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HomeMy WebLinkAboutITEM VIII-B-2CITY OF AUBU~:N ~~ WASHINGTON AGENDA BILL APPROVAL FORM Agenda Subject: Date: Resolution No. 4229 Se tember 4, 2007 Department: Attachments: Budget Impact: Human Resources Resolution No. 4229 Administrative Recommendation: City Council to adopt Resolution No. 4229. Background Summary: A resolution authorizing the Mayor and City Clerk to execute a real estate transfer/sale agreement between the City of Auburn and Raymond Lazor and Nancy Lazor and Harold Gambini and execute a companion agreement, a sublease agreement between the City of Auburn and Harold Gambini. S0904-1 A3.13.4 Reviewed by Council & Committees: Reviewed by Departments & Divisions: ^ Arts Commission COUNCIL COMMITTEES: ^ Building ^ M&O ^ Airport ®Finance ^ Cemetery ^ Mayor ^ Hearing Examiner ®Municipal Serv. ^ Finance ^ Parks ^ Human Services ^ Planning & CD ^ Fire ^ Planning ^ Park Board ^Public Works ^ Legal ^ Police ^ Planning Comm. ^ Other ^Public Works ^ Human Resources ^ Information Services Action: Committee Approval: ^Yes ^No Council Approval: ^Yes ^No Call for Public Hearing _/_/_ Referred to Until _/_/_ Tabled Until _/_/_ Councilmember: Backus Staff: Heineman Meeting Date: September 4, 2007 Item Number: VI11.B.2 ~jJ$jJ * MORE T~-{AN YtJU 1NtAGINED RESOLUTION N0.4 2 2 9 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A REAL ESTATE TRANSFER/SALE AGREEMENT BETWEEN THE CITY OF AUBURN AND RAYMOND LAZOR AND NANCY LAZOR AND HAROLD GAMBINI AND EXECUTE A COMPANION AGREEMENT, A SUBLEASE AGREEMENT BETWEEN THE CITY OF AUBURN AND HAROLD GAMBINI WHEREAS, City of Auburn is working with property owners to promote revitalization of the downtown core area; and WHEREAS, Harold Gambini ("Gambini") and others are the owners of certain real property located in the City of Auburn; and WHEREAS, the City of Auburn desires to enter into a Real Estate Transfer/Sale Agreement with Gambini whereby the City would acquire certain property owned by Gambini, tied to the City's downtown revitalization efforts; and WHEREAS, Gambini desires to sell this property to the City of Auburn in exchange for funds and assignment of leases as set forth in the Auburn Sound Transit Station Sublease Agreement; and WHEREAS, Gambini recognizes that the Real Estate Transfer/Sale Agreement is subject to the approval of the Auburn Sound Transit Station Sublease Agreement and that the Real Estate Transfer/Sale agreement and the Auburn Sound Transit Station Sublease are given in consideration of each other. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, KING COUNTY, WASHINGTON, HEREBY RESOLVES as follows: Resolution No. 4229 August 21, 2007 Page 1 of 2 Section 1. The Mayor of the City of Auburn and the Auburn City Clerk are hereby authorized to execute a Real Estate Transfer/Sale Agreement and Auburn Sound Transit Station Sublease Agreement between the City of Auburn and Harold Gambini which agreements shall be in substantial conformity with the agreements, copies of which are attached hereto, marked as Exhibit "A" and "B" respectively and incorporated herein by this reference. Section 2. The Mayor is hereby authorized to implement such administrative procedures as may be necessary to carry out the directives of this legislation. Section 3. This resolution shall be in full force and effect upon passage and signatures hereon. Dated and Signed this day of CITY OF AUBURN PETER B. LEWIS MAYOR ATTEST: Danielle E. Daskam, City Clerk APP D .2007. Resolution No. 4229 August 21, 2007 Page 2 of 2 REAL ESTATE TRANSFER/SALE AGREEMENT This agreement made and entered into this day of August, 2007, by and between the City of Auburn, a municipal corporation, organized under the Optional Municipal Code, Title 35A RCW, hereinafter referred to as "Auburn" and Raymond Lazor and Nancy Lazor, husband and wife, and Harold Gambini, a single man, hereinafter referred to as "Gambini'. Whereas, Gambini is the owner of certain real estate located in the City of Auburn, legally described as Lots 3 and 4, Block 6, Town of Slaughter, according to the Plat thereof, recorded in Volume 2 of Plats, page 56, records of King County, Washington, tax parcel 781570-0290 and 781570-0295, and Whereas, Gambini desires to enter into a sale of the above described property in exchange for funds and an assignment of leases as set forth below, and Whereas, Auburn desires to redevelop the property described above, and surrounding properties as part of a revitalization of the City, such work to be done by the third party, and Whereas, for the revitalization effort is necessary to acquire the property set forth above, and Whereas, it is for the benefit of public health, safety and welfare of the City of Auburn that Auburn acquire the subject property for the purposes of the revitalization effort, and Real Estate Transfer/Sale Agreement (8/21/07) - 1 - Whereas, the assignment and/or subleases of commercial space and parking spaces is allowable under the agreement between Sound Transit and the City of Auburn, and Whereas, the parties recognize this agreement is subject to surplusing the certain property interest of the City of Auburn and approval by Auburn City Council. Now, therefore, based upon mutual covenants to be derived the parties agree as follows: 1. Real Estate Sale: Gambini agrees to sell, and Auburn agrees to purchase, that certain real estate as legally described above. At the time of closing the seller shall provide a Statutory Warranty Deed providing that the property is free and clear of all liens and encumbrances and seller shall provide a policy of title insurance insuring that the subject property is free and clear of all liens and encumbrances at a value of $1,800,000.00. 2. Consideration: At the time of closing Auburn shall pay to Gambini the sum of $1,125,000.00, cash at closing, plus provide assignments and/or subleases to those commercial properties existing on the ground floor of the Sound Transit Station, Auburn, Washington, together with 42 parking spaces located in the Sound Transit Terminal. Auburn agrees to remove the costs of security from the triple net expenses charged back to the tenant. 3. Involuntary Conversion: The parties agree that the property subject of this sale is a part of an area-wide revitalization program, and that as a part of that program, properties are being assembled by private property owners and developers for Real Estate Transfer/Sale Agreement (8/21/07) - 2 - economic development. Separate and apart from that, however, the subject property is targeted to be a part street improvement program, identified as the Promenade program, whereby improvements would be made to certain public rights-of-way to enhance the public sidewalk. If the subject property were not sold, so as to make it available for development as part of the area-wide revitalization program, it may nevertheless be subject of condemnation in so far as the Promenade program could require taking of some or all of the subject property for that purpose. Toward that end, Gambini's position is that the subject property is being sold under threat of condemnation and he intends to qualify as Involuntary Conversion as defined by the IRS. 4. Closing: This transaction shall close on or before September 15, 2007 or such other date as the parties may mutually agree. 5. Contingencies: This agreement is contingent upon Auburn declaring as surplus the interest in the Sound Transit lease space and the 42 parking spaces and the approval by the Auburn City Council of this agreement and no objections by Sound Transit, and approval by the Auburn City Council of the sub-lease agreement for the premises at the Sound Transit facility. 6. Assignment: The parties to this agreement may assign their interests. This agreement shall be binding on the heirs, successors and assign of the parties. 7. Closing Costs: Gambini shall pay costs of title insurance premium and tax and Auburn shall pay excise tax. Escrow fees to be divided between the parties. Real estate taxes and utilities will be pro-rated to the time of closing. Real Estate Transfer(Sale Agreement (8/21/07) - 3 - 8. Earnest Money: Auburn shall deposit $10,000.00 earnest money into escrow, mutually agreed upon by the parties, upon execution, declaring of surplus and approval by City Council, whichever occurs last. Pete Lewis Attested: Mayor, City of Auburn Dated: Dani Daskam City Clerk, City of Auburn Approved as to-Form: Daniel Heid City Attorney, City of Auburn Raymond Lazor, Seller Dated: Nancy Lazor, Seller Dated: Harold Gambini, Seller Dated: Real Estate Transfer/Sale Agreement (8/21/07) - 4 - AUBURN SOUND TRANSIT STATION SUBLEASE AGREEMENT CITY OF AUBURN - GAMBINI THIS AGREEMENT made and entered into this day of 2007, by and between the City of Auburn, a municipal corporation, organized under Title 35A, RCW hereinafter referred to as "Auburn," and Harold Gambini, a single man, and LLC., jointly and severally, hereinafter collectively referred to as "Gambini." WHEREAS, Auburn is in the process of revitalization efforts for the downtown core area., and WHEREAS, in the revitalization efforts, Auburn entered into agreements with other public agencies and private parties to carry out the intent of the revitalization, and WHEREAS, the revitalization of the downtown core area of the City of Auburn will result in certain economic benefits and quality of life benefits that will enhance public safety, health and- welfare, and WHEREAS, to enhance quality development in the downtown area, and to provide an efficient and cost effective mode of transportation to its citizens to other geographic areas, Auburn entered into agreements with Central Puget Sound Regional Transit Authority "Sound Transit", for the creation of a transit terminal, parking garage and commercial tenancies within the parking garage, and WHEREAS, Resolution #3469 was passed on May 20, 2002, attached as Exhibit 1 which authorized the entry into the lease between Central Puget Sound Regional Transit Authority "Sound Transit" as landlord and City of Auburn "City" as tenant, dated Auburn Sound Transit Station Sublease Agreement City ofAuburn -Gambini Page 1 8/20107 June 26, 2002, attached as Exhibit A to Resolution #3469, which becomes part of Exhibit 1 attached hereto, and WHEREAS, to promote the development of quality commercial space in the downtown area, in the proximity of the Sound Transit facility, the City of Auburn passed Resolution #3701 on March 15, 2004, authorizing the execution of a LID Formation and Guarantee Agreement wherein certain parking spaces were recognized to the Guarantor of the agreement in the Sound Transit facility, and WHEREAS, the parking spaces provided in the LID Formation and Guarantee Agreement as authorized by Resolution #3701 are not inconsistent with parking provided under the Real. Estate Transfer/Sale Agreement between Auburn and Gambini, and WHEREAS, the Real Estate Transfer/Sale Agreement between Auburn and Gambini is to further the revitalization efforts of the downtown City core area, and is essential for a design consisting of a promenade in the vicinity of the Sound Transit parking facility, and WHEREAS, this agreement and the Real Estate/Transfer Sale Agreement are entered into simultaneously to carry out part of the consideration requirements as set forth in the Real Estate/Transfer Sale Agreement involving subleases to certain parking stalls and subleases of the commercial tenant spaces on the ground floor of the parking garage, and WHEREAS, Auburn reviewed the value of the property it is purchasing from Gambini, legally described as Lots 3 and 4, Block 6, Town of Slaughter, according to the Flat thereof, recorded in Volume 2 of Flats, page 56, records of King County, Auburn Sound Transit Station Sublease Agreement City of Auburn -Gambini Page 2 8/20/07 Washington, tax parcel 781570-0290 and 781570-0295, in light of the leasehold interest it would be conveying to Gambini, and WHEREAS, an appraisal was conducted on the Sound Transit facility leasehold interests and parking spaces, and WHEREAS, the appraisal and the valuation review indicate that the Real Estate Transfer/Sale Agreement- between Auburn and Gambini is at fair and market value, .and WHEREAS, as part of the consideration of the Real Estate Transfer/Sale Agreement between Auburn and Gambini, Auburn, as Lessee from Sound Transit, as set forth in Exhibit 1 shall sublease to Gambini the commercial spaces on the ground floor of the transit facility and sublease 42 parking spaces in the Sound Transit terminal, and WHEREAS, the parties intend and contemplate herein that, pursuant to the Lease Agreement, Exhibit 1, Auburn shall still remain primarily liable to perform all. the obligations under the lease, and WHEREAS, the parties recognize that Auburn's option to purchase, as set forth in Section 2.6, Exhibit 1 shall remain with Auburn exclusively and is not intended to be assigned to Gambini hereunder. NOW, THEREFORE, based upon mutual covenants and benefits to be derived, THE PARTIES AGREE as follows: 1. Sale of Real Prouerty: Contemporaneous with this transaction, Gambini shall sell and convey to Auburn Lots 3 & 4, Block 6, Town of Slaughter, according to plat thereof, recorded in Volume 2 of plats, page 56, records of King County, Washington, in accordance with and pursuant to the Purchase and Sale Agreement between the parties. 2. Sublease: At the time of the closing of the Real Estate Transfer/Sale Agreement between Auburn and Lazor and Gambini for Lots 3 & 4, Block 6, Town of Auburn Sound Transit Station Sublease Agreement City of Auburn -Gambini Page 3 8/20/07 Slaughter, according to plat thereof, recorded in Volume 2 of plats, page 56, records of King County, Washington, Auburn subleases to Lazor and Gambini that property consisting of the ground floor commercial tenancies and 42 parking spaces on the ground and second floor, as depicted in Exhibit "5" in the Sound Transit Terminal, Auburn, Washington, described in Exhibit 1, attached hereto and incorporated by reference. The Term of this Sublease shall commence on the day of , 2007, and unless terminated earlier, the Term of this Sublease .shall expire at midnight on the 1st day of June, 2101. Gambini may negotiate or discuss lease issues directly with Sound Transit. Any changes require Auburn's approval. This sublease includes a right by commercial tenant for the use of the plaza tenant area as described in the Lease Agreement, Exhibit 1. Auburn agrees not to lease, license or otherwise grant the right to any person (sidewalk vendor) to offer competitive goods or services from a cart, kiosk, or other temporary or permanent facility which goods are the same or competitive with those offered by any subtenant or licensee of the Commercial Tenant Agreement, Exhibit L 3. Assumption of Obligations: Gambini accepts all obligations and conditions as they pertain to the commercial retail space as outlined in the Lease Agreement between Auburn and Sound Transit, Exhibit 1, and the 42 parking spaces provided in Section 2 hereof. Gambini assumes all obligations of Auburn, including but not limited to all maintenance, repair, and operating costs, directly associated with the Commercial Retail space, as Lessee, as they pertain to the commercial retail space as outlined in the Lease Agreement, Exhibit 1, and the said 42 parking spaces. Auburn represents that nothing in this sublease conflicts with the lease agreement, Exhibit 1. 