking stalls will be allocated to a particular condominium unit, hotel
guest, commercial tenant or any of their invitees or customers; provided, however, that the owner
of the Parking Garage shall have the right to issue a limited number of special use parking
permits as set forth in the Public Parking Easement The Parking Garage shall be operated as a
self-park, public parking garage and shall be managed to maximize the availability of Short
Term Parking (as defined in the Public Parking Easement) at all times
2.3 Parking Garage, Minimum Design Criteria. The Parking Garage shall
consist of four (4) levels of above-grade parking containing a minimum of three hundred fifty
(350) parking spaces for multi-passenger motor vehicles. Elevators, stairs and pedestrian
walkways providing access to the Parking Garage shall be clearly marked or structurally
integrated at the ground level so that members of the public, hotel guests, condominium owners
and retail tenants and their customers and invitees may easily access the Parking Garage from
adjoining public streets or other parts of the Project Springboard Improvements There shall be
at least one entrance and exit to the Parking Garage providing for vehicular ingress and egress to
the public streets adjoining the Property utilizing the private street The Parking Garage shall be
designed to high standards for vehicular access and circulation, lighting, safety, ease of
maintenance, energy efficiency and attractiveness, including one or more entry and exit plazas
and shall conform to the additional design standards set forth on Exhibit E attached hereto and by
this reference incorporated herein The Parking Garage shall be built in compliance with all
applicable building codes and other applicable laws, rules and regulations, including, but not
limited to, the applicable provisions of Title III of the Americans with Disabilities Act and
I
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regulations issued thereunder concerning accessibility of places of public accommodation and
commercial facilities.
3. Acquisition of Property
3.1 Contribution of SPI Land. Developer represents to City that it has entered
into a binding contract with SPI (the "SPI Contribution Agreement") whereby SPI has agreed to
contribute the SPI Land (following the SPI exchange with the City) to Developer. The SPI
Contribution Agreement contains, at a minimum, the following terms and conditions:
(i) feasibility period not to exceed forty-five (45) days with closing on or before December 15,
2005; (ii) the SPI Contribution Agreement for the SPI Land shall provide for a simultaneous
closing and shall be expressly conditioned on the contribution or exchange of the remainder of
the Property pursuant to the Pooling Agreement, including, but not limited to, the Replacement
Parking Site; and (in) construction of the Parking Garage must commence on or before
March 31, 2006.
3.2 Exchange of Harrison Property Pursuant to Paragraph 9 of the Pooling
Agreement, Harrison has agreed to exchange the Hamson Property for the Harrison Exchange
Property.
3.3 Disposition of Replacement Parking Site: Public Parking, Easement.
Subject to all the terms, covenants, conditions and provisions of this Agreement, City agrees to
transfer the Replacement Parking Site to Developer upon the express condition that Developer
design, develop and complete construction of the Parking Garage on the Replacement Parking
Site and grant City the Public Parking Easement upon Final Completion of the Parking Garage
and satisfaction of the conditions precedent to acceptance of the Public Parking Easement set
forth in Sections 19 and 20 of this Agreement.
3.4 Description of Public Parkiniz Easement. The public parking easement
shall grant City, any successor public entity and members of the general public, a perpetual
easement to park in the Parking Garage to be constructed by Developer as part of Project
Springboard, twenty four (24) hours a day, seven (7) days a week, initially at no charge, together
with rights of pedestrian and vehicular access to and from the Parking Garage and the public
streets adjoining the Property, including ingress and egress by means of the private street All
parking stalls in the Parking Garage are intended to be used for Short-Term Parking by
Springboard Project condominium owners, hotel guests, tenants of Project Springboard
Improvements, tenants of real property owned by Second Avenue south of Harrison Street and
their respective customers and members of the general public on an unreserved first-come, first-
serve basis; provided, however, that the owner of the Parking Garage may issue a limited number
of special use permits on the terms and conditions set forth in the Public Parking Easement Not
less than seventy (70) parking spaces in the Parking Garage shall be available to members of the
general public for Short Term Parking at all times (the "Exclusive Public Parking Stalls") In
addition to the Exclusive Public Parking Stalls which shall be reserved for public parking at all
times, members of the general public shall have the right to park in any open parking stall in the
Parking Garage on a first-come, first-serve basis twenty-four (24) hours a day, seven (7) days a
week. Short Term Parking shall be determined by the City from time to time to maximize
utilization of parking stalls in the Parking Garage by members of the general public and hotel
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guests, condominium owners, Project Springboard and Second Avenue tenants and their
customers while limiting use of the Parking Garage by commuters and tenants of adjoining
properties. The public parking easement shall be in substantially the form annexed hereto as
Exhibit F and by this reference incorporated herein ("Public Parking Easement").
4. Fair Value Determination of Replacement Parking Site; Public Parking Easement.
4.1 Fair Value Determination of Exchange Properties City and Developer
agree that City would not agree to transfer the Replacement Parking Site to Developer in
exchange for the Public Parking Easement, but for Developer's agreement to- (a) complete
construction of the Parking Garage on the Property as part of the Project Springboard
Improvements, at its sole cost and expense, pursuant to the provisions of Sections 5 and 15 of
this Agreement within nine (9) months following Closing, (b) complete construction of the
Parking Garage with a minimum capacity of three hundred fifty (350) parking spaces for multi-
passenger motor vehicles, which is sixty-five (65) parking stalls more than the number of
parking stalls that Developer would be required to construct in order to build the Project
Springboard Improvements on the Property to satisfy the Project parking ratios set forth in
Section 2 2 of this Agreement; (c) manage the Parking Garage so that the seventy (70) Exclusive
Public Parking Stalls are reserved for public parking at all times and in addition, members of the
general public shall have the right to park in any open parking stall in the Parking Garage on a
first-come, first-serve basis at all times, (d) operate the Parking Garage as a self-park, public
parking garage open to members of the public twenty-four (24) hours a day, seven (7) days a
week, initially without charge, and in a manner which maximizes the availability of Short Term
Parking at all times, (e) operate and maintain the Parking Garage at Developer's sole cost and
expense in first-class order, condition and repair in accordance with standards prevailing in first
class mixed-use developments including multilevel structured parking garages and the multilevel
structured parking garage owned, operated and maintained by The Central Puget Sound Regional
Transit Authority in connection with its Kent commuter rail station, and (f) grant City, any
successor public entity and members of the general public, the Public Parking Easement.
4.2 Security; City Mortgage; First Lien on Property The obligations of
Developer under this Agreement shall be secured by a deed of trust in the form attached hereto
as Exhibit G and by this reference incorporated herein (the "City Mortgage") which shall
constitute a first lien on the Project Site. Developer shall also assign to City the architect's
agreement and construction contracts for the Parking Garage as additional security for the
performance of Developer's obligations under this Agreement, which assignments shall be in
form and substance satisfactory to Developer and City and shall be consented to by the architect
and contractors, respectively.
4.3 Terms of City Mortgage City shall have the right to foreclose the City
Mortgage upon the occurrence of certain Events of Default by Developer under this Agreement
as defined in Section 25 of this Agreement. As a condition to Closing, Developer's equity
investors and lenders shall approve the form of the Public Parking Easement and pursuant to
agreements in form and substance satisfactory to City, agree to consent to and subordinate the
lien of any financing to the Public Parking Easement upon Final Completion of the Parking
Garage and recordation of the Public Parking Easement in the real property records of King
County, Washington
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4.4 Acceptance of Public Parking Easement Upon Final Completion of
Parking Garage; Satisfaction of Gtv Mortgage. Provided there is no Event of Default by
Developer under this Agreement and no event that with the giving of notice, the passage of time
or both, would constitute an Event of Default by Developer under this Agreement, if (a) Final
Completion of the Parking Garage has occurred on or before the Outside Completion Date, and
(b) each of the conditions set forth in Sections 19 and 20 of this Agreement have been met to the
reasonable satisfaction of City, City will agree to accept title to the Public Parking Easement in
full and complete satisfaction of the obligations of Developer to design, develop and complete
construction of the Parking Garage pursuant to this Agreement and will record the Public
Parking Easement in the real property records of King County, Washington and release the City
Mortgage of record.
4.5 Escrow A ent LandAmerica Title Insurance Company in its capacity as
g P Y P
escrow agent ("Escrow Agent") and in its capacity as title insurer ("Title Company") has been
designated as Escrow Agent and Title Company by mutual agreement of City and Developer
5. Design Development of Project Springboard Improvements and the Parking
Garage.
5.1 Construction of Project Springboard Improvements and Parking Garage.
City would not have entered into this Agreement and agreed to transfer the Replacement Parking
Site in exchange for the Public Parking Easement, but for the agreement by Developer to cause
the construction of the Project Springboard Improvements on the Property and to cause the
construction of the Parking Garage in accordance with the terms and conditions hereinafter set
forth. As of the date of this Agreement, City has reviewed and approved the basic project
elements and uses proposed for the Project Springboard Improvements to be constructed on the
Property, including the preliminary site plan attached hereto as Exhibit D, the minimum design
standards for the Parking Garage attached hereto as Exhibit E Prior to December 1, 2005, City
shall have reviewed and approved the Schematic Design Documents and Detailed Specifications
for the Parking Garage (the "Parking Garage Schematic Design Documents").
5.2 Construction Drawings and Detailed Specifications for Parking Garage.
Following approval of the Parking Garage Schematic Design Documents, Developer shall, at its
sole cost and expense, cause its architects to prepare construction drawings for the Parking
Garage in a form sufficient to apply for a building permit for the Parking Garage ("Construction
Drawings"), which Construction Drawings shall be prepared in accordance with the requirements
of this Agreement and the Parking Garage Schematic Design Documents in all material respects
and shall deliver a copy of same to City for its review and approval Any change from the
Parking Garage Schematic Design Documents shall be clearly highlighted to indicate the
changes City shall promptly review the Construction Drawings and shall give Developer
written notice within fifteen (15) days following its receipt of the Construction Drawings, of its
approval or disapproval of the Construction Drawings, specifying in the case of its disapproval,
its reasons therefore City shall have the right to disapprove Construction Drawings which (i) do
not comply with all Requirements of Law, (u) do not comply with the Parking Garage Schematic
Design Documents in all material respects, (ui) materially change the configuration or layout of
the parking stalls from the preliminary site plan attached hereto as Exhibit D or the minimum
design standards attached hereto as Exhibit E, or (iv) reduce the capacity of the Parking Garage
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below three hundred fifty (350) parking stalls. If City has not responded to the Construction
Drawings within fifteen (15) days after City's receipt thereof, or of any resubmittals thereof, the
Construction Drawings shall be deemed approved. Nothing contained herein shall constitute a
waiver of City's rights as the jurisdiction with permitting authority over the Project Springboard
Improvements including, but not limited to, the Parking Garage, to review Developer's
application for building and other permits, compliance with the City's Downtown Design
Review process, or the City's right to impose conditions pnor to issuance of permits necessary to
construct the Project Springboard Improvements and the Parking Garage in accordance with all
Requirements of Law
5.3 Resubmittals. If objections or comments are submitted in writing by City
within the timeframe set forth in the preceding subsection, Developer shall cause its architects to
make changes in the Construction Drawings consistent with objections or comments made by
City pursuant to the preceding subsection and shall resubmit the same in accordance with the
foregoing schedule for further review The process of resubmittal and review shall continue until
the submittals have been approved by all parties. The final Construction Drawings and Detailed
Specifications setting forth in detail the requirements for the construction of the Parking Garage
once they have been approved by City are called the "Parking Garage Construction Documents"
There shall be no changes in the Parking Garage Construction Documents without the prior
written consent of City as hereinafter provided.
5.4 Design Development for Remainder of Protect Springboard
Improvements. City acknowledges that the Parking Garage has been designed as an integrated
part of a mixed-use commercial development containing a number of different buildings The
remainder of the Project Springboard Improvements more particularly described in Section 2.1
of this Agreement will be constructed on the Property in accordance with the preliminary site
plan attached hereto as Exhibit D Developer reserves the right to make changes, modifications,
additions and deletions to the plans and specifications for the Project Springboard Improvements
(other than the improvements to be built by Developer pursuant to Section 20 1.6 below and the
Parking Garage, unless such change would increase the number of available parking spaces in
the Parking Garage subject to the Public Parking Easement) so long as Developer does not
change the basic program elements or make any material change in the type of uses proposed as
part of the Project Springboard Improvements without the prior written consent of City
5.5 Construction in Phases. Developer has agreed to construct Project
Springboard in phases. The Parking Garage shall be constructed first as part of Phase One. City
shall not be obligated to issue building permits for the remainder of Project Springboard until
after Final Completion of the Parking Garage and acceptance of the Public Parking Easement
pursuant to Sections 19 and 20 of this Agreement
5.6 Permits; Costs, Compliance with Legal Requirements. Developer shall
obtain all permits and authorizations from any federal, state or local government or departments
or subdivisions thereof having jurisdiction over the Property in order to permit construction of
the Parking Garage in substantial accordance with the Parking Garage Construction Documents
and all Requirements of Law Nothing contained in this Agreement is intended or shall be
construed to require that City exercise its discretionary authority under its regulatory ordinances
to further Project Springboard or the Parking Garage nor binds City to do so. City will process
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applications for permits and approvals as if such applications were made without any City
agreement to accept the Public Parking Easement to park in the Parking Garage upon satisfaction
of the conditions set forth in Sections 19 and 20 of this Agreement
6. Title to Replacement Property Site.
6.1 Title to Replacement Parking Site. City shall execute and deliver to
Developer at Closing a bargain and sale deed in the form attached hereto as Exhibit I and by this
reference incorporated herein ("Deed") conveying fee simple title to the Replacement Parking
Site subject to Permitted Exceptions as determined in accordance with Sections 62 and 6 3
below.
6.2 Title Insurance On the Closing Date, City shall cause the Title Company
to issue Developer an Extended Coverage Owner's Policy of Title Insurance (the "Developer's
Title Policy"), with liability in the amount of Nine Hundred Ninety-One Thousand and Five
Hundred Fifty Dollars ($991,550) insuring good and marketable fee title to the Replacement
Parking Site in Developer against any loss or damage by reason of defects in City's title to the
Replacement Parking Site, other than Permitted Exceptions Developer may, at its sole cost and
expense, request endorsements to Developer's Title Policy, but the availability of such
endorsements shall not be a condition precedent to closing
6.3 Title Review The Title Company shall provide City and Developer with
a preliminary commitment for title insurance for the Replacement Parking Site ("Title
Commitment") within ten (10) days following execution of this Agreement, together with
complete copies of any exceptions identified in Schedule B thereof Developer shall conduct its
review of the Title Commitment in accordance with the following procedures:
6.3.1 Developer's Notice. Developer shall have fifteen (15) days from
the date of receipt of the Title Commitment to notify City of its approval or disapproval of each
exception in Schedule B of the Title Commitment. Failure to deliver such notice by that date
shall constitute Developer's approval of all exceptions in Schedule B All monetary liens and
encumbrances arising through City's actions other than non delinquent ad valorem property
taxes, special assessments and local improvement district assessments will be deemed
disapproved and City shall cause all such monetary liens and encumbrances to be fully satisfied,
released and discharged of record on or prior to the Closing Date without the necessity of
Developer's objection. Developer shall not be entitled to disapprove the general exceptions or
any exceptions created by or on the account of Developer or exceptions recorded in connection
with the proposed redevelopment of the Property with Project Springboard. Covenants,
conditions, restrictions, reservations and easements presently of record which are not
inconsistent with the redevelopment of the Property with Project Springboard, or proposed
Public Parking Easement in favor of City and members of the general public, the City Mortgage,
and non-delinquent real estate taxes, special assessments and local improvement district
assessments now or hereafter levied against the Replacement Parking Site shall be deemed
Permitted Exceptions and shall not be objected to by Developer Exceptions deemed approved
pursuant to this Section 6 3 1 or not disapproved by Developer within the time period set forth
above shall be "Permitted Exceptions"
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6.3.2 City's Notice. City shall have five (5) days after receipt of
Developer's title review letter in which to notify Developer whether or not it elects to cure or
remove any of the disapproved exceptions of which City received timely notice pursuant to
Section 6 3 1 above. City's failure to so notify Developer shall constitute City's election to not
remove all such exceptions City shall remove all exceptions it elects to remove on or before the
Closing Date.
6.3.3 Developer's Election If City does not elect to remove all
exceptions disapproved by Developer, Developer may elect to terminate this Agreement by
written notice to City given within five (5) days following City's notice in which event this
Agreement shall automatically terminate and except as otherwise expressly provided herein,
neither party hereto shall have any further rights, duties or obligations under this Agreement. If
Developer does not elect to terminate this Agreement within the time frame set forth herein,
disapproved exceptions that City has not elected to remove shall become Permitted Exceptions
for the Replacement Parking Site.
6.3.4 Survey. Developer shall obtain a current ALTA/ASCM survey of
the Replacement Parking Site prepared by a licensed or registered surveyor, which survey shall
be satisfactory to Developer and the Title Company
6.3.5 Approval of Title to Property. Prior to expiration of the Due
Diligence Period set forth in Section 8 of this Agreement, Developer shall notify City, Anderson
and SPI that it has either: (a) approved the condition of title to all of the parcels constituting the
Property and the Harrison Property to be exchanged for the Harrison Exchange Property, or
(b) not approved the condition of title to all of the parcels constituting the Property and the
Harrison Property to be exchanged for the Harrison Exchange Property In the event Developer
has not approved the condition of title to all such parcels on or prior to expiration of the Due
Diligence Period, either party may thereafter terminate this Agreement without liability to the
other party upon thirty (30) days written notice, and thereafter, except as otherwise expressly
provided herein, neither party shall have any further rights, duties or obligations under this
Agreement
6.4 Title to Property The Title Company shall also provide City and
Developer with a preliminary commitment for title insurance for the entire Property within ten
(10) days following execution of this Agreement, together with complete copies of any
exceptions identified in Schedule B thereof City and Developer shall conduct their review and
approval of the title commitment for the Property utilizing the same procedure and within the
same time period set forth above for Developer's review and approval of title to the Replacement
Parking Site and the title exceptions which have been approved by City and Developer shall be
referred to as the "Property Permitted Exceptions"). Once approved by City and Developer,
Developer shall not enter into or consent to any Intervening Lien (as defined in Section 7 4) with
respect to the Property without the prior written consent of City or which would impair the first
lien priority of the City Mortgage. Notwithstanding any provision of this Agreement to the
contrary, Developer shall cause any mortgage, deed of trust or other encumbrances to be fully
satisfied, released and discharged of record on or prior to the Closing Date without the necessity
of City's objections. The Title Company shall also issue City an ALTA Extended Coverage
Mortgagee's Policy of Title Insurance (the "City Loan Policy") with liability in the amount of
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Six Million Five Hundred Ninety-One Thousand and No/100 Dollars ($6,591,000 00) insunng
the first lien priority of the City Mortgage on the Property subject only to the Property Permitted
Exceptions approved by City and Developer during the title review period.
7. Title to Public Parkin}Easement.
7.1 Public Parking Easement Upon Final Completion of the Parking Garage
and satisfaction of the conditions set forth in Sections 19 and 20 of this Agreement, Developer
shall execute and deliver to City on the Public Parking Easement Acceptance Date (as defined in
Section 20 of this Agreement) the Public Parking Easement, subject only to City's Permitted
Exceptions as determined in accordance with Section 7 3 below.
7.2 Title Insurance. On the Public Parking Easement Acceptance Date,
Developer shall cause the Title Company to issue City an Extended Coverage Owner's Policy of
Title Insurance the "City's Title Policy"), with liability m the amount of One Million Four
( tY y ), Y
Hundred Seventy-Five Thousand Seven Hundred Fifty and No/100 Dollars ($1,475,750.00)
insuring that City is the owner of, and benefited party under, the Public Parking Easement, and
insuring City against any loss or damage by reason of defects in Developer's title to the Property
subject to the Public Parking Easement, other than City Permitted Exceptions (as defined below).
7.3 Initial Title Review. The Title Company shall provide City and Developer
with a preliminary commitment for title insurance for the property which will be subject to the
Public Parking Easement ("City's Title Commitment") within ten (10) days following execution
of this Agreement, together with complete copies of any exceptions identified in Schedule B
thereof. City shall conduct its review of City's Title Commitment in accordance with the
following procedures:
7.3.1 City's Notice. City shall have fifteen (15) days from the date of
receipt of City's Title Commitment to notify Developer of its approval or disapproval of each
exception in Schedule B of City's Title Commitment. Failure to deliver such notice by that date
shall constitute City's approval of all exceptions in Schedule B All monetary liens and
encumbrances other than non delinquent ad valorem property taxes, special assessments and
local improvement distnct assessment will be deemed disapproved and Developer shall cause all
such monetary liens and encumbrances to be fully satisfied, released and discharged of record on
or prior to the Closing Date without the necessity of City's objection. City shall not be entitled
to disapprove the general exceptions or any exceptions created by or on the account of City.
Covenants, conditions, restrictions, reservations and easements presently of record which are not
inconsistent with the rights of City and members of the general public under the Public Parking
Easement, and non-delinquent real estate taxes, special assessments and local improvement
district assessments now or hereafter levied against the Property shall be deemed Permitted
Exceptions and shall not be objected to by City. Exceptions deemed approved pursuant to this
Section 7.3 1 or not disapproved by City within the time period set forth above shall be "City's
Permitted Exceptions" Notwithstanding any provision of this Agreement to the contrary, any
mortgage or deed of trust which Developer intends to record in connection with financing for
Project Springboard shall be expressly subject and subordinate to City's Mortgage and the Public
Parking Easement, and upon request by City or the Title Company, Developer shall cause its
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lenders to consent to, and subordinate the lien of any mortgage financing to, City's Mortgage and
the Public Parking Easement.
7.3.2 Developer's Notice Developer shall have five (5) days after
receipt of City's title review letter in which to notify City whether or not it elects to cure or
remove any of the disapproved exceptions of which Developer received timely notice pursuant to
Section 7 3 1 above Developer's failure to so notify City shall constitute Developer's election
to not remove all such exceptions. Developer shall provide City with reasonable assurances
pnor to expiration of the Due Diligence Period that it will remove all such exceptions and shall
remove all exceptions it elects to remove on or before the Closing Date set forth in Paragraph 13.
7 3.3 Citv's Election. If Developer does not elect to remove all
exceptions disapproved by City, City may elect to terminate this Agreement prior to expiration
of the Due Diligence Penod by wntten notice to Developer given within five (5) days following
Developer's notice in which event this Agreement shall automatically terminate and except as
otherwise expressly provided herein, neither party hereto shall have any further rights or
obligations under this Agreement.
7.4 New Exceptions to Title; CityApproval Once the City's Permitted
Exceptions have been determined, Developer shall not enter into any new agreement, easement,
restriction, condition, covenant, right-of-way, lease, license or other matter affecting title or
create any lien or encumbrance (collectively, "Intervening Lien") which will affect the Property
or the Parking Garage without the prior written consent of City which consent shall not be
unreasonably withheld so long as such Intervening Lien will not adverse affect or interfere with
the rights of City and members of the public under the Public Parking Easement
7.5 Undated Title Commitment. Upon Substantial Completion of the Parking
Garage, Developer shall cause the Title Company to deliver an update to City's Title
Commitment to the City and Developer, together with copies of any exceptions identified in any
update that were not set forth in the original City Title Commitment, together with a copy of any
declaration and survey map and plans which Developer intends to record against the Property in
connection with the Parking Garage (which meets the requirements of Section 20 1 3) City
agrees not to unreasonably withhold its consent to any new exceptions to title so long as any
such exceptions will not adversely affect or interfere with the rights of City and members of the
general public under the Public Parking Easement City shall advise Developer in writing within
fifteen (15) days after receipt of the update to the City's Title Commitment what exceptions to
title, if any, in addition to the declaration and survey map and plans and the City's Permitted
Exceptions will be accepted by City Developer shall remove all new exceptions objected to by
City on or before the Public Parking Easement Acceptance Date.
8. Inspection and Evaluation of the Property; "AS IS Sale".
8 1 Due Diligence Period. Developer shall have until November 15, 2005 in
which to conduct its due diligence investigation of the Property including, but not limited to, the
Replacement Parking Site, and determine the financial feasibility of Project Springboard ("Due
Diligence Period"). Developer's obligations under this Agreement are expressly subject to its
approval of the Replacement Parking Site, the suitability of the Replacement Parking Site for
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Developer's intended development of Project Springboard, title, the environmental condition of
the Replacement Parking Site and the financial feasibility of Project Springboard, such approval
to be determined by Developer in its sole and absolute discretion and within the time period set
forth in this Section 8.1. Developer shall deliver written notice to City and Escrow Agent prior
to expiration of the Due Diligence Period that it has either (a) elected to terminate this
Agreement whereupon Developer shall, subject to its legal right to do so, deliver to City the
originals of all site plans, the Parking Garage Schematic Design Documents and Construction
Drawings related to the Parking Garage then in existence for no additional consideration, this
Agreement shall terminate and, except as otherwise expressly provided herein, neither party shall
have any further rights, duties or obligations under this Agreement, or (b) Developer has elected
to proceed with the acquisition of the Replacement Parking Site, in which event Developer shall
have agreed to accept the Replacement Parking Site in its "AS IS" condition and state of repair
and shall have waived its financial feasibility contingency.
8.2 Property Investigation. City shall give Developer and its agents and
consultants the right to enter upon the Replacement Parking Site or any part thereof after mutual
execution of this Agreement after reasonable prior notice and during normal business hours
(subject to the rights of members of the public to use the Replacement Parking Site for public
parking) for the purposes of determining the physical condition of the Replacement Parking Site
and the financial feasibility and the suitability of the Replacement Parking Site for Developer's
intended purposes, including without limitation, the right to conduct soil compaction tests,
surveys, engineering, traffic and access studies and review of zoning and other matters, at
Developer's sole cost and expense. City shall have the right to accompany Developer or its
agents or consultants on all such inspections. studies and tests. Developer and its agents and
consultants shall comply with City's reasonable safety requirements and shall conduct all
inspections, studies and tests at reasonable times agreed upon by City and Developer, and in a
manner so as to minimize any interference with the continued use of the Replacement Parking
Site by members of the public for public parking purposes Developer shall repair any damage
to the Replacement Parking Site caused by Developer, its employees or agents during such
inspections, studies and tests and shall restore the Replacement Parking Site to the condition it
was in immediately prior to Developer's activities on the Replacement Parking Site. Developer
shall protect, defend, indemnify and hold City and the Replacement Parking Site harmless from
any claims, liabilities, costs, expenses or liens (including, but not limited to, any claims for
personal injury or property damage) arising out of or resulting from its inspection of the
Replacement Parking Site This indemnification and restoration obligation shall survive Closing
or any termination of this Agreement If Developer does not approve the condition, feasibility
and suitability of the Replacement Parking Site as provided in Section 8 1 above, Developer shall
notify City and the Escrow Agent in writing prior to the expiration of the Due Diligence Period.
If Developer fails to deliver written notice to City and Escrow Agent prior to the expiration of
the Due Diligence Period, Developer shall be deemed to have approved the condition, feasibility
and suitability of the Replacement Parking Site for Developer's intended purposes.
8.3 Environmental Condition of the Replacement Parking Site City expressly
makes no representation or warranty regarding the environmental condition of the Replacement
Parking Site or the presence or absence of hazardous substances thereon. Developer shall have
the right to retain environmental consultants to determine the environmental condition of the
Replacement Parking Site and conduct environmental assessments of the Replacement Parking
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Site during the Due Diligence Period, at its sole cost and expense. Such additional
environmental assessments may include, by way of illustration and not by way of limitation,
drilling, sampling, soil borings and the installation of monitoring wells or other equipment on the
Replacement Parking Site Developer shall repair any damage to the Replacement Parking Site
caused by Developer or its environmental consultants during such environmental assessment,
including properly closing in place all test wells that will remain on the Replacement Parking
Site, and will protect, defend, indemnify and hold City and the Replacement Parking Site
harmless from any claims, liabilities, costs, expenses or liens (including, but not limited to, any
claims for personal injury or property damage) arising out of such evaluation or testing. This
indemnification and restoration obligation shall survive Closing or any termination of this
Agreement If Developer does not approve the environmental condition of the Replacement
Parking Site, Developer shall notify City and Escrow Agent in writing prior to the expiration of
the Due Diligence Period. If Developer fails to deliver written notice to City and Escrow Agent
prior to the expiration of the Due Diligence Period, Developer shall be deemed to have approved
the environmental condition of the Replacement Parking Site and to have elected to proceed with
its acquisition of the Replacement Parking Site.
84 "AS IS SALE". Developer acknowledges and agrees that Developer will
be concluding its acquisition of the Replacement Parking Site based upon Developer's inspection
and investigation of the Replacement Parking Site and its suitability for Developer's intended
purposes Developer further acknowledges and agrees. that, except as expressly provided in this
Agreement, City does not make any representations or warranties of any kind, either express or
implied, with respect to the Replacement Parking Site, including, but not limited to, the use or
condition of the Replacement Parking Site, compliance with applicable statutes, laws, codes
ordinances, regulations, or zoning, subdivision, building, fire, safety, health or environmental
matters THE TRANSFER OF THE REPLACEMENT PARKING SITE IS MADE ON AN "AS
IS" CONDITION AND BASIS WITH ALL FAULTS AND CITY HAS NO OBLIGATION TO
MAKE REPAIRS, REPLACEMENTS OR IMPROVEMENTS TO THE REPLACEMENT
PARKING SITE IN PARTICULAR, BUT WITHOUT LIMITATION, CITY MAKES NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER WITH RESPECT TO THE
PHYSICAL CONDITION OR VALUE OF THE REPLACEMENT PARKING SITE, THE
PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES ON THE REPLACEMENT
PARKING SITE, SOILS CONDITIONS, OR OTHER PHYSICAL CHARACTERISTICS OF
THE REPLACEMENT PARKING SITE OR THE SUITABILITY OF THE REPLACEMENT
PARKING SITE FOR DEVELOPER'S INTENDED DEVELOPMENT CITY MAKES NO
REPRESENTATION WHATSOEVER REGARDING THE FINANCIAL FEASIBILITY OF
PROJECT SPRINGBOARD OR THE PARKING GARAGE UPON CLOSING AND
RECORDING OF THE DEED TO THE REPLACEMENT PARKING SITE, DEVELOPER
DOES HEREBY WAIVE AND RELEASE CITY, ITS OFFICIALS, OFFICERS, EMPLOYEES
AND AGENTS FROM ANY AND ALL DAMAGES. LOSSES, LIABILITIES, COSTS AND
EXPENSES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEYS' FEES AND COSTS) AND CLAIMS THEREOF, WHETHER DIRECT OR
INDIRECT, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, WHICH MAY
ARISE ON ACCOUNT OF OR IN ANY WAY ARISING OUT OF OR IN CONNECTION
WITH THE PHYSICAL OR ENVIRONMENTAL CONDITION OF THE REPLACEMENT
PARKING SITE OR THE PRESENCE OF ANY HAZARDOUS SUBSTANCES WHICH
-1 3- P lDRS%DRS2US 09/29M
MAY EXIST ON THE REPLACEMENT PARKING SITE OR ANY REQUIREMENT OF
LAW APPLICABLE THERETO.
