HomeMy WebLinkAbout17-131 - Tukwila Village Associates LLC - Police Resource Center Lease Option for Tukwila Village17-131
Council Approval N/A
Reference 12-129
LEASE OPTION AGREEMENT
(Police Resource Center Lease)
THIS LEASE OPTION AGREEMENT is made as of this 19th day of July, 2017, by and
between TUKWILA VILLAGE DEVELOPMENT ASSOCIATES, LLC, a Washington limited
liability company, ("TVDA"), and the CITY OF TUKWILA, a municipal corporation operating
under the laws of the State of Washington as a non -charter code city ("Tukwila").
Recitals
Tukwila is the owner of real property legally described on Exhibit A attached (the
"Property"). Pursuant to (i) that certain Disposition and Development Agreement dated as of
October 30, 2012 entered into by and between the City of Tukwila and Tukwila Village
Development Associates, LLC, and amended by that certain First Amendment to the Disposition
and Development Agreement dated as of May 18, 2015 (as amended, the "Disposition
Agreement"), and (ii) that certain Real Estate Purchase and Sale Agreement (Tukwila Village
Phase 1) dated August 15, 2016, as amended by Addendum #1 dated January 30, 2017 and by
Addendum #2 dated June 12, 2017 (as amended, the "Purchase Agreement"), Tukwila has
agreed to convey the Property to TDVA. As a condition to the closing of the purchase and sale
of the Property in the Purchase Agreement and Section 2.12 of the Disposition Agreement,
TVDA has agreed to grant Tukwila an option to lease a portion of the Property as provided
herein.
Agreement
NOW, THEREFORE, for good and valuable consideration, the receipt the receipt and
sufficiency of which are acknowledged, TVDA and Tukwila agree as follows:
1. Grant of Option. TVDA hereby grants Tukwila an option (the "Option") to Lease a
portion of the Property (defined as the "Premises" in the Lease attached as Exhibit B), for
the teen and upon all of the terms and conditions as provided in the form of Lease
attached as Exhibit B (the "Lease").
2. Term of Option. The Option granted to Tukwila herein shall commence on the date
hereof and shall expire on February 15, 2018 ("Termination Date").
3. Exercise of Option. Tukwila may exercise this Option by giving written notice to
TVDA by the Termination Date. If Tukwila does not give such written notice by the
Termination Date, this Option shall terminate.
4. Execution of Lease. If Tukwila exercises the Option by giving written notice to TVDA
by the Termination Date, 1'VDA and Tukwila shall each cause the Lease in the form
attached as Exhibit B to be fully executed, acknowledged and delivered within ten (10)
days thereafter. _
5. Operations Prior to Commencement Date. Between the closing date under the
Purchase Agreement and the Commencement Date under the Lease, TVDA will operate
the Property in a commercially reasonable manner and will not default in any of its
obligations under any other agreement affecting the Property.
6. Notices. All notices required or permitted hereunder shall be in writing and shall be
given as follows:
If to TVDA:
If to Tukwila:
With a copy to:
Tukwila Village Development Associates, LLC
c/o Pacific Northern Construction Company, Inc.,
Manager
201 — 27th Avenue SE, Building A, Suite 300
Puyallup, WA 98374
ATTN: Bryan M. Park, Manager
Email: bryanp@housing4seniors.com
Office: (253) 231-5001
Fax: (253) 231-5010
City of Tukwila
Office of the City Clerk
6200 Southcenter Boulevard
Tukwila, WA 98188
Pepple Cantu Schmidt PLLC
1000 Second Avenue, Suite 2950
Seattle, Washington 98104
Attn: Jeffrey M. Hawkinson
Email: jhawkinson@a,pcslegal.com
Office: (206) 625-2302
Fax No. (206) 625-1627
Any such notices shall be (a) sent by certified mail, return receipt requested, in which
case notice shall be deemed delivered three business days after deposit, postage prepaid
in the U.S. mail, or (b) sent by a nationally recognized overnight courier, in which case
notice shall be deemed delivered one business day after deposit with such courier; or (c)
served personally, in which case notice shall be deemed given on the date of such service.
The above addresses may be changed by written notice to the other party; provided that
no notice of a change of address shall be effective until actual receipt of such notice.
7. Assignment. Tukwila may not assign this Option to another party without the express
written consent of TVDA, which consent it may grant or withhold in its sole and absolute
d iscretion.
8. General Provisions. TVDA and Tukwila agree as follows:
(a) If TVDA defaults hereunder, Tukwila may seek specific performance, damages or
rescission.
(b) This Agreement may be modified or amended only by a writing signed by TVDA
and Tukwila.
(c)
This Agreement shall be binding upon and shall inure to the benefit of the
respective successors and assigns of the parties, including without limitation any
transferee of fee simple title to the Property.
(d) This Agreement shall be governed by the laws of the State of Washington.
(e) Time is of the essence of this Agreement.
(f) In the event of any claim or dispute arising out of this Agreement, the party that
substantially prevails shall be awarded, in addition to all other relief, all legal fees
and other costs and expenses incurred in connection with such claim or dispute;
including without limitation those fees, costs, and expenses incurred with or
without suit, and in any appeal, any proceedings under any present or future
bankruptcy act or receivership, and any post -judgment proceedings.
IN WITNESS WHEREOF, this Agreement is executed as of the day and year first above
written.
Tukwila:
CITY OF TUKWILA, a municipal
corporation
By-
e:
ye:
Title: Mayor
Date: J LGl -19
Attest: D ,
By:
, City Clerk
Approved as to form:
By: —1)-A,...,r.Q.
,.lefcct rri t .ak:0sor•
City Attorney
TVDA:
TUKWILA VILLAGE DEVELOPMENT
ASSOCIATES; LLC, a Washington corporation
By:
Name: Bryan M. Park
Title: Manager
Date:
/
f`T /a-07
EXHIBIT A
TO
LEASE OPTION AGREEMENT
LEGAL DESCRIPTION OF PROPERTY
The Property which is subject to this Agreement is situate in the County of King, State of
Washington, and legally described as follows:
PARCEL A OF CITY OF TUKWILA LOT CONSOLIDATION NO. L16-031, ACCORDING
TO THAT LOT CONSOLIDATION RECORDED UNDER RECORDING NO.
20160629900001, WHICH WAS AMENDED UNDER RECORDING NO. 20160809900003,
IN KING COUNTY, WASHINGTON.
EXHIBIT B
TO
LEASE OPTION AGREEMENT
FORM OF LEASE
LEASE
,201_
TUKWILA VILLAGE DEVELOPMENT ASSOCIATES, LLC, as LANDLORD
and
CITY OF TUKWILA, as TENANT
-1-
LEASE
THIS LEASE is entered into as of this day of , 201_, between TUKWILA
VILLAGE DEVELOPMENT ASSOCIATES, LLC, a Washington limited liability company,
(`Landlord') whose address 201 — 27th Avenue SE, Building A, Suite 300, Puyallup, WA
98374, and the CITY OF TUKWILA, a municipal corporation operating under the laws of the
State of Washington as a non -charter code city ("Tenant"), whose address is 6200 Southcenter
Boulevard, Tukwila, WA 98188.
1. EXHIBITS. DEFINITIONS AND CONDITIONS.
1.1 Exhibits. The following exhibits are attached and made a part of this Lease:
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Legal Description of the Property
Floor Plan of Premises
Site Plan
Location of Tenant's Reserved Parking Spaces
1.2 Definitions. The following terms used in this Lease shall have the definitions as
set forth below:
"Commencement Date": means the earlier of (a) ninety (90) days after the Turnover
Date or (b) the date Tenant commences conducting business in the Premises.
"Commercial Improvements": means the commercial improvements at the Project
consisting of (a) Commercial Unit El as identified on the Survey Map and Plans,
containing approximately 1,403 square feet of Gross Leasable Area, and (b) Commercial
Unit E2 as identified on the Survey Map and Plans, containing approximately 2,003
square feet of Gross Leasable Area.
"Common Areas": means all lands, improvements, facilities, utilities, installations, and
equipment forming part of the Project from time to time, other than parts of those lands,
improvements, facilities, utilities, installations and equipment designated by Landlord for
leasing to tenants of the Project, and includes, without limiting the generality of the
foregoing, the exterior walls, floors and roofs of all improvements; public entries; interior
lobbies and hallways; the Parking Areas and parking control equipment; the alley,
sidewalks and landscaped areas; truck courts and loading areas, elevators and escalators;
electrical systems and equipment; public address, intercom, music and alarm systems;
heating, ventilating, air conditioning, plumbing, drainage and other mechanical systems
and equipment; general signs and information facilities; public telephones; decor,
furnishings; boiler and fan rooms, trash disposal and recycling facilities.