4. Sound Transit Costs: Auburn will not bill Gambini for any security feel or other charges that are billed by Sound Transit as set forth in Exhibit 1, except Auburn will bill Gambini for one hundred percent (100%) of the water and sewer utility bills from Sound Transit and for seven and eighteen one hundreds percent (7.18%) of the property insurance and storm water utility billings the City receives from Sound Transit. In the event Gambini is billed for a separate water meter supplied to Commercial tenant Auburn Sound Transit Station Sublease Agreement Ciry of Aubm~n -Gambini Page 4 8/20/07 area, then Gambini and Auburn shall negotiate distribution of the water and sewer billing from Sound Transit to reflect a fair distribution of this expense. 5. Potential Purchase: Auburn retains any right it has to the Option to Purchase, as set forth in Section 2.6, Exhibit 1. In the event that Auburn exercises the Option to Purchase, Gambini shall retain its rights as sub lessee for the duration of this sublease. 6. Current Leases: Leases between Auburn and other tenants currently exist for ground floor commercial spaces at the premises of this Sublease. Gambini shall assume the position of Auburn as Lessor as to these leases and shall also comply with any and all landlord obligations and shall take on all Sublessor obligations for the subleases for the premises previously subleased to third parties, as follows: A. That certain Sublease in which the City of Auburn, a Washington municipal corporation, is the Sublessor, and PMF Enterprises, Inc. is the Tenant, dated the 15th day of January, 2003, a copy of which is attached hereto, marked as Exhibit 2, incorporated herein by this reference; B. That certain Sublease in which the City of Auburn, a Washington municipal corporation, is the Sublessor, and Edward D. Jones is the Tenant, dated the 29th day of April, 2004, a copy of which is attached hereto, marked as Exhibit 3, incorporated herein by this reference; C. That certain Sublease in which the City of Auburn, a Washington municipal corporation, is the Sublessor, and Green River Community College is the Tenant, dated the 15th day of April, 2005, a copy of which is attached hereto, marked as Exhibit 4, incorporated herein by this reference. In connection therewith, all compensation paid by tenants thereof shall be paid to Gambini. 7. Leasehold Excise Tax: Gambini agrees to pay to Auburn, or the appropriate .recipient, the amount of any leasehold excise tax required to be paid under the laws of the State of Washington and ordinances of the City of Auburn, or collect the same from Gambini's tenants and forward the same to Auburn, or the appropriate recipient, which leasehold excise taxes shall be paid ~~~ithin 30 days after notification Auburn Sound Transit Station Sublease Agreement City of Auburn -Gambini Page 5 8/20/07 from Auburn as to the amount due. Gambini shall also provide Auburn with the information needed by Auburn to determine the amounts of the leasehold excise taxes, which information shall be provided at least 30 days after requested by Auburn. It shall not be considered a gratuity if any tenant's rent payment is reduced in any amount in any month providing that tenant's entire lease terms is at market value. Provided, however, that the leasehold tax shall be paid on the actual market value in the event of any such reduction. 8. Auburn to Remain Obligated: Auburn shall still remain liable to Sound Transit for the performance of obligations under the Lease Agreement, Exhibit 1. 9. Time is of the Essence: Time is of the essence in the performance of all covenants and conditions under this Sublease of Auburn and of Gambini. 10. Breach and Remedies Generally: A. Default and Breach Defined. A party to this Sublease shall be in "default" of an obligation it has under this Sublease if the party does not pay or perform the obligation as and when due, except that if such failure is later cured, then the party shall no longer be in default on the obligation. A party to this Sublease shall be in "breach" of an obligation it has under this Sublease: (1) If the party fails to make any payment required of it under this Sublease within thirty (30) days after. the other party's written notice of default specifying the amounts in default and the due date(s) thereof; (2) If the party fails to perform any of the party's other obligations under this Sublease for a period of thirty (30) days after written notice from the other party specifying the obligation in default and the action required of the party in default to cure such default. However, if more than thirty (30) days are reasonably required to complete such performance, the party in default shall not be in breach if the party commences such performance within the thirty (30) day period and thereafter diligently and continuously pursues such performance to completion. (3) If (i) a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against the party and is not dismissed within one hundred eighty (180) days; or if (ii) if a trustee or receiver is appointed to take possession of Auburn Sound Transit Station Sublease Agreement City of Auburn Gambini Page 6 8/20107 substantially all of the party's assets and such appointment is not dismissed or if possession of such assets is not restored to the party within one hundred eighty (180 days) after such appointment. B. The requirements for notice specified in subparts (1) and (2) of Section 10.A are intended to satisfy any and all notice requirements imposed by law and are not in addition to any such requirement. 11. Auburn's Remedies for Gambini's Breach: A. General Provisions. On or at any time after the occurrence of any breach of one or more of Gambini's .material obligations under this Sublease, Auburn may elect to: (1) Recover the sums owed by Gambini under this Sublease together with interest thereon at the rate of eight percent (8%) per annum on the unpaid principal balance thereof from time to time beginning with the date the sums were due and ending when the sums have been fully paid; (2) Specifically enforce Gambini's obligations under this Sublease; (3) Recover damages caused to Auburn by Gambirii's breach; and/or (4) Perform the obligations of Gambini that are in breach and recover from Gambini the costs incurred by Auburn in such performance. The remedies provided in this section are cumulative with each other and cumulative with and in addition to all other remedies as may be permitted by law or equity except that Auburn hereby waives and releases any and all rights, and shall have no right, to terminate this Sublease or Gambini's rights of possession of any part of the Leased Premises on account of any breach by Gambini of one or more of its obligations under this Sublease. As a substitute for such termination, Auburn may obtain an order from a court with jurisdiction over the parties and the subject matter directing Gambini's subtenants and licensees to attorn to and perform to and for the benefit of Auburn all of such subtenants' and licensees' respective obligations under their sublease or license until Gambini has fully cured its breach, including payment (to the extent applicable) under subparts (1); (2) and (4) of this section or such other time as the court may direct. Auburn Sound Transit Station Sublease Agreement City of Auburn -Gambini Page 7 8/20/07 B. Emergencies, If Gambini's default in any of its obligations under this Sublease creates or enhances an emergency, a serious risk of death or injury to any person, or a serious risk of injury or damage to any property, Auburn may, without giving Gambini prior notice and opportunity to cure, immediately exercise the remedy specified in Section 9.3 (a) (iv) with respect to that default and, for that purpose, enter any part of the leased premises reasonably necessary to do so. 12. Gambini's Remedies for Auburn's Breach: A. General Provisions. On or at any time after the occurrence of any breach of one or more of Auburn's obligations under this Sublease, Gambini may elect to: (1) Terminate this Sublease and recover ar_d setoff under subparts (4) and (5) of this Section; (2) Bring an action for specific .performance of Auburn's obligations and recover under subpart (4) of this Section; (3) Perform the obligations of Auburn which are in breach and recover under subpart (iv) of this Section; (4) Recover from Auburn (a) all monetary sums, if any, then due and unpaid to Gambini by Auburn, (b) the costs of performing or completing obligations of which Auburn is in breach, and (c) damages caused to Gambini by Auburn's breach; and (5) Setoff all or any part of the sums described in subpart (4) of this Section against any sums payable by Gambini to Auburn under this Sublease in the order in which such sums would otherwise be due until the entire amount, together with interest at eight percent (8%) per annum on the declining principal balance thereof, has been fully setoff. Gambini shall give Auburn written notice of Gambini's elections under this Section 12. Gambini's election of any of the remedies under subparts (2) through (5) shall not preclude .Gambini from electing at a subsequent time any other of such remedies or of electing to proceed under subpart (1). The election of the remedy under subpart (1) precludes the subsequent exercise of any other remedy. Except as provided in the preceding sentence, the remedies specified in this Section are cumulative with each other Auburn Sound Transit Station Sublease Agreement City of Auburn -Gambini Page 8 8/20/07 and cumulative with and in addition to all other remedies as may. be permitted by law or equity. B. Emergencies. If Auburn's default in any of its obligations under this Sublease creates or enhances an emergency, a serious risk of death or injury to any person, or a serious risk of injury or damage to any property, Gambini may, without giving Auburn prior notice and opportunity to cure, immediately exercise the remedy specified in Section 12.A (4) with respect to that default and, for that purpose, enter any part of the Parking Garage and of the Station reasonably necessary to do so. 13. Interest: Any amount owed by one party to the other under this Sublease which is not paid when due shall bear interest at the rate of eight percent (8%) per annum from the due date of such amount. The payment of interest on such amounts shall not excuse or cure any default under this Sublease on account of the failure to pay the amount owed when due. 14. Indemnification and Hold Harmless: Gambini shall defend, indemnify, and hold harnless Auburn, its officers, officials, employees and volunteers from and against any and all claims, suits, actions, or liabilities for injury or death of any person, or for .loss or damage to property, which arises out of Gambini's use of the commercial retail space, or from the conduct of Gambini's business, tenants, or from any activity, work or thing done, permitted, or suffered by Gambini in or about the premises, except only such injury or damage as shall have been occasioned by the sole negligence of Auburn. Auburn shall defend, indemnify and hold harmless Gambini from any claims by Sound Transit that Auburn breach its lease with Sound Transit. 15. Insurance: Gambini shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with Gambini's operation and use of the. sub-leased premises. A. Minimum Scope of Insurance. Gambini shall obtain Commercial General Liability insurance v~~ritten on Insurance Services Office (ISO) occurrence form CG 00 O1 and shall cover premises and contractual liability. Auburn shall be named as an insured Auburn Sound Transit Station Sublease Agreement City of Auburn -Gambini Page 9 8/20/07 on Gambini's Commercial General Liability insurance policy using ISO Additional Insured-Managers or Lessors of Premises Form CG 20 11 or a substitute endorsement providing equivalent coverage. Commercial General Liability insurance shall be written with limits no less than $.1,000,000 each occurrence, $2,000,000 general aggregate. Property insurance shall be written covering the full value of Gambini's property and improvements with no coinsurance provisions. The insurance policies are to contain, or be endorsed to contain, the following provisions for Commercial General Liability insurance: The Gambini's insurance coverage shall be primary insurance as respect to Auburn. Any Insurance, self-insurance, or insurance pool coverage maintained by Aubum shall be excess of the Gambini's insurance and shall. not contribute with it. Gambini's insurance shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to Auburn. B. Verification of Coverage. Gambini shall furnish Auburn with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Gambini. C. Waiver of Subrogation. Gambini and Auburn hereby release and discharge each other from all claims, losses and liabilities arising from or caused by any hazard covered by property insurance on or in connection with the premises or said building. This release shall apply only to the extent that such claim, loss or liability is covered by insurance. D. Destruction of Property/Insurance Benefit. In the event of any destruction of property, Gambini shall receive value of Gambini's interest from any insurance proceeds as described in the Lease Agreement, Exhibit 1, which value shall be determined by prorating the lease terms and lease amount remaining as taken as a percentage to the total property value. Auburn Sound Transit Station Sublease Agreement City of Auburn -Gambini Page 10 8/20/07 16. Condemnation: In the event of a condemnation Gambini would have the right to participate and any compensation received would be awarded as set forth in 15.E. above. 