8.5 Waiver of Due Diligence Period for Property. Prior to expiration of the
Due Diligence Period set forth in Section 8 1 of this Agreement, Developer shall notify City,
Anderson and SPI that it has either (a) elected to terminate one or more of the contribution or
exchange agreements for one or more parcels constituting the Property, in which event this
Agreement shall automatically terminate and except as otherwise expressly provided herein,
neither party shall have any further rights, duties or obligations under this Agreement or (b) it
has elected to proceed with its acquisition of each of the parcels constituting the Property
9. Operation of Replacement Parking Site Pendme C1osm2. At all times before the
closing of the transfer of the Replacement Parking Site, City shall have the right to use the
Replacement Parking Site for public parking purposes or as it may otherwise determines in its
reasonable discretion, provided, however that. (a) City shall not construct any buildings or
install any other permanent improvements on the Replacement Parking Site without the prior
written consent of Developer which consent shall not be unreasonably withheld, (b) City shall
not encumber the Replacement Parking Site with any mortgage or deed of trust that will not be
paid off or reconveyed prior to Closing, provided however, that nothing contained herein shall
preclude City from consenting to the formation of a local improvement district which would
include the Replacement Parking Site; and (c) City shall not enter into any lease or other
agreement regarding the Replacement Parking Site except for leases or other agreements that
may be terminated upon transfer of the Replacement Parking Site to Developer pursuant to this
Agreement upon thirty (30) days notice without payment of any cancellation or termination fee.
10 Conditions Precedent to Closing City's obligation to transfer the Replacement
Parking Site to Developer pursuant to and subject to all of the terms, covenants, conditions and
obligations of Developer set forth in this Agreement is expressly conditioned on, and subject to
satisfaction of each of the following conditions precedent which must be met to the reasonable
satisfaction of City prior to the Closing Date (as defined in Section 13 of this Agreement):
10.1 Representations and Warranties. All representations and warranties of
Developer and City contained herein shall be true, accurate and complete at the time of the
Closing as if made again at such time.
102 Performance Developer shall have performed all obligations to be
performed by it hereunder on or before Closing (or, if earlier, on or before the date set forth in
this Agreement for such performance) Developer is not in Default at the time of Closing, and
there is no event that with the giving of notice, the passage of time or both that would constitute
an Event of Default under this Agreement
103 Simultaneous Contribution of SPI Land The SPI Contribution Agreement
entered into by Developer with SPI for contribution of the SPI Land (a) is in full force and
effect, (b) Developer has approved the condition of title to each of the parcels constituting the
SPI Land, has completed or waived its due diligence review of such parcel, and is ready to close
the contribution of the SPI Land to Developer simultaneous with the closing of its acquisition of
the Replacement Parking Site.
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10.4 Vacation of Alley: Completion of Boundary Line Adjustment Process.
The vacation of the existing public alley has been approved by City, the various property owners
have executed quit claim deeds conveying their respective portions of the vacated alley to City,
and the reconfiguration of the City Property and Private Land into seven separate legal lots
pursuant to boundary line adjustment(s) has been approved by all necessary government
authorities, all confirming deeds necessary in connection with such boundary line adjustment(s)
have been executed by each of the owners of the affected parcels, subject only to recording of the
alley vacation quit claim deeds and boundary line adjustment surveys and the confirming deeds
in the real property records of King County
10.5 Simultaneous Exchange of Harrison Property Hamson and City (i) have
executed all documents required to exchange the Harrison Property for the Harrison Exchange
Property, (u) the City, Developer and Anderson have agreed on the terms of the restrictive
covenant contemplated under the Pooling Agreement and (m) the parties are ready to close the
exchange simultaneous with the closing of the acquisition of the Replacement Parking Site
10.6 Application for Parking Garage Building Permits and Downtown Design
Review. Developer has submitted to the City completed applications for all permits necessary to
commence construction of the Parking Garage and has filed a completed Downtown Design
Review Application and other information required to enable the City to complete design review
of the Parking Garage.
10.7 Availability of Construction and Equity Financing for Project
Springboard. Developer has obtained a commitment letter from a financial institution in an
amount sufficient to complete the construction of Project Springboard on terms and conditions
acceptable to City and demonstrated to City that it has sufficient cash equity to complete
construction of the Parking Garage.
108 Title Policies The Title Company is in a position to issue the Developer's
Title Policy in accordance with Section 6 2 and the Title Company is in a position to issue City
an ALTA lender's policy of title insurance insuring the City Mortgage as a first lien on the
Property, subject only to the Property Permitted Exceptions
10.9 No Bankruptcy Neither Developer nor any Private Owner, or any of their
respective officials, officers, members or managers: (a) has applied for or consented to the
appointment of a receiver, custodian or trustee for it or any of its property, (b) has become
insolvent, (c) has failed generally or admitted in writing its inability to pay its debts as they
become due, (d) has consolidated, liquidated or dissolved, (e) has filed a petition or action for
relief relating to any federal or state bankruptcy, insolvency, moratorium or similar statute or any
other law or laws for the relief of or relating to debtors, or (f) has made an assignment for the
benefit of its creditors or entered into an agreement of composition with its creditors, nor (g) has
a petition been filed by or against Developer, any Private Owner or any of their respective
officials, officers, members or managers under any federal or state bankruptcy, reorganization,
insolvency, moratorium or similar statute or any other law or laws for the relief of or relating to
debtors.
-15- P\DRS%DRS2UB 09/29/05
10.10 Condition of Property. As of the date of this Agreement there is a
building located on the SPI Land and SPI is engaged in legal proceedings to resolve issues
related to on-going occupancy of the building. SPI has advised the City and the Developer that it
expects to resolve such issues and arrange for demolition of the building prior to Closing
Accordingly, unless the parties agree otherwise, it shall be a condition precedent to Closing that
City and each of the Private Owners is in a position to deliver possession of that portion of the
real property owned by it, vacant, with all above-ground improvements demolished, free of
debris or trash, and not subject to the occupancy and/or possession by any tenant or any other
person or entity
10.11 City's Right to Terminate. The foregoing conditions contained in this
Section 10 are intended solely for the benefit of City If any of the foregoing conditions are not
satisfied, City shall have the right at its sole discretion either to waive the condition in question
and proceed with the exchange or, in the alternative, to terminate this Agreement upon written
notice to Developer and the Private Owners, whereupon this Agreement shall terminate, and
neither party hereto shall have any further rights, duties or obligations under this Agreement.
11. City Representations. In order to induce Developer to enter into this Agreement
and the transactions contemplated hereby, City makes the following representations as of the
date of this Agreement and again as of the Closing Date and the Public Parking Easement
Acceptance Date:
11.1 Authority. City is a municipal corporation duly organized, validly existing
and in good standing under the laws of the State of Washington Pursuant to City Council
Resolution No adopted , 2005, the City Council authorized its Mayor to
execute and deliver this Agreement on behalf of City.
11.2 No Litigation. There is no litigation pending or, to City's knowledge,
threatened in writing, against City before any court or administrative agency which might result
in City being unable to exchange the Replacement Parking Site to Developer for the Public
Parking Easement upon Final Completion of the Parking Garage and satisfaction of the
conditions set forth pursuant to this Agreement.
In the event that an administrative proceeding or lawsuit is filed against the City prior to
the Closing Date, and a result thereof either City or the Developer is unable to perform its
obligations under this Agreement, either party may extend the Closing Date for up to ninety (90)
days to enable the parties to dissolve any injunction, quash any lis pendens or resolve any
litigation, provided, however, neither party shall be required to pay money, settle a claim or post
a bond. If the legal action has not been resolved by the end of such period. either party may
thereafter terminate this Agreement upon ten (10) days written notice to the other party and
except as otherwise expressly provided herein, neither party shall have any further rights, duties
or obligations under this Agreement
11 3 No Condemnation. There is no condemnation proceeding pending against
the Replacement Parking Site
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11.4 Construction Liens. City has not authorized the performance of any
improvements to be made to the Replacement Parking Site which might form the basis of any
construction liens.
11.5 Survival. All of the representations and warranties of City contained in
this Section 11 shall survive the Closing Date.
12. Developer's Representations. In order to induce City to enter into this Agreement
and the transactions contemplated hereby, Developer makes the following representations as of
the date of this Agreement and again as of the Closing Date and the Public Parking Easement
Acceptance Date
12.1 Authori1y Developer is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Washington, and has the
power to carry on its business as now being conducted All limited liability company action on
the part of Developer and all corporate or other action on the part of its managers and members
necessary for the authorization, execution, delivery and performance of this Agreement. the
Pooling Agreement, the contribution and exchange agreements, the City Mortgage and the Public
Parking Easement and any other document executed in connection with this Agreement or the
Pooling Agreement (collectively, the "Developer Agreements") has been duly taken. Developer
has full power and authority to enter into, execute and deliver the Developer Agreements and to
perform its obligations under the Developer Agreements. The Developer Agreements when
executed and delivered by Developer will be the legal, valid and binding agreement of
Developer, enforceable in accordance with their respective terms. Neither the execution and
delivery of this Agreement or the other Developer Agreements nor the consummation of the
transactions contemplated hereunder or thereunder will constitute a breach of any evidence of
indebtedness or other financing agreement to which Developer is a party or by which Developer
is bound
122 All Consents Obtained. No consents, approvals, permissions,
authorizations, orders or licenses of any person or of any Governmental Authority (except for
City approval of the Parking Garage Construction Documents and issuance of building permits
necessary for construction of the Project Springboard Improvements) is necessary in connection
with the execution, delivery and performance of the Developer Agreements by Developer or any
transaction contemplated hereby or thereby, except as may have already been obtained by
Developer prior to the date of this Agreement There is no provision in Developer's certificate
of formation or organizational documents nor any provision in the organizational documents of
any member or manager of Developer which would be contravened by the execution and
delivery of this Agreement or the other Developer Agreements or by the performance of any
provision, condition, covenant or other term required to be performed by Developer under this
Agreement or the other Developer Agreements.
12.3 Availability of Construction and Equity Financing for Protect
Springboard Developer has obtained a commitment letter from a financial institution in an
amount sufficient to complete the construction of Project Springboard, has sufficient cash equity
to complete construction of the Parking Garage, has satisfied all conditions precedent to
disbursement of loan proceeds for construction of Project Springboard (subject only to Final
-17- P1DRSORS2US 09129M
Completion of the Parking Garage) and is prepared to close any construction loan financing
simultaneous with recording of the Public Parking Easement on the Public Parking Easement
Acceptance Date.
12.4 No Litigation. There is no action, suit, proceeding or investigation
pending, or to Developer's knowledge threatened in writing, before any agency, court or other
Governmental Authority affecting Developer or any member or manager of Developer which
could have a Material Adverse Effect on the legal existence or powers of Developer or any
manager or member thereof, or its financial condition or have a Material Adverse Effect on the
ability of Developer or any manger or member of Developer to perform its obligations under this
Agreement or the other Developer Agreements and neither Developer nor any manager or
member of Developer is in default with respect to any Requirement of Law that could result in
any such effect
12.5 No Land Speculation. Developer represents and agrees that the Property
will be used for purposes of timely redevelopment as set forth in this Agreement and not held by
Developer for speculation in landholding For purposes of this Agreement, "Land Speculation"
is defined as Developer acquiring the Property and not commencing construction of the Parking
Garage on or before March 31, 2006, or not achieving Substantial Completion of the Parking
Garage on or before September 30, 2006 ("Substantial Completion Date") which failure to
commence construction or achieve Substantial Completion is not due to Unavoidable Delay.
Developer understands and agrees that City would not have entered into this Agreement but for
this representation and that the following factors and the qualification and expertise and
experience of Developer and its members in the development of real property are of particular
concern to the commuruty and City:
12.5 1 The importance of the redevelopment of the Property to the general
welfare of the community;
12.5.2 The vacation of the public alley and the reconfiguration of the
Property to accommodate the development of Project Springboard on the Property;
12.5 3 The agreement by Developer to commence and complete
construction of the Parking Garage on the Replacement Parking Site within nine (9) months
following the Closing at its sole cost and expense, which Parking Garage shall have a minimum
capacity of three hundred fifty (350) parking spaces for multi-passenger motor vehicles, which is
an additional seventy (70) parking stalls beyond that required under Requirements of Law for the
Project Springboard Improvements,
12.5.4 The agreement by Developer to grant City the Public Parking
Easement to provide City and members of the general public a perpetual easement to park in a
minimum of seventy (70) parking stalls in the Parking Garage which shall be available for public
parking at all times and in addition, the right to park in any open parking stall on a first-come,
first-serve basis twenty-four(24) hours a day, seven (7) days a week initially at no charge;
12 5.5 The agreement by Developer to manage the Parking Garage so that
a minimum of seventy (70) parking spaces are reserved for public parking by members of the
-18- P\DRS\DRS2UB 09129l05
it
general public at all times and the remaining parking spaces are available on a first come, first
serve basis to members of the general public at all times;
12.5.6 The agreement by Developer to operate the Parking Garage as a
self-park, public parking garage open to members of the general public twenty four (24) hours a
day, seven (7) days a week, initially without charge and in a manner which maximizes the
availability of Short-Term Parking at all times,
12.5.7 The agreement by Developer to operate and maintain the Parking
Garage at Developer's sole cost and expense, in first-class order, condition and repair;
12 5.8 The reliance by City upon the unique qualifications and ability of
Developer to develop Project Springboard as a mixed-use integrated development which
provides an approximately 74-room hotel with conference facilities, indoor water park, retail and
restaurant space, and approximately 120 units of market rate condominium housing, to addition
to the Parking Garage, and
12.5 9 The fact that there will be no transfer of a controlling interest in
Developer or any member or any manager therein, nor any transfer of all or any portion of the
Property by Developer prior to Final Completion of the Parking Garage, without the prior written
consent of City.
12.6 Survival. All of the representations and warranties of Developer
contained in this Section 12 shall survive the Closing Date.
13. Closing and Escrow.
13.1 Time and Place of Closing The Closing shall be held at the offices of the
Escrow Agent on a date chosen by Developer that is after expiration of the Due Diligence Period
(as defined above) but in any event on or before December 15, 2005 (the "Closing Date"). As
used in this Agreement, "Closing" and "Closing Date" means the date on which all appropriate
documents are recorded in order to accomplish the alley vacation, boundary line adjustment and
various property contributions and exchanges contemplated under the Pooling Agreement and
transfer title to the Property to Developer, and the City Mortgage, and the restrictive covenant
affecting the Anderson Property have each been recorded. Developer and City shall place into
escrow all instruments, documents and moneys necessary to complete the acquisition of the
Replacement Parking Site in accordance with this Agreement, and Developer shall place into
escrow all instruments, documents and moneys necessary to complete the contribution of the
remainder of the Property from SPI in accordance with the SPI Contribution Agreement.
13.2 Documents to be Delivered by City City shall obtain and deliver to
Escrow Agent at Closing the following documents (all of which shall be duly executed and
acknowledged where required):
13 2.1 The Deed, together with a duly executed real estate excise tax
affidavit;
13.2.2 FIRPTA Affidavit;
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13 2 3 such other documents as may be required by the Title Company
and as are consistent with the provisions of this Agreement, and
13.2.4 City's share of closing costs.
13.3 Delivery by Developer. At Closing, Developer shall obtain and deliver to
Escrow Agent the following (all documents shall be duly executed and acknowledged where
required):
13.3.1 The executed real estate excise tax affidavit;
13.3 2 the City Mortgage;
13 3.3 such resolutions, authorizations, certificates and other documents
or other agreements relating to Developer as are reasonably required in connection with closing
this transaction,
13.3.4 Developer's share of closing costs.
13.4 Other Instruments City and Developer shall each deposit, and the various
parties to the Pooling Agreement shall each deposit, such other instruments as are reasonably
required by Escrow Agent or otherwise required to close the transactions contemplated by the
Pooling Agreement and this Agreement and consummate the exchange of the Property in
accordance with the terms of this Agreement, the SPI Contribution Agreement and the Pooling
Agreement, including without limitation, any boundary line adjustment surveys, confirming
deeds, documents confirming the vacation of the existing public alley, alley vacation quitclaim
deeds, and related tax segregation agreements, the various deeds exchanging a portion of the SPI
Land for land owned by the City and deeds exchanging the Harrison Property for the Harrison
Exchange Property and the restrictive covenant affecting the Anderson Property.
13.5 Prorations. All utilities and special assessments shall be prorated as of the
Closing. Because City is exempt from property taxes, no proration of ad valorem property taxes
is required; however, Developer shall be responsible for payment of all property taxes and all
special assessments and local improvement district assessments, if any, which affect the Property
from and after the Closing.
13.6 Payment of Costs. City shall pay the premium for a standard coverage
owner's policy of title insurance in an amount equal to the agreed valuation of the Replacement
Parking Site, the premium for any title insurance it elects to obtain insuring the lien of the City
Mortgage as a first lien and any real estate excise taxes applicable to the sale The escrow fee
shall be split equally between City and Developer Developer shall pay all recording costs, any
increase in the title insurance premium attributable to extended coverage, any endorsements it
requests of the Title Company, and the costs of any survey City and Developer shall pay their
own respective costs incurred with respect to the consummation of the purchase and sale of the
Property including, without limitation, attorneys' fees and the fees and expenses of their
respective consultants. Developer and City waive the services of the Escrow Agent in disbursing
closing funds to satisfy unpaid utility charges affecting the Property pursuant to RCW 60.80
-20- PORSORKUB 09/29/05
13.7 Closet of Contribution of SPI Land. Closet of the acquisition of the
g g q
Replacement Parking Site is expressly subject to the simultaneous closing of SPI's contribution
of the SPI Land to Developer.
13.8 Closing Simultaneous with Other Transactions Contemplated under
Pooline Agreement Closing of the acquisition of the Replacement Parking Site is also expressly
subject to the simultaneous closing of the alley vacation, recordation of the alley vacation deeds,
boundary line adjustment and recording of the boundary line adjustment confirming deeds, and
related tax segregation agreements, the various deeds exchanging a portion of the SPI Land for
land owned by the City and exchanging the Harrison Property for the Hamson Exchange
Property and the restrictive covenant affecting the Anderson Property Escrow Agent shall
establish a series of sub-escrows for each of the parcels constituting the real property and shall
coordinate the closings of the various property transactions affecting each of the parcels, all of
which shall be deemed to have closed simultaneously and none of which shall be deemed to have
closed unless all of the transactions close. Developer shall pay one-half of the escrow charges
associated with the escrow and each of the other Owners shall pay the other half of the escrow
charges associated with the portion of the real property owned by it.
139 Recordation. Provided that the Title Company has issued or is
unconditionally prepared and committed to issue Developer the Developer Title Policy and to
issue City the City Loan Policy, then Escrow Agent is authorized at 8 00 a.m. (or as soon
thereafter as possible on the Closing Date) to record the following documents in the official
records of King County, Washington:
13.9.1. Record all quitclaim deeds conveying the vacated alley to City:
139.2 Record the boundary line adjustment and all confirming
quitclaim deeds executed by the various owners required in order to vest title in accordance the
boundary line adjustment survey,
13 93 Record the deed of the remaining SPI Land from SPI to
Developer;
13.94 Record the restrictive covenant encumbering the Anderson
Property;
1395 Record the deeds exchanging the Harrison Property for the
Harrison Exchange Property;
139.6 Record the Deed;
13.9.7 Record the City Mortgage;
13 9.8 Record the Memorandum of this Agreement;
-21- P\DRSIDRS2UB 09/29105
1399 Record any reconveyance documents or releases that may be
required to eliminate any liens, mortgages, deeds of trust or other monetary liens against the
Property, the SPI Land, the Harrison Property or the Harrison Exchange Property that may be
required in order to issue the Developer the Developer Title Policy and the City the City Loan
Policy,
139 10 Deliver the FIRPTA Affidavit and the Developer Title Policy
to Developer and deliver the City Loan Policy to City.
139.11 Deliver closing statements and any other documents
delivered in connection with the closing of the various transactions to the parties entitled thereto.
14 Possession Developer shall be entitled to possession of the Property on Closing,
free and clear of all liens, encumbrances or other exceptions other than the Permitted Exceptions
and any liens, encumbrances or other exceptions arising through the actions of Developer or its
agents, employees or consultants.
15. Construction of Parking Garage.
15 1 Construction of Parking Garage; Construction Phasing Developer shall,
at its sole cost and expense, develop and manage the construction of the Parking Garage in
substantial accordance with the Parking Garage Construction Documents. Developer may enter
into a series of construction contract(s) for various components of the overall project with one or
more contractors including a separate construction contract for the Parking Garage as Developer
may determine taking into consideration availability of labor, materials, weather, permitting
restrictions, status of leasing, progress of overall design and development and other construction-
related factors City and Developer further agree that due to the nature of Project Springboard,
the Project shall be constructed in stages with the Parking Garage constructed as part of Phase
One. City shall not be obligated to issue building permits for the remainder of the Project
Springboard Improvements nor shall Developer commence construction of the remainder of
Project Springboard Improvements until after the Final Completion of the Parking Garage and
the Public Parking Easement Acceptance Date without the prior written consent of the City
15.2 Commencement and Completion of Construction. Developer shall cause
its general contractor to commence construction of the Parking Garage pursuant to the Parking
Garage Construction Documents on or before March 31, 2006 and to thereafter diligently and
continuously prosecute construction of the Parking Garage so as to achieve Substantial
Completion of the Parking Garage on or before September 30, 2006 (the "Substantial
Completion Date") in a good and workmanlike manner, free from defects in work or materials
and in substantial accordance with the Parking Garage Construction Documents, and free and
clear of all liens The Parking Garage shall be constructed in accordance with all Requirements
of Law applicable to the Parking Garage and the Property
15 3 Unavoidable Delay; Outside Completion Date. The existence of
Unavoidable Delays shall excuse contractors and Developer for delays in achieving Substantial
Completion of the Parking Garage on or before the Substantial Completion Date For purposes
of this Agreement, "Unavoidable Delay" means strikes, hots and judicial and/or regulatory
-22- P QRSORS2UB 09129105
action by federal, state or local governmental agencies that enjoin or delay construction on the
Parking Garage on the Property, acts of God, war or acts of terronsm that delay construction of
the Parking Garage. In the event the Parking Garage has not achieved Final Completion on or
before March 31, 2007, for any reason whatsoever including, but not limited to, the existence of
Unavoidable Delay (the "Outside Completion Date"), Developer shall be in default under this
Agreement and City may exercise the remedies set forth in Section 25 of this Agreement.
154 Hiring Program. Developer shall use reasonable good faith efforts to
cause its contractors and subcontractors hired to work on various phases of Project Springboard
to implement a recruitment strategy that encourages hiring of City residents.
155 Construction StagmQ, Remainin¢ Building Demolition, Temporary
Parking Area A plan for construction staging shall be prepared by Developer and approved by
City prior to commencement of construction of the Parking Garage In order to minimize the
impact of construction on surrounding businesses and disruption to downtown retail activity,
Developer and City may enter into a separate agreement setting forth the terms and conditions
under which Developer may utilize all or a portion of the Town Square Plaza Site and City and
Developer may utilize the remainder of the Property for construction staging purposes during the
course of construction of their respective projects Developer acknowledges that time is of the
essence in the construction of the Parking Garage and that City intends to commence
development of the Town Square Plaza Site as a town square plaza immediately following
completion of construction of the Parking Garage. Developer agrees to demolish any buildings
located on the Town Square Plaza Site, at its cost and expense, remove all construction trailers,
materials and equipment then stored on the site and deliver possession of the Town Square Plaza
Site vacant, free or trash or other debris and not subject to possession by any person upon sixty
(60) days prior written notice from City and in any event prior to the Public Parking Easement
Acceptance Date City will advise Developer as soon as it has determined when it will need
possession of the Town Square Plaza Site Developer shall, in consultation with City, install
directional signage on the Property and the public streets adjoining the Property advising
members of the public on the location and means of access to and from any temporary public
parking area that may be located on the Property or the Town Square Plaza Site.
15.6 Protect Manager; Construction Progress Reports Developer shall appoint
an experienced project manager to manage development of Project Springboard prior to Closing.
Developer may assign other qualified construction personnel to the construction of Project
Springboard and the Parking Garage as needed to construct the Parking Garage in accordance
with the requirements of this Agreement so as to achieve Substantial Completion of the Parking
Garage on or before the Substantial Completion Date City shall have the right, but not the
obligation, to inspect or hire an independent consulting architect, engineer or other appropriate
construction professional to inspect the construction of the Parking Garage as it progresses and to
review the construction work and its compliance with the Parking Garage Construction
Documents and this Agreement. The cost of any such construction professional shall be paid by
City City shall provide written notice to Developer of such inspection which shall be
coordinated with Developer and its contractors so as to not interfere with or delay construction of
the Parking Garage Developer shall record the progress of the Parking Garage and shall submit
periodic progress reports to City, and shall provide such information about the on-going progress
of construction as City may reasonably request from time to time
-23- P NDRSIDRS2UB 09129/05
157 Changes to Parkins Garage Construction Documents.
15.7.1 No Reduction in Parking Garage Capacity or Other Characteristics.
Developer shall not (a) reduce the capacity of the Parking Garage below three hundred fifty
(350) parking stalls for multi-passenger motor vehicles, (b) make any change to the Parking
Garage Construction Documents which would require City's approval under Section 5.2 above,
or (c) make any change to the Parking Garage Construction Documents that would violate, or
cause a violation of, any Requirement of Law
15.7 2 Changes to Construction Documents. In the event Developer
desires to make any material change to the Parking Garage Construction Documents not
prohibited by subsection 15.7.1 above, such material change shall first be submitted by
Developer to City accompanied by a statement from Developer's architect delineating the nature
and extent of the changes, for review and approval or disapproval Within five (5) business days
after such request for change has been received by City, City shall give Developer written notice
of its approval or disapproval thereof, specifying in the case of its disapproval its reason
therefore. Except as otherwise provided herein, approval of such change shall not be
unreasonably withheld, conditioned or delayed The extent of City's approval rights with respect
to any material change(s) shall be the same as would have applied to City's approval of the
Parking Garage Construction Documents in the first instance If City fails to disapprove such
change within five (5) business days after the receipt of such change, the same shall be deemed
to have been approved by City.
15 8 Disclaimer: City Not Liable for Construction of Project Springboard
Improvements or Parking Garage. Notwithstanding any provision of this Agreement to the
contrary, City is under no obligation to, nor shall it construct or supervise the construction of the
Project Springboard Improvements or the Parking Garage. It is understood and agreed that
City's rights to approve the Parking Garage Schematic Design Documents and the Parking
Garage Construction Documents as provided in this Agreement is for the sole purpose of
protecting its rights under this Agreement, as beneficiary under the City Mortgage and as the
benefited party under the Public Parking Easement, and shall not constitute any representation or
warranty, express or implied, as to the adequacy of the design or any obligation on City to ensure
that work or materials are in compliance with Requirements of Law, the Parking Garage
Schematic Design Documents or any building requirement imposed by any governmental
agency. City is under no obligation or duty and disclaims all responsibility to pay for the cost of
construction of the Project Springboard Improvements, including, but not limited to, the Parking
Garage, the cost of which is and shall at all times remain the sole liability and responsibility of
Developer Nothing contained in this Agreement shall be construed as the consent or request of
City, express or implied, for the performance of any labor or services or for the furnishing of any
materials or equipment for any construction, alteration, addition, repair or demolition of the
Property (or any part thereof) NOTICE IS HEREBY GIVEN THAT CITY WILL NOT BE
LIABLE FOR ANY LABOR, SERVICES, MATERIALS OR EQUIPMENT FURNISHED, OR
TO BE FURNISHED TO DEVELOPER FOR CONSTRUCTION OF THE PROJECT
SPRINGBOARD IMPROVEMENTS, INCLUDING, BUT NOT LIMITED TO, THE
PARKING GARAGE OR ANYONE HOLDING AN INTEREST IN THE PROPERTY (OR
ANY PART THEREOF) THROUGH OR UNDER DEVELOPER
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159 Payment of Parking Garage Costs* Construction Liens. The cost of
development and construction of the Parking Garage, including, without limitation, any and all
sales, business and occupation, employment, withholding and other taxes which may be payable
in connection therewith, shall be paid by Developer at its sole cost and expense. Prior to the
Final Completion of the Parking Garage, Developer shall pay or cause to be paid within thirty
(30) days after the filing thereof any and all construction or other liens that may be filed against
the Parking Garage or the Property in connection with labor, services, materials, supplies or
equipment furnished or alleged to have been furnished to or upon the request of Developer
(collectively, "Liens") Developer reserves the right to contest the validity or amount of any
such Lien claims in good faith provided that Developer shall within thirty (30) days after the
filing of such Lien, discharges said Lien of record or records a bond which complies with the
requirements of RCW 60.04.161 eliminating such Lien as an encumbrance against the Parking
Garage or the Project Site. In the event Developer shall fail to so remove any such Lien, City
may take such action as City shall reasonably determine to remove such Lien and all costs and
expenses incurred by City including, without limitation, amounts paid in good faith settlement of
such Lien and attorneys' fees and costs shall be secured by the City Mortgage and shall be paid
by Developer within ten (10) days following request. Developer's obligations pursuant to this
Section 15 9 shall survive the expiration or earlier termination of this Agreement.