"Common Area Costs": means the total of all amounts Landlord shalt have paid for
reasonable costs and expenses incurred relating directly to the maintenance and repair of
the Common Area in fulfilling Landlord's obligations under Section 7.1 of this Lease. If
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all or any part of the activities or work involved in Landlord's maintenance and repair of
the Common Area is provided or performed on behalf of Landlord by any other person
not affiliated with Landlord, the amount paid by Landlord to such other person for such
activities or work may be included in Common Area Costs, but only to the extent that
such amount so paid to such other person is separately noted and itemized and is for
items of cost and expense which would be included within Common Area Costs as
defined hereunder if such activities or work were performed by Landlord's employees.
Common Area Costs shall not include real estate taxes or assessments (which are covered
by Section 6.1) nor insurance premiums (which are covered by Section 9.2), and shall
exclude the following:
(i)
Depreciation, except for depreciation on equipment used in the repair and
maintenance of the Common Area over the useful life of such equipment;
(ii) payments of principal and interest under any mortgages on the Project;
(iii) payments applicable to expenses included in Common Area Costs made or
owing by tenants or other occupants of the Project;
(iv) corporate, income, profits, or excess profits taxes assessed upon the
income of Landlord; and
(v) the amounts or proceeds actually recovered by Landlord relating to
damage, the costs of repair of which was included in Common Area Costs.
(vi) The cost of capital assets and improvements or any other costs which
would be capitalized under generally accepted accounting principles,
except that Common Area Costs may include the amortization over its
useful life on a straight-line basis of the cost of capital improvements that
are installed primarily for the purpose of reducing Common Area Costs.
(vii) Leasing commissions.
(viii) Management and administrative fees in excess of ten percent (10%) of the
total Common Area Costs (exclusive of any management and
administrative fees, property taxes, or insurance premiums).
(ix) Cost of repair and replacement incurred by reason of fire or other casualty
or by the exercise of the right of eminent domain, except for Landlord's
commercially reasonable deductibles.
(x) Consulting fees, marketing fees, advertising and promotional
expenditures.
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(xi) Legal fees in connection with the negotiation and preparation of leases of
space, or legal fees in connection with the sale of all or any portion of the
Project or an interest therein, or the refinancing of Landlord's interest in
all or any portion of the Project, or in connection with disputes with
tenants, and legal and auditing fees other than legal and auditing fees
reasonably incurred in connection with the maintenance, repair, or
operation of the Common Area.
(xii) Rents payable in connection with any ground or underlying lease of all or
any portion of the Project.
(xiii) Any costs and expenses which are solely for the benefit of the Residential
Improvements of the Project, including without limitation any costs or
expenses relating to the Parking Garage.
(xv) Costs resulting from the correction of any construction defect.
(xvi) Penalties due to any violation of law by Landlord or other tenants.
(xvii) Costs of preparing tenant space for tenant occupancy.
(xviii) Costs of any utilities, services, or capital improvements relating to all or
any portion of the Project which were paid directly by Tenant or any other
tenant.
"Floor Plan": The floor plan for the Premises attached to this Lease as Exhibit B.
"Gross Leasable Area": The square footage of a particular area which shall be
accurately determined by measuring from the outside of each outside wall (assuming wall
thickness of no more than one foot) to the outside of the opposite outside wall, except in
the case of common walls which shall be measured from the center of such common
walls. The outside of a wall shall be the major portion of its outside surface and shall not
include any protrusions which may extend from it. Mezzanines and exterior storage areas,
vestibules, loading docks, platforms, drive through lanes and related improvements
appurtenant to or used in connection with the Premises, and similar exterior facilities
shall not be included in Gross Leasable Area for the Premises or the Project.
"Hazardous Substances": Any hazardous, toxic, or dangerous substance, waste, or
materia] (including medical waste) which is or becomes regulated under any federal,
state, or local statute, rule, regulation or ordinance now or hereafter in effect pertaining to
human health, environmental protection, contamination, or cleanup.
"Interest": Interest shall mean 2% per annum above the rate of interest publicly
announced by Bank of America, N.A., or its successors in interest, as its "prime rate",
adjusted simultaneously with each adjustment in such "prime rate". 1f Bank of America,
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N.A. no longer publicly announces its "prime rate", the rate of interest designated by
Citibank, N.A. or its successors in interest as its "prime rate" shall be used.
"Lease Year": The first Lease Year shall be the period beginning on the Commencement
Date and terminating twelve (12) months from the last day of the calendar month in
which the Commencement Date occurs (except that if the Commencement Date occurs
on the first day of a calendar month, the first Lease Year shall terminate on the day prior
to the first anniversary of the Commencement Date), and in the case of each subsequent
Lease Year, means each twelve (12) month period following the first Lease Year.
"Master Lease": That certain long-term Master Lease dated as of July , 2107 entered
into by and between Landlord, as lessee, and Tukwila Village Commercial (1)
Associates, LLC, the owner of the Premises -(the "Owner"), as lessor.
"Parking Areas": means any concrete and paved portions of the Project, including
without limitation the Parking Garage, which have been or are to be allocated for the
parking of motor vehicles, as from time to time altered, reconstructed or expanded, and
includes entrances, roads and other means of access thereto and any parking structures or
other parking facilities from time to time constructed in the Project.
"Parking Garage": means the parking garage located under the Project, as shown on the
Survey Map and Plans, which is part of the Residential Improvements.
"Premises": Commercial Unit E2 of the Commercial Improvements consisting of
approximately 2,003 square feet of Gross Leasable Area, located on the ground floor of
the Project, as shown on the Floor Plan.
"Project": That certain mixed-use building located on the Property, known as "Building
E" of Tukwila Village, with an address of 4500 South 144th Street, Tukwila, WA 98168,
which includes the Commercial Improvements, the Residential Improvements, and the
Common Areas.
"Property": The real property legally described on Exhibit A attached.
"Rent": means individually and collectively all Base Rent, Additional Rent and any other
monetary obligations of Tenant under this Lease.
"Residential Improvements": the residential improvements at the Project consisting of:
(a) the Residential Unit as identified on the Survey Map and Plans, consisting of one
hundred twenty five (125) residential units, and (b) the Parking Garage, as identified on
the Survey Map and Plans.
"Site Plan": The Site Plan for the Project attached to this Lease as Exhibit C.
"Survey Map and Plans" means the Survey Map and Plans for Tukwila Village, a
Condominium, recorded under Recording No.
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"Structural Elements" means the foundations, load bearing walls and columns, and
structural portions of all roofs, floors, parking and circulation areas. Structural Elements
shall not include any wearing surface, decorative element, finish material, roof
membrane, glass, or waterproofing material.
"Taxes": means all taxes, assessments, and other governmental charges, general and
special, ordinary and extraordinary, of any kind or nature whatsoever relating to the
Project, including but not limited to assessments for public improvements or benefits,
which relate to or are payable during the Term, subject only to the following:
(a) Franchise, estate, inheritance, succession, capital levy, transfer, and income taxes
imposed upon Landlord shall be excluded.
(b) If at any time during the Term a tax, license fee or excise on Rents or other tax,
however described (including business and occupation taxes), is levied or
assessed against Landlord on account of the Rents payable to Landlord by the
tenants of the Project, such tax or excise on Rents or other tax shall be included in
"Taxes".
(c) With regard to any assessment which may be levied or assessed with respect to
the Project or the Premises and which under the laws then in force may be
evidenced by improvement or other bonds, or may be paid in annual installments,
there shall be included in "Taxes" with respect to any tax year only the amount
currently payable on such bond for such tax year, or the current annual installment
for such tax year.
"Tenant's Commercial Proportionate Share": The percentage or proportionate share of
the whole of the Commercial Improvements for which Tenant is responsible based upon
the ratio of the Gross Leasable Area of the Premises to the Gross Leasable Area of the
Commercial Improvements. The estimated Tenant's Commercial Proportionate Share is
58.81%.
"Tenant's Project Proportionate Share": The percentage or proportionate share of the
whole of the Project for which Tenant is responsible based upon the ratio of the Gross
Leasable Area of the Premises to the Gross Leasable Area of the Project. The estimated
Tenant's Project Proportionate Share is 1.95%.
"Tenant's Work": Tenant's installation of furniture, fixtures and equipment in the
Premises.