17. Attorneys' Fees and Costs: In any action between the parties arising out of or related to this Sublease, the prevailing party shall recover from, and the losing party shall pay to the prevailing party, the prevailing party's reasonable expenses of the action. "Action" includes: (i) litigation or other adversary proceeding in any court or governmental body with jurisdiction (including but not limited to a bankruptcy court); appeals of the decision of any lower tribunal (including but not limited to an award in arbitration); and, if such proceedings are required by law or agreed by the parties, alternative dispute resolution proceedings (such as but not limited to mediation and/or arbitration). "Expenses of the action" include but are not limited to the reasonable fees and costs of witnesses,. consultants, experts, and attorneys. However, anything appearing to the contrary notwithstanding, the provisions of this Section 16 does not apply to mediation under Section 17B. 18. Dispute Resolution: A. Negotiation. The Parties agree to use their best efforts to resolve disputes and other matters arising out of the planning, design and construction of the Station and Station Area (including but not limited to the Parking Garage and the Plaza Areas), arising out of the ongoing administration of the Parking Garage and Plaza Areas facilities, and arising under this Sublease. If an issue cannot be resolved between Auburn and Gambini, either of them may invoke a formal conflict resolution process. The first step in the process is a meeting including Auburn's Property Management Officer and Harold Gambini or his authorized representatives. If these persons do not resolve the dispute in a timely manner, the second step in the conflict resolution process shall be a meeting of Auburn's Supervisor of the Property Management Officer and Harold Gambini. If these persons do not resolve the dispute in a timely manner the third step in the conflict resolution process shall be a meeting of Auburn's Mayor and Harold Gambini. Auburn and Gambini agree to exhaust all .three steps of this negotiation process before seeking mediation as next described. Auburn Sound Transit Station Sublease Agreement City of Auburn -Gambini Page 11 8/20/07 B. Mediation. If the parties do not resolve the dispute in the conflict resolution process described in Section 17.A, then either party may by written notice to the other require that the dispute be submitted to mediation. Within fourteen (14) days after such notice, the parties shall agree on and mutually appoint a mediator. If such agreement and appointment is not made, then either party may petition the King County Superior Court to appoint a mediator. Each party shall participate in good faith in the mediation process -with the appointed mediator. Auburn and Gambini each agree to participate in good faith in the mediation process with appointed mediator before seeking redress in a court of law or other tribunal. The costs and fees of the mediator shall be paid one-half each by Gambini and by Auburn. 19. Miscellaneous Provisions: A. Non-Discrimination. Neither Gambini nor Auburn shall discriminate against any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in any way related to or arising out of the party's rights or obligations under this Sublease. B. Interpretation. The captions of the Articles and Sections of this Sublease are intended only to assist in reading this Sublease and are not a part of the terms or provisions of this Sublease nor. shall they be considered in construing or interpreting any provision of this Sublease. Whenever required by the context of this Sublease, the singular shall include the plural and the plural shall include the singular. The masculine, feminine and neuter genders shall each include the other. In any provision relating to the conduct, acts or omissions of either party to this Sublease, reference to the party shall also be to the party's agents, employees,. contractors, and successors. C. Administration. This Agreement shall be administered by on behalf of Gambini, and by the Mayor of the City of Auburn, or designee, on behalf of Auburn. Any written notices required by the terms of this Agreement shall be served on or mailed to the following addresses: City of Auburn Auburn City Hall 25 West Main Auburn, WA 98001-4998 Harold Gambini P.O. Box 3044 Renton, «rA 98059 (253) 931-3000/Fax (253) 931-3053 Auburn Sound Transit Station Sublease Agreement City of Auburn -Gambini Page 12 8120/07 D. Notices. All notices. or communications permitted or required to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered in person or deposited in the United States mail, postage prepaid, for mailing by certified mail, return receipt requested, and addressed, if to a party of this Agreement, to the address for the -party set forth above, or if to a person not a party to this Agreement, to the address designated by a party to this Agreement. in the foregoing manner. Any party may change his, her or its address by giving notice in writing, stating his, her or its new address, to any other party, all pursuant to the procedure set forth in this section of the Agreement. L. Recording. This Sublease shall not be recorded without the prior written consent of both parties. However, promptly after the request of either party, both parties shall execute, acknowledge, deliver to one another, and record a Memorandum of this Sublease giving constructive notice of the terms and conditions hereof. The party requesting such recording shall pay the recording fees thereof. F. Binding Effect; Governing Law. This Sublease is binding upon the parties hereto and their respective successors and assigns in interest. However, the preceding sentence does not permit any assignment in contravention of other provisions of this Sublease. This Sublease is governed by and shall be construed and enforced according to the laws of the State of Washington, excluding that State's laws relating to choice of law. G. Force Majeure. If either party cannot perform any of its obligations due to events beyond the party's control, the time provided for performing such obligations shall be extended by a period of time equal to the duration of such events. Events beyond a party's control include, but are not limited to, acts of God, war, civil commotion, labor disputes, strikes, fire, flood or other casualty, shortages of labor or material, government regulation or restriction and weather conditions. H. Authorized Persons. For the purpose of all provisions of this Sublease that require Auburn's consent or approval or that require Auburn to consult or agree with Gambini, the person authorized to act for Auburn in all such matters is Aubunl's Property Management Officer. For the purpose of all provisions of this Sublease that require Auburn Sound Transit Station Sublease Agreement City of Auburn -Gambini Page 13 8/20/07 Gambini's consent or approval or that require Gambini to consult with or agree with Auburn, the person authorized to act for Gambini in all such matters is Harold Gambini, or such person authorized in writing by Harold Gambini. Each party may from time to time change its authorized person by written notice to the other. I. Survival. Terms and provisions of this Sublease related to liability and indemnity obligations shall survive the expiration or earlier termination of this Sublease. J. Binding Effect. The covenants, obligations and conditions herein contained shall be binding on and inure to the benefit of the heirs, legal representatives, _ and assigns of the parties hereto. GAMBINI AUBURN By: Harold Gambini Dated: LLC by Harold Gambini Managing Partner Dated: Auburn Sound Transit Station Sublease Agreement City of Auburn -Gambini Page 14 8120/07 By: Peter B. Lewis, Mayor Dated: Attested: Danielle E. Daskam, City Clerk Approved as to Form: Daniel B. Held, City Attorney EXHIBITS EXHIBIT 1 Resolution 3469 and Lease Agreement between Auburn and Central Puget Sound Regional Transit Authority, dated June 26, 2002, EXHIBIT 2 Sublease between Auburn and PMF Enterprises, Inc., dated January 15, 2003, EXHIBIT 3 Sublease between Auburn and Edward D. Jones, dated April 29, 2004, EXHIBIT 4 Sublease beriveen Auburn and Green River Community College dated April 15, 2005. EXHIBIT 5 Diagram of the 42 designated parking spaces in the Sound Transit parking garage. Auburn Sound Transit Station Sublease Agreement City of Auburn - Gambini Page 15 8/20/07 STATE OF WASHINGTON COUNTY OF ss. I certify that I know or have satisfactory evidence that is the person who appeared before me and said person acknowledged that signed this instrument, on oath stated that was authorized to execute the instrument and acknowledged it as the of to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. DATED: STATE OF WASHINGTON ss. COUNTY OF Printed Name: NOTARY PUBLIC in and for the State of Washington, residing at My Commission expires: I certify that I know or have satisfactory evidence that is the person who appeared before me and said person acknowledged that signed this instrument, on oath stated that was authorized to execute the instrument and acknowledged it as the of to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. DATED: STATE OF WASHINGTON COUNTY OF ss. Printed Name: NOTARY PUBLIC in and for the State of Washington, residing at My Commission expires: I certify that I know or have satisfactory evidence that is the person who appeared before me and said person acknowledged that signed this instrument, on oath stated that _ was authorized to execute the instrument and acknowledged it as the of to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. DATED: Auburn Sound Transit Station Sublease Agreement City of Auburn - Gambini Page 16 8/20/07 Printed Name: NOTARY PUBLIC in and for the State of Washington, residing at My Commission expires: STATE OF WASHINGTON COUNTY OF ss. I certify that I know or have satisfactory evidence that is the person who appeared before me and said person acknowledged that signed this instrument, on oath stated that was authorized to execute the instrument and acknowledged it as the of to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. DATED: STATE OF WASHINGTON ss. Printed Name: COUNTY OP NOTARY PUBLIC in and for the State of Washington, residing at My Commission expires: I certify that I know or have satisfactory evidence that is the person who appeared before me and said person acknowledged that signed this instrument, on oath stated that was authorized to execute the instrument and acknowledged it as the of to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. DATED: Auburn Sound Transit Station Sublease Agreement City of Auburn - Gambini Page 17 8/20/07 Printed Name: NOTARY PUBLIC in and for the State of Washington, residing at My Commission expires: EXHIBIT 1 Resolution #3469 and Lease Agreement Between Auburn and Central Puget Sound Regional Transit Authority RESOLUTION NO. 3 4 6 9 A RESOLUTION OF THE CITY COUNCIL OF THE CITY COUNCIL OF AUBURN, WASHINGTON, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A LEASE AGREEMENT BETWEEN THE CITY OF AUBURN AND THE CENTRAL PUGET SOUND REGIONAL TRANSIT AUTHORITY (SOUND TRANSIT). WHEREAS, the City of Auburn and the Central Puget Sound Regional Transit Authority (Sound Transit) have been working cooperatively on the development in utilization of the Sound Transit -Auburn Station, including parking garage, plaza and retail spaces; and WHEREAS, corollary to the Station activities, the City and Sound Transit have cooperated in the construction of-the Aubum Station and Sound Transit has, on behalf of the City, constructed certain retail spaces available within the City and over which the City has operational and management responsibilities; and WHEREAS, in order to manage and coordinate this retail space, in cooperation with Sound Transit, the City and Sound Transit have negotiated a lease acceptable to both parties; and WHEREAS, it is also appropriate for the lease to address on-going maintenance and operation responsibilities and relationships between the City and Sound Transit for the retail space, as a master lease, accommodating the individual leases into which the City of Auburn would enter with subtenants; and Resolution No. 3469 May 14, 2002 Page 1 of 3 WHEREAS, the City Council has heretofor authorized the leasing arrangements in concept and has allocated resources in support thereof, with its adoption of Resolution 3278, passed on November 6, 2000; and WHEREAS, the City also is envisioned to have responsibility for 180 parking spaces in the Sound Transit -Auburn Station, which can be used for retail parking in the downtown area. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, HEREBY RESOLVES as follows: ..Section 1. The City Council .approves the the lease in substantially the form as set for in Exhibit "A" between the Central Puget Sound Regional Transit Authority (Sound Transit) as landlord and the City of Aubum, as tenant, a copy of which is attached hereto, marked as Exhibit "A" and Incorporated herein by this reference. Section 2. That the Mayor and City Clerk are authorized to execute the lease in substantially the form as set forth in Exhibit "A", and the Mayor is further authorized to take such other and further actions as are necessary and convenient for the management space over which the City has .responsibility, including executing sub-leases with merchants, and managing the 180. parking spaces in accordance with the City's parking plan. Section 3. That this resolution shall be in full force and affect upon passage and signatures hereon. DATED and SIGNED this Z 4 day of May, 2002. Resolu~on No, 3469 May 14, 2002 Page 2 of 3 OF AUBU ~~ J -. ~%"__ .- _,_.. PE ATTEST: i-~~~i~Q.~CU~j'L-.