15.10 Assignment of Contracts Developer shall assign all of its right, title and
interest under (a) the architect's agreement and construction contracts for the Parking Garage and
the plans and specifications as additional security for the performance of Developer's obligations
under this Agreement and (b) shall cause the architect and contractors to execute a consent to
assignment of the architect's agreement and construction contracts, respectively, prior to
Closing. Developer shall not further assign its rights under the architect's agreement and/or
construction contracts without the prior written consent of the City. Developer shall enforce and
secure the performance of all conditions and obligations to be performed or observed by the
architect or the contractors under the architect's and construction contracts and shall perform and
observe in a timely manner all of its obligations under the architect's and construction contracts.
Developer shall notify City of any default or breach of or under the architect's contract or the
construction contracts Upon the occurrence of an Event of Default by Developer under this
Agreement, City shall have the right, but not the obligation, and Developer hereby authorizes
City, to take over and complete construction of the Parking Garage in accordance with its rights
under this Agreement, to enforce Developer's rights under the architect's and construction
contracts and to receive the performance of the architect and contractors thereunder The
assignments made herein in no way affect Developer's ability to exercise its rights under the
architect's agreement or any construction contract prior to any Event of Default by Developer
under this Agreement. City does not assume any of the Developer's obligations or duty under
the architect's agreement or any construction contract, including, without limitation the
obligation to pay for services rendered or materials supplied thereunder unless and until City
shall expressly assume any such obligation by written notice to the architect or the contractors
following the occurrence of an event of default by the Developer under this Agreement. In the
event of an Event of Default by Developer and subsequent assumption by the City of the
obligations of Developer under the architect's agreement or any construction contract, the cost of
performing the obligations of Developer thereunder and hereunder, together with interest thereon
at the rate of twelve percent (12%) per annum from the date incurred until repaid in full shall be
secured by the City Mortgage.
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POMOR52US 09?2905
16. Developer Financing. Prior to Final Completion of the Parking Garage Developer
shall not grant any lien, mortgage, security interest or other interest in the Property except the
City Mortgage without the prior written consent of the City, which consent shall not be
unreasonably withheld so long as such lien is expressly subordinated to the City's rights under
this Agreement and the City Mortgage and any such lender expressly agrees to subordinate its
lien to the Public Parking Easement Notwithstanding any other provision of this Agreement,
following Final Completion of the Parking Garage but prior to final completion of Project
Springboard, Developer shall not have the right to mortgage, pledge, encumber or assign its
rights under this Agreement or the Property, in whole or in part, except in connection with
financing of the construction of Project Springboard by Construction Lender, and shall not
encumber the Property as security for a loan to acquire, construct, finance or refinance any real
property other than the Property Prior to Final Completion of the Project Springboard
Improvements all proceeds of the Construction Loan shall be used solely to pay for costs
associated with construction of Project Springboard and shall not be used for any other purpose
or applied to any other property or project.
17. Indemnification.
17.1 Developer's Indemnification. Developer shall protect, defend, indemnify,
and save harmless City and its officers, officials, employees and agents, from any and all claims,
demands, suits, penalties, losses, damages,judgments, or costs of any kind whatever (hereinafter
"claims"), arising out of or in any way resulting from Developer's officers, employees, agents,
contractors and/or subcontractors of all tiers, acts or omissions, performance or failure to
perform this Agreement. Developer's obligations under this Section 17 shall include, but not be
limited to:
17.1.1 The duty to promptly accept tender of defense and provide defense
to City at Developer's own expense.
17.1 2 The duty to indemnify and defend City from any claim, demand
and/or cause of action brought by or on behalf of any of Developer's employees or agents. The
foregoing duty is specifically and expressly intended to constitute a waiver of Developer's
immunity under Washington's Industrial Insurance Act, RCW Title 51, as respects City only,
with a full and complete indemnity and defense of claims made by Developer's employees or
agents. The parties acknowledge that these provisions were mutually negotiated and agreed
upon by them.
17 1.3 Developer shall indemnify and defend City from and be liable for
all damages and injury which shall be caused to owners of property on or in the vicinity of the
construction of Project Springboard or the Parking Garage or which shall occur to any person or
persons or property whatever arising out of this Agreement, including, but not limited to,
members of the general public who utilize any temporary parking area for parking purposes,
whether or not such injury or damage is caused by negligence of the contractors or caused by the
inherent nature of the construction of Project Springboard or the Parking Garage
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17.1.4 In the event City incurs any judgment, award, and/or costs ansing
therefrom, including attorneys' fees, to enforce the provisions of this Section 17, all such fees,
expenses, and costs shall be paid by Developer.
Notwithstanding the provisions contained in Subsection 17 1 above, Developer's
obligation to indemnify City shall not extend to any claim, demand or cause of action to the
extent caused by the negligence of City or breach of this Agreement by City.
17.2 Notice of Claim. Any person making a claim for indemnification pursuant
to this Section 17 (an "Indemnified Party") must give Developer written notice of such claim (an
"Indemnification Claim Notice") promptly after the Indemnified Party receives any written
notice of any action, lawsuit, proceeding, investigation or other claim (a "proceeding") against or
involving the Indemnified Party by a government entity or other third party, or otherwise
discovers the liability, obligation or facts giving rise to such claim for indemnification; provided
that the failure to notify or delay in notifying Developer will not relieve Developer of its
obligations pursuant to this Section 17 except to the extent that Developer's ability to defend
against such claim is actually prejudiced thereby Such notice shall contain a description of the
claim and the nature and amount of such loss (to the extent that the nature and amount of such
loss is known at such time)
18. Insurance. From and after the execution of this Agreement and until Final
Completion of the Parking Garage and City's acceptance of the Public Parking Easement,
Developer shall maintain builder's risk, commercial general liability insurance and such other
insurance as may be required under the terms of the City Mortgage. From and after City's
acceptance and recordation of the Public Parking Easement in the King County real property
records, Developer shall maintain insurance with respect to its ownership, operation,
maintenance and repair of the Parking Garage as may be set forth in the Public Parking
Easement.
19. Completion of Parking Garage
19.1 Substantial Completion "Substantial Completion" means that each of the
following events shall have occurred with respect to the Parking Garage prior to the Substantial
Completion Date.
19.1.1 Architect's Certification. Architect has issued its "Certificate of
Substantial Completion" AIA Document G704 stating that the portion of the work under the
construction contract for the Parking Garage is substantially complete in substantial accordance
with the Parking Garage Construction Documents
19.1.2 Project Substantially Completed. The Parking Garage has been
Substantially Completed in accordance with all Requirements of Law and Developer has
received no notice of any violation of any Requirements of Law which have not been fully cured
to the reasonable satisfaction of Developer, City and the applicable governmental authority with
jurisdiction over the Parking Garage or the Property
19.1 3 Temporary Certificate of Occupancy City has issued a temporary
certificate of occupancy for the Parking Garage permitting its use as a parking garage
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19.1.4 Owner Acceptance. Developer has accepted the Parking Garage as
complete subject to completion of normal punch list items.
19.1.5 Completion of Punch List Items. Following Substantial
Completion of the Parking Garage, Developer shall cause all punch list items to be completed
promptly in accordance with the Parking Garage Construction Documents.
19.2 Final Completion of the Parking Garage Developer shall give written
notice to City at least thirty (30) days prior to the date upon which the Parking Garage shall have
achieved Final Completion, which date shall be a date prior to the Outside Completion Date.
"Final Completion" means that each of the following items shall have occurred with respect to
the Parking Garage:
19.2.1 Certificate of Occupancy. City shall have issued a final
unconditional certificate of occupancy for the Parking Garage permitting the use and occupancy
of the Parking Garage for parking purposes.
19.2.2 Contractors' Certification. Each contractor involved in the
construction of the Parking Garage shall have issued its "Certificate of Substantial Completion"
together with its Affidavit of Payment of Debts and Claims, AIA Forms 706 and 706A together
with final waivers and releases of lien from all persons who have provided labor, services,
materials or equipment in connection with the construction of the Parking Garage.
19.2.3 Punch List Items Completed. All punch list items have been
completed to the reasonable satisfaction of Developer and City.
19.2.4 Construction Costs Paid Developer shall have submitted evidence
reasonably satisfactory to City that all costs associated with the construction of the Parking
Garage have been paid in full.
19.2 5 No Construction Liens. The period for filing construction liens has
expired or releases or discharges of construction liens in form and substance satisfactory to City
have been obtained by Developer from all contractors in accordance with the Parking Garage
Construction Documents
19 2 6 Private Street Completed The private street to be constructed by
Developer connecting Smith and Harrison Streets as part of Project Springboard and which
provides vehicular access to and from the Parking Garage and the public streets adjoining the
Property has been completed to the reasonable satisfaction of City and can be used by pedestrian
and vehicular traffic
19 2.7 Garage Operational All signage and graphics required under the
Parking Garage Construction Documents have been installed, all security systems have been
installed and are operational, the Parking Garage is no longer in use as a construction staging
area for the storage of construction materials, machinery and equipment or to provide temporary
parking for construction workers' automobiles and equipment and the entire Parking Garage is
open to members of the general public for the parking of vehicles (the "Opening Date")
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20. Acceptance of Public Parking Easement, Release of City Mortgage. City shall
accept the Public Parking Easement and release the City Mortgage within thirty (30) days
following Final Completion of the Parking Garage and the Opening Date ("Public Parking
Easement Acceptance Date"). The acceptance of the Public Parking Easement shall be held at
the offices of the Escrow Agent on the Public Parking Easement Acceptance Date. As used in
this Agreement, the Public Parking Easement Acceptance Date means the date on which the
Public Parking Easement is recorded, and the City has executed a request for full reconveyance
of the City Mortgage. Developer and City shall place into escrow all instruments, documents
and moneys necessary for City to accept the Public Parking Easement in accordance with this
Agreement upon satisfaction of the conditions precedent set forth in Section 20.1 and delivery of
the documents and other items set forth in Sections 20 2 and 20 3 to Escrow Agent•
201 Conditions Precedent to City's Obligation to Accept Public Parking
Easement. City's obligation to accept the Public Parking Easement in satisfaction of
Developer's obligations under this Agreement is expressly conditioned on, and subject to
satisfaction of each of the following conditions precedent which must be met to the reasonable
satisfaction of the City prior to the Public Parking Easement Acceptance Date.
20.1.1 Representations and Warranties All representations and
warranties of Developer and City contained herein shall be true, accurate and complete as the
time of the Public Parking Easement Acceptance Date as if made again at such time.
20.12 Performance. Final Completion of the Parking Garage as defined
in Section 19 has occurred and Developer shall have performed all other obligations to be
performed by it hereunder on or before the Public Parking Easement Acceptance Date (or earlier,
on or before the date set forth in this Agreement for such performance).
20.1 3 Approval of Condominium Documentation City shall have
approved the proposed declaration and the survey map and plans for the master condominium for
the Project Springboard Improvements, which approval shall not be unreasonably withheld,
conditioned or delayed, provided, however, that such declaration shall provide, inter alia that
(i) the Parking Garage is a separate condominium unit, (n) there shall be no assessments, or
charges for on-going operation, maintenance and repair of the Parking Garage levied against
City, in its capacity as the benefited party under the Public Parking Easement, and (ni) no
charges shall be imposed on members of the general public to park in the Parking Garage
20.1.4 Title Policy The Title Company is in a position to issue the City
Title Policy in accordance with Section 7.2 insuring that City is the benefited party under the
Public Parking Easement, subject only to the City Permitted Exceptions
20.1 5 No BankWtcy. Neither Developer nor any of its officials,
officers, members or managers: (a) has applied for or consented to the appointment of a receiver,
custodian or trustee for it or any of its property, (b) has become insolvent, (c) has failed generally
or admitted in writing its inability to pay its debts as they become due, (d) has consolidated,
liquidated or dissolved, (e) has filed a petition or action for relief relating to any federal or state
bankruptcy, insolvency, moratorium or similar statute or any other law or laws for the relief of or
relating to debtors, or (f) has made an assignment for the benefit of its creditors or entered into
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an agreement of composition with its creditors, nor (g) has a petition been filed by or against
Developer, or any of its officials officers, members or managers under any federal or state
bankruptcy, reorganization, insolvency, moratorium or similar statute or any other law or laws
for the relief of or relating to debtors
20 1 6 Additional Construction Agreements Developer shall at its
expense construct a 15 x 15 foot mechanical chase room and men and women's public restrooms
which will accommodate three fixtures and two sinks in each restroom. The mechanical chase
room and public restrooms will be constructed at the location shown on the preliminary site plan
for the Project Springboard Improvements attached hereto as Exhibit D and in accordance with
plans and specifications therefore approved by City as part of the construction of the hotel and
condominium improvements The restrooms shall be maintained in good condition and repair by
Developer at its sole cost and expense, and shall be available for use by members of the public at
no charge Following completion of construction Developer will grant City an easement for the
mechanical chase room on terms mutually acceptable to City and Developer
20.1.7 No Casualty of Condemnation No matenal part of the Parking
Garage shall have been taking in condemnation or other like proceeding (for the purpose of this
Agreement a taking for a limited or indefinite term shall be deemed equivalent to a transfer of
fee title) and no material part of the Parking Garage shall have been transferred in lieu of
condemnation or other like proceeding and no damage to any part of the Property shall have
occurred which shall not have been fully restored or replaced.
20 1 8 Project Springboard Improvement Building Permits. Developer
has obtained all permits necessary to commence construction of the remainder of the Project
Spnngboard Improvements or has applied for and is diligently working to obtain all such
permits.
20.1.9 Simultaneous Closing of Construction Financing for Remainder of
Project Springboard Improvements. Developer has satisfied all conditions precedent to
disbursement of loan proceeds under its construction financing and is prepared to close the
construction loan financing simultaneous with recordation of the Public Parking Easement, and
has completed demolition of any building then located on the Town Square Plaza Site.
20.1.10 City Right to Terminate The foregoing conditions
contained in this Section 20 1 are intended solely for the benefit of City If any of the foregoing
conditions are not satisfied, City shall have the right at its sole discretion either to waive the
condition in question and proceed with the acceptance of the Public Parking Easement or to
declare an Event of Default under this Agreement in which event City may exercise its remedies
under Section 25 of this Agreement
202 Documents to be Delivered by Developer Developer shall obtain and
deliver to Escrow Agent prior to the Public Parking Easement Acceptance Date the following
documents (all of which shall be duly executed and acknowledged where required)
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20 2.1 The Public Parking Easement executed by Developer and
consented to by Construction Lender together with a duly executed real estate excise tax
affidavit;
20 2.2 FIRPTA Affidavit;
20.2.3 Evidence that the master declaration and survey map and plans for
Project Springboard have been recorded in the real property records and the Parking Garage
constitutes a separate condominium unit thereunder;
20.2.4 All documents required to close the Construction Loan for the
remainder of the Project Springboard Improvements including any subordination of the
Construction Mortgage to the rights of the City under the Public Parking Easement to the extent
required by the City and/or the Title Company,
20.2.5 such other documents as may be required by the Title Company
and as are consistent with the provisions of this Agreement; and
20.2.6 the costs required to close this transaction.
20.3 Documents to be Delivered by City. City shall obtain and deliver to
Escrow Agent prior to the Public Parking Easement Acceptance Date the following documents
(all of which shall be duly executed and acknowledged where required):
20 3.1 The Public Parking Easement executed by City, together with a
duly executed real estate excise tax affidavit;
20.3.2 A request for full reconveyance of the City Mortgage; and
20.3 3 such other documents as may be required by the Title Company
and as are consistent with the provisions of this Agreement
20.4 Other Instruments City and Developer shall each deposit such other
instruments as are reasonably required by Escrow Agent or otherwise required to record the
Public Parking Easement in accordance with this Agreement.
20.5 Prorations: Pavment of Costs. There shall be no prorations of costs and
expenses in connection with the recording of the Public Parking Easement. Developer shall be
responsible for payment of all closing costs, including, but not limited to the premium for the
City Title Policy, any real estate excise taxes applicable to the transfer, all costs of financing,
including lender's title insurance premiums, if any, the escrow fee, and all recording costs. City
and Developer shall each pay their own attorneys' fees and the fees and expenses of their
respective consultants
206 Recordation Provided that the Title Company has issued or is
unconditionally prepared and committed to issue City the City Title Policy, then Escrow Agent is
authorized at 8 00 a in (or as soon thereafter as possible on the Public Parking Easement
Acceptance Date) to.
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20 6 1 Record the Public Parking Easement and any subordination
agreements in the official records of King County, Washington;
20.6.2 Deliver the FIRPTA Affidavit and the City Title Policy to City;
20.6 3 Record the reconveyance of the City Mortgage in the official
records of King County; and
20 6 4 Record the Construction Mortgage and any other documents
required by the Construction Lender in connection with the Construction Loan.
21. Damage, Destruction or Condemnation Prior to Closing In the event that prior to
the Closing Date, the Replacement Parking Site is destroyed or materially damaged or if
condemnation proceedings are threatened against all or any material portion of the Replacement
Parking Site, either party shall have the right by giving written notice of such decision to the
other within fifteen (15) days after receipt of written notice from City of such damage,
destruction or condemnation proceedings to terminate this Agreement, in which event this
Agreement shall automatically terminate, all work product prepared by or on behalf of Developer
for development of the Parking Garage shall immediately and without payment of additional
consideration be assigned to City, and except as expressly provided herein, neither party shall
have any further rights, duties or obligations to the other under this Agreement If neither party
elects to terminate this Agreement, the Agreement shall remain in full force and effect,
Developer shall accept the Replacement Parking Site in its then condition and state of repair, and
all proceeds of insurance or condemnation awards payable to City by reason of such damage,
destruction or condemnation, if any, shalt be paid or assigned to Developer upon closing and
used to build the Parking Garage on the Replacement Parking Site In the event that Developer
elects to complete the acquisition of the Replacement Parking Site, it is expressly agreed that
City shall have no obligation to repair or restore same Notwithstanding anything to the contrary
set forth herein, any damage to the Replacement Parking Site prior to Closing as a result of
Developer's inspections shall be the responsibility of Developer, and City shall have no
obligation to repair it.
22. Damage, Destruction or Condemnation After Closing, but Prior to Final
Completion of the Parking Garage
22.1 Damage or Destruction. After the happening of any casualty to the
Parking Garage after the Closing but prior to the Final Completion of the Parking Garage and the
Public Parking Easement Acceptance Date, Developer shall give City prompt written notice
thereof generally describing the nature and cause of such casualty and the extent of the damage
or destruction to the Parking Garage Developer shall cause reconstruction and restoration of the
Parking Garage in accordance with the Parking Garage Construction Documents and the
provisions of this Agreement Developer will deposit all insurance proceeds which Developer
may be entitled to receive with respect to such damage or destruction with City, who shall
thereafter disburse insurance proceeds to reimburse Developer for the cost of restoration or
repair in accordance with the terms, covenants, conditions, provisions and procedures set forth in
the City Mortgage.
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22.2 Condemnation. After the Closing but prior to the Final Completion of the
Parking Garage, in the event of a partial condemnation of the Project Site or the Parking Garage
to the extent that the Parking Garage may still be constructed in accordance with the Parking
Garage Construction Documents or may be constructed in accordance with the Parking Garage
Construction Documents as modified by changes acceptable to Developer and City, Developer
shall proceed to construct the Parking Garage in accordance with the Parking Garage
Construction Documents, as modified, if applicable Any partial condemnation proceeds shall be
deposited with City, who shall disburse condemnation proceeds to reimburse Developer for the
cost of restoration or repair in accordance with the terms, covenants, conditions, provisions and
procedures set forth in the City Mortgage. In the event of a condemnation of all of the Project
Site or the Parking Garage or to the extent condemnation proceeds are not used to repair or
restore the Parking Garage, such condemnation proceeds shall be paid to City
23. Restrictions on Transfers.
23.1 No Transfer of Rights under Agreement. Developer acknowledges that
City is relying upon the personal knowledge, expertise and experience of Developer and Plan B
Development, L L C ("Plan B"), the managing member of Developer, and Ben Errez, the
managing member of Plan B, in entering into this Agreement. Developer shall not voluntarily or
involuntarily sell, transfer, convey, assign or otherwise dispose of its rights under this Agreement
prior to the Public Parking Easement Acceptance Date without the prior written consent of City,
which consent may be withheld by City in its sole and absolute discretion
23.2 Restrictions on Transfer of Interests in Developer. Prior to the Public
Parking Easement Acceptance Date, Developer may (a) sell, transfer, convey or assign interests
in Developer, (b) admit additional or substitute members in Developer or any member or
manager of Developer, or (c) change or transfer the ownership interests in any member or
manager of Developer so long as there is no change in the existing ownership interests of the
existing members of Plan B and Plan B shall at all times have a controlling interest in and be the
managing member of Developer. Any other transfer shall require the prior written consent of
City, which consent may be withheld by City in its sole and absolute discretion City and
Developer acknowledge and agree that Developer may grant SPI an interest in Developer
pursuant to the SPI Contribution Agreement and may transfer ownership interests in Developer
to third parties in the discretion of Developer after the Public Parking Easement Acceptance Date
and recordation of the Public Parking Easement in the King County real property records.
23.3 Definition of Transfer. As used in Subsection 23 2, a "transfer" includes
any sale, transfer, conveyance, assignment, mortgage, pledge or other disposition of any interest
in Developer or any member or manager of Developer, whether voluntary or involuntary. by
operation of law or otherwise, including transfers to a trustee in bankruptcy, receiver or assignee
for the benefit of creditors or any merger, consolidation, liquidation or dissolution of Developer
or any member or manager of Developer
234 No Transfer of Replacement Parking Site During Construction of Parking
Garage. Developer shall not sell, transfer, lease, convey, encumber or enter into a contract of
sale or other conveyance of all or any part of or any interest in the Parking Garage during the
construction thereof and prior to Final Completion of the Parking Garage and the Public Parking
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Easement Acceptance Date without the prior written consent of City, which consent may be
withheld by City in its sole and absolute discretion. City acknowledges that Developer reserves
the right to sell all or any portion of Project Springboard, including, but not limited to, sales of
residential condominiums to individual homeowners after the Public Parking Easement
Acceptance Date Developer may enter into "pre-sale" agreements with individual homeowners
to purchase a condominium upon final completion thereof without the consent of City. From and
after the Public Parking Easement Acceptance Date, Developer shall have the right to sell the
Parking Garage, subject to, and on the terms and conditions set forth in, the Public Parking
Easement.
24. Events of Default Prior to Closing Date; Remedies.
24 1 City's Default. In the event of a default by City of a material provision
under the Agreement prior to the Closing Date, then provided Developer is not in default
hereunder, Developer's sole and exclusive remedy shall be either (a) to seek and obtain specific
performance of City's obligations hereunder, or (b) to terminate this Agreement upon written
notice to City and Escrow Agent and except as otherwise expressly provided herein neither party
hereto shall have any further rights, duties or obligations under this Agreement
24.2 Developer's Default. In the event of a breach or default by Developer
without any default by City or failure of any condition precedent to Closing hereunder prior to
the Closing Date, City's sole and exclusive remedy shall be either (a) to seek and obtain specific
performance of Developer's obligations hereunder, or (b) to terminate this Agreement by written
notice to Developer and Escrow Agent whereupon all work product prepared by or on behalf of
Developer for development of the Parking Garage shall immediately and without payment of
additional consideration be assigned to City, Developer shall pay all title and escrow cancellation
charges, if any, and except as otherwise expressly provided herein, neither party shall have any
further rights, duties or obligations under this Agreement.
25. Developer Events of Default Following Closing Date; Remedies.
25.1 Developer Default The following events shall constitute a "Default" or
"Event of Default"by Developer:
25.1.1 If Developer shall fail to perform any material obligation under
this Agreement; or
25.12 If Developer has abandoned construction of the Parking Garage
for a period of twenty (20) consecutive days (except for Unavoidable Delay); or
25.13 If any permit required for construction of the Parking Garage
shall be revoked or canceled, or
25.1 4 If Developer shall have assigned, pledged or encumbered its
rights, duties or obligations under this Agreement in violation of this Agreement, or
25.1.5 If any representation or warranty made by Developer as set forth
in Section 12 shall be untrue or breached in any material respect, or
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25.1.6 If Developer has not commenced construction of the Parking
Garage on or before March 31, 2006, or
25.1 7 If Substantial Completion of the Parking Garage has not occurred
for any reason except for Unavoidable Delay, on or before September 30, 2006 (the Substantial
Completion Date); or
25.1.8 If Substantial Completion of the Parking Garage has not occurred
for any reason whatsoever including Unavoidable Delay on or before March 31, 2007 (the
Outside Completion Date); or
25.1.9 If Developer files a petition for bankruptcy or if it makes a
general assignment for the benefit of Developer's creditors, or if a receiver is appointed on
account of Developer's insolvency and any such petition or appointment is not dismissed within
ninety (90) days, or
25.1.10 There is an event of default under the City Mortgage which has
not been cured prior to the expiration of any cure period contained therein
25.2 City Remedies upon Developer Event of Default. Upon any Event of
Default by Developer, City shall give Developer written notice of the same, whereupon
Developer shall have thirty (30) days within which to commence all necessary action to cure any
such Event of Default, (and if such cure is commenced, proceed to diligently complete such cure
within a reasonable period of time not to exceed ninety (90) days), except with respect to Events
of Default set forth in Section 25 14, 25 1 6, 25 1 7, 25.1 8, 25.1 9 or 25.10 for which no cure
period exists beyond the time period stated therein. In the event Developer fails to cure such
Event of Default within the time period set forth above, City may- (a) terminate this Agreement
upon ten (10) days prior written notice to Developer, (b) bring an action for damages, (c) seek
specific performance of this Agreement, (d) take over and complete the work of construction of
the Parking Garage, including the right to enforce contracts or agreements theretofore made by
or on behalf of the Developer and to do any and all things necessary or proper to complete the
work of construction, as may be deemed reasonably necessary and to recover the cost thereof,
together with interest thereon at the rate of twelve percent (12%) per annum, or (e) foreclose the
City Mortgage.
26. City Events of Default Following Closing Date, Remedies. If City fails to
perform any material obligation under this Agreement after Closing but prior to the Public
Parking Easement Acceptance Date, Developer shall give City written notice of same,
whereupon following receipt of such written notice, City shall have thirty (30) days within which
to commence all necessary action to cure any such failure (and if cure is commenced with such
thirty (30) day period, proceed to diligently complete such cure within a reasonable period of
time) In the event City fails to cure such failure within the time period set forth above and
provided Developer is not in default hereunder, then Developer's sole and exclusive remedy
shall be the right to seek and obtain specific performance of City's obligations hereunder.
27. Rights and Remedies Cumulative Except as otherwise expressly stated in this
Agreement, the rights and remedies of the parties are cumulative, and the exercise or failure to
-35- PXDRS\DRS2UB 09/29/05
exercise one or more of such rights or remedies by either party shall not preclude the exercise by
it, at the same time or different times, of any right or remedy for the same default or any other
default by the other party. Consequential damages and damages which are speculative or remote
are not recoverable under this Agreement even if such damages would otherwise be available
under law or equity.
28 Notices. Unless applicable law requires a different method of giving notice, any
and all notices, demands or other communications required or desired to be given hereunder by
any party (collectively, "Notices") shall be in writing and shall be validly given or made to the
other party if delivered either personally, or by overnight delivery service of recognized
standing, or by United States Marl, certified, registered, or express mail with postage prepaid, or
by facsimile transmission with electronic confirmation of receipt. If such Notice is personally
delivered or delivered by facsimile during normal business hours, it shall be conclusively
deemed given at the time of such delivery If such Notice is delivered by facsimile after normal
business hours or is delivered by overnight delivery service, it shall be deemed given one (1)
business day after receipt thereof(if sent by facsimile transmission) or one (1) business day after
the deposit thereof with such delivery service. If such Notice is mailed as provided herein,
notice shall be deemed given three (3) business days after the deposit thereof in the United States
Mail Each such Notice shall be deemed given only if properly addressed to the party to whom
such Notice is to be given as follows-
To City: City of Kent
220 Fourth Avenue
Kent, Washington 98030
Attn: City Clerk
Fax: (253) 856-6725
With a copy to: City of Kent
220 Fourth Avenue
Kent, Washington 98030
Attn: City Attorney
Fax: (253) 856-6770
To Developer: Springboard Holdings, L L C.
1627 East Sammamish Place SE
Sammamish, Washington 98075
Attn: Ben Errez
Fax: (425) 369-9949
With a copy to: Plan B Development, L.L.C.
12889 Casino Drive
Anacortes, Washington 98221
Fax (425) 936-7329
-36- POR&DRS2U8 OM9105
With a copy to: Chairman, Swmomish Indian Tribal Community
P O. Box 817
LaConner, Washington 98257
Fax. (360) 466-5309
To Second Avenue: Second Avenue Real Estate LLC
1301 Fifth Avenue, Suite 2600
Seattle, Washington 98101
Attn Ben Porter
Fax: (206) 587-0579
Any party hereto may change its address for the purpose of receiving Notices as herein provided
by a written notice given in the manner aforesaid to the other parties hereto.
29. Survival of Representations and Warranties. Except as otherwise expressly
provided herein, all representations, warranties, covenants and agreements of the parties
contained in this Agreement, or in any instrument or other writing provided for herein, shall
survive the Closing.
30 Brokerage Fees. Each party represents to the other that no broker has been
involved in this transaction In the event of a claim for any broker's fee, finder's fee,
commission or other similar compensation in connection herewith Developer, if such claim is
based upon any agreement alleged to have been made by Developer, hereby agrees to indemnify
City and Second Avenue against and hold City and Second Avenue harmless from any and all
damages, liabilities, costs, expenses and losses (including, without limitation, reasonable
attorneys' fees and costs) which City or Second Avenue may sustain or incur by reason of such
claim. In the event of a claim for any broker's fee, finder's fee, commission or other similar
compensation in connection herewith Second Avenue, if such claim is based upon any agreement
alleged to have been made by Second Avenue, hereby agrees to indemnify City and Developer
against and hold City and Developer harmless from any and all damages, liabilities, costs,
expenses and losses (including, without limitation, reasonable attorneys' fees and costs) which
City or Developer may sustain or incur by reason of such claim City, if such claim is based
upon any agreement alleged to have been made by City, hereby agrees to indemnify Developer
and Second Avenue against and hold Developer and Second Avenue harmless from any and all
damages, liabilities, costs, expenses and losses including, without limitation reasonable
attorneys' fees and costs) which Developer or Second Avenue may sustain or incur by reason of
such claim. The indemnification provisions set forth herein shall survive Closing or termination
of this Agreement.