"Turnover Date": The first date on which all of the following have occurred: (a) the
Project has been completed in accordance with Section 5.1; (b) Landlord's Work has
been substantially completed, subject only to completion of punchlist items; (c)
Landlord's architect has provided a certificate of substantial completion to Landlord and
Tenant with respect to the Project; (d) Landlord has delivered possession of the Premises
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-6-
to Tenant for Tenant's exclusive occupancy; (e) the City of Tukwila has issued a
certificate of occupancy for the Premises; (0 Tenant has exercised the option in
accordance with the Option Agreement dated July —, 2017 between Landlord and
Tenant; and (g) Landlord has provided Tenant with commercially reasonable SNDA(s)
with respect to the Master Lease and the Mortgage in accordance with Section 13.3 of
this Lease.
2. PREMISES AND TERM.
2.1 Premises and Demise. Landlord hereby subleases the Premises to Tenant, and
Tenant subleases the Premises from Landlord, subject to the terms and conditions of this Lease
and the Master Lease.
2.2 Primary Term. The primary term ("Primary Term") of this Lease shall
commence on the Commencement Date, and shall terminate at midnight on the Iast day of the
fifty (5th) Lease Year. This Lease is a binding and enforceable contract on the date that it is
executed by both Landlord and Tenant, even though the Primary Term does not commence until
the Commencement Date.
2.3 Entry and Inspection. Prior to the Turnover Date, Tenant may enter upon the
Premises during the course of construction of Landlord's Work to inspect it and take
measurements so long as such entry does not unreasonably interfere with Landlord's Work.
Such early entry shall not constitute acceptance of possession of the Premises by Tenant.
2.4 Extended Terms. Tenant shall have the option to extend the term of this Lease
for two (2) consecutive periods of five (5) Lease Years each (each, an "Extended Term") on the
same terms and conditions as provided herein for the Primary Tenn except for Base Rent.
Tenant shall exercise its option to extend by giving Landlord at least four (4) months written
notice ("Extension Notice") before the expiration of the Primary Term or Extended Term then in
effect. Base Rent during each Extended Term shall be as provided in Section 3.1(b).
2.5 Surrender of Premises. Upon termination of this Lease, Tenant shall surrender
possession of the Premises to Landlord in good condition, as modified by any repairs, alterations
or improvements made by Tenant in accordance with this Lease, and subject to ordinary physical
depreciation, wear and tear, Landlord's responsibility for the Premises' maintenance, and
damage by fire or other insured casualty.
3. RENT.
3.1 Base Rent.
(a) Primary Term. Tenant agrees to pay base rent ("Base Rent') per square
foot of Gross Leasable Area in the Premises per Lease Year as follows:
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Lease Year
Lease Years 1-5
Annual Rent / SF Monthly Rent
$12.00 / SF $2,003.00
(b) Extended Terms. Tenant covenants and agrees to pay Landlord annual
Base Rent for each Lease Year of each Extended Term in an amount equal to the Base Rent
payable in the Lease Year immediately preceding commencement of such Extended Term
increased by the percentage increase, if any, in the CPI over the five (5) Lease Year(s)
immediately preceding the commencement of such Extended Term.
(c) Installments. The annual Base Rent for each Lease Year of the Primary
Term and any Extended Term shall be payable in equal monthly installments in advance on or
before the first day of each calendar month from and after the Commencement Date. Base Rent
for any partial month shall be prorated on the basis of a 30 -day month.
3.2 Additional Rent.
(a) Obligation. Beginning on the Commencement Date, Tenant shall pay to
Landlord as additional rent ("Additional Rent"), Tenant's Commercial Proportionate Share of
real property taxes and assessments as provided in Section 6.1(a), Tenant's Project Proportionate
Share of Common Area Costs as provided in Section 3.2(b), Tenant's Project Proportionate
Share of insurance premiums as provided in Section 9.5, and other items of Additional Rent
provided for in this Lease.
(b) Time of Payment. Tenant's Commercial Proportionate Share of real
property taxes and assessments shall be paid as provided in Section 6.1(a) of this Lease.
Tenant's Project Proportionate Share of insurance premiums for Landlord's insurance shall be
paid as provided in Section 9.5 of this Lease. Tenant's Project Proportionate Share of Common
Area Costs shall be paid as follows: At least thirty (30) days prior to the Commencement Date
and at least sixty (60) days prior to the commencement of each calendar year during the Primary
Term and any Extended Term of this Lease, Landlord shall submit to Tenant a line item budget
showing Landlord's reasonable estimate of Tenant's Project Proportionate Share of Common
Area Costs for the ensuing calendar year (or in case of the Commencement Date, for the portion
of the calendar year after the Commencement Date). Tenant shall pay Tenant's Project
Proportionate Share as estimated by Landlord, in equal monthly installments concurrently with
each monthly payment of Base Rent. Tenant shall continue to make such monthly payments
until notified by Landlord of a change thereof. By March I of each calendar year, Landlord shall
give Tenant a statement ("Reconciliation Statement") showing the total Common Area Costs
actually incurred for the prior calendar year and Tenant's Project Proportionate Share thereof.
The Reconciliation Statement shall be broken down by line item in a format reasonably
acceptable to Tenant. The first and last of such statements shall be prorated as appropriate for
any partial calendar year during the Primary Tenn or any Extended Term of this Lease. If the
total of the monthly payments which Tenant has made for the prior calendar year is less than
Tenant's actual Proportionate Share, Tenant shall pay the difference within thirty (30) days of
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Landlord's demand therefor. If the total of the monthly payments made by Tenant for the prior
calendar year is more than Tenant's actual Proportionate Share, the difference shall be retained
by Landlord and applied against the Rent next due under this Lease unless the Lease has then
been terminated, in which case such amount shall be paid in cash by Landlord to Tenant within
thirty (30) days after delivery of the Reconciliation Statement (together with supporting
information) to Tenant.
3.3 Proration. Upon the expiration or termination of this Lease, or during or at the
end of any holdover period, all Base Rent and Additional Rent shall be prorated to the date of
expiration or termination, and Landlord shall promptly refund to Tenant any rent or deposit paid
in advance and unearned at the time of expiration or termination and any other sums paid by
Tenant for periods beyond the date of expiration or termination.
3.4 No Deduction or Offset. Except as specifically provided in this Lease, all Base
Rent and Additional Rent due under this Lease shall be paid without deduction or offset.
3.5 Tenant's Right to Audit. Tenant, or its designated agents shall have the right,
exercisable upon ten (10) days written notice to Landlord, to audit Landlord's operating records
pertaining to the Project for up to the two preceding Lease Years for purposes of validating
Common Area Costs, property taxes, insurance premiums or any other charge included within
Additional Rent and Landlord shall fully cooperate with Tenant in this regard. If such audit
discloses errors in determination of Additional Rent or that Tenant has erroneously overpaid any
Additional Rent, Landlord shall repay such overpayment to Tenant within thirty (30) days of
completion of said audit. Information obtained by Tenant as a result of such audit shall be held in
strict confidence by Tenant. If it is found that Tenant has been over -charged and the error is
greater than five (5%) percent, Landlord shall reimburse Tenant for the cost of the audit. Any
failure of Tenant to exercise its rights under this Section shall not be a waiver of its right to do
so.
4. TITLE AND USE.
4.1 Title and Authority.
(a) By .Landlord. Landlord represents and warrants to Tenant as follows,
which representations and warranties shall be true on the date hereof and on the Commencement
Date: (a) Landlord is a limited liability company duly organized and validly existing under the
laws of the State of Washington, and is duly authorized to conduct its business in the State of
Washington; (b) Landlord has fee simple title to the Property and has ail the requisite right,
power, title and authority to enter into this Lease and to perform its obligations hereunder; and
(c) no consent or approval of any other person is necessary for the effectiveness of Landlord's
obligations under this Lease.
(b) .By Tenant. Tenant represents and warrants to Landlord as follows which
representations and warranties shall be true on the date hereof and on the Commencement Date:
(i) Tenant is a municipal corporation operating under the laws of the State of Washington as a
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non -charter code city; (ii) no consent or approval of any other person is necessary for the
effectiveness of Tenant's obligations under this Lease, and (iii) Tenant has all the requisite right,
power, and authority to enter into this Lease and to perform all of its obligations hereunder. The
truth of the representations and warranties in this Section 4.1(bi on the date hereof and on the
Commencement Date is, at the election of Landlord, a condition precedent to any of Landlord's
obligations under this Lease.
4.2 No Restrictions. Landlord represents and warrants to Tenant that, to Landlord's
knowledge, there are no easements, covenants, conditions or restrictions which affect the
Property that would affect Tenant's use and occupancy of the Premises or the rights granted to
Tenant hereunder.