~" Danielle E. Daskam, City Clerk APPR D FORM I B. Hel , City Attorney ER 8. LEWIS MAYOR Resolution No. 3469 May 14, 2002 Page 3 of 3 LEASE BETWEEN: CENTRAL PUGET SOUND REGIONAL TRANSIT AUTHORITY "So.und Transit" as Landlord AND CITY OF AUBURN "city° as Tenant Date of Lease June 2G, 2002 267865.11 06/26/03 LEASE Table of Contents P~ ARTICLE 1 : BASIC TERMS .................:................................................................................2 1.1 Definitions ................................................................................... .........................2 (a) City .................................................................:.:.................. .........................2 (b) City's Parking Spaces .......................................................... .........................2 (c) Commercial Tenant Area .................................................... .........................2 (d) Common Areas .................................................................... ......:..................2 (e) Kiss and Ride Spaces .......................................................... .........................3 (~ Leased Premises ----• ............................................................. .........................3 (g) Other Parking Spaces .......................................................... .........................3 {h) Operating Procedures .......................................................... .........................3 (i) Parking Garage .................................................................... .........................3 ~) Plaza .................................................................................... .........................3 ~) Plaza Tenant Area ............................................................... .........................3 (1) Sound Transit ...................................................................... .........................3 (m) Station......-----• ...................................................................... .........................3 (n) Term .................................................................................... .... .................3 l .2 Date of Lease .........................................................._.........-•----•-•• --------......---........3 1.3 Landlord ..............................................................................•------. .........................4 1.4 Tenant ......................................................................................... .........................4 1.5 Leased Premises .......................................................................... .........................4 1.6 Lease Term .................................................................................. .........................4 1.7 Permitted Uses ............................................................................ .........................4 1.8 Charges Payable by City ............................................................. .........................4 ARTICLE 2: LEASE, LEASE TERM AND CITY PAYMENTS .................. ._.......................4 2.1 Lease of Property for Initial Lease Term .................................... .........................4 2.2 City's Options to Extend ........................•-••--•-•--.......................... .........................5 2.3 Sound Transit's Work .................................................................. .........................5 2.4 Delivery; Early Occupancy; Delay in Commencement .............. .........................5 2.5 City's Additional Rights ............................:................................. .........................6 (a) Common Areas .................................................................... .........................6 ~) Kiss and Ride Spaces .......................................................... .........................6 (c) Other Parking Spaces .......................................................... .........................6 (d) Special Events ..................................................................... .........................6 {e) Elevator Lobby .................................................................... .........................7 (fl Sidewalk Vendors and Kiosks ............................................. .........................8 (g) Plaza Tenant Area ............................................................... .........................8 (h) Vertical Shafts and'Roof Top' Equipment and Devices ..... .........................8 2.6 City's Option To Purchase .......................................................... .........................9 (a) Preliminary Notices ............................................................. .........................9 (b) Determination of Price ........................................................ .........................1Q -~- ae~ess i i oana~n2 (c) Notice of Exercise ..........................................................................,.............11 (d) Closing ......................................................:................................................... L 1 (d) Sound Transit's Option .................................................................................13 2.7 Termination; Advance Payments ....................... ............................................ . .....14 ARTICLE 3: CHARGES PAYABLE BY CITY ...............:...................................................... 14 3.1 Utilities ..................................................................................... .. 14 3.2 Parking Garage Operations .................................................................................. I S (a} Sound Transit's Obligations ......................................................................... 15 (b) Costs of Operations ...................................................................................... 1 S 3.3 Insurance Policies ................................................................................................ 15 (a}, Liability Insurance ........................................................................................ 16 (b) Sound Transit's Property Insurance .............................................................. Iti {c) Other Insurance ............................................................................................ lb (d) Payment of Premiums .................................................................................. 16 (e) Evidence of Insurance .................................................................................. 17 (f) General Insurance Provisions ....................................................................... 17 3.4 Self-Insurance ...................................................................................................... 18 3.5 Leasehold Excise Tax .......................................................................................... 18 ARTICLE 4: USE OF LEASED PREMISES ..........................................................................18 4.l Permitted iJses ......................................................................... ............................] 8 (a) City's Parking Spaces and Other Parking Spaces ..........:.. ............................18 (b) Commercial Tenant Area ---------------------------------•--•----........ ............................18 4.2 Manner ofUse .......................................................................... ............................18 (a) General ............................................................................. ..... ..18 .. ............. (b) Prohibited Uses ................................................................. ...........................19 (c) Rules .................................•--..........---------............-.-........... ............................19 4.3 Hazardous Materials ................................................................ ................•--.........19 4.4 Signs ..............................•-----...._................................................ ..........:.................19 (a) Permanent Signs ............................................................... ..... .........20 .............. (b} Special Event Temporary Signs ....................................... ............................20 4.S Indemnity ................................................................................. ............................20 4.6 Sound Transit's Access .................................. .......................... ..20 ........................... 4.7 Quiet Possession ...................................................................... ............................21 ARTICLE 5: CONDITION OF LEASED PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS .................................................................... 21 S.1 Condition and Suitability of Leased Premises ............................................:........ 21 S.2 Exemption of Sound Transit from Liability ......................................................... 21 S.3 Sound Transit's Obligations to Repair ....................................................:............ 21 5.4 City's Obligations ..................... ............................................................................ 22 5.5 Alterations, Additions and Improvements .......:................................................... 22 S.6 Condition Upon Termination ............................................................................... 22 ARTICLE 6: DAMAGE OR DESTRUCTION ...:.................................................................... 23 6.1 Partial Damage to Parking Garage ....................................................................... 23 6.2 Substantial or Total Destruction .......................................................................... 23 -ii- ze~aes i i oeitwoz 6.3 Abatement of Certain Charges; Setoff of Certain Expenses ................................23 6.4 Exceptions ............................................................. ...............................................24 ARTICLE 7 : CONDEMNATION ............................................. ...............................................24 7.1 Permanent Taking ................................................. ..............................................24 (a) General Provisions ........................................ .......................:....................:..24 (b} Allocation of Award ...................................... ...............................................25 7.2 Abatement and Adjustment of Charges Payable b y City .....................................25 7.3 Temporary Taking ............................................... ...............................................25 ARTICLE 8 : ASSIGNMENT AND SUBLETTING ................ ...............................................26 8.1 Subletting .............................................................. ...............................................26 8.2 Assignment ........................................................... ...............................................26 8.3 Release of City ...................................................... ...............................................26 8.4 Requesting Sound Transit's Consent ..................... ...............................................26 8.5 Sound Transit's Right to Information .................... ...............................................27 ARTICLE 9 : BREACH AND REMEDIES ...........:................... ...............................................27 9.1 Time is of the Essence .......................................... ...............................................27 9.2 Default and Breach Defined .................................. ...............................................27 9.3 Sound Transit's Remedies for City's Breach ......... ...............................................27 {a) General Provisions ........................................ .............................................. 27 (b} Termination ................................................... ...............................................28 {c) Remedies Cumulative .................................... ...............................................28 (d) Emergencies .................................................. ...............................................2$ 9.4 City's Remedies for Sound Transit's Breach ......... ...............................................28 (a) General Provisions ........................................ ...............................................28 (b) Emergencies .................................................. ...............................................29 9.5 Interest ................................................................... ...............................................29 9.6 Attorneys' Fees and Costs ................. 9.7 Dispute Resolution ................................................ ...............................................30 {a) Negotiation .................................................... ...............................................30 (b) Mediation ....................................................... ..................................:............30 ARTICLE 1 0: MISCELLANEOUS PROVISIONS .................. ...............................................30 I0.1 Non-Discrimination .............................................. ...............................................30 10.2 Interpretation ......................................................... ..............................................:30 10.3 Notices .................................................................. .........................................•.....30 10.4 Recording .............:................................................ ...............................................31 10.5 Binding Effect; Governing Law ............................ ...............................................31 10.6 Force Majeure .............................:......................... ...............................................31 10.7 Authorized Persons ............................................... ...............................................31 10.8 Survival ................................................................. ...............................................32 -111- 267863 I I ~ 0686/02 LIST OF EXHIBITS Exhibit 1.1(b) Commercial Tenant Area and City's Parking Spaces Exhibit 1.1(e) Station, Parking Garage, Plaza, Plaza Tenant Area and Kiss and Ride Spaces Exhibit 1.1{~ Legai Description of Parking Garage and Plaza Property Exhibit 1.1(i) Parking Garage Operating Procedures Exhibit 2.3 Plans and Specifications for Sound Transit's Work Exhibit 2.5(c) Holidays Exhibit 3.2{b) Parking Garage Operating Costs Exhibit 4.2{c) Station Rules and Regulations Exhibit 4.4(d} Exterior Wall Sign Criteria -iv- ')fi7R65 I I OW2ti/02 RECITALS A. CENTRAL PUGET SOUND REGIONAL TRANSIT AUTHORITY ("Sound Transit") is a regional transit authority organized and existing under Chapters 81.104 and 81.112 of the laws of the State of Washington. B. CITY OF AUBURN {"City"} is a Washington municipal corporation and, in connection with this Lease, is acting in its. proprietary capacity. C. King County ("King County") is a Washington municipal corporation. D. King County operates a mass public transit system in King County, Washington consisting primarily of buses. Sound Transit operates a high capacity public transit system in Pierce, King, and Snohomish counties of the State of Washington consisting of buses and commuter rail and intended to include light rail. E. In 1999, Sound Transit, King County, and City made that Agreement Between King County, City Of Auburn, And Central Puget Sound Regional Transit Authority For The Planning, Design And Construction Of The Auburn Multimodal Transit Facility ("the Agreement"). F. Pursuant to the Agreement, Sound Transit, King County, and City agreed to jointly design, provide for the construction, and share the costs of development of a facility in the downtown part of City to provide the public with facilities for access to and use of the public transit facilities of Sound Transit and King County ("Station"). City's participation in such development is intended in major part to further City's goal of rehabilitating its downtown by acquiring parking spaces and developing space capable of being used for transit oriented retail, office and dining use. G. Sound Transit has acquired title or long term lease rights to the land on which the Station is located and has constructed the Station, including a pazking garage ("Parking Garage") consisting of 6 floors with 562 parking spaces, 9 of which are designated as disabled parking spaces. The ground floor of the parking garage has approximately 14,000 gross square feet of space suitable for use by retail tenants ("Commercial Tenant Area"). Sound Transit has constructed the Commercial Tenant Area as a "shell" with concrete floor and back wall but no interior walls. . H. Pursuant to the Agreement, City contributed to the costs of development of the Station by making $2,100,000 in improvements to streets in the vicinity of the Station. These improvements were made to mitigate traffic impacts the Station will have and are properly considered costs of development of the Station. Pursuant to the Agreement, City contributed from Transportation Improvement Board and federal grants, an additional $1,802,323 toward the costs of development of the Station, consisting of $400,000 for planning and approximately $1,402,323 toward the costs of construction of a pedestrian bridge. The Agreement provided that in exchange for these contributions, City would be entitled to lease the Commercial Tenant Area and have exclusive use of 45 of the parking spaces in the Parking Garage. -1- 267865. I I Oh726/02 I. City has agreed to contribute an additional $2,106,196 to the costs of construction of the Parking Garage for a total contribution by City of $6,008,519 to costs of dcvclopment of the Station. In exchange for this additional contribution, Sound Transit has agreed that City would have (i} the exclusive use of an additional I35 of the parking spaces in the Parking Garage, (ii) exclusive use of all other parking spaces in the Parking Garage during off-peak hours, and (iii) other rights as set forth in Section 2.S of this Lease. this Lease. By its Motion 2001-84 Sound Transit's Board of Directors authorized entry into K. By its Resolution No 3278, City authorized entry into this Lease. THEREFORE, for and in consideration of City's improvements and payments described in Recital H, City's agreement to make the payments described in Recital H as provided in Sections 2.3, and City's agreement to make the payments described in Article 3 and Section 5.4, City's other covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which Sound Transit acknowledges, City and Sound Transit make the following Lease: ARTICLE 1: BASIC TERMS This Article 1 contains the Basic Terms of this Lease between the Sound Transit and City. Other Articles and Sections of the Lease referred to in this Article 1 explain and define the Basic Terms and are to be read in conjunction with the Basic Terms. 1.1 Definitions: In this Lease, the terms defined in this Section 1.1 have the meanings specified below unless the context clearly requires otherwise. Other terms are defined in other Sections of this Lease. {a) Cam. "City" is defined in Section 1.4. (b} City's Parkin~Spaces. "City's Parking Spaces" means the 180 parking spaces that are outlined on the drawings of the ground through the sixth floors of the Parking Garage attached hereto as Exhibit 1.1(b). (c} Commercial Tenant Area. "Commercial Tenant Area" means that part of the interior of the ground floor of the Parking Garage that is outlined and labeled as the Commercial Tenant Area on the drawing of the ground floor of the Parking Garage that is attached hereto as part of Exhibit 1.1{b). {d} Common Areas. "Common Areas" means (i) the driving lanes of the Parking Garage, (ii) the stairways and elevators of the Parking Garage, (iii) the elevator lobby, the restrooms on the service corridor and accessible from the elevator Tabby of the Parking Garage, (iv) the trash area, truck delivery zone, vault room of the Parking Garage and (v) the Plaza (defined below) except that during the term of any sublease thereof by City those parts of the Plaza. Tenant Area (defined below) subleased by City as permitted by this Lease shall not be part of the Common Areas. -2- 267B6S.11 ON26/02 {e) Kiss and Ride Spaces. "Kiss and Ride Spaces" means those surface spaces for motor vehicles at the Station north of the Plaza General Area that are outlined and labeled as the Kiss and Ride Spaces on the copy of the site plan of the Station that is attached hereto as Exhibit 1.1{e). (f) Leased Premises. "Leased Premises" is defined in Section 1.5. The legal description of the Parking Garage and Plaza Property (as defined in Section 2.6) of which the Leased Premises is a part is as set forth in Exhibit 1.1 (t} attached hereto. (g) Other Parking Spaces. "Other Parking Spaces" is defined in Section 2.6(b). (h) Operating Procedures. "Operating Procedures" means the procedures, rules and regulations for use of the Parking Garage attached as Exhibit 1.1(i}, and as they may be changed from time to time by Sound Transit acting in its reasonable discretion after consultation with City. Each such change shall be effective fifteen (15) days after the changed Operating Procedures are received in writing by City. No such change shall unreasonably interfere with City's use of City's Parking Spaces or, as permitted under this Lease, the Other Parking Spaces. (i) Parking Garage. "Parking Garage" means the parking garage at the Station depicted on the copy of the site plan of the Station attached hereto as Exhibit 1.1(e), and includes, but is not limited to, the Leased Premises. (j) Plaza. "Plaza "means that part of the Station that is north of the Parking Garage and is outlined and labeled as the Plaza on the copy of the site plan of the Station that is attached hereto as Exhibit 1.1(e). (k) Plaza .Tenant Area. "Plaza Tenant Area" means that part of the Plaza bounded by the north exterior wall of the Parking Garage, lines extended from and parallel with the east and west exterior walls of the Parking Garage, and a line thirty feet north of and parallel to the north exterior wall of the Parking Garage and is outlined and labeled as the Plaza Tenant Area on the copy of the site plan of the Station that is attached hereto as Exhibit 1.1(e). (1) Sound Transit. "Sound Transit" is defined in Recital A and Section 1.3. {m) Station. "Station" is defined in Recital F, is depicted in the drawing attached hereto as Exhibit 1.1(e) and includes all improvements that are a part of the Station, including but not limited to the Leased Premises, the Parking Garage, the Plaza, platforms, surface parking and loading areas, and roads. (n) Term. "Initial Term," "Extended Term, "Term" and similar phrases are all defined in Section 1.6. 1.2 Date of Lease: June 26, 2002. -3- 267865. I 1 Dena/o2 1.3 Landlord: CENTRAL PUGET SOUND REGIONAL TRANSIT AUTHORITY, a regional transit authority organized under the laws of the State of Washington {"Sound Transit"). Address of Sound Transit: 401 South Jackson Street, Seattle, WA 98104-2826, which shall be Sound Transit's address for notice purposes under Section 10.3 unless and until changed according to the provisions of that Section. 1.4 Tenant: CITY OF AUBURN, a Washington municipal corporation ("City") Address of City: 25 West Main Street, Auburn, WA 98001-4998, which shall be City's address for notice purposes under Section 10.3 unless and until changed according to the provisions of that Section. 1.5 Leased Premises: "Leased Premises" means the Conunercial Tenant Area, the City's Parking Spaces, and during the term of any sublease thereof by City those parts of the Plaza Tenant Area subleased by City as permitted by this Lease. 1.6 Lease Term: The "Initial Term" of this Lease is as provided in Section 2.1. City shall have the option to extend the term of this Lease as set forth in Section 2.2 and "Extended Term" -means the term of this Lease as so extended from time to time, if and to the extent City exercises one or mare of such options. In this Lease, the terms "Lease Ternn," "Tenrn," "Term of this Lease;' and phrases of similar import each means the Initial Term and, to the extent City exercises its options to extend, the Extended Terms. 1.7 Permitted Uses: See Section 4.1. Notwithstanding any other provision of this Lease, no use by City, its subtenants or licensees of all or any part of the Leased Premises or any other part of the Station as to which City has the right to use or the right to grant a Iicense or other permit to use shall unreasonably interfere with Sound Transit's use of the Station for high capacity public transit purposes. 1.8 Charges Payable 6y City: See Sections 2.3 (construction costs}, 3.1 (utilities), 3.2 (operating costs), 3.3 (insurance premiums) and 5.4 (repair and maintenance). ARTICLE 2: LEASE, LEASE TERM AND CITY PAYMENTS 2.1 Lease of Property for lnitial Lease Term. On the terms, conditions and covenants herein set forth, Sound Transit leases the Leased Premises to City, and City leases the Leased Premises from Sound Transit, for the Lease Term. The Initial Lease Term is for the period beginning on the Commencement Date and ending on the earlier of (a) ninety-nine years thereafter or (b), if applicable, such earlier time as the end of the useful life of the Parking Garage. The "Commencement Date" is the date on which this Lease has been fully executed by the City and Sound Transit. When the Commencement Date has been determined, then promptly after the request of either of them, City and Sound Transit shall mutually execute, acknowledge and deliver to one another duplicate originals of a written agreement confirming the date which is the Commencement Date. -4- 267865 1 I 06/26/02 2.2 City's Options to Extend. Provided that at the time each Extended Term would comrr~ence City is not in material default beyond any applicable period for cure under this Lease, City shall have the option to extend the Term of this Lease for successive period of ninety-nine (99) years each. Each of City's Extended Terms, if any, shall begin on the day after the expiration of the Initial Lease Term or, if applicable, the day after the preceding Extended Term and shall end on the earlier of (a) ninety-nine years thereafter or (b), if applicable, such earlier time as the end of the useful life of the Parking Garage. City shall exercise its option to extend by written notice to Sound Transit given not later than six months before the end of the current Term. The terms and conditions of this Lease during each Extended Term shall be on all the same terms and conditions of this Lease as for the Initial Term. 2.3 Sound Transit's Work. Sound Transit has constructed the Parking Garage, its sidewalks, utilities, and amenities and the Plaza ("Sound Transit's Work") according to the plans and specifications listed in or otherwise identified according to Exhibit 2.3 attached hereto (the "Plans" and "Specifications."). Promptly after execution of this Lease Sound Transit shall deliver to City one copy of "as-built" Specifications and one blueprint copy and one reverse mylar sepia copy of "as-built" Plans for the Parking Garage and the Plaza. Sound Transit warrants that it has constructed the Parking Garage and the Plaza according to the Plans and Specifications, in good and workmanlike manner and in compliance with all applicable laws, ordinances, rules and regulations of governmental authorities with jurisdiction, including but not limited to City acting in its governmental capacity. At its sole expense, Sound Transit shall promptly correct (i) alI material defects in design of the Parking Garage or the Plaza; (ii) all rnatenial defects in materials and workmanship of Sound Transit's Work and (iii) all failures to conform to the Plans and Specifications or to governmental requirements therefor, which defects or nonconfottnities are discovered within one year after the Commencement Date. Sound Transit and City shall each give the other prompt written notice a8er discovering any such defect or nonconformity. City shall reimburse Sound Transit $2,106,196 of the costs of construction of the Parking Garage. Such reimbursement shall be payable in three equal installments of $702,065.33 each, without interest, as follows: (a) the first installment within thirty (30) days after the Commencement Date; (b) the second installment one year after the Commencement Date; and (c) the third installment two years after the Commencement Date. 2.4 Delivery; Early Occupancy; Delay in Commencement. (a) On the Commencement Date, Sound Transit shall deliver to City, and City shall take possession of, the Leascd Premises. On or before the Commencement Date, Sound Transit shall deliver to the City any keys, access codes and operating instructions necessary far City's access to the Leased Premises. (b) City was permitted early occupancy of the City's Parking Spaces beginning on January 28, 2002 and shall pay its forty percent share of utilities and operating costs of the Parking Garage under Sections 3.1 and 3.2 beginning on that carly occupancy date. Except for such payments, City shall have no obligation under this Lease to make any payments of money otherwise required of it under this Lease until the Commencement Datc has occurred and, upon such occurrence, no payments of money shall be required of City under this Lease on account of any period of time before the Commencement Date. -5- 267865. I 1 06/16/02 2.5 City's Additional Rights. In addition