31. Miscellaneous
31.1 Burden and Benefit The covenants and agreements contained herein shall
be binding upon and inure to the benefit of the successors and permitted assigns of the respective
parties hereto Developer agrees that City may transfer its rights under this Agreement
(including its rights under the Public Parking Easement) whether voluntarily, involuntarily, by
operation of law or otherwise, to any city, county, governmental subdivision or agency or other
municipal corporation.
-37- P ORSORMB 09129/05
31.2 No Contmumg Waiver. Any waiver by either of the parties of any breach
of any covenant herein contained to be kept and performed by the other party shall not be
deemed or considered as a continuing waiver, and shall not operate to bar or prevent the
damaged party from declaring a forfeiture for any succeeding breach, either of the same
condition or covenant or otherwise
31 3 Nondiscrimination. Developer will not discriminate and shall ensure that
its consultants and all contractors engaged by Developer in connection with Project Springboard
comply with all applicable federal, state and local discrimination laws, rules and regulations
31.4 Neutral Authorship. In connection with the execution and delivery hereof,
each party has been represented by counsel. Each of the provisions of this Agreement has been
reviewed and negotiated, and represents the combined work product of the parties hereto. No
presumption or other rules of construction which would interpret the provisions of this
Agreement in favor of or against the party preparing the same shall be applicable in connection
with the construction or interpretation of any of the provisions of this Agreement.
31.5 Terminology All personal pronouns used in this Agreement, whether
used in the masculine, feminine and neuter gender, shall include all other genders, the singular
shall include the plural, and vice versa as the context may require.
31.6 Complete Agreement, Amendment. This Agreement together with the
exhibits annexed hereto or referred to herein is intended to be the entire agreement of the parties
with regard to the subject matter hereof and may only be amended with the written consent of all
parties.
31 7 Severability. Each provision of this Agreement shall be considered
severable, and if for any reason any provision that is not essential to the effectuation of the basic
purposes of the Agreement is determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or affect those provisions of this Agreement that
are valid.
31.8 Relationship of Parties. Developer, Second Avenue and City shall not be
construed as joint venturers or general partners, and no party shall have the power to bind or
obligate any other party except as set forth in this Agreement. Neither Developer nor Second
Avenue shall have any right or authority, express or implied, to commit or otherwise obligate
City in any manner whatever except to the extent specifically provided herein or specifically
authorized in writing by City City shall have no right or authority, express or implied, to
commit or otherwise obligate Developer or Second Avenue in any manner whatever except to
the extent specifically provided herein or specifically authorized in writing by Developer or
Second Avenue.
31.9 No Third Party Rights The provisions of this Agreement are intended
solely for the benefit of, and may only be enforced by, the parties hereto and their respective
successors and permitted assigns. None of the rights or obligations of the parties herein set forth
(or implied) is intended to confer any claim, cause of action, remedy, defense, legal justification,
indemnity, contribution claim, set-off, or other right, whatsoever upon or otherwise inure to the
-38- PQRSORS2US 09/29105
benefit of any contractor, architect, consultant, subcontractor, worker, supplier, mechanic,
architect, insurer, surety, guest, condominium owner, tenant, member of the public, or other third
parties having dealings with any of the parties hereto or involved, in any manner, in the Property.
31.10 Non Waiver of Governmental Rights. Nothing contained in this
Agreement shall require City to take any discretionary action relating to development of the
improvements to be constructed on the Property as part of Project Springboard, including, but
not limited to, zoning and land use decisions, permitting, design review or any other
governmental approvals.
31.11 Captions. The captions of this Agreement are for convenience and
reference only and in no way define, limit or describe the scope or intent of this Agreement
31.12 Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement.
31.13 Further Assurance. Each party hereto agrees that it will execute or furnish
such documents and further assurances to the other or to proper authorities as may be necessary
for the full implementation and consummation of this Agreement and the transactions
contemplated hereby
31 14 Authori Each of the persons signing below represent and warrant that
they have the requisite authority to bind the party on whose behalf they are signing
31 15 Time Is of the Essence Time is of the essence of this Agreement. All
periods of time referred to herein shall, unless otherwise expressly provided herein, include
Saturdays. Sundays and legal holidays in the State of Washington, except that if the last day of
any period falls on any Saturday, Sunday or such holiday, the period shall be extended to the
next business day.
31 16 Memorandum of Agreement The Agreement shall not be recorded;
however, upon the request of either party, the parties shall record a Memorandum of this
Agreement in a form mutually acceptable to both parties in the real property records of King
County, Washington.
31.17 Attorneys' Fees. Each party shall be responsible for payment of the legal
fees of its counsel in the event of any litigation, mediation, arbitration or other proceeding
brought to enforce or interpret or otherwise ansmg out of this Agreement.
31.18 WAIVER OF JURY TRIAL. CITY, DEVELOPER AND SECOND
AVENUE HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM ARISING
OUT OF THIS AGREEMENT, WHETHER NOW OR HEREAFTER ARISING AND
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE AND HEREBY
CONSENT AND AGREE THAT ANY SUCH CLAIM SHALL BE DECIDED BY TRIAL
WITHOUT A JURY. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART
OR COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
WAIVER AND AGREEMENT CONTAINED HEREIN.
-39- PORSTRS2U0 09/29/05
31.19 Exhibits. The exhibits referred to herein or attached hereto are made a
part of and incorporated into this Agreement All exhibits not finalized as of the date of this
Agreement shall be finalized and agreed to by the parties prior to the expiration of the Due
Diligence Period and shall thereafter become part of and incorporated into this Agreement.
31.20 Conflicts of Interests. No member, official or employee of City shall
make any decision relating to the Agreement which affects his or her personal interests or the
interests of any corporation, partnership or association in which he or she is directly or indirectly
interested
31.21 Non-Liability of City Officials Employees, and Agents. No member,
official, employee or agent of City shall be personally liable to Developer, or any successor in
interest, in the event of any default or breach by City or for any amount which may become due
to Developer or such successor or on any obligation under the terms of this Agreement.
31.22 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Washington, without regard to principles of conflicts of
laws, and venue of any action brought to enforce this Agreement shall lie exclusively in King
-40- P%DRS\DRMB 09f29/05
County Superior Court. The parties hereto consent to the jurisdiction of the King County Superior
Court and waive the right to file suit elsewhere.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first above written.
DEVELOPER: CITY:
SPRINGBOARD HOLDINGS, L.L.C., CITY OF KENT, a Washington municipal
a Washington limited liability company corporation
By: e 6 By-
Name: �— ^ 2 Name
Title- MVP Title: MA yo -P
SECOND AVENUE APPROVED AS TO FORM:
Second Avenue Real Estate LLC, a
Washington limited liability company
By.
iY
Name i 0✓ !�
Title ,�C .iD lGleGal�P�
-41- P QRSORS2UB 09/2W05
Exhibits
A-1 Legal Description for City-Owned Town Square Plaza Site
A-2 Legal Description for City-Owned Replacement Parking Site
A-3 Legal Description for Harrison Exchange Property
B Legal Description for Private Land
B-1 Legal Description for Harrison Property
B-2 Legal Description for SPI Land
C-1 Legal Description for Property (A-2 and B-2)
C-2 Legal Description for Harrison Exchange Property
D Preliminary Site Plan for Project Springboard Improvements
E Parking Garage Design Standards
F Public Parking Easement
G City Mortgage
H City Deed
I Definitions
-42- P\0RS\DRS2UB 09/29/05
Exhibit A-1
Legal Description for City-Owned Town Square Plaza Site
[To be provided by Title Company and surveyor and agreed to by parties.]
A-1-1 P QRSORS2UB 0909/05
Exhibit A-2
Legal Description for City-Owned Replacement Parking Site
[To be provided by Title Company and surveyor and agreed to by parties]
A-2-1 PORSIORS2UB 09/29/05
Exhibit A-3
Legal Description for Harrison Exchange Property
[To be provided by Title Company and surveyor and agreed to by parties.]
A-3-1 P%DRS\DRS2UB 09Y M5
Exhibit B
Legal Description for Private Land
[To be provided by Title Company and surveyor and agreed to by parties.]
B-1 PIDRSORSWB OW9/05
Exhibit B-1
Legal Description for Harrison Propergy
[To be provided by Title Company and surveyor and agreed to by parties.]
B-1-1 P MRSORS2US 09/29/05
Exhibit B-2
Legal Description for SPI Land
(following completion of boundary line
adiustment and alley vacation)
[To be provided by Title Company and surveyor and agreed to by parties.]
B-2-1 P\DRSIDRS2UB 09/29/05
Exhibit C-1
Leal Description for Property
(SPI Land plus City-Owned Replacement Parking Site)
[To be provided by Title Company and surveyor and agreed to by parties.]
C-1-1 PORSORS2UB 09/29/05
Exhibit C-2
Legal Description for Harrison Exchange Property
[To be provided by Title Company and surveyor and agreed to by parties.]
C-2-1 P\DR5\DR52UB 09/29/05
Exhibit D J,
Preliminary Site Plan for Project Sprineboard Improvements
[To be provided by Developer.]
D-I P1DRS%DRS2UB 09129MS
Exhibit E
Parking Garage Design Standards
1. Garage Design, Si nnaage and Graphics. The Parking Garage shall be designed to
ensure simple ingress and egress by members of the general public to the Parking Garage, and
directional signage at appropriate locations on the Property, indicating the location of vehicular
and pedestrian entrances and exists to the Parking Garage and traffic circulation within the
Parking Garage To help the customer remember the parking locations, signs designating the
floor level and the alphabetical or numerical designation of the aisle shall be displayed
throughout the parking area of the Parking Garage and adjacent to elevators and other entrances
to the Parking Garage. Signage and graphics shall be designed to achieve a superior level of
visibility, legibility and user-fnendliness The design of the Parking Garage (including signage
and graphics) shall be in accordance with the Parking Garage Construction Documents prepared
and approved in accordance with this Agreement Such plans shall incorporate the immediately
following elements:
2. Garage Illumination• Adequate lighting is one of the most important safety
features of the Parking Garage, and a strong maintenance program is necessary to preserve the
lighting levels in the Parking Garage Lighting for the Parking Garage shall be provided by
fixtures with area controls on a seven-day program, sufficient to provide the following light
intensity twenty-four (24) hours a day (a) Traffic Lanes — a minimum maintained intensity
approved by the parties as part of the Parking Garage Construction Documents measured thirty
(30) inches above finished floor with a uniformity ratio of three to one (3.1) average to
minimum, (b) Parking Stalls—a minimum maintained intensity approved by the parties as part of
their approval of the Parking Garage Construction Documents measured thirty (30) inches above
finished floor with a uniformity ratio of three to one (3 1) average to minimum; (c) Vehicular
Entrances — a minimum maintained intensity of thirty (30) foot candles measured thirty (30)
inches above finished floor with a uniformity ratio of three to one (3 1) average to minimum and
(d) Stairways open to the public, Vestibules, Corridors and Lobbies — a minimum maintained
intensity of twenty-five (25) foot candles measured thirty (30) inches above finished floor with a
uniformity ratio of three to one (3 1) average to minimum. The ceilings shall be painted white
and all vertical surfaces of the Parking Garage shall be painted white, where practicable
3 Parking Spaces and Module: Parking shall be available for a minimum of three
hundred fifty (350) multi-passenger motor vehicles There shall be additional parking spaces
provided for motorcycles and bicycles. One (1) additional foot for stall width shall be required
for parking stalls adjacent to columns In addition, before issuance of a building permit for the
Parking Garage the City shall approve a vehicle maneuvering diagram as submitted by the
Developer that shows adequate vehicle maneuvering for parking stalls throughout the garage
4. Stall Striping: Stalls shall be separated by single four (4) inch paint or
therma-plastic stripe
E-1 P\DRS\DRS2UB 09/29/05
5. Security Devices: The plans for the Parking Garage shall specify the security
devices to be installed, which may including closed circuit T.V monitors and cameras,
assistance call boxes installed on each level at elevators and other critical locations, audio
monitoring devices and their locations.
6. Ventilation: The Parking Garage design shall be designed to include a separate
ventilation system for the Parking Garage which shall vent automobile exhaust fumes to the
outside and ensure that unsafe levels of carbon monoxide, noxious fumes and other pollutants do
not remain in the Parking Garage or enter the Project Springboard Improvements.
E-Z P OWDRS2UB 09/29/05
Exhibit F
Public Parking Easement
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City of Kent
220 Fourth Avenue
Kent, Washington 98030
Attn: City Attorney
PUBLIC PARKING EASEMENT
GRANTORS: 1. Springboard Holdings, L.L.C., a Washington limited
liability company
2. Second Avenue Real Estate LLC, a Washington
limited liability company
GRANTEE: City of Kent, a Washington municipal corporation
Legal Description:
Abbreviated form:
Additional legal on page Exhibit A
Assessor's Property Tax Parcel ID No(s).:
F-1 P 1DRMDRS2UB 09I29105
PUBLIC PARKING EASEMENT
THIS PUBLIC PARKING EASEMENT (the "Easement Agreement") is executed
this day of , 2006 by SPRINGBOARD HOLDINGS, L L C , a
Washington limited liability company ("Developer") and SECOND AVENUE REAL
ESTATE LLC, a Washington limited liability company ("Second Avenue") in favor of CITY
OF KENT, a Washington municipal corporation, its successors and assigns ("City") with
reference to the following facts.
RECITALS
A. Pursuant to the terms and conditions set forth in that certain Replacement
Parking Agreement dated as of September 30, 2005 by and between City and Developer
(the "Replacement Parking Agreement"), City agreed to transfer certain real property more
particularly described therein as the Replacement Parking Site on the express condition
that the Developer redevelop certain real property located in the City of Kent and generally
bordered on the north by Smith Street, on the west by Fourth Avenue, on the south by
Harrison Street (excluding certain real property owned by Meeker Street Law Building
LLC and MBA Harrison Square I LLC and MBA Harrison Square II LLC, each a
Washington limited liability company) and on the east by Second Avenue and more
particularly described in the Replacement Parking Agreement as the "Property" or the
"Project Site", with a privately owned mixed-use condominium development as more
particularly described in the Replacement Parking Agreement (collectively, "Project
Springboard").
B. Pursuant to the terms and conditions set forth in the Replacement Parking
Agreement, including, but not limited to, the design standards set forth in Exhibit E
thereto, Developer agreed to design, develop and construct a parking garage consisting of
four (4) levels of above-grade parking containing a minimum of three hundred fifty (350)
parking spaces for multi-passenger motor vehicles (the "Parking Garage"), to grant City,
any successor public entity and members of the general public a perpetual easement to park
in the Parking Garage twenty four (24) hours a day, seven (7) days a week, initially at no
charge, and to thereafter operate and maintain the Parking Garage as a self—park public
parking garage and in a manner to maximize the availability of Short Term Parking (as
hereinafter defined), on the terms and conditions set forth herein.
C. Developer has achieved Final Completion of the Parking Garage (as defined
in the Replacement Parking Agreement) and all other conditions precedent to City's
acceptance of the public parking easement have been met to the satisfaction of City.
NOW, THEREFORE, in consideration of the foregoing recitals, the terms and
conditions set forth in the Replacement Parking Agreement and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows
F-2 P1DRS%DRS2UB 09/29/05
AGREEMENT
1. Recitals Incorporated: Definitions Each of the recitals set forth above is
incorporated into this Easement Agreement as though fully set forth herein All capitalized
terms not otherwise defined herein shall have the same meaning as set forth in the
Replacement Parking Agreement or on Exhibit E to this Easement Agreement Developer,
in its capacity as owner of the Parking Garage, and its successors and assigns, is also
referred to in this Easement Agreement as the Parking Garage Owner.
2. Grant of Public Parking Easement. Developer hereby grants and establishes
for the benefit of City, any successor public entity, and members of the general public, a
perpetual easement to park in the Parking Garage located on the real property more
particularly described in Exhibit A attached hereto and by this reference incorporated
herein (the "Property") twenty four (24) hours a day, seven (7) days a week, initially at no
charge, together with rights of pedestrian and vehicular access to and from the Parking
Garage and the public streets adjoining the Property utilizing the existing private road as
outlined in red on the map annexed hereto as Exhibit B
(a) Exclusive Public Parking Stalls. Not less than seventy (70) parking
stalls in the Parking Garage located on the first and second levels of the Parking Garage
shall be available to members of the general public for Short Term Parking at all times
(collectively, the "Exclusive Public Parking Stalls") The location of the Exclusive Public
Parking Stalls is set forth on the map annexed hereto as Exhibit B and by this reference
incorporated herein and shall not be changed without the prior written consent of City.
(b) Shared Parking Stalls; Public Right to Use Shared Parking Stalls
The remaining parking stalls on level two, and all of the parking stalls on levels three and
four of the Parking Garage are intended to be used for Short Term Parking by Project
Springboard condominium owners, hotel guests, tenants of Project Springboard
Improvements and their customers and tenants of property currently owned by Second
Avenue south of Harrison Street (the "Second Avenue Project Improvements") and their
customers on an unreserved, first come, first serve basis Members of the general public
shall also have the right to park in any open parking stall located on the remainder of level
two and all of levels three and four on a first-come, first serve basis, twenty four (24) a
day, seven (7) days a week (collectively, the "Shared Parking Stalls"). The location of the
Shared Parking Stalls is set forth on the map annexed hereto as Exhibit B and by this
reference incorporated herein and shall not be changed without the prior written consent of
City No parking stalls will be allocated to a particular condominium unit, hotel guest,
commercial tenant or any of their employees, invitees or customers.
(c) Short Term Parking For purposes of this Easement Agreement,
Short Term Parking means use of a parking stall by the same motor vehicle for up to three
(3) hours or less during any twenty four (24) hour period (excluding the hours between
midnight and 6 00 a.m ). The City shall have the nght to revise the definition of Short
Term Parking as it applies to the Parking Garage from time to time The City shall
F-3 P ORSOassue OWM05
periodically, but not more often than quarterly, review the use of the Parking Garage and
following consultation with the Parking Management Committee established pursuant to
Section 10 of this Easement Agreement ("Committee"), revise the definition of Short Term
Parking to maximize utilization of parking stalls in the Parking Garage by members of the
general public and hotel guests, condominium owners, Project Springboard and Second
Avenue Project Improvements tenants and their customers, while limiting use of the
Parking Garage by commuters and employees of organizations located in downtown Kent.
(d) Special Use Parkin Stalls.talls. The Parking Garage Owner may issue
special use parking permits to the owner of the Project Springboard Improvements in an
amount equal to the number of hotel rooms and number of bedrooms in all condominium
units built as part of the Project Springboard Improvements for use solely by Project
Springboard condominium owners and hotel guests Second Avenue shall be entitled to at
least seventy (70) special use permits for use solely by Second Avenue Project tenants,
with the total number of special use permits issued to Second Avenue based upon Second
Avenue's contribution toward the cost of the Parking Garage. A special use permit shall
entitle such permit holder the right to park in the Shared Parking Stalls for periods longer
than the then applicable Short Term Parking limit established by the City, on a first come,
first serve basis The Parking Garage Owner shall have the right to issue such special use
parking permits in the exercise of its business judgment and subject to such conditions and
limitations as it may determine from time to time and may charge for issuance of a special
use permit, provided, however, the Parking Garage Owner shall not issue more than one
special use parking permit per sold or leased condominium unit or occupied hotel room
and shall not issue Second Avenue more than one special use permit for each parking stall
purchased without the prior written consent of the City Upon request by any party to this
Easement Agreement from time to time, the parties shall confirm the total number of
special use permits that can be outstanding at any one time Special use permits are not
transferable and must be surrendered by the permit holder if the permit holder no longer
satisfies the requirements for a special use permit set forth in this Easement Agreement and
such additional qualifications as Developer or Second Avenue may establish from time to
time Parking Garage Owner and Second Avenue shall each maintain records regarding
the number of special use permits issued at any time including the name, address and status
of the special use permit holder (i.e , hotel guest, condominium unit owner or tenant), date
of issuance, motor vehicle license number and such other information as City or the
Committee may reasonably request The holders of special use parking permits may not
park in the Exclusive Public Parking Stalls at any time except with the prior written
consent of the City.
(e) Handicapped Parking Stalls. Notwithstanding the foregoing and
provided that there is no reduction in the number of Exclusive Parking Stalls available for
use by members of the general public, Parking Garage Owner may reserve parking spaces
on each level of the Parking Garage for use by persons with a valid disability parking
permit or license plate. The handicapped parking stalls shall be evenly distributed
FA P1DMDRS2l18 092"s
throughout the Parking Garage. Only persons with a valid disability parking permit or
license plate may park in a parking stall designated as handicapped parking.
(f) Uninterrupted Access to Parking Garage. Members of the general
public shall have free, open and continuous pedestrian and vehicular access to and from the
Parking Garage, the entrances and exits thereto and the sidewalks, streets and public rights
of way adjoining the Property, using existing elevators, stairs, skybndges, roadways,
driveways and sidewalks now or hereafter located on the Property, including but not
limited to the private street connecting Smith and Hamson Streets, at all times (subject to
the Parking Garage Owner's right to control pedestrian ingress and egress to the Parking
Garage after certain hours to protect the safety and security of patrons of the Parking
Garage). With the exception of the Exclusive Public Parking Stalls which shall be
reserved for Short Term Parking by members of the general public at all times, parking
spaces in the Parking Garage will be provided on an unreserved, first come, first served
basis. Persons utilizing the Parking Garage shall not be entitled to use any one particular
parking space and may not use more than one parking space at any one time for the
parking of a single vehicle Members of the general public shall also have the right to use
the restrooms located adjacent to the spa constructed as part of Project Springboard at no
charge.
3. Operation of the Parking Garage.
(a) Public Parking Garage. Parking Garage Owner shall at its sole cost
and expense, provide for the safe and efficient operation of the Parking Garage as a self-
park, public parking garage which can park at least three hundred fifty (350) multi-
passenger motor vehicles and which is open to members of the general public for public
parking twenty four (24) hours a day, seven (7) days a week in accordance with the terms
and conditions set forth in this Easement Agreement Parking Garage Owner shall pay all
Operating Expenses (as defined in Exhibit C) incurred in connection therewith. The
Parking Garage shall be operated and managed to maximize the availability of Short Tenn
Parking at all times in accordance with the provisions of this Easement Agreement.
(b) Compliance with All Laws Parking Garage Owner shall at its sole
cost and expense, operate the Parking Garage (and entrances, exits, elevators, stairs,
skybridges, sidewalks, driveways and roadways providing pedestrian and vehicular access
to the public and private streets adjoining the Property including, but not limited to the
private street that will connect Smith and Hamson Streets) in compliance with all
Requirements of Law, and in the event any use or operation of the Parking Garage shall
constitute a violation of any Requirements of Law, promptly following knowledge of such
violation take all steps reasonably necessary to remedy same Parking Garage Owner shall
secure at its sole cost and expense, all permits, licenses, permissions, consents and
approvals required to be obtained from governmental agencies or third parties in
connection with the operation of the Parking Garage or the making of repairs or
replacements to the Parking Garage or equipment thereon.
F-5 P 1DRSORS2UB 09/2905
(c) Signaee. Parking Garage Owner and City shall mutually agree on
the designation and signage in the Parking Garage and elsewhere on the Project
Springboard Improvements including designated entrances and exits to the Parking Garage
and the Project Springboard Improvements which are adequate to inform members of the
public of the location and means of access through the Project Springboard Improvements
to and from the Parking Garage, the location of the Exclusive Public Parking Stalls, the
then applicable time limitation on the use of the Exclusive Public Parking Stalls, the
location of Shared Parking Stalls, and the roadways, sidewalks and streets adjoining the
Property The final design and choice of materials for such signs shall be subject to City's
approval, which approval shall not be unreasonably withheld, conditioned or delayed.
(d) Parking Garage Rules Following consultation with the Committee,
the Parking Garage Owner may adopt, modify and enforce reasonable rules (the "Parking
Garage Rules") governing the use of the Parking Garage so long as such rules do not
restrict access to or from the Parking Garage by members of the general public parking in
the Parking Garage and are not inconsistent with the terms of this Easement Agreement
The Parking Garage Rules currently in effect are attached hereto as Exhibit D and by this
reference incorporated herein City acknowledges that Parking Garage Owner may refuse
to permit any person who violates the Parking Garage Rules to park in the Parking Garage
and any serious or repeated violation of the current Parking Garage Rules may result in the
removal of the motor vehicle belonging to such a person from the Parking Garage.
Parking Garage Owner shall post copies of the Parking Garage Rules in the various
entrances and exits to the Parking Garage and shall make copies of the Parking Garage
Rules available to the City and all Project Springboard condominium owners, tenants,
hotel guests, and their respective tenants, subtenants, invitees and customers who use the
Parking Garage, upon any change or modification thereof.
(e) Prohibited Uses.
(t) The layout, type and number of parking stalls and the
configuration of the parking spaces shall not be changed without the prior written consent
of the City The lighting, graphics, signage, structural support characteristics and locations
of exits and entrances to the Parking Garage shall not be materially changed from the as-
built plans and specifications for the Parking Garage without the prior written approval of
City
(d) Parking Garage Owner shall not do or permit anything to be
done in or about the Parking Garage nor bring or keep anything therein which will cause a
cancellation of any insurance policy covering the Parking Garage, nor shall Parking
Garage Owner sell or permit to be kept, used or sold in or about the Parking Garage any
articles which may be prohibited by the terms of the property insurance required to be
carried by the Parking Garage Owner pursuant to the provisions of Section 6 of this
Easement Agreement
F-6 P\DRSDRS2UB 09f29105
e
(iii) Parking Garage Owner shall not close any entrance or exit to
the Parking Garage that provides pedestrian or vehicular access to or from the Parking
Garage, or do or authorize anything to be done in or about Project Springboard or the
Parking Garage which will in any way obstruct or interfere with the rights of members of
the public to enter or exit the Parking Garage from the roadways, sidewalks and streets
adjoining the Property, including, but not limited to the right to use the private street
connecting Smith and Harrison Street to enter and exit the Parking Garage
Notwithstanding the foregoing, Parking Garage Owner shall have the right to close
portions of the Parking Garage in order to make necessary repairs or maintenance, which
repairs and maintenance shall be performed in accordance with the requirements of
Section 5 of this Easement Agreement, and, following consultation with the Committee,
may control pedestrian ingress and egress to the Parking Garage after certain hours to
protect the safety and security of patrons of the Parking Garage
(iv) Parking Garage Owner shall not permit the Parking Garage
to be used for any use other than as a self park, public parking garage, or be used for any
unlawful or objectionable purpose, nor shall the Parking Garage Owner cause, maintain or
permit any nuisance in, on or about the Parking Garage Parking Garage Owner shall not
commit or suffer to be committed any waste in or upon the Parking Garage.
(v) Parking Garage Owner shall not install or permit the
installation of any underground storage tanks in the Parking Garage, allow any person to
sell or dispense gasoline, diesel fuel or other petroleum products from fuel tanks located in
the Parking Garage, sell motor oil, nor allow any person to provide automobile repair
services (other than emergency repairs) in the Parking Garage
(vi) So as not to interfere with traffic flow to and from the
Parking Garage and within the various levels of the Parking Garage there shall be no sales
conducted within the Parking Garage without the prior written consent of City and no
kiosks, pushcarts or other merchandising units or obstructions shall be placed in the
Parking Garage or near the entrances or exits thereto without the prior written consent of
the City.
(vii) Parking Garage Owner shall not use the Parking Garage or
permit anything to be done in or about the Parking Garage which will in any way conflict
with any law, statute, ordinance or governmental rule or regulation or requirement of duly
constituted public authorities now in force or which may hereafter be enacted or
promulgated.
(vui) Parking Garage Owner shall operate and maintain or cause
the Parking Garage to be operated and maintained so that levels of carbon monoxide,
noxious fumes and other pollutants in the Parking Garage do not exceed levels in excess of
that established under applicable Environmental or other laws.
F-7 P%DRSIDR52UB 09129105
(ix) With the exception of the Exclusive Public Parking Stalls,
parking stalls reserved for use by persons with a valid disability parking permit or license
and special use parking permit holders, Parking Garage Owner shall not enter into daily or
monthly parking permits, written or oral agreements or other contracts granting any person
a right to park in the Parking Garage.
(f) Parking Management Plan. Parking Garage Owner shall supervise
the daily operation of the Parking Garage and shall, in consultation with the Committee,
develop and thereafter enforce a parking management plan to ensure that the Exclusive
Parking Stalls are used solely for Short Term Parking by members of the general public at
all times and that the remainder of the parking stalls in the Parking Garage are utilized in
the manner set forth in Section 2 of this Easement Agreement Parking Garage Owner
shall maintain records of the operation of the Parking Garage and utilization of the
Exclusive Parking Stalls and the Shared Parking Stalls, and shall provide periodic written
reports to the Committee regarding same. Parking Garage Owner shall monitor the daily
use of the Parking Garage and shall take such measures as may be reasonably necessary
given the utilization of the Parking Garage, to enforce the limitations on use of the parking
stalls set forth in Section 2 of this Easement Agreement Such measures may include, in
addition to signage notifying patrons of the Parking Garage that the Exclusive Public
Parking Stalls are reserved at all times for use by members of the general public and the
current Short Term Parking limit for parking in the Parking Garage, issuance of warning
notices, use of security patrols, observation, or other means necessary to monitor parking
compliance The Parking Garage Owner shall in consultation with the Committee
establish, assess and collect penalties from persons who exceed the then applicable Short
Term Parking limit and do not have a valid special use permit Unauthorized vehicles
remaining in any parking stall for more than the then applicable Short Term Parking limit
may be removed by the Parking Garage Owner at the vehicle owner's expense if the
vehicle in question has received more than three (3) ticketed warnings during any thirty
(30) day period, and shall be removed from the Exclusive Parking Stalls by the Parking
Garage Owner at the vehicle owner's expense if requested by the City.