4.3 Hazardous Substances.
(a) Landlord's Responsibilities and Indemnity. Landlord will hold harmless,
protect, indemnify and defend Tenant from and against any claims, demands, penalties, fees,
liens, damages, losses, expenses, or liabilities (including the cost of clean-up), incurred by
Tenant as a result of the presence of any Hazardous Substance on the Property to the extent
existing prior to the Commencement Date or caused by Landlord, its employees, agents or
contractors. This indemnity shall survive termination of this Lease. This indemnity shall not
apply to any Hazardous Substance carried in stock by Tenant or introduced by (a) Tenant and/or
its employees, agents, contractors, or invitees or (b) any other tenants of the Project and/or their
respective employees, agents, contractors, or invitees.
(b) Tenant's Responsibilities and Indemnity. Tenant shall not keep in, on or
around the Premises or the Project any .Hazardous Substance except such as is used or sold by
Tenant in the ordinary course of its business and then only in accordance with all applicable
laws, rules, regulations and ordinances covering the storage, sale, use, and disposal of any such
products. Tenant will hold harmless, protect, indemnify and defend Landlord from and against
any claims, demands, penalties, fees, liens, damages, losses, expenses, or liabilities (including
the costs of clean-up) incurred by Landlord as a result of any Hazardous Substance on the
Premises which results from Tenant's use of the Premises or is caused by Tenant, its employees,
agents or contractors. This indemnity shall survive termination of this Lease.
4.4 Quiet Enjoyment. Subject to Tenant's compliance with the terms of the Lease,
Landlord warrants that Tenant shall have quiet enjoyment of the Premises and all of the rights
granted hereunder without interference by Landlord, anyone lawfully acting by, through or under
Landlord, or anyone having title or any lien or interest paramount to Landlord.
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4.5 Use of the Premises. Tenant shall use the Premises only for the operation of a
police resource center, including any lawful activities as may be incidental to the operation of a
police resource center, and for no other purposes without Landlord's prior written consent, which
shall not be unreasonably withheld, conditioned or delayed. Tenant will comply with all
governmental rules and regulations applicable to the conduct of its business in the Premises.
4.6 Parking. Landlord agrees to provide, at no cost to Tenant, throughout the Term
of this Lease, three (3) easily accessible, surface parking spaces immediately adjacent to the
Premises, in the location shown on Exhibit D. Landlord shall install "Police Only" or similar
signage on the parking spaces available for Tenant's exclusive use.
4.7 Tenant's Signs. As part of Landlord's Work, Landlord shall install blade and
suite entry signage on the Premises, which shall be designed by Tenant and subject to Landlord's
prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.
Except as expressly permitted herein, Tenant shall not place, construct or maintain on the
exterior walls of the Premises (including the exterior windows and doors of the Premises), any
other signage without Landlord's prior written consent. All exterior signs when installed shall
conform with all applicable regulations and building and sign codes of the applicable public
authority. Landlord will cooperate with Tenant's applications for sign permits and will do
nothing to impair or impede such applications. At the termination of this Lease, all signs,
symbols and advertising matter attached to the Premises, whether the exterior or interior thereof,
shall be removed by Tenant at its own expense, and any damage or injury to the Premises or the
Project caused thereby shall be repaired by Tenant at its own expense.
5. CONSTRUCTION.
5.1 Construction of Project. As soon as reasonably possible, Landlord will cause
construction of Project to be completed in accordance with all applicable laws, rules, regulations,
and ordinances and ready for occupancy by tenants (except for construction of tenant
improvements on unleased space).
5.2 Landlord's Work.
(a) Landlord's Work. Landlord shall construct all aspects of the Premises, at
its sole cost and expense, for "turnkey" delivery to Tenant ("Landlord's Work"). Landlord
shall, at its sole cost and expense, cause detailed plans and specifications for Landlord's Work
("Plans") to be prepared and submitted to Tenant for approval. Tenant shall not unreasonably
withhold its approval of the Plans. Tenant shall have thirty (30) days after receipt of the Plans to
request any changes to the Plans and Landlord shall cause those changes to be made to the extent
reasonably possible.
(b) Construction of Premises. Landlord will cause Landlord's Work to be
completed in a good and workmanlike manner and in accordance with the Plans approved by
Tenant under Section 5.2(a) above as soon as reasonably possible.
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(c) Tenant's Work. After Landlord notifies Tenant in writing that Landlord's
Work is substantially complete, Tenant shall, at its own expense, perform Tenant's Work. Even
if Landlord's Work is not complete because of construction mistakes or omissions, Tenant may,
at its option, accept the Premises on the Turnover Date subject to Landlord's agreement to
remedy the construction mistakes or omissions in a timely manner and in a manner acceptable to
Tenant.
(d) Compliance With Law. Landlord agrees that, subject to Tenant's
obligation to complete Tenant's Work, upon completion of Landlord's Work the Premises will
be in compliance with all applicable laws, rules, regulations, and ordinances, including without
limitation, the accessibility requirements of the Americans With Disabilities Act of 1990.
6. TAXES, ASSESSMENTS AND UTILITIES.
6.1 Real Estate Taxes and Assessments.
(a) Payment of Taxes. Tenant shall pay to Landlord, as Additional Rent,
Tenant's Project Proportionate Share of all Taxes.
(b) Calculations. Tenant's liability for its share of taxes and assessments shall
be pro -rated for the first and last Lease Years if they are not full calendar years.
(c) Installments. If any Taxes may be paid in installments without penalty or
interest, Tenant shall be required to reimburse Landlord only for Tenant's Commercial
Proportionate Share of those installments which become due and payable during the term
of this Lease.
6.2 Personal Property Taxes. Tenant shall pay prior to delinquency all personal
property taxes assessed during the term of this Lease upon Tenant's fixtures, furnishings,
equipment and stock in trade or upon any other personal property of Tenant situated in or upon
the Premises.
6.3 Utilities. Landlord agrees that there will be available at the Premises the
following utilities and services: (a) electricity and water for drinking and restroom purposes
twenty-four hours a day, seven days a week; (b) heating, air conditioning, and ventilation
required for normal operations in the Premises during Tenant's customary business hours; and
(c) janitorial services. From and after the Commencement Date, Tenant agrees to pay for all
water, sewer, heat, gas, electricity, and all other utility services or janitorial services consumed
or used by Tenant in connection with its occupancy of the Premises. Landlord shall cause all
such utilities to be separately metered. Nothing contained herein shall be deemed to render
Tenant liable for any charges incurred prior to the Commencement Date, or after the termination
or expiration of this Lease, all such charges being solely for the account of Landlord.
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7. COMMON AREA.
7.1 Operation and Maintenance of Common Area. Subject to Tenant's obligation
under this Lease to pay its Proportionate Share of Common Area Costs, Landlord agrees to
operate the Project and maintain the Common Area of the Project in good condition and repair,
consistent with similar mixed-use buildings in the greater Seattle metropolitan area. Without
limitation, Landlord shall observe the following standards:
(a) Landlord shall maintain the Parking Areas in good condition and repair,
keeping the surfaces smooth and evenly covered with the type of surfacing material
originally installed thereon or such substitute as shall be in all respects equal in quality,
appearance, and durability.
(b) Landlord shall periodically remove all papers, debris, filth, refuse, surface
waters, snow, and ice from the Common Area and wash or thoroughly sweep paved
Common Area as required.
(c) Landlord shall maintain, repair, and replace such appropriate parking area
entrance, exit and directional signs, markers, and lights in the Project as shall be
reasonably required.
(d) Landlord shall clean Common Area lighting fixtures of the Project and re -
lamp and re -ballast them as needed.
(e) Landlord shall repaint striping and replace markers, directional, and
similar signs as necessary to maintain the same in a good condition.
(f) Landlord shall install and maintain signage in the parking areas of the
Project sufficient to advise users of parking restrictions, shall reasonably monitor the
parking areas and reasonably enforce the parking restrictions, and to the extent
reasonably necessary shall provide towing service to remove automobiles parked in
violation of the restrictions.
(g) Landlord shall maintain, repair, and replace landscaping as necessary to
keep the same in good condition.
(h) Landlord shall clean, re -lamp, and repair all signs of the Project
(excluding those of tenants).
(i} Landlord shall clean, repair, replace, and maintain all storm drains,
sanitary sewer, domestic water, natural gas, electrical power, fire protection, water,
telephone, and cable television utility facilities within the Common Area to the extent the
same are not cleaned, repaired, replaced, and maintained by public utilities.
(j) Landlord shall keep and maintain all elevators or escalators serving the
Premises and the Common Areas in good working order and condition.
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(k) .Landlord shall maintain the exterior of the buildings comprising the
Project, including painting when reasonably necessary for the maintenance and care of
the Project.