to the City's rights to the Leased Premises, the City shall also have, and Sound Transit grants to City, the following rights for the Lease Term: (a) Common Areas. City, its licensees and invitees shall have the non- exclusive right with others designated by Sound Transit to the free use of the Common Areas for the intended and normal uses of such areas. Sound Transit has the right to change the Common Areas provided that the change or changes (i) do not interfere with access to or use of the Leased Premises by City, its subtenants and licensees, and their invitees and contractors and {ii) do not interfere with exercise of any of City's other rights under this Lease. (b) Kiss and Ride Spaces. Sound Transit shall not use and shall not permit others (except City) to use the Kiss and Ride Spaces for parking vehicles or for any use except as an area for loading and unloading Sound Transit's customers. City may use and may permit others to use the Kiss and Ride Spaces as parking spaces (i) all day on weekends and holidays and (ii) Monday through Friday except between the hours of 6:00 a.m. and 9:00 am and 4:00 p.m. and 6:00 p.m. Notwithstanding the preceding, on days when Sound Transit operates one or more special events trains, City may not use and may not permit others to use the Kiss and Ride Spaces during the period beginning one hour before the first such special event train is scheduled to leave the station and ending when the last such special event train actually leaves the Station. (c) Other Parking Spaces. In addition to City's Parking Spaces, City shall have the nonexclusive license to use all other parking spaces in the Parking Garage ("Other Parking Spaces") on a first-come, first-served basis from the following times until the Parking Garage is closed for the day to use by the public for parking motor vehicles: (i)on those days on which Sound Transit operates one or more special events trains (for example and not by way of limitation those operated to offer transit services for sporting events), from the time the last special events train or other special events transit service operated by Sound Transit of that day actually leaves the Station; (ii) except as provided in item {i), on week days from the time the last train or other transit service operated by Sound Transit actually leaves the Station; and (iii) except as provided in item (i), at all times during Saturdays, Sundays, and holidays. "Holidays" means those days which are listed on Exhibit 2.5(c). Sound Transit shall provide to City its schedule of regular Sound Transit trains and all changes to such schedules promptly after such schedules and changes are available. Sound Transit shall exercise its best efforts to give City not less than thirty (30) days' prior notice of the schedules for special events trains. City shall use the Other Parking Spaces consistent with the Operating Procedures. If City charges the users any fees for use of the Other Parking Spaces, then Sound Transit shall be entitled to ane- half of City's net revenue from such charges. "City's net revenue" is that. amount, if any, by which the sums collected exceed (a) all taxes included within such collections (including any taxes imposed by the City) plus (b} City's out-of-pocket costs incident to use of the Other Parking Spaces (such as, but not limited to, those of operating and security personnel). {d) Special Events. City may request the right to use all or a portion of the Plaza, for itself or third persons for special events. Sound Transit shall grant such right provided that the requested use is consistent with Sound Transit's reasonable. written policies for public use. of the Plaza in effect at the time of the request and that the proposed use will not unreasonably interfere with the use of the Station for public transit purposes. "Special events" -6- 261865.1 I 06/2W02 include but are not limited to street fairs. City shall give Sound Transit not less than thirty (30) days prior written notice of each special event proposed to be held. in the Plaza. If Sound Transit determines the special event is inconsistent with its policies or would unreasonably interfere with Sound Transit's use of the Station for public transit purposes, Sound Transit shall so notify City not later than seven (7) days after receipt of City's request. At its expense, City shall provide, perform or cause to be performed all security, maintenance, set up, take-down, appropriate cleaning and refuse pickup. and all other services required or desired by City and those reasonably required by Sound Transit for each special event, both during the special event and promptly after the end of each special event authorized under this Section 2:5(d). Any damage to the Plaza suffered during such special event shall be repaired by City at its expense unless (i) caused by Sound Transit or its customers, contractors, invitees or licensees in which case Sound Transit shall repair such damage at its expense or (ii) caused by an occurrence that is unrelated to the special event. If City derives any revenue from a special event under this Section and such revenue exceeds City's costs of the special event, then unless otherwise agreed Sound Transit shall be entitled to fifty percent (50%) of such excess in exchange for City's use of the Plaza for such special event. For- such purposes, City's "revenue" means those charges collected by City from third parties in exchange for use of the Plaza or part thereof during the special event and does not include derivative benefits such as tax revenues and City's "costs" includes overhead such as .but not limited to the salaries, wages and benefits paid to City's emp}oyees reasonably allocable to the amount of time spent by them in connection with the special event. On Sound Transit's request, City shall permit Sound Transit to inspect and copy City's books and records related toa special event. (e) Elevator Lobby. The Commercial Tenant Area includes a room adjacent (in this Section called "the adjacent room") to the east interior wall (in this Section called "the interior wall") of the ground floor elevator lobby of the Parking Garage (in this Section called "the lobby"). The interior wall consists in part of windows through which part of the adjacent room is visible from the lobby. Access to the adjacent room is by a door in the interior wall. City intends to use, and to grant licenses to third parties who are governmental agencies or nonprofit entities to use, a part of the adjacent room to install, maintain, and change from time to time wall units and floor cases to display photographs, papers, artifacts, and other items of historical interest and/or to display works of art, which displays may be seen from the lobby through the windows in the interior wall. To the extent Sound Transit wishes from time to time to participate in such displays or to add its own historical or art displays in such adjacent room, City and its licensees will reasonably cooperate with Sound Transit in such matters. City- intends to sublease or otherwise license to a financial institution the remainder of the adjacent room for installation, repair, replacement, maintenance and use of an automated teller machine or other device for persons to electronically conduct banking business. City shall have the right to make, and the right to permit such a financial institution to make, appropriate openings in the exterior wall of the Parking Garage and/or in the interior wall for installation of such a machine or device. So long as City desires to make the uses of the adjacent room that are described in this paragraph, Sound Transit shall not, and shall not permit anyone else to, obstruct the view through the windows of the interior wall into the adjacent room or access into the adjacent room through the door in the interior wall. The preceding sentence does not apply to temporary obstructions required by routine maintenance or repairs or to any obstructions required by emergency. The provisions of this Section control over any inconsistency with the provisions of Section 2.5(a). -7- 2678ti5. I I 0626/02 (f) Sidewalk Vendors and Kiosks. Sound Transit shall not lease, license or otherwise grant the right to use any part of the Plaza to any person ("sidewalk vendor") to offer any goods or services for sale or other distribution to the public from a cart, kiosk, or other temporary or permanent facility which goods or services are the same or competitive with those offered for sale or other distribution to the public by any of City's subtenants or licensees of the Commercial Tenant Area. The preceding does not apply to vending machines for beverages or snacks or other devices for the sale or free distribution of newspapers or other periodicals. In addition, the preceding does not apply to leases, licenses or other rights granted to a competing sidewalk vendor before- the City's sublease was made or license granted ("existing sidewalk vendor"), but in such cases, Sound Transit shall not renew or extend a competing existing sidewalk vendor's lease, license or other right during the term of the sublease or license of the City's subtenant or licensee and, if the lease, license or other right granted by Sound Transit to the competing existing sidewalk vendor is terminable by Sound Transit without cause and without payment of money, then Sound Transit shall terminate such Iease, license or other right according to the terms for such termination. If the competing existing sidewalk vendor's rights are terminable without cause by Sound Transit but conditioned on Sound Transit's payment of money, then Sound Transit shall terminate such rights on City's request and City's agreement to make such payment. {g) Plaza Tenant Area. City shall have the right to grant its subtenants and licensees of retail space along the north side of the Parking Garage the right to exclusive use of that part of the Plaza Tenant Area adjacent to their subleased or licensed premises but only for use in connection with the business conducted by such subtenant or licensee in such subleased or licensed premises. Such uses may include, but shall not be limited to, outdoor seating areas for restaurants and coffee shops and displays of merchandise. Notwithstanding the provisions of the first sentence of this Section, no use by City's subtenants or licensees shall unreasonably interfere with, and City's subtenants and licensees shall permit, concurrent use of the Plaza Tenant Area by the public for pedestrian access in, about, and through the Plaza. In addition, the provisions of this Section are applicable for the limited term of ten {10) years beginning with the commencement date of this Lease. Beginning six (6) months before the end of-such limited term, City and Sound Transit shall negotiate in good faith concerning the terms and conditions on which such limited term shall be extended. Sound Transit shall not unreasonably refuse or condition such extension. {h) Vertical Shafts and "Roof Top" Equipment and Devices. With Sound Transit's prior approval as to purpose, location, plans and specifications, City's subtenants of all or part of the Commercial Tenant Area may install in existing (and any future) vertical shafts in the Parking Garage and on any of the second through the top floors of the Parking Garage mechanical equipment, antennae and other devices for venting odors and smoke from space in the Commercial Tenant Area or for communications and electronic data-transfer, including cables, ducts, filters, fans and other appropriate associated items to enable use of such equipment or devices in the space rented by them in the Commercial Tenant Area and for use in connection with the subtenant's primary business or other operations conducted in such space (so long as such primary business is not provision of telecommunications services). Sound Transit shall not unreasonably refuse, condition or delay such approval but may consider, among other things: (i) whether use of the proposed equipment or devices for communications or data-transfer purposes would interfere with any of Sound Transit's similar equipment at the Station; (ii) whether the -S- 2e786s.11 ~ 06/26/02 proposed location, plans and specifications provide reasonable enclosures or screening from view for aesthetic purposes and for noise suppression and safety; (iii) whether such equipment or devices would unreasonably interfere with the primary use of the floor of the Parking Garage for motor vehicle parking; and (iv) and the manner in which such equipment or devices (and associated screening or enclosures} are to be attached to the structure of the Parking Garage. With regard to subpart (iii), such use shall not be considered to unreasonably interfere merely because one or more parking spaces are lost to such equipment, devices or associated screening or enclosures if the spaces lost are some of City's Parking Spaces or, if not, City permits Sound Transit to use without charge the same number of City's Parking Spaces as are lost while such equipment or other devices and any associated screening or enclosures are in place. If Sound Transit's approval is granted to installation and use of any such equipment or devices, City's subtenants shall: (v} obtain all necessary permits for installation thereof and otherwise conform to al] requirements of Law for installation and use thereof; (vi) maintain, service, repair and replace such equipment or other devices and any associated screening and enclosures so that they are at all times in good working order; (vii) at the end of the term of the subtenant's sublease of its space in the Commercial Tenant Area, remove the equipment or devices and all associated screening, .enclosures and other things installed in connection therewith and restore all affected parts of the Parking Garage as reasonably as practical to the condition immediately before such installation; and (viii) pay when due all costs of the foregoing. City shall be responsible for such removal and restoration if City's subtenant fails to do so when required. 