4. Parking Charges. Parking Garage Owner shall not charge for the right to
park in the Parking Garage until such time as the City charges for parking on any of its
streets, or City-owned surface parking lots or parking structures located within the Kent
Station Planned Action Ordinance Area. Parking Garage Owner acknowledges that City
would not have entered into the Replacement Parking Agreement or agreed to accept this
Easement Agreement in exchange for the City Replacement Property but for the agreement
by Developer and its successors and assigns as owners of the Parking Garage to not charge
for parking in the Parking Garage until such time as the City charges for parking on any
City streets located within the Kent Station Planned Action Ordinance Area, or City-owned
surface parking lots or parking structures located within the Kent Station Planned Action
Ordinance Area Each party to this Easement Agreement agrees that this provision was
specifically negotiated by the parties, is a material inducement to the City to enter into this
Easement Agreement and that any breach or attempted breach of the terms of this
F-O P 1DRSIDRS2UB 09/29/05
Section 4 by the Parking Garage Owner would cause irreversible and substantial damages
to the City that would be extremely difficult or impracticable to determine Accordingly,
City shall be entitled to seek an injunction or other equitable relief from a court of
competent jurisdiction to enjoin a breach of the provisions of this Section 4.
5. Maintenance of Parking Garage.
(a) Maintenance Requirements. Parking Garage Owner shall, at its sole
cost and expense, maintain the Parking Garage (and entrances, exits, elevators, stairs,
skybndges, sidewalks, driveways and roadways providing pedestrian and vehicular access
to the public and private streets adjoining the Property including, but not limited to the
private street that connects Smith and Harrison Streets) in first class order, condition,
appearance and wear, in accordance with standards prevailing in first class mixed-use
developments including multilevel structured parking garages and the multilevel structured
parking garage owned, operated and maintained by the Central Puget Sound Regional
Transit Authority in connection with its Kent commuter rail station The Parking Garage
Owner shall prepare and submit to the Committee for its review and approval an annual
operating budget and detailed operating agreement for the Parking Garage which shall
comply with all Requirements of Law and this Easement Agreement The initial operating
agreement for the Parking Garage shall be agreed to by the Developer, the City and Second
Avenue prior to November 15, 2005. As part of such maintenance obligation, Parking
Garage Owner shall take all action and shall perform all interior and exterior, structural
and non-structural, foreseen and unforeseen, ordinary and extraordinary, maintenance and
repairs (including, without limitation, all necessary repair, replacements and other work
required following any damage, destruction or condemnation of the Parking Garage) or
any work required under Requirements of Law, as a condition to the continued use of the
Parking Garage for parking purposes or any work required by any order of any court or
other governmental agency with jurisdiction over the Parking Garage required to keep the
Parking Garage (and entrances, exits, elevators, stairs, skybridges, sidewalks, driveways
and roadways providing pedestrian and vehicular access to the public and private streets
adjoining the Property, including, but not limited to the private street that connects Smith
and Harrison Streets) in first class order. condition and repair. All repairs, replacements
and renewals shall be substantially equal or superior in quality and class to the original
construction work It is expressly agreed that City shall not be required to maintain, repair
or rebuild all or any part of the Parking Garage and shall have no obligation to maintain all
of any part of the Parking Garage
(b) City Maintenance Notices. City shall provide the Parking Garage
Owner written notice of any maintenance or repair required to the Parking Garage (or any
entrance, exit, elevator, stair, skybridge, sidewalk, driveway or roadway providing
pedestrian and vehicular access to the public and private streets adjoining the Property,
including, but not limited to the private street that connects Smith and Harrison Streets) or
of any default by Parking Garage Owner in the performance of its obligations under this
Section 5 Parking Garage Owner shall have five (5) business days after receipt of notice
F-9 P ORswRszue 09/29/05
from City detailing the need for maintenance or repair, to commence to perform its
obligations under this Easement Agreement or, in the event Parking Garage Owner cannot
commence performance within such five (5) business day period, deliver a detailed
maintenance and/or repair plan within such time period together with a schedule for
commencement and completion of the maintenance or repair work. Notwithstanding the
foregoing, Parking Garage Owner shall perform its obligations as soon as possible if the
nature of the problem presents a hazard, threat to public safety or emergency Parking
Garage Owner shall notify City at least thirty (30) days in advance of any temporary
closure of all or any portion of the Parking Garage in connection with normal maintenance
and in all other cases as soon as Parking Garage Owner becomes aware of the need for
temporary closure of the Parking Garage in whole or in part All work shall be scheduled
and conducted in a manner to minimize closure of the Parking Garage or unavailability of
the Exclusive Public Parking Stalls for parking by members of the general public, in whole
or in part, and to the greatest extent practicable all work shall be conducted between the
hours of 5.00 p in and 5 00 a.m. each weekday or on weekends Parking Garage Owner
shall limit access to the Parking Garage and parking stalls by its contractors or
maintenance personnel to those portions necessary to conduct repairs, replacement or
maintenance of the Parking Garage or the parking stalls and shall cause its contractors
and/or maintenance personnel to promptly finish any work for which they entered the
Parking Garage
(c) Environmental Condition of the Parking Garage Parking Garage
Owner shall operate and maintain the Parking Garage in compliance with all
Environmental Laws and shall not cause or permit any Hazardous Substance to be brought
upon, kept or used in or about the Property, the Parking Garage or the Project Springboard
Improvements (except for reasonable quantities of Hazardous Substances as may be
required to operate and maintain the Project Springboard Improvements and maintain the
Parking Garage in accordance with the requirements of this Easement Agreement, which
Hazardous Substances shall be stored, used and disposed of in accordance with all
Environmental Laws each as defined in Exhibit E hereto). If Parking Garage Owner
breaches its obligations under this Easement Agreement or if, as a result of any action or
inaction by Parking Garage Owner or any of its agents, employees, invitees, contractors or
subcontractors, or as a result of its maintenance of the Parking Garage, there are Hazardous
Substances in, on, about or under the Property, the Parking Garage or the Project
Springboard Improvements in excess of the quantities permitted under applicable
Environmental Laws, Parking Garage Owner shall, at its sole cost and expense, perform all
Remedial Work (as defined in Exhibit E) to the Property, the Parking Garage and/or
Project Springboard Improvements necessary to comply with then applicable
Environmental Laws.
(d) Alterations and Additions Parking Garage Owner shall have the
right at any time and from time to time to make renovations, alterations and additions to
the Parking Garage or any part thereof, provided, however that any such change,
renovation, alteration or addition.
F-10 P1DRSIDRS2UB 09129105
(i) shall not violate any term of this Easement Agreement,
change the use of the Parking Garage, impair the structural integrity of the Parking
Garage or interfere with the right of members of the public to park in the Parking
Garage on the terms and conditions set forth in this Easement Agreement,
(ii) shall be effected with due diligence in good and
workmanlike manner and in compliance with all Requirements of Law and
insurance requirements; and
(iii) shall be promptly and fully paid for by Parking Garage
Owner.
(e) On-Going Inspections. On the tenth (loth) anniversary of this
Easement Agreement and every five (5) year interval thereafter (each an "Inspection
Date"), Parking Garage Owner shall, following consultation with City, retain an
independent qualified construction professional with at least five (5) years of experience
inspecting multilevel structured parking structures comparable to the Parking Garage in the
greater Seattle metropolitan area mutually acceptable to Parking Garage Owner and the
City (the "Inspector") to conduct a physical inspection of the condition of the Parking
Garage (including all major budding and utility systems, machinery and equipment,
elevators, public lobbies and other common areas). Within thirty (30) days following such
inspection, the Inspector shall deliver a copy of its report ("Inspection Report") to Parking
Garage Owner and the City including a descnption of what corrective work, if any, needs
to be undertaken to restore the Parking Garage (including all entrances, exits, elevators,
stairs, skybndges, sidewalks, driveways and roadways providing pedestrian and vehicular
access to the public and private streets adjoining the Property including, but not limited to
the private street that connects Smith and Harrison Streets) to first class condition and state
of repair (the "Corrective Work"), and a description of what work if any, need to be made
to the Parking Garage (or the entrances, exits, elevators, stairs, skybndges, sidewalks,
dnveways and roadways providing pedestrian and vehicular access to the public and
private streets adjoining the Property including, but not limited to the private street that
connects Smith and Harrison Streets) in order to maintain the Parking Garage in first
class, condition and state of repair (the "Maintenance Work") and a recommended
schedule of Corrective Work and Maintenance Work to be performed during the next five
(5) year period. Parking Garage Owner shall promptly commence all Corrective Work
identified by the Inspector in the Inspection Report and shall diligently and continuously
prosecute the Corrective Work to completion Parking Garage Owner shall provide City
with a copy of the Maintenance Work Plan and construction schedule which shall be
approved by the City Parking Garage Owner shall thereafter perform the Maintenance
Work recommended by the Inspector in the Inspection Report and shall complete such
work in accordance with the schedule set forth in the Maintenance Work Plan Disputes
between Parking Garage Owner and the City regarding the Inspection Report, the
Corrective Work Plan or the Maintenance Work Plan shall be referred to an independent
F-I I PORSORSWB 09129005
a
mediator for resolution pursuant to the independent dispute mediation process set forth in
subsection (f) below
(f) Mediation of Disputes. City and Parking Garage Owner agree to
follow the independent dispute mediation process set forth in this Section 5(f) to attempt to
resolve disputes regarding the proposed Maintenance Work Plan or Corrective Work Plan
in an economic and time efficient manner and without resort to litigation so that the
proposed Maintenance Work Plan or Corrective Work Plan (collectively, "Work Plans")
conforms to the requirements of this Easement Agreement and any mamten,.nce work or
repairs made to the Parking Garage (including all entrances, exits, elevators, stairs,
skybridges, sidewalks, driveways and roadways providing pedestrian and vehicular access
to the public and private streets adjoining the Property) are made in an cost-efficient,
appropriate and timely manner In the event a dispute arises between City and Parking
Garage Owner regarding the proposed Work Plans, either party may, by delivering written
notice to the other, refer the matter to an independent construction professional with
experience in the management and repair of multilevel structured parking garages
comparable to the Parking Garage mutually approved by City and the owner ("Mediator")
whom the City and the Parking Garage Owner have mutually designated as an independent
mediator to mediate the dispute regarding the proposed Work Plans. Within the fifteen
(15) business day period following receipt of notice referring the matter to Mediator, the
City the Parking Garage Owner and the Inspector shall submit all necessary information
with respect to the matter as to which there is a dispute to Mediator to make a final
recommendation. Mediator shall be entitled to consult independently with any of the
parties or such of their respective consultants as Mediator determines necessary in order
for it to make a final recommendation as to the matter within five (5) business days after
receipt of the above information Any costs incurred in connection with the mediation of
the matter under dispute (other than each parry's legal fees), including payment of fees to
Mediator, shall be paid by the substantially non-prevailing party
6. Insurance.
(a) Property Insurance. So long as this Easement Agreement remains in
effect Parking Garage Owner or the condominium association consisting of the owners of
the Parking Garage and the Project Springboard Improvements, shall maintain property
insurance on the Parking Garage in an amount not less than the full insurable replacement
cost of the Parking Garage (exclusive of the cost of excavations, foundations and footings
below the lowest basement floor) insuring against loss or damage by fire and such other
risks as may be covered from time to time by a "special cause of loss" form of property
msurance and specifically against the following perils: fire, windstorm, hail, cyclone,
tornado, riots, terrorism, civil commotion, malicious mischief, vandalism, aircraft, vehicle,
smoke damage and sprinkler leakage, earthquake and explosion The Parking Garage
Owner or the condominium association, at its option, may obtain such additional coverages
or endorsements as the Parking Garage Owner or such condominium association deems
appropriate or necessary, including, without limitation, business income and rent loss
F-12 P1DRSORS2UB 09rM05
insurance, boiler and machinery insurance, flood insurance and other coverages. The
Parking Garage Owner or the condominium association may maintain such insurance in
whole or in part under blanket policies, so long as that does not reduce the type or amount
of coverage required under this Easement Agreement The cost of such insurance shall be
paid by the Parking Garage Owner as part of the operating expenses associated with the
Parking Garage to be paid by the Parking Garage Owner.
(b) Parking Garage Owner's Commercial Liability Insurance. So long
as this Easement Agreement remains in effect, Parking Garage Owner shall obtain and
keep in force general commercial liability insurance, on an occurrence basis, insuring
Parking Garage Owner and City against claims for personal injury (including, without
limitation, bodily injury or death), property damage liability and such other loss or damage
from such causes of loss as are embraced by insurance policies of the type now known as
"Commercial General Liability Insurance," with a combined single limit of not less than
$2,000,000 per occurrence and 53,000,000 in the aggregate (per policy year). Parking
Garage Owner shall name City as an additional insured and such owner's policy shall be
primary and non-contributory to any coverage maintained by City
(c) Insurance Policy Requirements. All insurance required under this
Easement Agreement shall (i) be issued by insurance companies authorized to do business
in the State of Washington with a rating reasonably satisfactory to Parking Garage Owner
and City, (u) be issued as a primary policy in the case of insurance obtained by the Parking
Garage Owner pursuant to Section 6(b), and (ni) contain an endorsement requiring thirty
(30) days' prior written notice (ten (10) days for non-payment of premiums) from the
insurance company to the Parking Garage Owner and City and any additional insured or
lender before cancellation or change in the coverage, scope, or amount of any policy. Each
policy or a certificate of the policy shall be deposited with the other party on or before the
effective date of this Easement Agreement, and as reasonably available upon replacement
or renewal of each policy
7. Indemnification. Parking Garage Owner shall protect, indemnify, defend
and hold City harmless from and against any and all claims, debts, causes of action,
demands, obligations, losses, damages, liabilities, judgments or expenses (including
reasonable attorney's fees and costs with or without trial or on appeal) now or hereafter
arising in connection with the design, development, construction, operation, maintenance,
repair or management of the Parking Garage or arising from any act or omission of the
Parking Garage Owner, its agents and employees (including, but not limited to, liability
imposed by law or for breach of any statutory duty or administration rule or regulation,
death or injury to any person or destruction, loss or damage to property) and all claims for
personal injury or property damage suffered by persons using the Parking Garage Upon
receipt of written notice of any such claim from City, Parking Garage Owner shall defend
any such claim at its expense and with counsel reasonably satisfactory to City This
indemnification shall survive the expiration or other termination of this Easement
F-13 P%DRSkDRS2UB 0er29M
Agreement and is for the sole benefit of the City and shall not inure to the benefit of any
third party.
8. Damage or Destruction to Parking Garage. In the event the Parking Garage
shall be damaged or destroyed by fire or other casualty that renders the Parking Garage
unusable, the Parking Garage Owner shall, at its sole cost and expense, repair the Parking
Garage in full compliance with all legal requirements and to substantially the same
condition, appearance, layout, configuration and parking capacity and at least equal value
and general utility as nearly as possible to that existing prior to such damage or destruction
under then applicable building code, land use, zoning and other legal requirements
(collectively, the "Restoration") This Easement Agreement will remain in full force and
effect and the Parking Garage Owner shall commence and complete the Restoration with
all commercially reasonable diligence and speed The Parking Garage Owner shall notify
City with the estimated dates of commencement and completion of construction of the
Restoration as soon as such information is available.
9. Condemnation of Parking Garage. If all or any portion of the Parking
Garage (or the entrances or exits thereto, including but not limited to the private street
connecting Smith and Harrison Streets) is damaged or taken under power of eminent
domain or sold to a condemning authority in lieu thereof (collectively "Condemnation")
the rights and obligations of Parking Garage Owner and City shall be determined as
follows:
(a) Condemnation of All or Substantially all of the Parking Garage. If
there is a taking or damaging of all or any portion of the Parking Garage, by the exercise of
any governmental power, whether by legal proceedings or otherwise by a governmental
agency with jurisdiction or a transfer by the owner under threat of condemnation or while
legal proceedings for condemnation are pending (a"Condemnation") such that there can be
no reasonable use of the Parking Garage by members of the public, then this Easement
Agreement shall automatically terminate on the date the condemning authority has the
nght to possession of the property being condemned
(b) Partial Condemnation. If only a portion of the Parking Garage shall
be taken in connection with a Condemnation and the remainder of the Parking Garage not
so taken can be made usable in the reasonable judgment of the City and the Parking
Garage Owner, then this Easement Agreement shall continue in full force and effect as to
the remainder of the Parking Garage, all of the terms and conditions of this Easement
Agreement shall continue in full force and effect, there shall be no reduction in the number
of Exclusive Parking Stalls and the Parking Garage Owner shall rebuild the remainder of
the Parking Garage in accordance with the requirements of Section 8
(c) Condemnation Award. The Parking Garage Owner is entitled to
receive and keep all damages, awards or payments resulting from or paid on account of a
Condemnation of the Parking Garage in whole or in part City is entitled to receive and
keep all damages, awards or payments resulting from any loss or damage to City's rights
F-14 P IDRMDR52UB 09/2905
under the Easement Agreement, including any award payable in connection with the
condemnation of City's easement rights. City shall file a separate claim with the
condemning authority for any loss of or damage to City's rights under this Easement
Agreement In the event the condemning authority does not enter separate awards for the
taking of the City's rights and easements under this Easement Agreement on the one hand,
and the taking of the Parking Garage on the other hand, or does not allocate the award
between the City's rights and easements under this Easement Agreement and the Parking
Garage on the other hand, either party shall have the right to request the court for an
allocation of the award.
10. Parkimz Management Committee. A five (5) person parking management
committee (the "Committee") shall be formed within sixty (60) days following the
recording of this Easement Agreement. The Committee shall consist of two
representatives designated by City, two representatives designated by Parking Garage
Owner, and one (1) representative designated by Second Avenue. The chair of the
Committee shall be the parking services manager for the Parking Garage Owner or the
Parking Garage Owner's designee. The Committee shall meet at least quarterly or as
otherwise determined by the Committee The purpose of the Committee is to provide
guidance and direction to the Parking Garage Owner on matters related to Parking Garage
operation, including signage, lighting, safety, security devices, scheduling of deliveries to
the Project Springboard Improvements or Parking Garage, resolution of parking issues
associated with use of the conference center, scheduling of routine and other maintenance,
use of the loading dock, traffic circulation, parking enforcement and other matters relating
to the Parking Garage If requested by the Committee, the Parking Garage Owner shall
engage an independent nationally recognized manager of parking garages with substantial
experience operating multi-level parking garages in mixed use developments comparable
to Project Springboard (the "Parking Consultant"), to advise the Parking Garage Owner
and the Committee on issues relating to security, safety, utilization of parking spaces in the
Parking Garage to maximize capacity and minimize conflict among users, enforcement of
Short Term Parking limits, customer satisfaction, and issues relating to on-going
operations, maintenance and repair of the Parking Garage The Parking Garage Owner
shall, following consultation with the Committee, adopt the recommendations of the
Parking Consultant which do not violate Requirements of Law or the terms and conditions
set forth in this Easement Agreement to the extent reasonably feasible The City shall have
the sole right to revise the definition of Short Term Parking, determine the rights of
persons to park in the Exclusive Public Parking Stalls and matters affecting the public's
rights to park in the Exclusive Public Parking Stalls Except as expressly provided in this
Easement Agreement, the Parking Garage Owner shall make all other operational decisions
relating to the Parking Garage subject only to the provisions of this Easement Agreement
and applicable law and shall be solely responsible for the enforcement of all parking
restrictions set forth in this Easement Agreement or agreed upon by the Committee The
Parking Garage Owner shall consider the advice of the Committee before taking action on
the subject about which such advice was given.
F-15 P ORSORMB 09/29/05
11 Parking Garage Owner's Use of Parking Garage The Parking Garage
Owner reserves for itself all rights associated with its ownership of the Parking Garage,
including the right to grant its invitees, tenants and hotel guests of the Project Springboard
Improvements the right to park in the Parking Garage so long as such rights do not
interfere with the rights granted City under this Easement Agreement The Parking Garage
Owner shall have the right to grant other persons easement rights in, on, under, through
and across the Parking Garage so long as such easement rights do not interfere with the
rights to park in the Parking Garage set forth in Section 2 of this Easement Agreement.
12. Default and Remedies.
(a) Dental of Access. If access to the Parking Garage is dented by the
Parking Garage Owner to members of the general public for reasons which City believes
are not permitted under this Easement Agreement, City shall provide the Parking Garage
Owner with written notice of the actions that it believes constitutes a breach of its parking
easement rights under this Easement Agreement Parking Garage Owner shall have ten
(10) days following receipt of written notice in which to restore such access or provide
City with notice in writing why it believes its actions are permitted under the terms of this
Easement Agreement In the event Parking Garage Owner has not restored access to
members of the general public within ten (10) days following Parking Garage Owner's
receipt of written notice, City may petition a court of competent jurisdiction in King
County, Washington for entry of an order of specific performance, provided, however, that
the foregoing shall not be City's exclusive remedy and City shall be entitled to seek
damages or an injunction or other equitable relief from a court of competent jurisdiction
(b) Failure to Perform Other Obligations In the event the Parking
Garage Owner fails to perform its obligation to operate and maintain the Parking Garage in
accordance with its duties and obligations under this Easement Agreement and after notice
and opportunity to cure, in addition to its rights to seek an order of specific performance or
other equitable relief from a court of competent jurisdiction, City shall have the right, at
Parking Garage Owner's cost and expense, to take such actions and expend such funds as
are reasonably required to operate, maintain and repair the Parking Garage (and entrances,
exits, elevators, stairs, skybridges, sidewalks, driveways and roadways providing
pedestrian and vehicular access to the public and private streets adjoining the Property) in
first class order. condition and repair and otherwise in accordance with the requirements of
this Easement Agreement. Any amount so expended by City shall be reimbursed by the
Parking Garage Owner promptly after demand together with interest at twelve percent
(12%) per annum if not paid in full within thirty (30) days following receipt of an invoice
for such expense. City shall have no liability to the Parking Garage Owner as a result of
the performance of any such work by City Nothing in this Easement Agreement shall
imply any duty or obligation upon the part of City to do any such work or to make any
such repairs and/or maintenance and the performance thereof by City shall not constitute a
waiver of the Parking Garage Owner's default in failing to perform the same
F-16 P MRSDRMB 09129(05
(c) Remedies not Exclusive The remedies set forth above and
elsewhere in this Easement Agreement are not exclusive and City may pursue any other
remedies now or hereafter permitted or available to City under law or equity
13. Payment of Taxes, Liens and Other Charges. Parking Garage Owner will
pay or cause to be paid when due
(a) All taxes, assessments and other governmental or public charges
affecting the Property or the Parking Garage and any accrued interest, costs and/or
penalties thereon and upon request by City will submit receipts therefore to City promptly
following payment;
(b) All premiums for all insurance policies required to be maintained in
full force and effect pursuant to the provisions of Section 6,
(c) All encumbrances (including any debt secured by deeds of trust),
ground rents, liens and/or charges, with interest which are filed against the Property and/or
the Parking Garage and all costs and expenses related thereto, and
(d) All charges for utilities or services, including, but not limited to,
electricity, gas, water, sewer, garbage collection and telephone service;
(e) Should Parking Garage Owner fail to make any payment or do any
act as provided in this Section 13, then City shall have the right, but not the obligation and
upon reasonable prior notice to or demand upon Parking Garage Owner (except for
monetary defaults and defaults in the payment of taxes, assessments or other governmental
charges or insurance for which no prior written notice or demand shall be required) and
without releasing Parking Garage Owner from any obligation therefor, make or do the
same in such manner and to such extent as it may deem necessary to protect its rights
under this Easement Agreement, including the right to enter upon the Property and the
Parking Garage for such purpose, commence, appear in and defend any action or
proceeding purporting to affect its rights under this Easement Agreement, pay, purchase,
contest or compromise any encumbrance, charge or lien and in exercising any such power,
incur any liability, expend reasonable amounts necessary therefore, including cost of
evidence of title, employ an attorney and pay said attorney's reasonable fees Any amount
so expended by City shall be reimbursed by Parking Garage Owner promptly after demand
together with interest at the rate of twelve percent (12%) per annum if not paid in full
within thirty (30) days following receipt of an invoice detailing such expense.
14. Notices. All notices, demands, requests, consents and approvals
which may, or are required to be given by any party shall be in writing and shall be in
writing and shall be validly given or made to the other parties if delivered either
personally, or by overnight delivery service of recognized standing, or by United States
Mail, certified, registered, or express mail with postage prepaid, or by facsimile
transmission with electronic confirmation of receipt If such notice is personally delivered
F-17 P lDR5lDR52UB 09/29105
or delivered by facsimile during normal business hours, it shall be conclusively deemed
given at the time of such delivery. If such notice is delivered by facsimile after normal
business hours or is delivered by overnight delivery service, it shall be deemed given one
(1) business day after receipt thereof(if sent by facsimile transmission) or one (1) business
day after the deposit thereof with such delivery service If such notice is mailed as
provided herein, notice shall be deemed given three (3) business days after the deposit
thereof in the United States Mail Each such notice shall be deemed given only if properly
addressed to the party to whom such notice is to be given as follows
To City: City of Kent
220 Fourth Avenue
Kent, Washington 98030
Attn City Clerk
Fax. (253) 856-6725
With a copy to: City of Kent
220 Fourth Avenue
Kent, Washington 98030
Attn: City Attorney
Fax. (253) 856-6770
To Developer: Springboard Holdings, L L C
1627 East Sammarmsh Place SE
Sammamish, Washington 98075
Atm- Ben Errez
Fax (425) 369-9949
With a copy to: Plan B Development, L.L.C.
12889 Casino Drive
Anacortes, Washington 98221
Fax (425) 936-7329
With a copy to: Chairman
Swinomish Indian Tribal Community
P O. Box 817
LaConner, Washington 98257
Fax (360) 466-5309
To Second Avenue: Second Avenue Real Estate LLC
1301 Fifth Avenue, Suite 2600
Seattle, Washington 98101
Attn Ben Porter
Fax (206) 587-0579
F-18 P ORS ORS2UB 09rM05
Any party hereto may change its address for the purpose of receiving notices as
herein provided by a written notice given in the manner aforesaid to the other parties
hereto
15. Miscellaneous.
(a) Captions. The captions and paragraph headings contained in this
Easement Agreement are for convenience of reference only and in no way limit, describe,
extend or define the scope or intent of this Easement Agreement, nor the intent of any of
the provisions hereof
(b) Amendments; Waivers. No modification or amendment of this
Easement Agreement may be made except by written agreement or as otherwise may be
provided in this Easement Agreement No failure by City or the Parking Garage Owner to
insist upon the strict performance of any covenant, duty, agreement or condition of this
Easement Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute a waiver of any such breach or any other covenant, agreement, term or
condition Any party hereto, by notice and only by notice as provided in Section 14 of this
Easement Agreement may, but shall be under no obligation to, waive any of its rights or
any conditions to its obligations hereunder. or any duty, obligation or covenant of any
other party hereto No waiver shall affect or alter this Easement Agreement and each and
every covenant, agreement, term and condition of this Easement Agreement shall continue
in full force and effect with respect to any other then existing or subsequent breach thereof.
(c) Merger of Prior Agreements. This Easement Agreement and the
Replacement Parking Agreement and exhibits hereto and thereto constitute the entire
agreement between the parties with respect to the parking easements intended to be granted
by Developer in favor of City as contemplated by Section 3 4 of the Replacement Parking
Agreement and supersedes all prior and contemporaneous agreements and understandings
between the parties hereto relating to the subject matter hereof
(d) No Partnership or Joint Venture It is not intended by this Easement
Agreement to, and nothing contained in this Easement Agreement shall, create any
partnership, joint venture or other arrangement between the Parking Garage Owner,
Second Avenue and City except that of parties to an easement No term or provision of
this Easement Agreement is intended to be, or shall be, for the benefit of any person, firm,
organization or corporation not a party hereto, and no such other person, firm, organization
or corporation shall have any right or cause of action hereunder.
(e) Termination of Easements. The easements granted in favor of City
under this easement are perpetual, and can be terminated only by an agreement executed in
writing by City and the Parking Garage Owner which termination agreement is thereafter
recorded in the real property records.
F-19 P 1DRSM)RS2US 09/29/05
(f) Time is of the Essence Time is hereby expressly declared to be of
the essence of this Easement Agreement and of each and every term, covenants, agreement
condition and provision hereof
(g) Burden and Benefit. The easements granted under this Easement
Agreement run with the land and the rights, duties, covenants, restrictions, agreements,
limitations and obligations herein created shall constitute covenants running with the land,
shall burden the Property and the Parking Garage, and all such easements, covenants,
restrictions, agreements, limitations and obligations contained herein shall be binding upon
and inure to the benefit of the successors and permitted assigns of the respective parties
hereto Developer agrees that City may transfer its rights under this Easement Agreement
whether voluntarily, involuntarily, by operation of law or otherwise, to any city, county,
governmental subdivision or agency or other municipal corporation.
(h) Neutral Authorship In connection with the execution and delivery
of this Easement Agreement, each party has been represented by counsel. Each of the
provisions of this Easement Agreement has been reviewed and negotiated, and represents
the combined work product of both parties hereto. The language in all parts of this
Easement Agreement shall be construed as a whole according to its fair meeting No
presumption or other rules of construction which would interpret the provisions of this
Easement Agreement in favor of or against the party preparing the same shall be applicable
in connection with the construction or interpretation of any of the provisions of this
Easement Agreement.
(i) Non Waiver of Governmental Rights. Nothing contained in this
Easement Agreement shall require City to take any discretionary action relating to
development of the improvements to be constructed on the Property as part of Project
Spnngboard, including, but not limited to, zoning and land use decisions, permitting, or
any other governmental approvals or enforcement of fire or building codes or other
Requirements of Law applicable to the Parking Garage
�) Priority of Easements granted under this Easement Agreement. The
public parking and other easements granted under this Easement Agreement shall have
priority over any and all liens, encumbrances, leases, subleases, or other interests in the
Parking Garage, including, but not limited to any condominium declaration which may be
recorded against the Property. The Parking Garage Owner shall, at its sole cost and
expense, obtain any and all consents and/or subordinations of other interests in the
Property or the Parking Garage, including the subordination of the rights of owners under
any condominium declaration, the subordination of the rights of any mortgagees, lessees,
sublessees, successors and assigns as may be necessary to assure the City its rights under
this Easement Agreement are and remain free and clear of all liens, exceptions,
encumbrances or other interests affecting the rights of the public to park in the Parking
Garage or the rights of the City under this Easement Agreement.