7.2 Rules and Regulations. Landlord may adopt reasonable rules and regulations
from time to time, provided that the same do not contravene any of Tenant's rights under this
Lease, and provided the same shall be of general application to tenants and occupants of the
Project. All rules and regulations now or hereafter in force shall in all respects be observed and
performed by Tenant and its agents, concessionaires, employees, invitees, licensees and
subtenants. Landlord will take all reasonable steps to enforce any rules and regulations
applicable to the Project including reasonable steps necessary to require the other tenants and
occupants of the Project and their employees to park their vehicles in the areas established for
employees' parking, and to prevent unauthorized parking in Tenant's reserved parking spaces.
Tenant agrees to cooperate with Landlord to enforce this restriction with respect to Tenant's
employees. Notwithstanding the foregoing, Landlord shall not be responsible or liable to Tenant
for the nonobservance or violation by any other tenant or person of the rules and regulations.
7.3 Changes to the Common Area. Upon written notice from Landlord to Tenant,
Landlord may change the driveways, roadways, exits, entrances, approaches, Parking Areas,
sidewalks, lighting, landscaping, pad locations, roof lights and other areas which comprise the
Common Area, including the boundaries thereof, provide that, without Tenant's prior written
consent, Landlord will not authorize or permit any change to the Project which would obstruct or
impair visibility of or access to the Premises or affect Tenant's reserved parking spaces.
7.4 Tenant's Right to Use and Enjoyment of Common Area. Subject to Section
7.3 and Landlord's right to temporarily close portions of the Common Areas, Landlord agrees
that Tenant, its customers, employees (subject to Section 7.2 above) and all persons having any
business relations with Tenant shall at all times have the non-exclusive right to the reasonable
free and unobstructed use and enjoyment of the Common Areas of the Project necessary for the
use and enjoyment of the Premises as permitted hereunder.
7.5 Payment of Common Area Costs. Tenant shall pay to Landlord, as Additional
Rent, Tenant's Project Proportionate Share of all Common Areas Costs unless this Lease
expressly provides that Tenant shall pay Tenant's Commercial Proportionate Share of a certain
Common Area Cost, as more particularly described herein provided, however, in no event shall
Tenant be charged twice for any one category of Common Area Cost.
7.6 Allocation of Common Areas. From time to time, Landlord may permit portions
of the Common Areas to be used exclusively by specified tenants, licensees, or other persons.
8. MAINTENANCE. REPAIRS AND ALTERATIONS.
8.1 Tenant's Obligations. Throughout the Term of this Lease, Tenant, at its sole
cost and expense, shall clean, maintain and keep in good condition and repair the interior of the
Premises. Tenant shall be obligated to perform its maintenance and repair responsibilities
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hereunder in accordance with the standards required by any applicable manufacturer's warranty
and generally in accordance with the reasonable standards of the Landlord in connection with the
maintenance of the rest of the Project. Notwithstanding any provision of this Lease to the
contrary, if a condition arises in or damage exists to the Premises which condition or damage is
within Tenant's duty to maintain, correct or repair, but Tenant fails to do so after reasonable
notice from Landlord, Landlord may, but shall not be required to, make such repairs or perform
such maintenance and Tenant shall reimburse Landlord for the reasonable and necessary costs of
such repairs or maintenance within thirty (30) days after Landlord's demand for reimbursement
submitted to Tenant together with an itemized statement of the repairs and charges. During the
period when any warranty or guarantee of labor, material or equipment exists with respect to the
Premises, Landlord agrees to cooperate with Tenant in obtaining and enforcing such guarantee or
warranty with respect to Tenant's repair and maintenance obligations. Tenant's repair and
maintenance obligations under this Section are expressly subject to any related obligation of
Landlord in this Lease for repair, maintenance or replacement.
8.2 Landlord's Obligations. In addition to the obligations of Landlord under
Section 7.1, Landlord agrees:
(a) Landlord shall conduct all maintenance, repairs and replacements to the
equipment for heating, ventilating and air conditioning installed and serving the Common
Areas of the Project, the cost of which shall be included in Common Area Costs.
(b) Landlord shall be responsible at its sole cost and expense for repair to and
replacement of the Structural Elements.
(c) Landlord shall re -paint when necessary those parts of the exterior of the
Premises requiring painting, the cost of which shall be included in Common Area Costs.
(d) In fulfilling its obligations pursuant to this Section 8.2, Landlord shall be
entitled to enter the Premises upon 48 hours prior written notice and shall act as
expeditiously as is reasonably possible under the circumstances. Landlord agrees that
such entry will be conducted in such a manner as to minimize interference with Tenant's
business in the Premises.
8.3 Tenant's Alterations.
(a) Tenant, at its sole cost and expense, without need for Landlord's approval,
may make such non-structural repairs, alterations, and improvements to the Premises as
Tenant deems desirable in its sole discretion. Tenant may install necessary trade fixtures,
equipment and furniture in the Premises, provided that such items are installed and are
removable without structural or material damage to the Project.
(b) Tenant shall not construct, nor allow to be constructed, any alterations or
additions in, about or to the Premises which impact any of the Structural Elements,
without obtaining the prior written consent of Landlord, which consent may be
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conditioned upon Tenant's compliance with Landlord's reasonable requirements
regarding construction of improvements and alterations but such consent otherwise shall
not be unreasonably withheld, conditioned or delayed.
(c) When seeking the approval of Landlord as required by this Section 8.3,
Tenant shall present to Landlord plans and specifications for the proposed work, if
available. Prior to commencement of any work, Tenant shall obtain all governmental
approvals and permits required to complete the work. Upon request, Tenant shall provide
Landlord copies of all such approvals and permits. :In the event Landlord approves such
alterations, Landlord shall specify whether such alterations must be removed at the
expiration or earlier termination of this Lease.
(d) Such alterations, additions and improvements"shall be owned by Tenant
during the Term, but shall be owned by Landlord at the expiration or earlier termination
of the Lease.
8.4 Removal of Fixtures.
(a) So long as Tenant is not in default hereunder at the expiration of the Term,
Tenant shall then have the right to remove Tenant's trade fixtures from the Premises, but
Tenant shall promptly repair any damage caused to the Premises resulting from the
installation or removal thereof.
(b) If Tenant, following the expiration of the Lease and receipt of a notice
from Landlord, fails to promptly remove any trade fixtures in accordance with such
Notice, then Landlord may enter into the Premises and remove therefrom all or part of
such trade fixtures without any liability and at the expense of Tenant, which expense
shall forthwith be paid by Tenant to Landlord.
8.5 Landlord's Alterations. Landlord reserves the rights to:
(a) make any changes or additions to the apparatus, appliances, conduits,
ducts, equipment, pipes or structures of any kind in the Premises where necessary to
serve adjoining premises or other parts of the Project;
(b) subject to Section 7.3, alter the location, extent and nature of the Common
Areas, close off parts thereof, erect additions thereto or extend any part thereof; and
(c) subject to Section 7.3, make alterations or additions to the Project.
All of the foregoing reserved rights may be exercised by Landlord in its sole and
absolute discretion (subject to Section 7.3) and provided the same are conducted in such a
manner as to minimize interference with Tenant's business in the Premises.
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In the event that such exercise results in a change in the Gross Leasable Area of
the Project, the Additional Rent payable by Tenant thereafter shall be recalculated, but
without any adjustment with respect to any earlier payment of Additional Rent.
9. INDEMNITY AND INSURANCE.
9.1 Indemnity by Tenant. During the Term of this Lease, Tenant agrees to hold
harmless, protect, indemnify and defend Landlord from all demands, claims, damages, causes of
action or judgments, and all reasonable expenses incurred in investigating and defending the
same (including reasonable attorney fees and costs) for injury to person or property occurring to
or on or about the Premises or Property and arising out of the negligence or willful misconduct
of Tenant or its agents, employees or contractors, except to the extent caused by the negligence
or willful misconduct of Landlord or its agents, employees or contractors.
9.2 Indemnity by Landlord. During the Term of this Lease, Landlord agrees to hold
harmless, protect, indemnify and defend Tenant from all demands, claims, damages, causes of
action or judgments, and all reasonable expenses incurred in investigating and defending the
same (including reasonable attorney fees and costs) for injury to person or property occurring to
or on or about the Premises or Project and arising out of the negligence or willful misconduct of
Landlord or its agents, employees or contractors, except to the extent caused by the negligence or
willful misconduct of Tenant or its agents, employees or contractors.
9.3 Landlord's Insurance. Continuously during the Term of this Lease, Landlord
shall keep in full force and effect a policy or policies of property insurance covering the Project,
providing "Special Form" coverage. In addition, Landlord shall maintain at all times commercial
general liability insurance for property damage and bodily injury covering the Common Area
with coverage and insurance carrier requirements at least equal to those required of Tenant.