2.6 City's Option To Purchase. If at any time during the term of this Lease {as it may be extended) Sound Transit decides to cease using. the Station .for public .transit purposes and its governing body authorizes disposition of the Parking Garage and Plaza, then City shall have the option to purchase the Parking Garage and the Plaza, the real property on which such improvements are located, and all other improvements located on, in or over such real property (in this Section 2.6 collectively called "the Parking Garage and Plaza Property" and legally described in Exhibit 1.1(f) attached hereto) on the terms and conditions specified in this Section 2.6 ("City's Option"). If City's Option is exercised, then the purchase price for the Parking Garage and the Plaza shall be the fair market value of the Parking Garage and Plaza Property as encumbered by the City's interest in such property under this Lease as such fair market value is determined in accordance with subsection {b) of this Section 2.6. City's Option expires when the , Term of this Lease expires unless before then by appropriate action of Sound Transit's governing body Sound Transit decides to cease such use of the Station and to dispose of its interest in the Parking Garage and Plaza Property. If such action is taken before expiration of the Term of this Lease, then City's Option survives such expiration, subject however to the time limits specified in this Section 2.6. (a) Preliminary Notices. Promptly after Sound Transit's governing body decides to cease use of the Station for public transit purposes and to dispose of the Parking Garage and Plaza Property, Sound Transit shall give City written notice of Sound Transit's decision and the anticipated date that such use will cease ("Sound Transit's Cessation Notice"). Within sixty (60} days after receiving Sound Transit's Cessation Notice, City shall give Sound Transit written notice of City's preliminary intention to exercise its option to purchase the Parking Garage and Plaza Property ("City's Notice of Intent"). if City's Notice of Intent is not timely given, then City's Option shall expire. -9- 2G~8G5.11 UG/2G/U2 (b) Determination of Price. If City's Notice of Intent is timely given, then the purchase price for the Parking Garage and Plaza Property pursuant to City's Option, if exercised, shall be determined as provided in this Section 2.6(b}. (1) During the period of forty-five (45) days beginning with the day after City's Notice of Intent is given, City and Sound Transit shall negotiate in good faith in an effort to agree in writing upon the amount of the purchase price. If agreement is not made in writing within such forty-five day period, then the fair market value of the Parking Garage and Plaza Property as encumbered by City's interest in such property under this Lease shall be determined as provided in Section 2.6(b)(2) and the purchase price for Parking Garage and Plaza Property pursuant to City's Option, if exercised, shall be that amount that is equal to such fair market value. (2} Within sixty (60) days after City's Notice of Intent is given, each of City and Sound Transit shall select an appraiser and the two appraisers shall independently determine and make their written report to each other and to each of City and Sound Transit of the appraiser's opinion of the fair market value of the Parking Garage and Plaza Property as encumbered by City's interest in-such property under this Lease. If within ten {10) days after the last of such reports is delivered, the two appraisers agree on such fair market value, then the two appraisers shall report such agreement in writing to City and Sound Transit and the fair market value of the Parking Garage and Plaza Property as so encumbered shall be the sum so agreed. If the two appraisers do not so agree within such period and if their written opinions of such value are within five percent of the lowest of them, then the fair market value of the Parking Garage and Plaza Property as so encumbered shall be that amount determined by adding the two opinions together and then dividing by two. If the two appraisers' opinions are not within such five percent tolerance then within twenty (20) days after the last of their reports were delivered to City and Sound Transit, these two appraisers shall select a third appraiser who shall independently {but with the benefit of the reports of the first two appraisers) determine and make its written report to each of City and Sound Transit of the third appraiser's opinion of the fair market value of the Pazking Garage and Plaza Property as so encumbered, in which case such fair market value shall be that amount determined by the third appraiser except that such fair market value shall not be greater than the highest, nor lower than the lowest, of the fair market value as determined by the two appraisers first selected under this Section 2.6(2). (i) If City does not select an appraiser, if Sound Transit does not select an appraiser or if the first two appraisers do not select a third, all as required and by the time specified in Section 2.6(b)(2), then on application the appraiser may be selected by the then president of the chapter of the American Institute of Appraisers (or its successor organization} whose area includes King County, Washington or on such person's failure to act within ten (10) days after the application, by the superior court of King County, Washington. If the failure of selection is by City, the application for appointment may be made by Sound Transit. If the failure of selection is by Sound Transit, the application for appointment may be made by City. If the failure of selection is by the first two appraisers, then the application for appointment may be made by either or both of City and Sound Transit. (ii) All appraisers selected or appointed under Section Z.6(b}(2) shall deliver their written reports not later than thirty (30) days after their respective selection or -10- 267865.11 06/26/02 appointment. All appraisers selected or appointed under Section 2.6(b)(2) shall have been a member of the American Institute of Appraisers (or its successor organization) for not less than the period of fifteen (15) years preceding selection or appointment and regularly (not necessarily exclusively) engaged in the profession of appraising the fair market value of iinptoved commercial real property in King County, Washington for not less than the period of ten (10) years Preceding selection or appointment. (iii) City shall pay the costs and fees of the appraiser selected by or appointed for it and, if a third appraiser is appointed, one-half the fees and costs of the third appraiser. Sound Transit shall pay the costs and fees of the appraiser selected by or appointed for it and, if a third appraiser is appointed, one-half the fees and costs of the third appraiser. City and Sound Transit shall bear their own costs and fees, including those of attorneys, witnesses, and consultants of any application made for appointment of an appraiser under Section 2.6(b}(2)(i). If agreed according to subpart (1) of Section 2.6(b}, the purchase price as so agreed for the Parking Garage and Plaza Property is binding and conclusive on City and Sound Transit and all other persons having any interest in the premises. If determined according to subpart (2} of this Section 2.6(b), the fair rnazket value of the Parking Garage and Plaza Property as encumbered by the City's interest in such property under this Lease as so determined and the purchase price being equal to such value as provided in Section 2.6(a), are binding. and conclusive on City and Sound Transit and all other persons having any interest in the premises. (c) Notice of Exercise. City may exercise City's Option by written notice to Sound Transit ("City's Notice of Exercise") given not later than sixty (60} days after the purchase price of the Parking Garage and Plaza Property has been agreed or determined as provided in Section 2.6(b). If City's Notice of Exercise is not timely given then City's Option shall expire. (d) Closing. If City's Notice of Exercise is timely given, then the purchase and sale of the Parking Garage and Plaza Property shall be closed as provided in this Section 2.6(d). (1) The purchase and sate of the Parking Garage and Plaza Property shall be closed in escrow with the title company selected by City as provided in subpart (4) of this Section 2.6(d) acting as the escrow agent at such title company's office in (and, if none, nearest to) downtown Seattle, Washington. Closing shall occur on the later of (i) sixty (60) days after City's Notice of Exercise is given or (ii) thirty (30) days after any required segregation under subpart (7) of this Section 2.6(d) is accomplished. (2) At closing, City shall pay the purchase price of the Parking Garage and Plaza Property in full, in cash and Sound Transit shall deliver to City a statutory warranty deed for the Parking Garage and Plaza Property conveying such property to City free and clear of all encumbrances, claims, defects, liens and other defects in title except: (i) those of City's subtenants and licensees, if any; (ii) utility and other easements that do not materially interfere with use of the Parking Garage and Plaza Property; and (iii) rights reserved in federal patents or state deeds. -ll- 267863.11 06/26/02 (3) At closing, the following shall be prorated and adjusted between the parties as of the date of closing; (i) Sound Transit's share under the terms of this Lease of the charges for utilities and operating costs of the Parking Garage and Plaza; (ii) rents and other charges payable by third parties to Sound Transit for use of parking spaces in or any other part of the Parking Garage (except the Leased Premises); and (iii) sums payable under agreements that are assigned to City as provided in Section 2.6{d){6). (4) At closing, Sound Transit shall provide and pay for an extended form of owner's policy of title insurance insuring City as the owner of the Parking Garage and Plaza Property with no exceptions other than those provided in subpart (2) of this Section 2.6(d) and such other exceptions and exclusions as are included in the title company's printed form of policy jacket. The policy limits of such policy shall be equal to the purchase price to be paid by City for the Parking Garage and Plaza Property. The title policy shall be issued by such title insurance company as City selects in its discretion. (5) City shall pay the following costs of the closing: the costs of recording the deed, one-half the title company's fees and costs for acting as escrow agent, and, if applicable, City's net share of the prorations described in subpart {3} of this Section 2.6(d). Sound Transit shall pay the following costs of the closing: the title company's premium for the title policy described in subpart (4} of this Section 2.6(d), one-half the title company's fees and costs of acting as escrow agent, and, if applicable, Sound Transit's net share of the prorations described: in subpart (3) of this Section 2.b(e) and-the costs of any survey required by the title company as a condition to issuing the extended form of owner's policy of title insurance. (6) At closing, Sound Transit shall terminate all licenses, permits, Leases, andother contracts with third parties to provide services to the Parking Garage and Plaza Property or to use. any part of such Property except the Leased Premises (in this Section 2.6(d) collectively, "agreements") that are terminable without cause and without payment of money, except any that City elects to have assigned to City at closing. At closing, Sound Transit shall assign to City such agreements that City elects to have assigned to it under the preceding sentence and such other agreements that are not terminable without cause and without payment of money, .and City shall assume and agree to perform (and .indemnify and defend Sound Transit against claims and liabilities on account of or arising from) Sound Transit's obligations under the agreements that are assigned to City to the extent such obligations first accrue on and after the date of closing. Sound Transit shall perform (and indemnify and defend City against claims and liabilities on account of or arising from) the obligations in connection with such agreements to the extent such obligations accrue before the date of closing. At closing, Sound Transit shall deliver to City copies of all agreements assigned to City under this subpart (including but not limited to all amendments and modifications thereof) and of all Sound Transit's records relating thereto. The assignments and assumptions described in this subpart shall be in form and substance reasonably satisfactory to City, Sound Transit and their respective legal counsel. (7) If a short plat, boundary adjustment or other subdivision or segregation of the Parking Garage and Plaza Property is required in order for such property to be legally conveyed to City, then the parties shall cooperate with one another in order to accomplish such segregation as promptly as practical after City's Notice of Exercise. is given. City and Sound Transit shall each pay one half the fees and costs of such segregation, including but not -12- 157665.11 06/26/oz limited to those of engineers, surveyors and other professionals engaged to accomplish the segregation and the usual fees of the applicable governmental authorities with jurisdiction (including but not limited to City) incident to applying for, processing, and accomplishing such segregation. If a survey is reasonably required in order to prepare an accurate legal description of the Parking Garage and Plaza Property, then Sound Transit, after consultation with City, shall select the surveyor and City and Sound Transit shall each pay one-half the fees and costs of the surveyor for making such survey and preparing such description. If the title company requires a survey as a condition to its willingness to issue an extended farm of owner's policy of title insurance, then Sound Transit shall pay the costs of such survey or, as applicable, the additional costs required to upgrade any survey otherwise provided in this subpart (7} to the standards required by the title company as a condition to issuing such extended farm of owner's policy. (e) Sound Transit's Option. If City has but does not exercise City's Option, then Sound Transit shall have the option ("Sound Transit's Option") to purchase City's leasehold interest under this Lease in the Parking Garage and Plaza Property {"City's Leasehold Interest ") for a purchase price equal to the fair market value of City's Leasehold Interest. Such fair market value shall be determined in the manner and within the time periods specified in Section 2.6(b) for the purposes of determine the fair market value of the Parking Garage and Plaza Property as encumbered by the City's interest in such property under this Lease. Sound Transit shall give City written notice of Sound Transit's preliminary intention ("Sound Transit's Notice