F-20 P%DRSIDRS2UB OWS MS
(k) Attorneys' Fees. Each party shall be responsible for payment of the
legal fees of its counsel in the event of any litigation, mediation, arbitration or other
proceeding brought to enforce or interpret or otherwise arising out of this Easement
Agreement.
(1) Governing Law. This Easement Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Washington. In the
event of any litigation to enforce or interpret the rights, duties and obligations of the parties
set forth in this Easement Agreement, venue of any such legal action shall lie exclusively
in King County Superior Court and the parties waive the right to file suit elsewhere.
IN WITNESS WHEREOF. Developer, Second Avenue and City have executed this
Easement Agreement as of the date and year first set forth above.
DATED this day of 12006.
SECOND AVENUE: DEVELOPER.
SECOND AVENUE REAL ESTATE LLC, SPRINGBOARD HOLDINGS, L.L.C.,
a Washington limited liability company a Washington limited liability company
By By:
Name- Name
Title: Title:
Approved as to Form: CITY:
CITY OF KENT, a Washington municipal 1
corporation
City Attorney
By
Name:
Title:
F-21 P)DRS\DRS2UB 0MW05
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that
is the person who appeared before me, and said person acknowledged that he signed this
instrument, and on oath stated that he was authorized to execute the instrument as the
of SPRINGBOARD HOLDINGS, L L C , a Washington fronted
liability company, and acknowledged it to be the free and voluntary act of said
SPRINGBOARD HOLDINGS, L.L.C., for the uses and purposes mentioned in the
instrument
DATED-
NOTARY PUBLIC in and for the State of
Washington residing at
Print Name.
My commission expires:
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that
is the person who appeared before me, and said person acknowledged that he signed this
instrument, and on oath stated that he was authorized to execute the instrument as the
of SECOND AVENUE REAL ESTATE, LLC, a Washington limited
liability company, and acknowledged it to be the free and voluntary act of said SECOND
AVENUE REAL ESTATE, LLC, for the uses and purposes mentioned in the instrument
DATED:
NOTARY PUBLIC in and for the State of
Washington residing at
Print Name:
My commission expires:
F-22 P\DRS\DRS2UB 09029/05
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that
and are the persons who appeared before me and said
persons acknowledged that they signed this instrument, and on oath stated that they were
authorized to execute the instrument as the and
of CITY OF KENT, a Washington municipal corporation,
acknowledged it to be the free and voluntary act and deed of said corporation for the uses
and purposes mentioned in the instrument
DATED:
NOTARY PUBLIC in and for the State of
Washington residing at
Print Name-
My commission expires:
F-23 POR&DRS2UB 09n9105
EXHIBIT A
Legal Description of Parking Garage
[To be provided by Title Company prior to Closing ]
F-A-1 PwRSMRszue o9129M
EN IIBIT B
Map of Parking Garage
[To be provided by Developer and approved by City prior to November 15, 2005.]
F-B-1 P1DRS\DRSWB 09129V05
EXHIBIT C
Definition of Operating Expenses
Operating Expenses include all costs incurred by Parking Garage Owner either directly or
through a parking operator, parking lessee or property manager in connection with the
ownership, use, operation, management, maintenance or repair of the Parking Garage (and
entrances, exits, elevators, stairs, skybridges, sidewalks, driveways and roadways
providing pedestrian and vehicular access to the public and private streets adjoining the
Property including, but not limited to the private street that connects Smith and Harrison
Streets) and the restrooms located near the spa facing the Town Square Public Plaza
constructed as part of Project Springboard. Operating Expenses include, but are not
limited to, the following. All utility services provided to the Parking Garage and
restrooms; all permits, licenses and certificates necessary to operate, manage and maintain
the Parking Garage and any building elevators; all property, liability and other insurance
premiums applicable to the Parking Garage including any deductible cost the Parking
Garage Owner incurs in connection with any covered loss; worker's compensation
insurance, the purchase or rental of supplies, tools, equipment and materials used in
connection with the ownership, use, operation, management, maintenance, repair or
restoration of the Parking Garage; expenses incurred in order to comply with any laws,
regulations or governmental requirements of any kind, fees, if any, paid to parking
operators, parking lessees or other property management companies; wages, salaries and
other compensation and benefits for all persons engaged in connection with the repair,
maintenance, restoration or operation of the Parking Garage, including employer's Social
Security taxes, unemployment taxes or insurance, and any other taxes which may be levied
on such wages, salaries, compensation and benefits, all Property Taxes (defined below), all
operating costs of the Parking Garage and all Parking Garage systems and their equipment
and component services, including, but not limited to, janitorial service, trash removal,
lighting, security, operation and maintenance of elevators, stairs, skybridges, sidewalks,
walkways, driveways, trash removal, cleaning and maintenance, drainage facilities and
curbs, including resurfacing, repaving and re-striping of parking facilities, roof
maintenance, repair and replacement, maintenance and repair of the Parking Garage,
removal of ice and snow, and any service or maintenance contracts related to such
operation, repair, maintenance and replacement and reasonable reserves for periodic
maintenance and repair "Property Taxes" means all federal, state, county or local
governmental or municipal taxes, assessments, levies, fees, charges or other impositions of
every kind and nature levied against the Parking Garage including, without limitation, real
and personal property taxes, general and special assessments, transit taxes, water and sewer
rent or other similar taxes, fees or changes in taxes assessed in lieu of any of the foregoing
excluding inheritance taxes The parties agree that Operating Expenses include the cost of
acquisition, installation, operation, maintenance, upgrade or replacement of parking
security and access systems.
F-C-i PwRsNDRs2us 09/22/05
E)GUBIT D
Parking Garage Rules
All persons using the Parking Garage shall comply with the following rules:
(1) Cars must be parked entirely within the stall lines painted on the floor, and
only small cars may be parked in areas reserved for small cars.
(2) All directional signs and arrows must be observed.
(3) The speed limit is 5 miles per hour.
(4) Spaces reserved for disabled parking must be used only by vehicles
properly designated.
(5) Parking is prohibited in all areas not expressly designated for parking,
including without limitation:
(a) areas not striped for parking;
(b) aisles;
(c) where "no parking" signs are posted;
(d) ramps, and
(e) loading zones
(6) Parking stickers, key-cards or any other devices or forms of identification
for entry supplied by Parking Garage Owner shall remain the property of Parking Garage
Owner If parking stickers, key cards or other parking control devices are issued, they
must be displayed as requested and not mutilated in any manner The serial number of the
parking identification device may not be obliterated Devices are not transferable and any
device in the possession of an unauthorized holder will be void. The use of parking
stickers, key cards or other parking control devices may be required for persons using
Shared Parking Stalls in excess of the applicable Short Term Parking limit
(7) Every parker is required to park and lock his or her own car
(8) Loss or theft of parking identification, key-cards or other such devices must
be reported to Parking Garage Owner immediately Any parking devices reported lost or
stolen that are found on any unauthorized car will be confiscated and the illegal holder will
be subject to prosecution. Lost or stolen devices should be reported to the Parking Garage
Owner immediately
F-D-1 a ORSORMB 0912e✓05
(9) Washing, waxing, cleaning or servicing (except in an emergency) of any
vehicle in the Parking Garage is prohibited. Parking spaces may be used only for parking
automobiles or motorcycles.
(10) No signs, banners or temporary signs shall be posted or placed within the
Parking Garage (other than directional signs)
(11) There shall be no sales conducted within the Parking Garage and no kiosks,
pushcarts, advertisements or other merchandising units or obstructions placed in the
Parking Garage
(12) No person shall use the Parking Garage for any illegal or immoral purpose
nor shall any person allow the use, sale or distribution of any alcoholic or intoxicating
beverages or controlled or illegal drugs or substances within the Parking Garage.
(13) No person shall use or permit the use of any part of the Parking Garage for
the storage, handling, transportation, disposal or use of any hazardous materials or toxic
substances except in strict compliance with all applicable laws.
(14) Parking Garage Owner shall post copies of the Parking Garage Rules at all
entrances and exits to the Parking Garage.
(15) Parking Garage Owner may deny access to persons who repeatedly violate
these Parking Garage Rules Parking Garage Owner may tow vehicles at the owner's
expense which are parked illegally, parked in a posted "no parking area" or block access to
any entrance, exit, ramp or loading dock.
(16) Parking Garage Owner reserve the right to change these Parking Garage
Rules from time to time, so long as such Parking Rules do not violate any of the terms or
conditions of the Easement Agreement.
F-D-2 PORsoRs2ua 09/29/05
EXHIBIT E
Definitions
For the purposes of this Easement Agreement, the following terms shall have the
following meanings:
"Hazardous Substances" shall include pollutants or substances defined as "hazardous
waste," "hazardous substances," "hazardous materials," "pollutants," "contaminants" or
"toxic substances" in the Comprehensive Environmental Response Compensation and
Liability Act of 1980, 42 U S C § 9601 et sec ("CERCLA"), as amended by the Superfund
Amendments and Reauthorization Act of 1986 (PL 99-499) ("SARA"), the Hazardous
Materials Transportation Act, 49 U S C Section 1801, et seq , the Toxic Substance Control
Act, 15 U.S C Section 2601, et SeMc.; the Resource Conservation and Recovery Act of 1976,
as amended, 42 U.S C. Section 6901 et sue. ("RCRA"), the Clean Water Act, 33 U.S.C.
Section 1251 et seq , the Washington State Environmental Policy Act, RCW 43 21 et seq., the
Water Pollution Control Act, RCW 90 48 010 et seq , the Hazardous Waste Management
Statute, RCW 70.105 et seq , the Washington Toxic Substance Control Act, RCW 70.105B et
seq, and the Model Toxics Control Act, RCW 70.105D et se9., and in the rules or regulations
adopted and guidelines promulgated pursuant to said laws and any material, waste or
substance which is asbestos, petroleum, polychlorinated biphenyls, flammable explosives,
radioactive materials, lead or lead-based paint, radon gas, coal combustion byproducts, urea
formaldehyde foam insulation, toxic mold, or other substances which are deemed dangerous
or injurious to human health.
"Release" shall mean releasing, spilling, leaking, pumping, pouring, flooding,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or dumping
Hazardous Substances in, on, under, about or around the Property or the Parking Garage or in
or into the air, soil, surface water or groundwater in, on, about or under the Property or the
Parking Garage including the migration of Hazardous Substances to or from the Parking
Garage and adjoining property.
"Environmental Law or Laws" means, as amended from time to time, the Federal
Resource Conservation and Recovery Act of 1976, 42 U S.0 Section 6901 et seq , Federal
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42
U S C Section 9601 et seq . Federal Hazardous Materials Transportation Control Act of
1980, 42 U S C Section 1801 et seq , Federal Clean Air Act, 42 U S C Section 7401 et seq.,
Federal Water Pollution Control Act, Federal Water Act of 1977, 93 U S.0 Section 1251 et
seq., Federal Insecticide, Fungicide and Rodenticide Act, Federal Pesticide Act of 1978, 7
U S C Section 136 et seq , Federal Toxic Substances Control Act, 15 U S C Section 2601 et
seq , Federal Safe Drinking Water Act, 42 US C Section 300f et seq , Washington Water
Pollution Control Act, RCW Chapter 90 48, Washington Clean Air Act, RCW Chapter 70 94,
Washington Solid Waste Management Recovery and Recycling Act, RCW Chapter 70 95,
Washington Hazardous Waste Management Act, RCW Chapter 70105, Washington
F-E-I P 1DRS\DR52UB 09129/05
Hazardous Waste Fees Act, RCW Chapter 70.95E, Washington Model Toxics Control Act,
RCW Chapter 70 105D, Washington Nuclear Energy and Radiation Act, RCW Chapter
70.98, Washington Radioactive Waste Storage and Transportation Act, RCW Chapter 70 99,
Washington Underground Petroleum Storage Tanks Act, RCW Chapter 70.148, and any
regulations promulgated thereunder from time to time
"Remedial Work" means all activities performed in connection with the investigation,
assessment, cleanup, removal, mitigation, monitoring or containment of Hazardous
Substances m, on, about or under the Property, the Parking Garage, or the Project Springboard
Improvements (collectively, the "Affected Property") or any portion thereof to meet the
requirements of any Environmental Laws (including common law) relating to the cleanup or
remediation of Hazardous Substances (in light of the reasonably intended use of the Affected
Property or any portion thereof at the time the Remedial Work commences) or as ordered by
any court or any other federal or state governmental agency Remedial Work includes all
costs reasonably necessary to comply with then applicable Environmental Laws in connection
with the presence, suspected presence. release or suspected release of a Hazardous Substance
in or into the air, soil, groundwater, surface water or soil vapor, at, on or within the Affected
Property or any portion thereof The term 'Remedial Work" also includes the defense or
prosecution of any proceedings before a federal or state court, administrative judge or tribunal
or federal or state governmental agency, and any and all negotiations with any federal or state
governmental agency or its employees or consultants, relating to the foregoing activities and
any fines or penalties assessed against the Parking Garage Owner or City, as applicable, in
connection therewith.
r
F-E-2 P ORSORS2US oWns
Exhibit G
City Mortgage
AFTER RECORDING RETURN TO
PRESTON GATES& ELLIS LLP
925 Fourth Avenue, Suite 2900
Seattle, WA 98104-1158
Attention- Diane R. Stokke, Esq.
DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
GRANTOR: SPRINGBOARD HOLDINGS L.L.C., a Washington
limited liability company
GRANTEES: (1) CITY OF KENT, a Washington municipal
corporation (Beneficiary)
(2) WASHINGTON ADMINISTRATIVE
SERVICES, INC (Trustee)
Legal Description:
Abbreviated legal-
Additional legal on Exhibit A
Assessor's Tax Parcel ID No(s):
G-1 P MR&DRS2US 9/29M
TABLE OF CONTENTS
Page
ARTICLE I
COVENANTS
1.01 Performance of Replacement Parking Agreement and Deed of Trust..........7
1.02. Warranty of Title . .. ....... .... .. ........ . ....... . .. ........ ...............7
1.03. Tax Deposits [Intentionally Deleted]................ ............... .... ....................8
1.04. Taxes, Liens and Other Charges....................... .........................................8
1.05. [Intentionally Deleted] ..............................................................................9
106. Insurance . ..... .... ............................................ ......................................9
1.07. Restoration............. .. ... ....... .. . . ...... ........ . . .. . ......... ...............11
1.08. Condemnation .. . . ... .... ...... .... .. ........................ ................. ...............13
1 09. Care of the Property.. .... .............. ..........................................................13
1.10. Further Assurances.... .... ................. ............. .. ...... .... .... .. ............ ....14
1.11 Leases and Other Agreements Affecting the Property........ . .................14
1.12. Expenses ... . .... ............ .. ........... .. .... ..............................15
1.13. Inspection of Property................. ............................................................15
1 14. Performance by Grantor...................... .. .......... . .. ................................15
1 15 Assignment of Rents. . ......................... .. .. .... ......... .... ....... ..............16
1 16 Collection of Rents .................. ....... .. .. .. . . ....... .. .... .. ..............16
1.17 Suits to Protect Property ..........................................................................17
1 18. Beneficiary's Right to Defend Action and Cure Certain Defaults....... ......17
ARTICLE II
DEFAULTS AND REMEDIES
2.01 Events of Default . . ................ .... . .. .......... .................................... ...18
2.02 Discontinuance of Proceedings........................ . .................................. . .20
2.03 Beneficiary Statement . . ....... ..................... .. .................................... 20
2.04 Remedies Upon Default ... .. ....... .......... . . . .................... ...............20
2.05. Foreclosure Sale .... . . . .. .. ... ... .. .. ....... . .. ................. ............... 21
2.06 Sale of Property Pursuant to a Foreclosure.... . . ............ .. . ............... 22
2.07 Appointment of Receiver........ .... ...........................................................22
ARTICLE III
GENERAL COVENANTS
3.01. No Waiver..... . ......... . ..... ... .... . ... ........ ....... . .. .......... . ......... ...22
3.02. Remedies Cumulative . .............. . ............. ... ... . .... ...................... ..22
3 03. Plats, Easements and Other Agreements........ .......... ............................ ..22
3.04. Recordation. . .. . ... ... . . .....................................................23
3.05. Substitution of Trustee ..... .......... . . .. ... .. ... ... . .. ............... .. ... 23
3.06. Notices .................. ... .... .... ... ... . .. . ... . .. ........ . . ........ . . ... ..23
G-2 P ORSORSWS 9129105
3.07 Heirs and Assigns; Terminology..............................................................24
3.08 Severability... ............ ..................... .......................... .......................... 24
3.09 Time is of the Essence.......................... .......................... ....................... 25
3.10 Captions. .. .... .. ......................................................................................25
3.11. Irrevocable Trust........................ . ...........................................................25
3.12. Conveyance of Property; Change of Ownership.......................................25
3.13. Secondary Financing. . .... .. ... .. ....... .. .............................................25
3.14. Effect of Security Agreement.......................... ... ... .. ..........................26
3.15 Covenants Regarding Environmental Compliance....................................28
3.16. Non-Agncultural Use... .... .. ..... ... . .. . ... .... .....................................29
3.17. Commercial Purposes; Time of Essence .................................. ...............29
3.18. Washington State Law Governs . . ....... .......... .... ..................................30
Exhibit A Legal Description
li
G-3 P ORSORMB 9/29105
DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF
LEASES AND RENTS AND FIXTURE FILING ("Deed of Trust") is made as of the
_ day of November, 2005, by SPRINGBOARD HOLDINGS L L C., a Washington
limited liability company as grantor and debtor ("Grantor"), whose address is 1627 East
Sammamish Place SE, Sammamtsh, Washington 98075, Attention: Ben Errez, to
WASHINGTON ADMINISTRATIVE SERVICES, INC , as trustee ("Trustee"), whose
address is 925 Fourth Avenue, Suite 2900, Seattle, Washington 98104, for the benefit of
CITY OF KENT, a Washington municipal corporation, ("City" or `Beneficiary"), whose
address is 220 Fourth Avenue, Kent, Washington 98030, Attention City Attorney.
WITNESSETH
GRANTOR HEREBY IRREVOCABLY GRANTS, BARGAINS, SELLS,
CONVEYS, TRANSFERS AND ASSIGNS-
A. To Trustee, in trust, with power of sale and right of entry and possession, all
of its present and future estate, right, title and interest in and to that certain real property
located in the County of King, State of Washington, as more particularly described in
Exhibit A attached hereto and made a part hereof, including all easements and rights used
in connection therewith or as a means of access thereto, together with all right, title and
interest that Grantor now has or may hereafter acquire in:
1. All income, rents, royalties, revenue, issues, profits and proceeds
from any and all of such real property, subject, however, to the right, power and authority
hereinafter conferred upon Beneficiary or reserved to Grantor to collect and apply such
income, rents, royalties, revenue, issues, profits and proceeds.
2. All deposits or other security or advance payments, including rental
payments, made by or on behalf of Grantor to others with respect to (i) utility service for
all or any part of said property or any improvements thereon, (ii) insurance policies
relating to said property or any improvements thereon, and all claims or demands relating
to insurance, (ui) cleaning, maintenance, repair or similar services for said property or any
part thereof or any improvements thereon, and (iv) rental of equipment used in the
operation of any part of said property or any improvements thereon.
3. All fixtures now or hereafter affixed to such real property, including
all buildings, structures and improvements of every kind and description now or hereafter
erected or placed thereon, and any and all machinery, motors, elevators, skybridges, 1
boilers, equipment (including, without limitation, all equipment for the generation or
distribution of air, water, heat, electricity, light, fuel or refrigeration or for ventilating or
air-conditioning purposes or for sanitary or drainage purposes or for the removal of dust,
I
G-4 PORSORMB 9/29/05
{
refuse or garbage), partitions, building service equipment, building materials, supplies,
electronic audio/visual equipment, computers, software, awnings, carpeting and other floor
coverings, lobby furnishings, conduit, wiring, cabling, plumbing, sprinklers and sprinkler
equipment, safety systems and equipment, alarms, control devices, security systems,
intercoms, any and all trees, plants, shrubs and other landscaping, trash compactors,
garbage dumpsters, incinerators and other property of every kind and description now or
hereafter placed, attached, affixed or installed in such buildings, structures or
improvements, and all replacements, repairs, additions, accessions or substitutions or
proceeds thereto or therefor, all of such fixtures, whether now or hereafter placed thereon,
being hereby declared to be real property and referred to hereinafter as the
"Improvements."
4. All damages, royalties and revenue of every kind, nature and
description whatsoever that Grantor may be entitled to receive from any person or entity
owning or having or hereafter acquiring a right to the oil, gas or mineral rights and
reservations of such real property, with the right in Beneficiary to receive and receipt
therefor and apply the same to the indebtedness secured hereby either before or after any
default hereunder, and Beneficiary may demand, sue for and recover any such payments
but shall not be required so to do.
5. All proceeds and claims arising on account of any damage to or
taking of any part thereof, and all causes of action and recoveries for any loss or
diminution in the value of such real property or the Improvements.
6. All licenses (including but not limited to any operating licenses or
similar matters) contracts, management contracts or agreements, franchise agreements,
permits, authorizations or certificates required or used in connection with the ownership of,
or the operation or maintenance of, the Improvements
7 All governmental permits relating to construction, all names under
or by which the Improvements or other real property may at any time be operated or
known, and all rights to carry on business under any such names or any variant thereof.
8. All of Grantor's rights further to encumber said property for debt.
All of the property conveyed or intended to be conveyed to Trustee in Paragraph A.
above is hereinafter referred to as the "Real Property "
B To Beneficiary, as secured party, a security interest in any portion of the
Real Property owned by Grantor which may be construed to be personal property and in all
other personal property of every kind and description, whether now existing or hereafter
acquired and owned by Grantor, now or at any time hereafter attached to, erected upon,
situated in or upon, forming a part of or appurtenant to and which is used or useful in the
construction or operation of or in connection with, or arising from the use or enjoyment of
all or any portion of, or from any lease or agreement pertaining to, the Real Property,
G-5 P\DRS\DRS2UB 9/29105
including-
1 All water rights appurtenant to the Real Property, all water permits
and applications together with all pumping and distribution equipment, plants, pipes and
flumes, all shares of stock or other evidence of ownership of any part of the Real Property
that is owned by Grantor in common with others, and all documents of membership in any
owners' or members' association or similar group having responsibility for managing or
operating any part of the Real Property.
2. All plans and specifications prepared for construction of the
Improvements and all studies, data and drawings related thereto, and also all contracts and
agreements of Grantor relating to the aforesaid plans and specifications or to the aforesaid
studies, data and drawings, or to the construction of Improvements.
3. All equipment, machinery, fixtures, inventory, keys and other access
devices, plants, decorations, art of any medium, tools, cleaning supplies and equipment,
and telephone systems, goods, accounts, investment property, as defined in the Washington
Uniform Commercial Code, general intangibles, documents, instruments and chattel paper,
and all other personal property of every kind and description.
4. All records and data related to any property herein described,
whether in the form of a writing, photographs, microfilm, microfiche, or electronic media,
together with all of Grantor's right, title and interest in and to all computer software
required to utilize, create, maintain and process any such records or data or electronic
media.
5. All substitutions, accessions, additions and replacements to any of
the foregoing.
b. All proceeds of any of the foregoing property, including, without
limitation, proceeds of any voluntary or involuntary disposition or claim respecting any
such property (pursuant to judgment, condemnation award or otherwise) and all goods,
documents, general intangibles, chattel paper and accounts, wherever located, acquired
with cash proceeds of any of the foregoing or proceeds thereof.
All of the property assigned or transferred or intended to be assigned or transferred
to Beneficiary in Paragraph B above is hereinafter referred to as the "Personal Property."
All of the Real Property and the Personal Property is referred to herein collectively
as the "Property "
TO HAVE AND TO HOLD said Property bargained and described, together with
all and singular the lands, tenements, privileges, water rights, hereditaments and
appurtenances thereto belonging or in anywise appertaining, and the reversion and
reversions, remainder and remainders, rents, issues and profits thereof, and all of the estate,
G-` P%DRSIDRS2US 9/29/05
right, title, claim and demands whatsoever of Grantor, either in law or in equity, of, in and
to the above-bargained Property forever, as security for the faithful performance of the
obligations of Grantor under the Replacement Parking Agreement (defined below) secured
hereby and as security for the faithful performance of each and all of the covenants,
agreements, terms and conditions of this Deed of Trust,
FOR THE PURPOSE OF SECURING-
ONE. Performance of each agreement of Grantor herein contained or contained in
any other agreement given by Grantor to Beneficiary, including, without limitation, that
certain Replacement Parking Agreement of even date herewith (the "Replacement Parking
Agreement') executed by Grantor and Beneficiary.
TWO: Payment of such sums as Grantor or any successor in ownership hereafter
may borrow from Beneficiary when evidenced by note or notes reciting it is secured by
this Deed of Trust, payable to Beneficiary or order and made by Grantor or any successor
in ownership together with all extensions, renewals, modifications, amendments and
replacements thereto.
THREE: Payment of all other moneys herein or in the Replacement Parking
Agreement agreed or provided to be paid by Grantor and such further sums as may be
advanced or loaned by Beneficiary to Grantor pursuant to the terms hereof.
GRANTOR REPRESENTS, ALLEGES, WARRANTS, COVENANTS AND
AGREES AS FOLLOWS.
ARTICLE I
COVENANTS
101. Performance of Replacement Parking Agreement and Deed of Trust.
Grantor will perform and comply with each and every term, covenant and condition
hereof, and of the Replacement Parking Agreement. All capitalized terms not otherwise
defined herein shall have the definition set forth in the Replacement Parking Agreement.
1.02. Warranty of Title.
Grantor represents and warrants that at the time of the delivery of this Deed of
Trust, (i) Grantor is lawfully possessed and is the owner in fee simple of the Property;
(ii) the Property is free and clear of any deed of trust, mortgage, lien, charge or
encumbrance thereon or affecting the title thereto prior to this Deed of Trust, and none will
be created by Grantor during the term of this Deed of Trust except upon such terms and
conditions as may be satisfactory to Beneficiary, (ui) Grantor has good right to make this
Deed of Trust; (iv) Grantor has good and absolute title to all existing Personal Property,
and has good right, full power and lawful authority to convey and encumber the same in
G-7 PMR&DRMS 9129105
3
the manner and form conveyed and encumbered hereby, that the same is free and clear of
all liens, charges, and encumbrances whatsoever, including, as to the Personal Property
and fixtures, security agreements, conditional sales contracts and anything of a similar
nature and none superior to this Deed of Trust will be created or suffered to be created by
Grantor, (v) there is no financing statement covering the Property, or any part thereof, on
file in any public office; (vi) Grantor will warrant and forever defend the title to the
Property against the claims of all person whomsoever, and (vu) there is no action,
litigation or proceeding pending or threatened against Grantor or the Property.
1.03. Tax Deposits. [Intentionally Deleted]
1.04. Taxes, Liens and Other Charges.
Grantor will pay when due:
(a) All taxes, assessments and other governmental or public charges
affecting the Property, including assessments on appurtenant water stock, and any accrued
interest, cost and/or penalty thereon and upon request by Beneficiary will submit receipts
therefor to Beneficiary promptly following payment,
(b) All encumbrances (including any debt secured by deeds of trust),
ground rents, liens and/or charges, with interest, on the Property or any part thereof which
appear to be prior, superior or on a parity hereto, and all costs and fees related thereto,
(c) All charges for utilities or services, including, but not limited to,
electricity, gas, sewer and water,
(d) All costs, fees and expenses of this Deed of Trust, including cost of
evidence of title, Trustee's fees and attorneys' fees in connection with sale pursuant to
Paragraph 2 01 (whether completed or not) together with interest from and after ten (10)
days following demand for repayment at an interest rate equal to twelve percent (12%) per
annum until paid in full, and
(e) Grantor may, in good faith, contest, by proper legal proceedings,
and at its own expense, the validity or amount of any such tax, assessment or governmental
charge, provided that Grantor shall deposit with Beneficiary a sum which shall be at least
ten percent (10%) greater than the amount so contested, (unless the contested amount has
been paid in full or is not yet due) and also, from time to time, on demand of Beneficiary,
such additional sums as may be reasonably required to cover interest or penalties accrued
or to accrue on any such item or items, and Beneficiary may upon reasonable notice to
Grantor pay such contested item or items out of any sums so deposited in case of undue
delay in the prosecution of such proceedings, or if the protection of the Property or of
Beneficiary's interest therein shall, in the reasonable judgment of Beneficiary, require such
payment.
G-8 P ORSORS2UB W905
105 Lntentionally Deleted]
1.06. Insurance.
(a) Grantor will at all times provide, maintain and keep in force or cause
to be provided, maintained or kept in force.