Property insurance shall be in the form of replacement cost insurance in an amount equal to one
hundred percent (100°/x) of the full replacement cost of the Project, and containing a waiver of
any co-insurance clause. Upon written request, Landlord shall provide certificates of insurance
evidencing such coverage to Tenant. Landlord may name Landlord's mortgagee as a loss payee.
Notwithstanding the foregoing, Landlord may, in its sole discretion, also procure and maintain
such other casualty, liability, rent loss, and such other policies as Landlord may determine. Any
liability insurance carried by Landlord shall be secondary to the liability insurance carried by
Tenant. Any property insurance carried by Landlord shall not cover any improvements, fixtures,
equipment, inventory, or other personal property of Tenant and/or its employees and invitees.
Landlord's insurance coverage may include blanket, layered, umbrella, separate, and/or
conventional forms of policies, as well as such deductibles and retention levels as Landlord
determines appropriate.
9.4 Tenant's Insurance. During the Term, Tenant shall procure and maintain at its
own expense commercial general liability insurance against claims for bodily injury, including
death, personal injury and broad forn property damage or loss, arising out of or with respect to
any construction of improvements on the Premises, the use, operation, occupation and/or
condition of the Premises or the operations of Tenant in, on or about the Premises including
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products and completed operations and contractual liability coverage. The limit of liability shall
be not less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars
($2,000,000) in the aggregate, with a deductible or retention amount not exceeding Fifty
Thousand Dollars ($50,000).
9.5 Obligation to Pay. Tenant shall pay to Landlord, in equal monthly installments
as Additional Rent, Tenant's Project Proportionate Share of the insurance premiums for the
insurance required under Section 9.2 above. Landlord will provide Tenant with an invoice
showing the coverage and pro -rata cost of each type of insurance.
9.6 General Requirements.
(a) Certificate of Insurance. All policies of insurance required to be carried
hereunder shall be evidenced by an appropriate evidence of insurance (ACORD Form 24
for property insurance and ACORD Form 25 for all others).
(b) Licensed in State. All policies of insurance required to be carried
hereunder shall be written by companies licensed to do business in the state of
Washington and having an A.M. Best's financial strength rating of "A-" or better and an
A.M. Best's Financial Size Category of Class "VII" or higher, and shall not contain a
deductible greater than $50,000 or any self-insured retention.
(c) Primary. All policies of insurance required to be carried hereunder shall
contain a clause that such policy and the coverage evidenced thereby shall be primary and
non-contributing with respect to any policies carried by any other party, and that any
coverage carried by another party shall be excess insurance. All insurance coverage must
be on an "occurrence basis" ("claims made" forms of insurance are not acceptable) and
shall contain a severability of interests endorsement.
(d) Additional Insured. All Tenant's liability policies shall name Landlord,
Landlord's property manager and such other parties reasonably requested by Landlord as
additional insureds utilizing ISO Endorsement CG 20-10 07 04 or its equivalent. All
Landlord's liability policies shall name Tenant and such other parties reasonably
requested by Tenant as additional insureds utilizing ISO Endorsement CG 20-10 07 04 or
its equivalent.
(e) Notice of Cancellation. Not be subject to cancellation except upon at least
thirty (30) days prior written notice to each additional insured (or ten (10) days for non-
payment of premium). The policies of insurance containing the terms specified herein, or
duly executed certificates evidencing them, together with satisfactory evidence of the
payment of premiums thereon, shall be deposited with each additional insured at least
prior to the Turnover Date and subsequently not less than ten (10) days prior to the
expiration of the original or any renewal term of such coverage.
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9.7 Waiver of Subrogation. Except for the waiving party's deductible amount, each
party hereby waives, and each party shall cause their respective property insurance policy or
policies to include a waiver of such carrier's, entire right of recovery (i.e., subrogation) against
the other party, and the officers, directors, agents, representatives, employees, successors and
assigns of the other party, for all claims which are covered or would be covered by the property
insurance required to be carried hereunder or which is actually carried by the waiving party.
10. DAMAGE BY CASUALTY.
10.1 Total Damage. If the Project or the Premises should be totally or substantially
destroyed by fire or other casualty or peril, this Lease shall terminate automatically.
10.2 Partial Damage. If the Premises or the Project are partially damaged by fire or
other casualty or peril, Landlord shall diligently make a good faith determination of the period of
time it would take to perform the repair work under normal working conditions (and then
existing availability of materials) and pursuant to the laws, rules, and regulations of the state,
federal, county, and municipal authorities having jurisdiction thereover. If such damage is fully
covered by insurance and the repair thereof can reasonably be made within ninety (90) days after
the date such determination is made, Landlord shall, subject to the provisions of this Section,
forthwith make such repairs (provided Landlord shall have no obligation to repair or reconstruct
any of Tenant's Work). If such damage is not fully covered by insurance, Landlord may elect to
terminate this Lease upon sixty (60) days prior notice to Tenant. If repairs cannot reasonably be
made within said 90 -day period, either Landlord or Tenant may elect to terminate this Lease
upon sixty (60) days prior notice to the other.
10.3 Rental Abatement. In the event of damage or destruction to the Premises or any
other portion of the Project as a result of which Tenant cannot reasonably conduct its business in
the Premises, Tenant's obligation to pay Base Rent and Additional Rent of any sort shall entirely
abate from the date of such damage or destruction until the damage or destruction has been
repaired or restored. if the Premises are partially damaged, impaired, or destroyed, Tenant may,
at its election continue business, but Tenant's obligation to pay Base Rent and Additional Rent
shall be partially abated until the Premises are restored in the proportion that the unusable Gross
Leasable Area of the Premises bears to the Gross Leasable Area of the Premises before such
damage or destruction.
10.4 Damage or Destruction at End of Term. Notwithstanding anything to the
contrary contained herein, Landlord shall not have any obligation to repair, reconstruct, or
restore the Premises or Project when the damage or destruction occurs during the last twelve (12)
months of the term of this Lease. If any such damage or destruction occurs during the last
twelve (12) months of the term of this Lease, Landlord may elect to terminate this Lease upon
sixty (60) days prior notice to the other. If any such material damage or destruction to the
Premises occurs during the last twelve (12) months of the term of this Lease, Tenant may elect to
terminate this Lease upon sixty (60) days prior notice to the other.
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11. CONDEMNATION AND GOVERNMENTAL ACTION.
11.1 Total Taking. In the event of a total taking of the Premises by condemnation or
eminent domain or under the threat thereof, this Lease shall automatically terminate as of the
date possession is taken by the condemning authority.
11.2 Partial Taking. If any portion of the Premises is taken by condemnation or by
any other governmental action, taking or damage, and such taking, in Tenant's sole judgment,
renders the Premises unsuitable for Tenant's operations, then Tenant may terminate this Lease as
of the date possession is taken by the condemning authority by written notice to Landlord. In the
event of such termination, Tenant shall be released from any liability arising thereafter under this
Lease except for any payments due Landlord by Tenant and Tenant's indemnity and other
obligations arising prior to the date of termination set forth above.
11.3 Restoration. If this Lease is not so terminated upon condemnation or eminent
domain, Landlord shall promptly restore the Premises, to the extent practicable, to a unit
architecturally and functionally comparable to the unit existing just prior to such taking or
damage, provided that Landlord shall not be obligated to expend an amount greater than that
which was awarded to Landlord for such taking, and this Lease shall continue; but, commencing
with the date on which Tenant is deprived of the use of any portion of the Premises, the Base
Rent shall be reduced by the percentage by which the fair market rental value of the Premises
(with the rights granted under this Lease) after the taking or damage is reduced from such fair
market rental value of the Premises prior to such taking or damage and Tenant's Commercial
Proportionate Share or Tenant's Project Proportionate Share shall be adjusted to reflect such
taking.
11.4 Proceedings. Nothing contained herein shall prevent Landlord and Tenant from
prosecuting claims in any condemnation proceedings for the value of their respective interests;
provided, Landlord reserves all rights to an award for damages to the Premises (including any
leasehold value) and Tenant hereby assigns to Landlord any right Tenant may have to such an
award, provided that Tenant's right to receive compensation for the value of trade fixtures and
personal property in the Premises and any award for Tenant's interruption of business and
moving expenses shall be the property of Tenant, but only to the extent that the compensation
awarded to Tenant shall be in addition to and shall not diminish the compensation awarded to
Landlord as provided above. Subject to the foregoing, neither Landlord nor Tenant shall have
the right to claim any portion of the condemnation award separately allocated to the other party.
12. DEFAULT.
12.1
Tenant:
Tenant's Default. Any one or more of the following is an "Evens of Default" by
(a) Tenant fails to make any payment of Rent when due, and such failure is not cured
within ten (10) calendar days after Landlord's notice to Tenant. The notice shall specify the
amounts past due.