(i) Builder's risk insurance insuring against loss or damage
from such causes of loss as are embraced by insurance policies of the type now known as
"Builder's Risk" property insurance (written on an "all risk" or "open perils" basis),
including, without limitation, fire and extended coverage, collapse of the improvements
and earthquake coverage to agreed limits, all in form and substance acceptable to
Beneficiary and (i) as to property then subject to Restoration (as defined in
Section 1 07(b)) or any restoration accomplished in connection with a Condemnation, in an
amount not less than the full replacement cost of such property, and (u) as to any
improvements then being constructed, in an amount not less than the completed value on a
non reporting form, of the additional improvements then being constructed, provided,
however, that such insurance shall be required only during any period of Restoration or
any restoration accomplished in connection with a Condemnation, or any period of
construction of any improvements;
(h) Policies of insurance insuring the Property against loss or
damage by fire and lightning; against loss or damage by other risks embraced by coverage
of the type now known as the broad form of extended coverage, including, but not limited
to, riot and civil commotion, vandalism and malicious mischief, and against such other
risks or hazards as Beneficiary from time to time reasonably may designate in an amount
sufficient to prevent Beneficiary or Grantor from becoming a co-insurer under the terms of
the applicable policies, but in any event in an amount not less than 100% of the then full
replacement cost of the Improvements (exclusive of the cost of excavations, foundations
and footings below the lowest basement floor) and Personal Property without deduction for
physical depreciation,
(in) Policies of insurance insuring the Property against the loss of
"rental value" of any building which constitutes a part of the Improvements on a "rented or
vacant basis" ansing out of the perils insured against pursuant to subparagraph (a) above in
an amount equal to twelve months' gross "rental value" of the Improvements with co-
insurance in such percentage as may be acceptable to Beneficiary "Rental value" as used
herein is defined as the sum of (a) the total anticipated gross rental income from tenant
occupancy of such buildings, and (b) the amount of all charges which are the legal
obligation of tenants and which would otherwise be the obligation of the Grantor, and
(c) the fair rental value of any portion of such buildings which are occupied by Grantor,
(iv) Flood insurance upon the Property in the event that such
insurance is available pursuant to the provisions of the Flood Disaster Protection Act of
1973 or other applicable legislation (Beneficiary reserves the right to require that Grantor
G-9 P 1ORS1ORS2US 9QM5
secure flood insurance in excess of the amount provided by the Flood Disaster Protection
Act of 1973 if such insurance is commercially available at a reasonable premium up to the
amount provided in Paragraph 1 06(a)(i)hereof),
(v) Commercial general liability insurance (full form personal
injury and broad form property damage) against claims for personal injury (including,
without limitation, bodily injury or death) and property damage liability with a coverage
limit acceptable to Beneficiary Such insurance coverage shall be issued and maintained
on an "occurrence" basis Beneficiary shall be named as an additional insured thereunder;
(vi) Such other insurance, and in such amounts, as may from
time to time be reasonably required by Beneficiary against the same or other insurable
hazards which at the time are commonly insured against in the case of premises similarly
situated, due regard being given to the height and type of buildings thereon and their
construction, use and occupancy.
(b) All policies of insurance required under this Paragraph 1.06 shall be
issued by companies approved by Beneficiary, shall be subject to the approval of
Beneficiary as to amount, content, form and expiration date, shall contain a
Noncontributory Standard Mortgagee Clause and the Lender's Loss Payable Endorsement
(Form 438 BFU NS), or their equivalents, in favor of Beneficiary, and shall provide that
the proceeds thereof shall be payable to Beneficiary. Beneficiary shall be furnished with
the ongmal of each policy or certificates thereof required to be provided by Grantor
hereunder, which policy shall provide that it shall not be modified or cancelled without
thirty (30) days' written notice to Beneficiary At least thirty (30) days prior to expiration
of any policy required to be provided by Grantor hereunder, Grantor shall furnish
Beneficiary appropriate proof of issuance of a policy continuing in force the insurance so
expiring Grantor shall furnish Beneficiary receipts for the payment of premiums on such
insurance policies or other evidence of such payment reasonably satisfactory to
Beneficiary In the event that Grantor does not deposit with Beneficiary a new policy of
insurance with evidence of payment of premium thereon at least thirty (30) days prior to
the expiration of any expinng policy, then Beneficiary may, but shall not be obligated to,
procure such insurance and pay the premiums therefor and Grantor agrees to repay to
I Beneficiary the premiums thereon promptly on demand, together with interest thereon at
an interest rate equal to twelve percent (12%) per annum until paid in full
(c) In the event of any loss or damage to the Property, all proceeds of
insurance (the "Insurance Proceeds") shall be payable to Beneficiary, and Grantor hereby
authorizes and directs any affected insurance company to make payment of the Insurance
Proceeds directly to Beneficiary The application or release by Beneficiary of any
Insurance Proceeds shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice
(d) In the event of the foreclosure of this Deed of Trust or other transfer
of the title to the Property in extinguishment, in whole or in part, of the indebtedness
G-10 P tDRS1DRS2UB 9129105
secured hereby, all right, title and interest of Grantor in and to any insurance policy, or
premiums or payments in satisfaction of claims or any other rights thereunder then in
force, shall pass to the purchaser or grantee notwithstanding the amount of any bid at such
foreclosure sale
1.07. Restoration.
(a) After the happening of any casualty to the Property whether or not
required to be insured against under the policies to be provided by Grantor hereunder,
Grantor shall give prompt written notice thereof to Beneficiary generally describing the
nature and cause of such casualty and the extent of the damage or destruction to the
Property.
(b) Grantor hereby assigns to Beneficiary all Insurance Proceeds which
Grantor may be entitled to receive. In the event of any damage to or destruction of the
Improvements, Grantor shall commence and diligently pursue to completion in accordance
with this Section 1 07 the repair, restoration and rebuilding of any portion of the Property
that has been partially damaged or destroyed in full compliance with the requirements set
forth in the Replacement Parking Agreement and in full compliance with all legal
requirements and to the same condition, character and at least equal value and general
utility as nearly as possible to that existing prior to such damage or destruction (the
"Restoration"), and Beneficiary shall hold and disburse the Insurance Proceeds (less the
cost, if any, to Beneficiary of recovering and paying out such proceeds (including, without
limitation, attorneys' fees and expenses, adjuster's fees, and fees incurred in Beneficiary's
performance of its obligations hereunder)) (the `Net Insurance Proceeds") in the manner
hereinafter provided to the Restoration.
(c) Prior to disbursement of any Net Insurance Proceeds for any work in
connection with the Restoration (the "Work"), Grantor shall deliver or furnish to
Beneficiary (i) complete plans and specifications for the Work which (A) have been
approved by all governmental authorities whose approval is required, (B) bear the signed
approval of an architect satisfactory to Beneficiary (the "Architect") and (C) are
accompanied by Architect's signed estimate of the total estimated cost of the Restoration.
Such plans and specifications shall be subject to Beneficiary's approval, which approval
shad not be unreasonably withheld (the Approved Plans and Specifications"), (u) the
amount of money which, as determined by Beneficiary, will be sufficient when added to
the Net Insurance Proceeds, if any, to pay the entire cost of the Restoration (all money as
held by Beneficiary is referred to herein as the "Restoration Funds"), (iu) copies of all
permits and approvals required by law in connection with the commencement and conduct
of the Restoration, and (iv) a contract for construction executed by Grantor and a
contractor satisfactory to Beneficiary (the "Contractor") in form, scope and substance
satisfactory to Beneficiary (including the customary retention) for performance of the
Work.
(d) After commencing the Work, Grantor shall perform or cause
G-1 1 P 1DRSORS2UB 9129MS
Contractor to perform the Work diligently and in good faith in accordance with the
Approved Plans and Specifications approved by Beneficiary So long as Grantor is not in
default under the Replacement Parking Agreement, Beneficiary shall disburse the
Restoration Funds in increments to Grantor or as Grantor may direct, from time to time as
the Work progresses, to pay (or reimburse Grantor for) the costs of the Restoration, but
subject to the following conditions, any of which Beneficiary may waive in its sole
discretion
(i) Beneficiary shall make such payments only upon not less
than ten (10) days' prior written notice from Grantor to Beneficiary and Grantor's delivery
to Beneficiary of (A) Grantor's written request for payment (a "Request for Payment")
accompanied by a certificate by Architect in form, scope and substance satisfactory to
Beneficiary which states that all of the Work completed to that date has been done in
compliance with the Approved Plans and Specifications and in accordance with all
provisions of law, that the amount requested has been paid or is then due and payable and
is properly a part of the cost of the Restoration and that when added to all sums, if any,
previously paid out by Beneficiary, the requested amount does not exceed the value of the
Work done to the date of such certificate. (B) evidence satisfactory to Beneficiary that
there are no construction or similar liens for labor or material supplied in connection with
the Work to date or that any such liens have been adequately provided for to Beneficiary's
satisfaction; and (C) evidence satisfactory to Beneficiary that the balance of the
Restoration Funds remaining after making the payments shall be sufficient to pay the
balance of the cost of the Restoration not completed to date (giving in such reasonable
detail as Beneficiary may require an estimate of the cost of such completion). Each
Request for Payment shall be accompanied by waivers of liens satisfactory to Beneficiary
covering that part of the Work previously paid for, if any, and by a search prepared by a
title company or by other evidence satisfactory to Beneficiary that no construction liens or
other liens or instruments for the retention of title in respect of any part of the Work have
been filed against the Property and not discharged of record and that no encumbrance
exists on or affecting the Property other than encumbrances, if any, which are set forth in
the title policy issued to Beneficiary insuring the lien of this Deed of Trust, and
(ii) Any Request for Payment after the Restoration has been
completed shall be accompanied by a copy of any certificate or certificates required by law
to render occupancy of the Improvements legal
(e) Upon Beneficiary's receipt of the certificate of occupancy for the
Improvements and other customary evidence requested by Beneficiary that the Restoration
has been completed and the costs thereof paid in full, and satisfactory evidence that no
mechanic's or similar liens for labor or material supplied in connection with the
Restoration are outstanding against the Property and Beneficiary's disbursement under the
final Request for Payment Beneficiary shall pay any remaining Restoration Funds then
held by Beneficiary to Grantor.
G-12 P%DRSIORS2UB 9129/05
1.08 Condemnation.
Should the Property or any part thereof be taken or damaged by reason of any
public improvement, condemnation proceeding, or conveyance in lieu thereof, or in any
other manner, Beneficiary shall be entitled to all compensation, awards and other payments
or relief therefor, and shall be entitled, at its option, to commence, appear in and prosecute
in its own name any action or proceeding. Grantor shall have the right, with the prior
written consent of the Beneficiary, to make a compromise or settlement in connection with
such taking or damage. All such compensation, awards, damages, rights of action and
proceeds (the "Condemnation Proceeds") are hereby assigned to Beneficiary, who shall,
after deducting therefrom all its reasonable expenses, including attorneys' fees, apply or
release the Condemnation Proceeds with the same effect as provided in Paragraph 1.07
above with respect to disposition of insurance proceeds; provided, that if such
Condemnation Proceeds are to be utilized for restoration of the Property and there are any
excess Condemnation Proceeds after application thereof to the restoration of the Property,
Beneficiary shall be entitled to apply such excess as provided in the Replacement Parking
Agreement. If the Condemnation Proceeds are not applied to the restoration of the
Property, the Condemnation Proceeds shall be paid to Beneficiary as provided in
Section 22 of the Replacement Parking Agreement. Grantor agrees to execute such further
assignments of the Condemnation Proceeds as Beneficiary may require
1.09 Care of the Property
Grantor will-
(a) Keep the Property in good condition and repair and not commit or
permit any waste or deterioration of the Property,
(b) Not remove, demolish or substantially alter any portion of the
Property, except as approved in writing by Beneficiary and except such alterations as may
be required by laws, ordinances or regulations of governmental authorities,
(c) Comply with all laws, ordinances, rules, regulations and orders of
governmental authorities now or hereafter affecting the Property or requiring any
alterations or improvements to be made thereon, and perform all of its obligations under
any covenant, condition, restriction or agreement of record affecting the Property,
(d) Complete promptly and in good and workmanlike manner any
portion of the Property which may be constructed hereafter, and promptly restore in like
manner as obligated in Paragraph 1 07, any portion of the Property which may be damaged
or destroyed, and pay, when due, all costs incurred and claims for labor performed and
materials furnished therefor,
(e) Not commit, suffer or permit any act to be done in, upon or to the
Property in violation of any law or ordinance or any covenant, condition or restriction
G-13 P%DRSIDRS2UB 9129105
affecting the Property;
(f) Do any and all acts which, from the character or use of the Property,
may be reasonably necessary to protect and preserve the security of Beneficiary, the
specific enumerations herein not excluding the general,
(g) Not permit any construction liens against the Property;
(h) Not take or permit to be taken any actions that might invalidate any
insurance carried on the Property;
1.10. Further Assurances.
If required by Beneficiary at any time during the term of this Deed of Trust,
Grantor will execute, acknowledge and deliver to Beneficiary, in form satisfactory to
Beneficiary, such chattel mortgages, security agreements or other similar security
instruments, in form and substance satisfactory to Beneficiary, covering all property of any
kind whatsoever owned by Grantor or in which Grantor has any interest which, in the sole
opinion of Beneficiary, is required to perfect the security interests intended to be created in
the real and personal property described in this Deed of Trust or which is essential to the
operation of the Real Property covered by this Deed of Trust Grantor shall further, from
time to time, within 15 days after request by Beneficiary, execute, acknowledge and
delver any financing statement, renewal, affidavit, certificate, continuation statement or
other document as Beneficiary may request in order to perfect, preserve, continue, extend
or maintain the security interest under, and the priority of, this Deed of Trust and the
priority of such chattel mortgage or other security instrument as a first hen. Grantor
farther agrees to pay to Beneficiary on demand all costs and expenses incurred by
Beneficiary in connection with the preparation, execution, recording, filing and refiling of
any such instrument or document including the charges for examining title and the
attorney's fee for rendering an opinion as to the priority of this Deed of Trust and of such
chattel mortgage or other security instrument as a valid first and subsisting lien However,
neither a request so made by Beneficiary nor the failure of Beneficiary to make such
request shall be construed as a release of such Property, or any part thereof, from the
conveyance of title by this Deed of Trust, it being understood and agreed that this covenant
and any such chattel mortgage, security agreement or other similar security instrument,
delivered to Beneficiary, are cumulative and given as additional security Any breach of
such security agreement shall constitute an Event of Default under this Deed of Trust.
1.11. Leases and Other Agreements Affecting the Property.
(a) Grantor shall not lease all or any portion of the Property or the
Improvements without the prior written consent of Beneficiary.
(b) Grantor shall at no time file or record a Condominium Declaration
against the Real Property or permit any part of the Real Property to be converted to, or
G-14 P\DRS\DRS2UB 9M/05
operated as, a cooperative whereby the tenants or occupants thereof participate in the
management or control of the Real Property, as tenants, stockholders or otherwise without
the prior written consent of the Beneficiary in accordance with the provisions of the
Replacement Parking Agreement.
(c) Save and except for taxes and assessments provided to be paid by
Grantor as specified in Paragraph 1 04 hereof, Grantor will not create or suffer or permit to
be created, subsequent to the date of the execution and delivery of this Deed of Trust, any
lien or encumbrance affecting the Real Property except such as have been disclosed to and
approved by Beneficiary in writing upon such terms and conditions as may be satisfactory
to Beneficiary.
1.12. Expenses.
(a) Upon election of either Beneficiary or Trustee so to do, employment
of an attorney is hereby authorized and Grantor shall pay all attorneys' fees, costs and
expenses, including expenses of retaking, holding, preparing for sale or selling (including
cost of evidence or search of title) in connection with any action or actions which may be
brought for the foreclosure of this Deed of Trust and/or for possession of the Property
and/or for the protection of or the defense of the priority of the lien provided for by this
Deed of Trust and/or for the appointment of a receiver and/or for the enforcement of any
and all covenants or rights contained in or secured by this Deed of Trust and/or any case or
proceeding under Chapters 7, 11, or 13 of the Bankruptcy Code or any successor statute
thereto
(b) Grantor will pay immediately following demand all sums expended
or expenses incurred by Trustee and/or Beneficiary, including, without limitation,
attorneys' fees, under any of the terms of this Deed of Trust, with interest from date of
expenditure at an interest rate equal to twelve percent (12%)per annum until paid in full.
1.13. Inspection of Property.
Beneficiary is authorized, by itself, its agents, employees or workmen, to enter at
any reasonable time upon any part of the Property for the purpose of inspecting the same
upon reasonable prior notice (except in the case of an emergency for which no prior notice
need be given), and for the purpose of performing any of the acts it is authorized to
perform under the terms of this Deed of Trust. Grantor agrees to cooperate with
Beneficiary to facilitate such inspections.
1.14. Performance by Grantor.
Grantor will faithfully perform each and every covenant to be performed by
Grantor under any lien or encumbrance, including, without limiting the generality hereof,
mortgages, deeds of trust, leases, declarations or covenants, conditions and/or restrictions
and other agreements which affect the Property, in law or in equity, which Beneficiary
I
G-15 P%DRS%DRS2UB 9/29105
i
f
reasonably believes may be prior or superior to or on a parity with the lien or charge of this
Deed of Trust. Grantor shall not, without first obtaining Beneficiary's prior written
consent, change the general nature of the occupancy or initiate or acquiesce in any zoning
reclassification or suffer any act or thing which would impair the security for Grantor's
performance of its obligations under the Replacement Parking Agreement or Beneficiary's
lien upon the Property A breach of or a default under any such lien or encumbrance, or a
breach of any requirement of this Paragraph 1.14 shall constitute an event of default under
this Deed of Trust
1.15. Assignment of Rents.
Grantor hereby absolutely and unconditionally assigns and transfers to Beneficiary
all the income, rents, royalties, revenue, issues, profits and proceeds of the Property,
whether now due, past due or to become due, and hereby gives to and confers upon
Beneficiary the right, power and authority to collect such income, rents, royalties, revenue,
issues, profits and proceeds. Grantor irrevocably appoints Beneficiary its true and lawful
attorney at the option of Beneficiary at any time to demand, receive and enforce payment,
to give receipts, releases and satisfactions, and to sue, either in the name of Grantor or in
the name of Beneficiary, for all such income, rents, royalties, revenue, issues, profits and
proceeds It is understood and agreed that neither the foregoing assignment of income,
rents, royalties, revenue, issues, profits and proceeds to Beneficiary nor the exercise by
Beneficiary of any of its rights or remedies under this Paragraph 1 15 or under
Paragraph 2.04 hereof shall be deemed to make Beneficiary a "mortgagee-in-possession"
or otherwise responsible or liable in any manner with respect to the Property or the use,
occupancy or enjoyment or operation of all or any portion thereof, unless and until
Beneficiary, in person or by agent, assumes actual possession thereof, nor shall
appointment of a receiver for the Property by any court at the request of Beneficiary or by
agreement with Grantor or the entering into possession of the Property or any part thereof
by such receiver be deemed to make Beneficiary a "mortgagee-in-possession" or otherwise
responsible or liable in any manner with respect to the Property or the use, occupancy,
enjoyment or operation of all or any portion thereof The foregoing assignment is intended
to be specific, perfected and choate upon the recording of this Deed of Trust as provided in
RCW 7.28 230(3).
1 16. Collection of Rents.
Notwithstanding anything to the contrary contained herein or in the Replacement
Parking Agreement secured hereby, so long as there is no Event of Default by Grantor in
the payment of any indebtedness secured hereby or in the performance of any obligation,
covenant or agreement contained herein, in the Replacement Parking Agreement, or in any
other agreement given as security for the performance of Grantor's obligations under the
Replacement Parking Agreement, Grantor shall have the right to collect all income, rents,
royalties, revenue, issues, profits and proceeds from the Property and to retain, use and
enjoy the same.
G-16 P 1DRSQRUUB 9/29M
1.17. Suits to Protect Property
Grantor covenants and agrees to appear in and defend any action or proceeding
purporting to affect the security of this Deed of Trust, and/or any additional or other
security for the obligations secured hereby, the interest of Beneficiary or the rights, powers
and/or duties of Trustee hereunder; and to pay all costs and expenses, including cost of
evidence of title and attorneys' fees in a reasonable sum, in any action or proceeding in
which Beneficiary and/or Trustee may appear or be made a party, including, but not
limited to, foreclosure or other proceeding commenced by those claiming a right to any
part of the Property under subordinate hens, in any action to partition or condemn all or
part of the Property, whether or not pursued to final judgment, and in any exercise of the
power of sale contained herein, whether or not the sale is actually consummated.
1.18. Beneficiary's Right to Defend Action and Cure Certain Defaults
Beneficiary may appear in and defend any action or proceeding at law or in equity
or in bankruptcy purporting to affect the Property or the security hereof, and in such event
(except where the purported defect affecting the security hereof arises or results from any
act or omission of Beneficiary), Beneficiary shall be allowed and paid all Beneficiary's
costs, charges and expenses, including cost of evidence of title and attorneys' fees incurred
in such action or proceeding in which Beneficiary may appear
Should Grantor fail to make any payment or to do any act as herein provided, then
Beneficiary or Trustee, but without obligation so to do and upon reasonable prior notice to
or demand upon Grantor (except for monetary defaults or defaults in the payment of taxes
or insurance for which no prior written notice or demand shall be required) and without
releasing Grantor from any obligation hereof. may- make or do the same in such manner
and to such extent as either may deem necessary to protect the security hereof, Beneficiary
or Trustee being authorized to enter upon the Real Property for such purposes, commence,
appear in and defend any action or proceeding purporting to affect the security hereof or
the rights or powers of Beneficiary or Trustee, pay, purchase, contest or compromise any
encumbrance, charge or lien which in the judgment of either appears to be prior or superior
hereto; and, in exercising any such power, incur any liability, expend whatever amounts in
its absolute discretion it may deem necessary therefor, including cost of evidence of title,
employ an attorney, and pay said attorneys' reasonable fees
Grantor hereby agrees to pay immediately following demand, together with interest
from and after ten (10) days following demand for payment at an interest rate equal to
twelve percent (12%) per annum until paid in full, all of Beneficiary's costs, charges,
expenses and accounts referred to above in this Paragraph 1 I8, including cost of evidence
of title and reasonable attorneys' fees incurred in such action or proceeding in which
Beneficiary may appear All costs, charges and expenses so incurred, together with
interest thereon as aforesaid, shall be secured by the lien of this Deed of Trust.
G-17 P 0RSQRS2UB 9129/05
ARTICLE II
DEFAULTS AND REMEDIES
2.01. Events of Default.
If any of the following events shall occur("Event or Events of Default'):
(a) If Grantor shall fail to perform any material obligation under the
Replacement Parking Agreement, or
(b) If Grantor has abandoned construction of the Parking Garage for a
period of twenty (20) consecutive days (except for Unavoidable Delay as defined in the
Replacement Parking Agreement); or
(c) If any permit required for construction of the Parking Garage shall
be revoked or canceled; or
(d) If Grantor shall have assigned, pledged or encumbered its rights,
duties or obligations under the Replacement Parking Agreement in violation of the
Replacement Parking Agreement, or
(e) If Grantor has not commenced construction of the Parking Garage
on or before March 31, 2006, or
(f) If Substantial Completion of the Parking Garage has not occurred
for any reason except for Unavoidable Delay, on or before September 30, 2006 (the
Substantial Completion Date), or
(g) If Substantial Completion of the Parking Garage has not occurred
for any reason whatsoever including Unavoidable Delay on or before March 31, 2007 (the
Outside Completion Date), or
(h) Grantor applies for or consents to the appointment of a receiver or
trustee for it or any portion of its property, or if such receiver or trustee is appointed for
Grantor, or Grantor admits in wnting its inability to pay its debts as they become due, or
Grantor becomes insolvent, or a petition is filed by or against Grantor, pursuant to any of
the provisions of the United States Bankruptcy Code, as amended, or
(i) A petition is filed against Grantor pursuant to any of the provisions
of the United States Bankruptcy Code, as amended, or there is an attachment or
P Y
sequestration of any of the property of Grantor and the same is not discharged or bonded
within ninety (90) days, or
0) Grantor shall cause or institute or there shall be instituted against
Grantor any proceeding for the dissolution or tpennmation of Grantor, or
G-1 O P ORS1URS2US 929/05
(k) Any representation or disclosure made to Beneficiary by Grantor
proves to be materially false or misleading on the date when such representation or
disclosure was made, whether or not that representation or disclosure appears in this Deed
of Trust; or
(1) The occurrence of any of the events descnbed in Paragraphs 3.12 or
3.13 below; or
(m) Any judgment or decree in an amount in excess of$10,000 against
the Grantor or against the Property shall remain unpaid, unstayed on appeal, undischarged,
unbonded or undismissed for a period of 30 days,
then and in any such event, the Beneficiary shall be entitled to exercise all rights, and shall
have the benefit of all remedies provided by law or set forth in this Deed of Trust or in the
Replacement Parking Agreement. No waiver of Beneficiary of any default on the part of
Grantor shall be construed as a waiver of any subsequent default hereunder
In the event of any such Event of Default and upon written request of Beneficiary,
Trustee shall sell the Property in accordance with the Deed of Trust Act of the state of
Washington (RCW Chapter 6124 as existing now or hereafter amended) and the Uniform
Commercial Code of the state of Washington, where applicable, at public auction to the
highest bidder. Any person except Trustee may bid at Trustee's sale Trustee shall apply
the proceeds of the sale as follows (i) to the expenses of sale, including a reasonable
Trustee's fee and attorneys' fee; (ii) to the payment and performance of the obligations set
forth in the Replacement Parking Agreement and all other indebtedness secured by this
Deed of Trust or any other instrument, (ui) the surplus, if any, shall be distributed in
accordance with said Deed of Trust Act. Trustee shall deliver to the purchaser at the sale
its deed, without warranty, which shall convey to the purchaser the interest in the property
which Grantor had or had the power to convey at the time of its execution of this Deed of
Trust and such as it may have acquired thereafter Trustee's deed shall recite the facts
showing that the sale was conducted in compliance with all the requirements of the law
and of this Deed of Trust, which recital shall be prima facie evidence of such compliance
and conclusive evidence thereof in favor of bona fide purchasers and encumbrances for
value The power of sale conferred by this Deed of Trust and by the Deed of Trust Act of
the state of Washington is not an exclusive remedy, and when not exercised Beneficiary
may foreclose this Deed of Trust as a mortgage
Trustee is not obligated to notify any party hereto of pending sale under any other
deed of trust or of any action or proceeding in which Grantor, Trustee or Beneficiary shall
be a party, unless such action or proceeding is brought by Trustee
Beneficiary may proceed as to the Personal Property in accordance with
Beneficiary's rights and remedies in respect to the Property or sell the Personal Property
separately and without regard to the remainder of the Property in accordance with
Beneficiary's rights and remedies provided by the Washington Uniform Commercial Code
G-19 P1URSMRS2UB 9129/05
as well as other rights and remedies available at law or in equity
2.02. Discontinuance of Proceedings.
Beneficiary, from time to time before the Trustee's sale pursuant to Paragraph 2.01,
may rescind any notice of default or notice of sale by executing and delivering to Trustee a
wntten notice of discontinuance of Trustee's sale, which notice, when recorded, shall also
constitute a cancellation of any prior notice of default and notice of sale The exercise by
Beneficiary of such right of rescission shall not constitute a waiver of any breach or default
then existing or subsequently occurring, or impair the right of Beneficiary to execute and
deliver to Trustee, as above provided, other notices of default and notices of sale, nor
otherwise affect any provision, covenant or condition of the Replacement Parking
Agreement and/or of this Deed of Trust or any of the rights, obligations or remedies of the
parties thereunder or hereunder.
2.03. Beneficiary Statement.
Trustee, upon presentation to it of an affidavit signed by or on behalf of Beneficiary
setting forth any fact or facts showing a default by Grantor under any of the terms or
conditions of this Deed of Trust, is authorized to accept as true and conclusive all facts and
statements in such affidavit and to act hereunder in complete reliance thereon Upon
written request by Grantor, Beneficiary will confirm the status of Grantor's performance
under the Replacement Parking Agreement.
2.04. Remedies Upon Default.
Grantor covenants and agrees that, should Grantor fail or refuse to make any
payment or do any act which it is obligated hereunder to make or do at the time and in the
manner herein provided, then Beneficiary, or Trustee upon written instructions from
Beneficiary (the legality thereof to be determined solely by Beneficiary), may, without
demand upon Grantor, without releasing Grantor from any obligation hereunder and
without waiving its right to declare a default as herein provided, or impairing any
declaration of default or election to cause the Property to be sold or any sale proceeding
predicated thereon:
(a) Make or do the same in such manner and to such extent as either
Beneficiary or Trustee may deem necessary to protect the security hereof, Beneficiary and
Trustee being authorized to enter upon and take possession of the Property for such
purposes, and any sums expended for such purposes shall be secured hereby;
(b) Commence, appear in and/or defend any action or proceedings
purporting to affect the security hereof, and/or any additional or other security therefor, the
interest, rights, powers and/or duties of Trustee and/or Beneficiary hereunder, whether
brought by or against Grantor, Trustee or Beneficiary,
G-20 P ORSORMB 909105
(c) Pay, purchase, contest or compromise any claim, debt, lien, charge
or encumbrance which, in the judgment of either, may affect or appear to affect the
security of this Deed of Trust, the interest of Beneficiary or the rights, powers and/or duties
of Trustee and/or Beneficiary hereunder, and any sums expended for such purposes shall
be secured hereby, and
(d) Beneficiary is authorized, either by itself or by its agent to be
appointed by it for that purpose or by a receiver appointed by a court of competent
jurisdiction, to enter into and upon and take and hold possession of any portion or all of the
Property, both real and personal, and exclude Grantor and all other persons therefrom, to
operate and manage the Property and rent and lease the same, to perform such reasonable
acts of repair or protection as may be reasonably necessary or proper to conserve the value
thereof, and collect any and all income, rents, issues, profits and proceeds therefrom, the
same being hereby assigned and transferred to Beneficiary, for the benefit and protection
of Beneficiary, and from time to time apply and/or accumulate such income, rents, issues,
profits and proceeds in such order and manner as Beneficiary or such receiver, in its sole
discretion, shall consider advisable, to or upon the following the expenses of receivership,
if any, the proper costs of upkeep, maintenance, repair and/or operation of the Property; the
repayment of any sums theretofore or thereafter advanced pursuant to the terms of this
Deed of Trust, the taxes and assessments upon the Property then due or next to become
due, and/or the amount required to perform Grantor's obligations under the Replacement
Parking Agreement. The collection and/or receipt of income, rents, issues, profits and/or
I'I proceeds from the Property by Beneficiary, its agent or receiver, after notice of default and
notice of sale shall not affect or impair such default or notice of default or notice of sale or
any sale proceedings predicated thereon, but such proceedings may be conducted and sale
effected notwithstanding the receipt and/or collection of any such income, rents, issues,
profits and/or proceeds. Any such income, rents, issues, profits and/or proceeds in the
possession of Beneficiary, its agent or receiver, at the time of sale and not theretofore
applied as herein provided, shall be applied in the same manner and for the same purposes
as the proceeds of the sale.
Neither Trustee nor Beneficiary shall be under any obligation to make any of the
payments or do any of the acts referred to in this Paragraph 2 04, and any of the actions
referred to in this Paragraph 2.04 may be taken by Beneficiary after an Event of Default
has occurred irrespective of whether any notice of default or notice of sale has been given
hereunder and without regard to the adequacy of the security for the performance of
Grantor's obligations under the Replacement Parking Agreement
2.05 Foreclosure Sale
In the event that this Deed of Trust is foreclosed as a mortgage and the Real
Property sold at a foreclosure sale, the purchaser may, during the statutory redemption
period, make such repairs or alterations on the Real Property as may be reasonably
necessary for the proper operation, care, preservation, protection and insuring thereof. Any
G-21 P MRS%DRS2UB 9/29105
sums so paid, together with interest thereon from the time of such expenditure at an
interest rate equal to twelve percent (12%) per annum until paid, shall be added to and
become a part of the amount required to be paid for redemption from such sale
2.06 Sale of Property Pursuant to a Foreclosure.
In case of a sale pursuant to a foreclosure of this Deed of Trust, the Property, real,
personal or mixed, may be sold as an entirety or in parcels, by one sale or by several sales
held at one time or at different times, all as Trustee, in its unrestricted discretion, may
elect, and Grantor, for and on behalf of itself and all persons claiming by, through or under
Grantor, waives any and all right to have the property and estates comprising the Property
marshalled upon any foreclosure sale and agrees that, upon foreclosure, the Property may
be sold as an entirety and not in parcels.
2.07. Appointment of Receiver
The holder of this Deed of Trust, separately or in any action to foreclose it, shall be
entitled (without regard to the adequacy of any security for said debt) to the appointment of
a receiver of the income, rents, issues, profits and proceeds of the Property who shall have,
in addition to all the rights and powers customarily given to and exercised by such
receiver, all the rights and powers granted to Beneficiary by the covenants contained in
Paragraph 2 04 hereof.
ARTICLE III
GENERAL COVENANTS
3.01. No Waiver.
No failure by Beneficiary to insist upon strict performance of any term, covenant or
condition hereof, nor failure to exercise any right or remedy hereunder, shall constitute a
waiver of any such breach of such term, covenant or condition or of the later exercise of
such right or remedy. All waivers shall be in writing.
3.02. Remedies Cumulative
No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended
to be exclusive of any other remedy herein or by law provided or permitted, but each shall
be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute.
3.03 Plats, Easements and Other Apa-eements
At any time upon written request of Beneficiary, payment of its fees and
presentation of this Deed of Trust, (in case of full reconveyance, for cancellation and
retention) without affecting the liability of any person for the performance of Grantor's
G-22 PIORSORS2US 9PM5
obligations under the Reimbursement Agreement or the effect of the Deed of Trust upon
the remainder of the Property, Trustee may (i) consent to the making of any map or plat of
said Real Property; (u)join in granting any easement or creating any restriction thereon;
(m)join in any subordination or other agreement affecting this Deed of Trust or the lien or
charge thereof; or (iv) reconvey, without warranty, all or any part of the Real Property.
The grantee in any reconveyance may be described as the "person or persons legally
entitled thereto", and the recitals therein of any matters or facts shall be conclusive proof of
the truthfulness thereof. Grantor agrees to pay a reasonable Trustee's fee for full or partial
reconveyance, together with a recording fee, if Trustee, at its option, elects to record said
reconveyance
3.04. Recordation.
Trustee accepts this Trust when this Deed of Trust, duly executed and
acknowledged, is made a public record as provided by law.
3.05. Substitution of Trustee.
Beneficiary may, from time to time, by a written instrument executed and
acknowledged by Beneficiary and recorded in the county or counties where the Property is
located, and by otherwise complying with appropriate statutory provisions, substitute a
successor or successors for the trustee named herein or acting hereunder Upon the
recording of such appointment in the mortgage records of the county or counties in which
the Property is situated, the successor trustee shall be vested with all the powers of the
original trustee.
3.06. Notices.
(a) All notices hereunder shall be deemed to have been duly given if
mailed by United States registered or certified mail, with return receipt requested, postage
prepaid, to the parties at the following addresses (or at such other addresses as shall be
given in writing by any party to the others), and shall be deemed complete upon receipt,
refusal of delivery or attempted delivery
To Beneficiary: City of Kent
220 Fourth Avenue
Kent, Washington 98030
Attn. City Clerk
With a copy to: City of Kent
220 Fourth Avenue
Kent, Washington 98030
Attn City Attorney
G-23 P\DMDRS2UB 9129/05
To Grantor: Springboard Holdings, L.L.C.
1627 East Sammamish Place SE
Sammamish, Washington 98075
Attn: Ben Errez
With a copy to: Plan B Development, L.L.0
12889 Casino Drive
Anacortes, Washington 98221
With a copy to: Chairman, Swinomish Indian Tribal Community
PO Box 817
LaConner, Washington 98257
(b) In the event of any strike or occurrence of another similar event
which interrupts mail service, notices may be served personally upon an individual, partner
or an officer or director of a corporation which is or is part of the party being served
hereunder
(c) Grantor requests that a copy of any notice of default and of any
notice of sale hereunder be mailed to Grantor at the address set forth above.
(d) Unless otherwise provided by applicable law, Trustee shall be under
no obligation to notify any party hereto of any action or proceeding of any kind in which
Grantor, Beneficiary and/or Trustee shall be a party, unless brought by Trustee, or of any
pending sale under any other deed of trust.
3.07. Heirs and Assigns: Terminology.
(a) This Deed of Trust applies to, inures to the benefit of, and binds all
parties hereto, their heirs, legatees, devisees, administrators, executors, successors and
assigns. The term "Grantor" shall mean both the original Grantor and any subsequent
owner or owners of any of the Property The term `Beneficiary" shall mean the City and
any assignee of the City under the Replacement Parking Agreement, whether or not named
as Beneficiary herein In this Deed of Trust, whenever the context so requires, the
masculine gender includes the feminine and/or neuter, and the singular number includes
the plural.
(b) The term "and/or" as used herein means one or the other or both, or
any one or all, or any combination of the things or persons in connection with which the
words are used.
3.08. Severability.
If any provision hereof should be held unenforceable or void, then such provision
G-24 P ORSIDRMB 9129M
shall be deemed separable from the remaining provisions and shall in no way affect the
validity of this Deed of Trust.
3,09. Time is of the Essence.
Time is of the essence hereof in connection with all obligations of Grantor herein
or in the Replacement Parking Agreement.
3.10. Captions.
The captions are inserted only as a matter of convenience and for reference, and in
no way define, limit or describe the scope or intent of this Deed of Trust nor in any way
affect this Deed of Trust
3.11. Irrevocable Trust.
The Trust created hereby is irrevocable by Grantor unless and until the Property is
reconveyed to Grantor as provided herein.
3.12. Conveyance of Property; Change of Ownership
In the event that (i) all or any part of or any interest in the Property shall be sold,
transferred, leased, further encumbered, conveyed, or a contract of sale or other
conveyance entered into with respect thereto, or (n) there is any change in the existing
ownership interests of the existing members of Plan B Development, L.L.C. ("Plan B"), or
(in)Plan B ceases to have a controlling interest in Grantor, or (iv) Plan B ceases to be the
managing member of Grantor, without the prior written consent of Beneficiary, then,
Beneficiary may declare an Event of Default by Grantor under the Replacement Parking
Agreement and this Deed of Trust The execution and delivery by the Grantor of any joint
venture agreement, partnership agreement, declaration of trust or option agreement
whereunder any other person or corporation may become entitled, directly or indirectly, to
the possession or enjoyment of the Property, or the income or other benefits derived or to
be derived therefrom shall in each case be deemed to be a conveyance or assignment of the
Grantor's interest in the Property for the purposes of this section, and shall require the
prior written consent of the Beneficiary.
3.13. Secondary Financing.
Grantor agrees that should the Property or any part thereof at any time be or
become subject to the lien of any other mortgage or deed of trust or subject to any other
encumbrance, pledge, hypothecation or security interest (except with the prior written
consent of Beneficiary), Beneficiary may declare an Event of Default by Grantor under this
Deed of Trust
G-25 PNDRS\DRS2UB 9/29105
3 14. Effect of Security Agreement.
This Deed of Trust creates a lien on the Property, and to the extent the Property is
not real property under applicable law this Deed of Trust constitutes a security agreement
under the Washington Uniform Commercial Code and any other applicable law and is filed
as a fixture filing Grantor authorizes Beneficiary to file financing statements covering all
personal property and fixtures described herein. If required by Beneficiary, at any time
during the term of this Deed of Trust, Grantor will execute and deliver to Beneficiary, in
form satisfactory to Beneficiary, additional security agreements, financing statements
and/or other instruments covering all Personal Property or fixtures of Grantor which may
at any time be furnished, placed on, or annexed or made appurtenant to the Real Property
or used, useful or held for use, in the operation of the Improvements.
Beneficiary may commingle any Personal Property which comes into its
possession; repledge such Personal Property upon terms which impair Grantor's right to
redeem such, and require Grantor to assemble the Personal Property and make it available
to Beneficiary at a place to be designated by Beneficiary which is reasonably convenient to
both parties. To the extent Beneficiary is required for any reason to provide commercially
reasonable notice to Grantor, Grantor agrees that notice mailed by first class mail ten (10)
days before the event of which notice is given, is commercially reasonable notice Grantor
shall notify Beneficiary in writing within 30 days of any change in name of Grantor or its
legal structure or state of organization. Nothing herein shall be construed as a consent by
Beneficiary to a change in legal structure or state of organization otherwise prohibited
hereby
Grantor hereby irrevocably constitutes and appoints Beneficiary the attorney-m-fact
of Grantor, to execute, deliver and file with the appropriate filing officer or office such
security agreements, financing statements or other instruments as Beneficiary may request
or require in order to impose and perfect the lien and security interest hereof more
specifically on the Personal Property or any fixtures
If Grantor enters into a separate security agreement with Beneficiary relating to any
of the Personal Property or fixtures, the terms of such security agreement shall govern the
rights and remedies of Beneficiary in the event of default thereunder Any breach of or
default under any such security agreement shall constitute an Event of Default under this
Deed of Trust.
It is understood and agreed that, in order to protect Beneficiary from the effect of
RCW 62A 9-313, as amended from time to time, in the event that (i) Grantor intends to
purchase any goods which may become fixtures attached to the Property, or any part
thereof, and (u) such goods will be subject to a purchase money security interest held by a
seller or any other party
(a) Grantor shall, before executing any security agreement or other
document evidencing such security interest, obtain the prior written approval of
G-26 P%DRSWRS2US 9129105
Beneficiary, and all requests for such written approval shall be in writing and contain the
following information.
(i) a description of the fixtures to be replaced, added to,
installed or substituted;
(it) the address at which the fixtures will be replaced, added to,
installed or substituted, and
(iii) the name and address of the proposed holder and proposed
amount of the security interest,
and any failure of Grantor to obtain such approval shall be a material breach of Grantor's
covenant under this Deed of Trust, and shall, at the option of Beneficiary, entitle
Beneficiary to all rights and remedies provided for herein upon default No consent by
Beneficiary pursuant to this subparagraph shall be deemed to constitute an agreement to
subordinate the right of the Beneficiary in fixtures or other property covered by this Deed
of Trust
(b) If at any time Grantor fails to make any payment on an obligation
secured by a purchase money security interest in the Personal Property or any fixtures,
Beneficiary, at its option, may at any time pay the amount secured by such security interest
and the amount so paid shall be (1) secured by this Deed of Trust and shall be a hen on the
Property having the same priorities as the liens and security interests created by this Deed
of Trust, and (2) payable on demand with interest at the default rate specified in the
Replacement Parking Agreement from the time of such payment. If Grantor shall fail to
make such payment to Beneficiary within ten (10) days after demand, the entire principal
sum secured hereby with all unpaid interest accrued thereon shall, at the option of
Beneficiary, become due and payable immediately.
(c) Beneficiary shall have the right to acquire by assignment from the
holder of such security interest any and all contract rights, accounts receivable, negotiable
or non-negotiable instruments, or other evidence of Grantor's indebtedness for such
Personal Property or fixtures, and, upon acquiring such interest by assignment, shall have
the right to enforce the security interest as assignee thereof, in accordance with the terms
and provisions of the Washington Uniform Commercial Code then in effect, and in
accordance with any other provisions of law
(d) Whether or not Beneficiary has paid the indebtedness secured by or
taken an assignment of such security interest, Grantor covenants to pay all sums and
perform all obligations secured thereby, and if Grantor at any time shall be in default for a
period of ten (10) days under such security agreement, it shall be a material breach of
Grantor's covenants under this Deed of Trust, and Beneficiary may, at its option, declare
the principal sum secured hereby immediately due and payable, time being of the essence
G-27 PORSORS2UB w9m
(e) The provisions of subparagraphs (b), (c) and (d) above shall not
apply if the goods which may become fixtures are of at least equivalent value and quality
as any property being replaced and if the rights of the party holding such security interest
have been expressly subordinated, at no cost to Beneficiary, to the lien of this Deed of
Trust in a manner satisfactory to Beneficiary, providing to Beneficiary a satisfactory
opinion of counsel to the effect that this Deed of Trust constitutes a valid and subsisting
first hen on such fixtures which is not subordinate to the lien of such security interest
under any applicable law, including without limitation, the provisions of RCW 62A 9-313
3.15. Covenants Regarding Environmental Compliance.
(a) Grantor hereby represents, warrants, covenants and agrees to and
with Beneficiary that all operations or activities upon, or any use or occupancy of the
Property, or any portion thereof, by Grantor, is presently and shall hereafter be in all
respects in compliance with all state, federal and local taws and regulations governing or in
any way relating to the generation, handling, manufacturing, treatment, storage, use,
transportation, spillage, leakage, dumping, discharge or disposal (whether legal or illegal,
accidental or intentional) of any Hazardous Substance; and that except as disclosed in
writing to and approved by City, Grantor has not at any time placed, suffered or permitted
the presence of any such Hazardous Substances at, on, under, within or about the Property
or any portion thereof in violation of applicable law In no event shall Grantor install or
maintain on the Property any underground storage tank or similar facility for the storage of
any Hazardous Substances.
(b) Grantor shall keep and maintain the Real Property in compliance
with, and shall not cause or permit the Real Property to be in violation of any
Environmental Law (as defined herein).
"Environmental Laws" shall mean any federal, state or local law, statute,
ordinance, or regulation pertaining to health, industrial hygiene or the environmental
conditions on, under or about the Real Property. including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
("CERCLA"), 42 U.S C. Section 9601, et sec , as amended by the Superfund Amendments
and Reauthorization Act of 1986 (PL 99-499), the Hazardous Materials Transportation
Act, 49 U S.0 Section 1801, et sec , the Toxic Substance Control Act, 15 U S C.
Section 2601, et sec , and the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA"), 42 U.S C. Section 6901, et sec .
The term "Hazardous Substance" shall include without limitation-
(a) Those substances included within the definitions of "hazardous
substances," "hazardous materials," "toxic substances," or "solid waste" in CERCLA,
RCRA, the Hazardous Materials Transportation Act, 49 U S C Section 1801, et sec , and
the Toxic Substance Control Act, 15 U S C. Section 2601 et sec , and in the regulations
promulgated pursuant to said laws; G-28 P ORSORSWS M9/05
(b) Those substances defined as "dangerous wastes," "hazardous
wastes" or as "hazardous substances" under the Water Pollution Control Act,
RCW 90.48 010 et sec., the Hazardous Waste Management Statute, RCW 70.105 0 t 0 et
se , the Washington Toxic Substance Control Act RCW 70 105B 010 et seq., the
Washington Model Toxics Control Act, RCW 70.105D 010 et seq., and the Toxic
Substance Control Act, 15 U S C Section 2601 et seq., and in the regulations promulgated
pursuant to said laws;
(c) Those substances listed in the United States Department of
Transportation Table (49 C.F R 172 101 and amendments thereto) or by the
Environmental Protection Agency (or any successor agency) as hazardous substances
(40 C.F R Part 302 and amendments thereto);
(d) Storm water discharge regulated under any federal, state or local
law, ordinance or regulation relating to storm water drains, including, but not limited to,
Section 402(p) of the Clean Water Act, 33 U.S C. Section 1342 and the regulations
promulgated thereunder;
(e) Such other substances, materials and wastes which are or become
regulated under applicable local, state or federal law, or the United States government, or
which are classified as hazardous or toxic under federal, state or local laws or regulations;
(f) Any material, waste or substance which is (A) petroleum,
(B) asbestos, (C) polychlorinated biphenyls, (D) designated as a "hazardous substance"
pursuant to Section 311 of the Clean Water Act, 33 U S.0 Section 1251, et seq. (33 U S.C.
Section 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U S.C.
Section 1317), (E) flammable explosives, (F)radioactive materials; (G) lead-based paint;
or (H) radon gas; (I) coal combustion byproducts; (J) area formaldehyde foam insulation,
(K) toxic mold; or other substances which are deemed dangerous or injurious to human
health.
3.16. Non-Agricultural Use
The Real Property which is the subject of this Deed of Trust is not used principally
for agricultural purposes
3.17. Commercial Purposes; Time of Essence.
The obligations evidenced by the Replacement Parking Agreement were incurred
primarily for commercial, investment or business purposes and not for personal, family or
household purposes. Time is of the essence hereof in connection with all obligations of
Grantor herein or in the Replacement Parking Agreement
G-29 P\DRSIORS2U9 9129105
3.18. Washington State Law Governs.
This Deed of Trust is to be governed by and construed in accordance with the laws
of the state of Washington. At the option of the Beneficiary, the venue of any action to
enforce the provisions hereof may be laid in King County, Washington.
IN WITNESS WHEREOF, Grantor has executed this Deed of Trust, Security
Agreement, Assignment of Leases and Rents, and Fixture Filing as of the date first written
above.
SPRINGBOARD HOLDINGS L L.C.,
a Washington limited partnership
By-
Name:
Its.
STATE OF WASHINGTON )
ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that is the person
who appeared before me, and said person acknowledged that he signed this instrument, on oath stated
that he was authorized to execute the instrument and acknowledged it as the authorized member of
Springboard Holdings, L L C to be the free and voluntary act of such party for the uses and purposes
mentioned in the instrument
Dated:
Notary Public
Print Name
My commission expires
(Use this space for notarial statnptseap
G-30 P\DRS1DRS2UB 9129105
EXHIBIT A
LEGAL DESCRIPTION
Certain real property situated in King County, Washington and more particularly
described as follows:
G-A-1 P ORSORS2UB 09/29/05
Exhibit H
Bargain and Sale Deed Replacement Parking Site
AFTER RECORDING RETURN DOCUMENT TO
Spnngboard Holdings,L L C
1627 East Lake Sammamish Place S E
Sammamish, WA 98075
Attn Ben Errez
BARGAIN AND SALE DEED
Grantor(s): City of Kent, a Washington municipal
corporation
Grantee(s): Springboard Holdings, L.L.C., a Washington
limited liability company
Abbreviated Legal Description:
Additional Legal Description is on Page Exhibit 1 of Document
Assessor's Property Tax Parcel or Account No.:
I
H-1 P\DR&DRMB 09/29/05
BARGAIN AND SALE DEED
THE GRANTOR, CITY OF KENT, a Washington municipal corporation ("City"),
for and in consideration of all of the terms, covenants, conditions and provisions set forth
in that certain Replacement Parking Agreement dated as of September 30, 2005 (the
"Replacement Parking Agreement"), TEN DOLLARS and other good and valuable
consideration, to hand paid, bargains, sells and conveys to SPRINGBOARD HOLDINGS,
L.L C , a Washington limited liability company, as GRANTEE, the following described
real estate, situated in the County of King, State of Washington
See Exhibit 1 attached hereto and incorporated herein by this reference
("Property").
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances hereunto belonging or in anywise appertaining,
SUBJECT however, to all existing interests, including but not limited to the current
non-delinquent general and special taxes for the fiscal year of the transfer of title, all
reservations, rights of way and easements of record or otherwise and further subject to the
matters described in Exhibit 2 attached hereto and by this reference made a part hereof.
Grantee has been allowed to make an inspection of the Property and has knowledge
as to the past use of the Property Based upon this inspection and knowledge, Grantee is
aware of the condition of the Property and GRANTEE ACKNOWLEDGES THAT,
PURSUANT TO THE PROVISIONS OF SECTION 8.4 OF THE REPLACEMENT
PARKING AGREEMENT BETWEEN CITY AND GRANTEE, THE TRANSFER
OF THE PROPERTY IS MADE ON AN "AS IS" CONDITION AND BASIS WITH
ALL FAULTS AND CITY HAS NO OBLIGATION TO MAKE REPAIRS,
REPLACEMENTS OR IMPROVEMENTS TO THE PROPERTY. IN
PARTICULAR, BUT WITHOUT LIMITATION, CITY MAKES NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER WITH RESPECT TO
THE PHYSICAL CONDITION OR VALUE OF THE PROPERTY, THE
PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES ON THE
PROPERTY, SOILS CONDITIONS, OR OTHER PHYSICAL
CHARACTERISTICS OF THE PROPERTY OR THE SUITABILITY OF THE
PROPERTY FOR GRANTEE'S INTENDED DEVELOPMENT. CITY MAKES NO
REPRESENTATION WHATSOEVER REGARDING THE FINANCIAL
FEASIBILITY OF GRANTEE'S PROPOSED DEVELOPMENT OR THE
PARKING GARAGE AS DEFINED IN THE REPLACEMENT PARKING
AGREEMENT. UPON CLOSING AND RECORDING OF THIS DEED TO THE
PROPERTY, GRANTEE DOES HEREBY WAIVE AND RELEASE CITY, ITS
OFFICIALS, OFFICERS, EMPLOYEES AND AGENTS FROM ANY AND ALL
DAMAGES, LOSSES, LIABILITIES, COSTS AND EXPENSES WHATSOEVER
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES
H-2 P ORSDRS2UB 0929/05
AND COSTS) AND CLAIMS THEREOF, WHETHER DIRECT OR INDIRECT,
KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, WHICH MAY ARISE
ON ACCOUNT OF OR IN ANY WAY ARISING OUT OF OR IN CONNECTION
WITH THE PHYSICAL OR ENVIRONMENTAL CONDITION OF THE
PROPERTY OR THE PRESENCE OF ANY HAZARDOUS SUBSTANCES
WHICH MAY EXIST ON THE PROPERTY OR ANY REQUIREMENT OF LAW
APPLICABLE THERETO.
The term "Environmental Law"means any federal, state or local statute, regulation,
code, rule, ordinance, order,judgment, decree, injunction or common law pertaining in any
way to the protection of human health or the environmental including without limitation,
the Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act, the Toxic Substance Control Act, the Model
Toxics Control Act and any similar or comparable federal, state or local law.
The term "Hazardous Substance" means any hazardous substance, toxic,
radioactive or infectious substance, material or waste as defined listed or regulated under
any Environmental Law, and includes, without limitation, petroleum oil and any of its
fractions
This Deed is granted on the express condition that Grantee design, develop,
construct and complete the Parking Garage and grant City the Public Parking Easement on
the terms and conditions set forth in the Replacement Parking Agreement, which by this
reference are incorporated herein and made a part hereof
By acceptance of this Deed, Grantee and its legal representatives, heirs, successors
and assigns, does hereby accept and agree to all of the terms, conditions, provisions,
reservations, restrictions, releases and indemnities contained herein and in the Replacement
Parking Agreement.
Dated this day of 2005.
APPROVED AS TO FORM: GRANTOR:
CITY ATTORNEY CITY OF KENT, a Washington municipal
corporation
By- By:
Name Tom Brubaker Name
Title.
H-3 PORSORS2UB 09/29/05
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day of 2005, before me personally appeared
to me known to be the
of the CITY OF KENT, a Washington municipal corporation, the corporation that
executed the within and foregoing instrument, and acknowledged the said 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 authorized to execute said instrument and that
the seal affixed, if any, is the corporate seal of said corporation
WITNESS my hand and official seal hereto affixed the day and year first above
written.
Notary Public in and for the State of Washington,
residing at
My commission expires
[Type or Print Notary Name]
(Use This Space for Notarial Seal Stamp
ACCEPTED this day of 2005 GRANTEE:
SPRINGBOARD HOLDINGS, L.L.C.,
a Washington limited liability company
By:
Name,
Title
H-4 P ORSDRS2US 09/29/05
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day of 2005, before me personally appeared
, to me known to be the
of SPRINGBOARD HOLDINGS, L.L.C., a Washington limited liability company, the
limited liability company that executed the within and foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said limited
liability company, for the uses and purposes therein mentioned, and on oath stated that he
was authorized to execute said instrument.
WITNESS my hand and official seal hereto affixed the day and year first above
written.
Notary Public in and for the State of Washington,
residing at
My commission expires:
[Type or Print Notary Name]
(Use This Space for Notarial Seal Stamp
H-5 P1DRS\DRS2UB 09/29/05
To BARD EXHIBIT z
AIN AN
LEGAE DES jpTtQ EEi5
[TO follows
P 1DRSfpRSZUR
��79/05
EXHIBIT 2
TO BARGAIN AND SALE DEED EXCEPTIONS
[To be finalized following delivery of title report.]
REPLACEMENT PARKING AGREEMENT AND TERMS AND CONDITIONS
THEREOF:
BETWEEN: CITY OF KENT AND SPRINGBOARD
HOLDINGS, L.L.C.
AREA AFFECTED: PROPERTY DESCRIBED ON EXHIBIT 1
DISCLOSED BY MEMORANDUM OF REPLACEMENT
PARKING AGREEMENT
RECORDING NO:
H-Exhibit 2-1 PORSQRS2US 09/29/05
Exhibit I
Definitions
The following terms shall have the definitions set forth below or are defined in the
section of the Agreement listed below:
"Agreement" Opening paragraph
"Anderson" Recital B
"Anderson Property" Recital C
"Certificate of Substantial Completion" Section 19 1.1
"City" Opening paragraph
"City Loan Policy" Section 6.4
"City Mortgage" Section 4 2
"City Property" Recital A
"City's Permitted Exceptions" Section 7.3.1
"City's Title Commitment" Section 7.3
"City's Title Policy" Section 7.2
"claims" Section 17.1
"Closing" Section 13.1
"Closing Date" Section 13.1
"Construction Drawings" Section 5.2
"Construction Lender" means any bank, mortgage company, financial institution or other person
that provides a loan to finance or refinance construction of all or any portion of the Project
Springboard Improvements.
"Construction Loan" means a loan made by a Construction Lender from time to time to finance
or refinance construction of the Project Springboard Improvements.
"Construction Mortgage" means a mortgage, deed of trust, security agreement or other lien
recorded from time to time against the Project Site or any of the Project Springboard
Improvements, including the Parking Garage, to secure payment and performance of a
Construction Loan.
1-1 P 1DR&DRS2UB 0929/05
i
"Deed" Section 6.1
"Detailed Specifications" means all written detailed requirements for materials, equipment,
construction systems, standards and workmanship for the construction of the Parking Garage
"Developer" Opening paragraph
"Developer Agreements" Section 12.1
"Developer's Title Policy" Section 6.2
"Due Diligence Period" Section 8 1
"Escrow Agent" Section 4.5
"Default" or"Event(s) of Default" Section 25.1
"Exclusive Public Parking Stalls" Section 3.4
"Final Completion" Section 19.2
"Governmental Authority" means any court or any foreign, federal, state, municipal or local
department, commission, board, bureau, agency, public authority, instrumentality or government
regulator with jurisdiction over Developer, the Contractor or the Parking Garage.
"Harrison" Recital B
"Harrison Exchange Property" Recital A
s
"Harrison Property" Recital B
"Hotel Improvements" Section 2 1
"Indemnification Claim Notice" Section 17.2
"Indemnified Party" Section 17.2
"Intervening Lien" Section 7.4
"Land Speculation" Section 12.5
"Liens" Section 15.9
"Material Adverse Effect" means a material adverse effect upon (a) the business or operations of
Developer, Plan B or the general contractor for construction of the Parking Garage
("Contractor"), (b) the legal existence, power of financial condition of the Developer, Plan B or
any member or manager of Developer or Plan B or the Contractor, (c) the validity or
enforceability of this Agreement, (d) the rights and remedies of City under this Agreement, or
(e) the timely payment of the contractor and the timely performance of the obligations of the
1-2 P\DWDRS2U9 09/29/05
k
Contractor, the Developer or Plan B under this Agreement.
"Meeker Street" Recital B
"Notices" Section 28
"Opening Date" Section 19.2.7
"Outside Completion Date" Section 15.3
"Parking Garage" Section 2.2
"Parking Garage Construction Documents" Section 5.3
"Parking Garage Schematic Design Documents" Section 5.1
"Permitted Exceptions" Section 6.3 1
"Phase One" means construction of the Parking Garage and related retail spaces including the
private road that will connect Smith and Harrison Streets.
"Plan B" Section 23.1
"Pooling Agreement" Recital C
"Private Land" Recital B
"Private Owners" Recital B
"proceeding" Section 17.2
"Project Site" Recital C
"Project Springboard" Section 2.1
"Project Springboard Improvements" Section 2.1
"Property" Recital C
"Property Permitted Exceptions" Section 6 4
"Public Parking Easement Acceptance Date" Section 20
"Public Parking Easement" Section 3 4 and Exhibit F
"Replacement Parking Site" Recital A
"Requirements of Law" means all requirements relating to land and building construction
including, without limitation, building, planning, zoning, subdivision, health, environmental, air
1 3 P 1 DR S DRS2U8 09l29/05
quality, flood hazard, fires safety, accessibility and other governmental approvals, permits,
licenses and /or certificates as may be necessary from time to time to comply with all of the
foregoing and other applicable statutes, rules, orders, regulations, laws, ordinances and
covenants, conditions and restrict which apply to or affect the design, construction, existence,
intended use, operation and/or occupancy of the Parking Garage, the Project Site, the Project
Springboard Improvements or any part thereof.
"Schematic Design Documents" are the initial drawings and specifications for the Parking
Garage.
"Second Avenue" Opening paragraph
"Short Term Parking" Section 2 2 (defined in Public Parking
Easement (Exhibit F)) ,
Y
"SPI" Recital B
"SPI Contribution Agreement" Section 3.1
"SPI Land" Recital C
"Substantial Completion" Section 19.1
"Substantial Completion Date" Section 12.5
"Substantially Completed" Section 19.1.2
"Title Commitment" Section 6.3
` "Title Company" Section 4.5 ;
"Town Square Plaza Site" Recital A ;
"transfer" Section 23.3
"Unavoidable Delay" Section 15.3
1-4 P%ORSORKUB 09/M05