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(b) Tenant fails to observe or perform any other covenant, condition or provision of
this Lease (other than the payment of Rent) to be observed or performed by Tenant, and such
failure is not cured within thirty (30) calendar days after Landlord's notice to Tenant. The notice
shall specify the covenant, condition or provision of this Lease that Tenant has failed to observe.
However, if Tenant's default is such that more than thirty (30) calendar days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if Tenant commences such
cure within said thirty (30) calendar day period and thereafter diligently prosecutes such cure to
completion.
(c) A petition to have Tenant adjudged a bankrupt, or a petition for reorganization or
arrangement under any law relating to bankruptcy is filed against Tenant (unless, in the case of a
petition filed against Tenant, it is dismissed within sixty calendar days of filing), or a trustee or
receiver is appointed to take possession of substantially all of Tenant's assets located on the
Premises or of Tenant's interest in this Lease, and such possession is not released in thirty (30)
calendar days after appointment of said trustee or receiver, or the filing of the petition for the
appointment of the same, whichever occurs first.
12.2 Landlord's Remedies. Upon the occurrence of an Event of Default by Tenant,
Landlord may thereafter exercise any right and obtain any remedy available to it at law or in
equity including, without limit, the following remedies:
(a) Terminate the Lease and Tenant's right to possession of the Premises by any
Iawful means and upon such notice as may be required hereunder and by law, in which case this
Lease shall terminate and Tenant shall surrender possession of the Premises to Landlord; or
(b) Upon written notice to Tenant, continue the Lease in effect whether or not Tenant
shall have abandoned the Premises. In such event Landlord shall be entitled to enforce all
Landlord's rights and remedies under this Lease, including the right to recover Rent as it
becomes due. In such event, Landlord shall use reasonable diligence to relet the Premises. Any
rental or other amounts realized by Landlord from such reletting, after deducting all expenses
incurred by Landlord to put the Premises in tenantable condition and to obtain a new tenant shall
be applied against amounts due from Tenant hereunder.
12.3 No Waiver. No provision of this Lease shall be deemed to have been waived by
Landlord or Tenant unless a written waiver from the waiving party has first been obtained and,
without limiting the generality of the foregoing, no acceptance of Rent subsequent to any Event
of Default and no condoning, excusing or overlooking by Landlord or Tenant on previous
occasions of any Event of Default nor any earlier written waiver shall be taken to operate as a
waiver by Landlord or Tenant or in any way to defeat or affect the rights and remedies of
Landlord or Tenant.
12.4 Default by Landlord. It shall be an Event of Default by Landlord under this
Lease if Landlord fails to perform an obligation required of Landlord under this Lease, and such
failure is not cured within thirty (30) calendar days after written notice by Tenant to Landlord,
provided, however, that if the nature of Landlord's default is such that more than thirty (30)
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-21-
calendar days are reasonably required for its cure, then it shall not be considered an Event of
Default by Landlord if Landlord commenced such cure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion.
12.5 Tenant's Remedies. Upon the occurrence of an Event of Default by Landlord,
then at the option of Tenant and without limiting any other available legal or equitable remedy,
Tenant may terminate this Lease. Upon any Event of Default by Landlord, Tenant shall have the
right, but not the obligation, to incur any cost or make any expenditure reasonably necessary to
remedy Landlord's default, in which case Landlord shall reimburse Tenant for any expenditure
made or cost incurred and Tenant shall have the right to withhold Rent. If, as the result of
Landlord's default or failure to perform, immediate action is necessary to avoid potential injury
to Tenant's customers or employees or actual injury to Tenant's business or property, Tenant
may, but shall not be required, to take such action immediately and withhold Rent or seek
recovery from Landlord.
12.6 Other Remedies. Except as provided herein, Landlord and Tenant shall have all
other remedies provided by law or statute to the same extent as if fully set forth herein. No
remedy herein conferred upon or reserved to Landlord or Tenant shall exclude any other remedy
herein or by law provided, including termination of this Lease, but each shall be cumulative.
13. GENERAL PROVISIONS.
13.1 Attorney Fees. If legal action is necessary to enforce or interpret this Lease, the
prevailing party in such litigation shall be entitled to be reimbursed by the other party for
reasonable attorney fees, litigation expenses, and statutory costs as awarded by the court. Such
fees, costs and expenses shall include those incurred in the enforcement and collection of any
judgment, the litigation of any right under bankruptcy law, and any appeal from any proceeding.
13.2 Assignment and Subletting.
(a) Tenant shall have the right, without Landlord's consent, to permit any
office, department or division of the City of Tukwila to occupy and use the Premises for
any governmental function. Except as provided in the preceding sentence, Tenant may
not assign this Lease or sublet the whole or any part of the Premises without Landlord's
consent, which consent may be granted or withheld in Landlord's sole and absolute
discretion. Landlord agrees to promptly respond in writing to any written request from
Tenant for consent to an assignment or sublease. Any sublease or assignment without
Landlord's consent shall be void. If Tenant sublets or assigns this Lease, Tenant shall
remain fully and primarily liable to Landlord for the payment and performance of
Tenant's obligations hereunder. When requesting consent, Tenant shall provide or cause
the proposed assignee or subtenant to provide to Landlord all available information as to
the responsibility, reputation, financial standing and business experience of the proposed
assignee or subtenant. Tenant shall be responsible for all costs and expenses incurred by
Landlord in reviewing a request for consent to an Assignment, including reasonable
attorneys' fees, all of which shall not exceed a total of $1,000.00.
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(b) Tenant shall pay to Landlord the full amount of any Transfer Premium
derived by Tenant from any assignment or subletting. "Transfer Premium" shall mean
all rent and any other consideration payable by a subtenant, assignee, or other transferee
in excess of the Rent payable by Tenant under this Lease (on a per square foot basis, if
less than all of the Premises is assigned or sublet), after deducting therefrom any
brokerage commissions in connection with the assignment or sublet actually paid by
Tenant to an unaffiliated broker. If any part of the consideration for such assignment or
sublet shall be payable other than in cash, Landlord's share of such non-cash
consideration shall be in such form as is reasonably satisfactory to Landlord. The
Transfer Premium payable hereunder shall be due within ten (10) days after Tenant
receives such payments.
13.3 Subordination; Recognition. If Landlord desires to place a mortgage or deed of
trust on the Project ("Mortgage"), or to place a ground lease or master lease on the Project
("Master Lease"), and the holder of such Mortgage ("Mortgagee"). or the lessor under such
Master Lease requires ("Ground Lessor") that this Lease be subordinate thereto, Tenant, upon
the written request of Landlord, agrees to execute a commercially reasonable subordination, non-
disturbance and attornment agreement ("SNDA") with such Mortgagee or Ground Lessor,
provided that the Mortgagee or Ground Lessor, as applicable, executes an agreement with
Tenant, as follows: (a) that in the event of foreclosure of such Mortgage, the Mortgagee shall
not join Tenant in any foreclosure action and Tenant's possession of the Premises shall remain
undisturbed and Tenant's rights under this Lease shall be recognized and shall not be adversely
affected so long as there is no Event of Default by Tenant hereunder; and (b) that in the event of
the termination of any such Master Lease, this Lease shall not be terminated, but shall continue
as a direct Lease between the Ground Lessor and Tenant, and that Tenant's possession of the
Premises shall remain undisturbed and Tenant's rights under this Lease shall be recognized and
shall not be adversely affected so long as there is no Event of Default by Tenant hereunder; (c)
that Tenant may remove Tenant's fixtures from the Premises in accordance with the provisions
of this Lease; and (d) the form is otherwise reasonably acceptable to Tenant. In the event that, as
of the date this Lease is executed, the Premises is then subject to any Mortgage or any Master
Lease, Landlord agrees to use commercially reasonable efforts to obtain and deliver to Tenant
SNDAs with such Mortgagee and/or Ground Lessor, which are in commercially reasonable form
and comply with the provisions of this Section 13.3. Landlord acknowledges that the Turnover
Date will not be deemed to have occurred unless or until such SNDAs are provided or this
condition is waived by Tenant.
13.4 Estoppel Certificate. Whenever requested in writing by Landlord, Tenant shall
execute and deliver within fourteen (14) days an estoppel certificate in form reasonably
requested by Landlord in favor of Landlord, it lender, and/or any prospective purchaser or lender
for the Project. Tenant's failure to deliver such certificate within the time provided shall be
conclusive against Tenant that the information set forth in the certificate or acknowledgment
which Tenant was requested to execute is as set forth in such certificate.
13.5 Sale by Landlord. If Landlord sells or otherwise transfers all or part of its
interest in the Project in a bona fide transaction where the proposed purchaser or transferee of
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such interest is an unrelated third party who shall assume Landlord's obligations under this
Lease, then Landlord shall be relieved of any obligation hereunder following the effective date of
such transfer. However the foregoing requirements of Landlord shall not apply to any transfer of
only a part of the Project to any municipality or other governmental or similar authority or utility
supplier, including, without limitation, for road widenings, utility easements, easements for
access, grade, pipes, poles, transformers, wires, or other like purposes. The liability of Landlord
to Tenant for any default by Landlord under this Lease or arising in connection herewith or with
Landlord's operation, management, leasing, repair, renovation, alteration, or any other matter
relating to the Premises or the Project, shall be limited to the interest of Landlord in the Project
and the proceeds thereof. Tenant agrees to look solely to Landlord's interest in the Project and
the proceeds thereof for the recovery of any judgment against Landlord, and Landlord shall not
be personally liable for any such judgment or deficiency after execution thereon.
13.6 Trade Fixtures And Personal Property. Any trade fixtures, equipment and
other personal property installed in or attached to the Premises by and at the expense of Tenant
shall remain the property of Tenant, except in any case where Tenant is the lessee of any trade
fixtures, equipment or other property, in which case the lessor of such property shall retain title.
Landlord agrees that Tenant shall have the right or may assign this right at any time up to the
expiration or termination of this Lease or any extension or renewal thereof to remove any and all
of its trade fixtures, equipment and other personal property which it may have stored, attached to,
or installed in the Premises; provided, however, that Tenant will repair all damage to the
Premises occasioned by such removal and no auctions or bulk or liquidation sales may be held at
or from the Premises.
13.7 Notices. Any notice provided for herein shall be delivered by a reputable courier
service or by certified United States mail, postage prepaid, addressed as set out in the opening
paragraph of this Lease. All Notices shall be in writing and shall be effective at such time as
they are delivered (or delivery is refused). The person and the place to which notices are to be
mailed may be changed by either party by written notice to the other.
13.8 Rights of Successors. Subject to Section 13.2. all rights and obligations under
this Lease shall bind, and inure to the benefit of, the parties hereto and their successors and
assigns.
13.9 Holdover. If Tenant shall hold over without the consent of Landlord following
the expiration of the Term of this Lease, such holding over shall be under the terms of this Lease
and any non -conflicting terms of this Lease shall apply to the holdover tenancy, except that the
Base Rent payable during the holdover period shall be 125% of the Base Rent payable
immediately prior to the holdover period.
13.10 Interest. Except as otherwise provided herein, any sum which remains due and
owing from either Landlord or Tenant to the other after the date on which it should have been
paid in accordance with the provisions of this Lease shall bear Interest from the date due.
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13.11 Severability. If any term or provision of this Lease or the application thereof to
any person or circumstances shall to any extent be invalid and unenforceable, the remainder of
this Lease or the application of such term or provision to persons or circumstances other than
those as to which it is invalid or unenforceable shall not be affected thereby, and each remaining
tern and provision of this Lease shall be valid and be enforced to the extent permitted by law.
13.12 Time of Essence. Time is of the essence. The failure of a party to insist upon a
strict performance of any of the terms, conditions and covenants herein shall not be deemed a
waiver of any rights or remedies that said party may have and shall not be deemed a waiver of
any subsequent breach or default in the terms, conditions and covenants herein contained.
13.13 Amendments. No change in the provisions of this Lease shall be effective unless
made in a non -electronic writing or a fax, in either case bearing the hand signatures of the parties
to this Lease.
13.14 Entire Agreement. There are no verbal or other agreements (unless attached
hereto or specifically referred to herein) which modify or affect this Lease. This Lease
supersedes any and all prior agreements executed by or on behalf of the parties hereto regarding
the Premises.
13.15 Force Majeure. Notwithstanding anything in this Lease to the contrary,
Landlord and Tenant shalt not be deemed to be in default in respect of the performance of any of
the terms, covenants and conditions of this Lease if any failure or delay in such performance is
due to any strike, lockout, civil commotion, warlike operation, invasion, rebellion, hostilities,
military or usurped power, sabotage, governmental regulations or controls, or Act of God
("Force Majeure"); provided, however, that this provision shall not excuse any obligation of
Landlord or Tenant to make any payment due to the other; including, but not limited to, Base
Rent or Additional Rent.
13.16 Relationship of Parties. Nothing contained herein shall be deemed or construed
by the parties hereto, nor by any third party, as creating the relationship of principal and agent or
of partnership or of joint venture between the parties hereto and nothing in this Lease is intended
or shall be construed to benefit anyone not a party to this Lease.
13.17 Brokerage Commissions. Landlord and Tenant each represent and warrant to the
other that, to its knowledge, no broker, agent or finder (a) negotiated or was instrumental in
negotiating or consummating this Lease on its behalf, or (b) is or might be entitled to a
commission or compensation in connection with this Lease. Landlord shall promptly indemnify,
protect, defend and hold Tenant harmless from and against any and all claims, damages,
judgments, suits, causes of action, losses, liabilities, penalties, fines, expenses and costs
(including attorneys' fees and court costs) that may be asserted or brought by any broker, agent
or finder alleging representation of or agreement with Landlord in connection with this Lease.
Tenant shall promptly indemnify, protect, defend and hold Landlord harmless from and against
any and all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines,
expenses and costs (including attorneys' fees and court costs) that may be asserted or brought by
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any broker, agent or finder alleging representation of or agreement with Tenant in connection
with this Lease. The foregoing indemnities shall survive the expiration or earlier termination of
this Lease.
13.18 Prevailing Law. This Lease shall be governed exclusively by the provisions
hereof and by the laws of the State of Washington as they exist from time to time.
13.19 Recordation. Neither Tenant nor anyone on Tenant's behalf or claiming under
Tenant shall record this Lease or any short form of this Lease. Tenant shall, upon request by
Landlord, execute and acknowledge a short form memorandum of lease for purposes of
recording.
[signatures on following page]
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IN WITNESS WHEREOF, Landlord and Tenant have signed this Lease as of the date first above
written.
"Landlord"
TUKWILA VILLAGE DEVELOPMENT
ASSOCIATES, LLC, a Washington limited IiabiIity
company
By:
Name: Bryan M. Park
Title: Manager
Date:
"Tenant"
CITY OF TUKWILA, a municipal corporation
By:
Name: Allan Ekberg
Title: Mayor
Date:
Attest:
By:
, City Clerk
Approved as to form:
By:
City Attorney
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I HEREBY CERTIFY that on this day of , 201 , before me, the
undersigned, a notary public in and for the State of Washington, duly commissioned and sworn,
personally appeared Bryan M. Park, to me known to be the Manager of TUKWILA VILLAGE
DEVELOPMENT ASSOCIATES, LLC, a Washington limited liability company, the company
that executed the within and foregoing instrument, and acknowledged the said instrument to be
the free and voluntary act and deed of said company for the uses and purposes therein
mentioned, and on oath stated that he or she was authorized to execute said instrument on behalf
of said company.
WITNESS my hand and official seal the day and year certificate first above written.
(Print Name)
Residing at
My appointment expires
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I HEREBY CERTIFY that on this day of , 201 , before me, the
undersigned, a notary public in and for the State of Washington, duly commissioned and sworn,
personally appeared Allan Ekberg, to me known to be the Mayor of the CITY OF TUKWILA, a
Washington non -charter optional municipal code city, the municipal code city that executed the
within and foregoing instrument, and acknowledged the said instrument to be the free and
voluntary act and deed of said municipal code city for the uses and purposes therein mentioned,
and on oath stated that he or she was authorized to execute said instrument on behalf of said
municipal code city.
WITNESS my hand and official seal the day and year certificate first above written.
(Print Name)
Residing at
My appointment expires
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EXHIBIT A
LEGAL DESCRIPTION
COMMERCIAL UNIT 2, BUILDING E, OF TUKWILA VILLAGE, A CONDOMINIUM,
ACCORDING TO DECLARATION THEREOF RECORDED UNDER RECORDING NO.
; SAID UNIT IS LOCATED ON SURVEY MAPS AND PLANS FILED IN
VOLUME OF CONDOMINIUMS, AS PAGES THROUGH , IN
KING COUNTY, WASHINGTON, TOGETHER WITH COMMON ELEMENTS, LIMITED
COMMON ELEMENTS AND APPURTENANT EASEMENTS IN BUILDINGS C, D AND E.
EXHIBIT A
EXHIBIT B
FLOOR PLAN OF PREMISES
EXHIBIT B
EXHIBIT C
SITE PLAN
EXHIBIT C
EXHIBIT D
LOCATION OF TENANT'S RESERVED PARKING SPACES
EXHIBIT D