of Intent") to exercise Sound Transit's Option not later than sixty (60) days after the earliest of the following to occur: (i) the time for City to timely give City's Notice of Intent under Section 2.6 (a) expires without such notice having been given; or (ii) the time far City to timely give City's Notice of Exercise under Section 2.6(c) expires without such notice having. been given. If Sound Transit's Notice of Intent is timely given, Sound Transit may exercise Sound Transit's Option by written notice to City ("Sound Transit's No#icc of Exercise") given not later than sixty (60) days after the fair market value of City's Leasehold Interest has been determined. Sound Transit's°Option shall expire on the earlier of the following to occur: (i) Sound Transi# does not timely give Sound Transit's Notice of Intent; or (ii} Sound Transit does not timely give Sotmd Transit's Notice of Exercise. If Sound Transit exercises Sound Transit's Option, then Sound Transit's purchase of City's Leasehold Interest shall be closed as follows: (1) Closing shall occur on or before sixty (b0} days after Sound Transit's Notice of Exercise is given. (2) At closing, Sound Transit shall pay the purchase price of City's Leasehold Interest in full, in cash and City shall execute and deliver to Sound Transit an assignment thereof. Such assignment shall be in form reasonably acceptable to Sound Transit and shall be sufficient for Sound Transit to obtain an owner's standard policy of title insurance for the Parking Garage and Plaza Property staving no exception for City's Leasehold Interest (but subject to any agreements assigned to Sound Transit as provided in the next subpart). (3) At closing, City shall terminate all subleases, licenses, permits, leases, and other contracts with third parties to provide services to or use all or any part of the Leased. Premises {in this Section 2.6(e) collectively, "agreements") that are terminable without cause and without payment of money, except any that Sound Transit elects to have assigned to Sound Transit at closing. At closing, City shall assign to Sound Transit such agreements that Sound -]3- 261865.1 1 06/202 Transit elects to have assigned to it under the preceding sentence and such other agreements that are not terminable without cause and without payment of money, and Sound Transit shall assume and agree to perform (and indemnify and defend City against claims and liabilities on account of or arising from} City's obligations under the agreements that are assigned to Sound Transit to the extent such obligations first accrue on and after the data of closing. City shall perform (and indemnify and defend Sound Transit against claims and liabilities on account of or arising from) the obligations in connection with such agreements to the extent such obligations accrue before the date of closing. At closing, City shall deliver to Sound Transit copies of all agreements assigned to Sound Transit under this subpart (including but not limited to all amendments and modifications thereof) and of all City's records relating thereto. In addition, at closing, City shall deliver to Sound Transit fully executed estoppel certificates from each subtenant, licensee or pennittee of an agreement that is assigned to Sound Transit as provided in this subpart. The assignments, assumptions, and estoppel certificates described in this subpart shall be in form and substance reasonably satisfactory to City, Sound Transit and their respective legal counsel; provided, however, the estoppel certificates shall not require the subtenant, licensee or pei-mittee from stating as fact any matter as to which such person does not have knowledge. (4) At closing, the following shall be prorated and adjusted between the parties as of the date of closing: (i) City's share under the terms of this Lease of the charges for utilities and operating costs of the Parking Garage and Plaza; (ii) rents and other charges payable by third parties to City under any sublease, license or permit for use. of all or any part of City's Parking Spaces or for use of all or any part of the Commercial Tenant Area or Plaza Tenant Area; and (iii) sums payable under agreements that are assigned to Sound Transit as provided in Section 2.6(e)(3). In addition, City shall at closing deliver to Sound Transit (or, at Sound Transit's option) allow as a credit against the purchase price of City's Leasehold Interest, the amount, if any, of any security or other deposits from third parties held by City under any sublease, license, or permit affecting all or any part of the Commercial Tenant Area or City's Parking Spaces_ 2.7 Termination; Advance Payments. Upon expiration or termination of this Lease under any provision of this Lease or of law (including but not limited to closing of City's purchase under Section 2.6), Sound Transit shall refund or credit to City any advance payments made by City under this Lease that are applicable or attributable to any period of time after the effective date of expiration or termination, excluding payments made under Section 2.3. ARTICLE 3: CHARGES PAYABLE BY CITY 3.1 Utilities. City shall pay, or cause its subtenants and licensees to pay when due, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, water, refuse disposal and other utilities supplied to the Commercial Tenant Area. Sound Transit shall cause such services to be separately metered or otherwise separately charged to such Area. City may install or cause the service providers to install additional meters or other devices to monitor usage so that charges for the services consumed by City's individual subtenants and licensees may be billed directly to or properly allocated among them. Sound Transit shall pay when due the costs of natural gas, heat, light, power, sewer service, water, refuse disposal and other utilities provided to the remainder of the Parking Garage and the Station (including but not limited to those in the Plaza during a special event but excluding those utilities provided to the -14- 2678b5. I 1 OW26/02 Commercial Tenant Area). City shall reimburse Sound Transit forty percent (40%) of the costs of such utilities and services to the Parking Garage within sixty (60} days after receipt of Sound Transit's invoice therefor, which invoice shall be accompanied. by copies of the. underlying billings from the providers. Sound Transit shall render such invoices regularly and, in any case, not less frequently than once each three months. 3.2 Parking Garage Operations. (a) Sound Transit's Obligations. In consultation with the City, Sound Transit shall operate the Parking Garage (except the Commercial Tenant Area) consistent with Sound Transit Operating Procedures and during Sound Transit Operating Hours only. Such operations shall include, but not be limited to establishing and observing procedures, installing and maintaining signs, markings and devices, employing such personnel and/or contracting with such third party providers, and supervising the performance of such employees and contractors all as are reasonably intended to provide security for the Parking Garage and users thereof and maintain a clean and safe environment. For the purpose of this Section 3.2(a) and Section 3.2(b), "City's Parking Spaces" include the Other Parking Spaces during those periods that City is entitled to use of the Other Parking Spaces under Section 2.5(a). At its election from time to time, City may notify Sound Transit that it wishes to extend the operating hours of the Parking Garage by either or both opening the Parking Garage earlier or closing the Parking Garage later, than Sound Transit Operating Hours. In such event, the City shall notify Sound Transit no less than 14 days in advance and .Sound Transit will arrange with its staff or contractors to operate and provide security' for the Parking Garage during the requested time. period, except that, with Sound Transit's prior approval as to the appropriate Ievel of security, -City may provide security during the extended hours through hiring commissioned police officers. ~ Sound Transit shall have no liability to City for damages, losses or personal injury that occur during times that are not Sound Transit Operating Hours, including but not limited to during extended operating hours requested by City. {b) Costs of Operations. Sound Transit shall pay when due the costs of operating the Parking Garage, including but not limited to the costs of the measures, personnel, and contractors described in Section 3.2(a) and as further detailed in Exhibit 3.2(b). For employees of Sound Transit, such costs include those for benefits. City shall reimburse Sound Transit forty percent (40%) of such costs allocable to Sound Transit's Operating Hours, and one hundred percent {100%) of such costs allocable to extended hours requested by City. Such payment shall be made within sixty (60) days after receipt of Sound Transit's invoice therefor, which invoice shall be accompanied by a statement in reasonable detail of the amount and purpose of each of the various items of cost, copies of any underlying billings from third parties and other reasonable evidence of the amount, purpose and allocation between Sound Transit and City of the variaus items of cost. Sound Transit shall render such invoices regularly and, in any case, not less frequently than once each three months. City shall have the right on demand to inspect and copy Sound Transit's books and records concerning operation of the Parking Garage and, if applicable, the hooks and records of any third party contractor engaged by Sound Transit to provide goods or services in connection with operation of the Parking Garage and City's Parking Spaces. 3.3 Insurance Policies. -15- 267845. ] 1 06126/02 (a) Liability Insurance. At all limes during the Lease Term, at its expense City shall maintain a policy of liability insurance insuring City against liability for bodily injury, property damage (including loss of use of property) and personal injury arising out of the operation, use or occupancy of the Leased Premises and the Other Parking Spaces. City shall name Sound Transit as an additional insured under such policy. The initial amount of such insurance shall be in the City's discretion but not less than Two Million Dollars ($2,000,000) per occurrence.- Not less frequently than every five years, the parties shall review such minimum coverage for possible increase based upon inflation, increased liability awards, recommendation of City's and of Sound Transit's professional insurance advisers and other relevant factors. Any such agreed increase shall be evidenced by the parties executing and delivering to each other duplicate originals of a writing specifying the newly agreed minimum coverage. Neither party shall unreasonably refuse to agree to an increase in such minimum coverage. The liability insurance obtained by City under this Section 3.3{a) shall {i) be primary and non-contributing with Sound Transit's liability insurance policies; (ii) contain cross-liability endorsements; and (iii) insure Sound Transit against City's performance under Section 4.5, if the matters giving rise to the indemnify under Section 4.5 result from the negligence of City; and {iv) contain a contractual liability endorsement. At its expense, Sound Transit may also obtain liability insurance, in an amount and with coverage determined by Sound Transit, insuring Sound Transit against liability arising out of ownership, operation, use or occupancy of the Station, including but not limited to the Parking Garage and the Leased Premises. (b) Sound Transit's Property Insurance. At all times during the Lease Term, Sound .Transit shall maintain a policy of property insurance covering loss of or damage to the Forking Garage, including the Leased Premises, in the full amount of its then current replacement cost without deduction for depreciation. Such policy shall provide protection against all perils included within the classification of "all risk," including but not limited to fire, extended coverage, vandalism, malicious mischief, special extended perils, sprinkler leakage and any other perils which Sound Transit deems reasonably necessary after consultation with City. Sound Transit shall have the right to obtain flood and earthquake insurance. Sound Transit shall not obtain insurance for fixtures or equipment or improvements installed by City, its subtenants or licensees in the Commercial Tenant Area or any other property of City, its subtenants or licensees located in or about the Station. City, its subtenants and licensees shall maintain policies of insurance covering loss of or damage to their respective fixtures, equipment, improvements, and/or other property installed in or located in or about in the Station, including the Leased Premises.. At its expense, City may also maintain a policy of insurance covering loss of or damage to those parts of the Parking Garage that City is obligated to repair or replace under Section 5.4 of this Lease. Neither party shall do or permit anything to be done in or about the Station that would invalidate any of the other party's insurance policies described in this Section 3.3{b}. (c) Other Insurance. Each party may, at its respective expense, maintain such other insurance for its own purposes or benefit, as it desires from time to lime. (d) Payment of Premiums. City shall pay all premiums for the insurance policies described in Sections 3.3(a) through 3.3(c} that City is to or may obtain. Sound Transit shall pay all premiums for the insurance policies described in Sections 3.3(a) through 3.3(c) that Sound Transit is to or may obtain. City shall reimburse Sound Transit forty percent (40%) of the -16- 267863.11 Ob/26/02 premiums for the property insurance described in Section 3.3(b} on the Parking Garage obtained by Sound Transit (including any flood or earthquake coverage). Such reimbursement shall be paid within sixty (60) days after City's receipt of Sound Transit's invoice therefor which shall be accompanied by a copy of the premium statement or other evidence of the amount due. If such property policy maintained by Sound Transit also covers other improvements on real property in addition to the Parking Garage (whether located in the Station or elsewhere), Sound Transit shall allocate the premiums of such policy between the Parking Garage and such other improvements on a fair and reasonable basis and, concurrently with delivery to City of Sound Transit's invoice and a copy of the premium statement described in this Section, Sound Transit shall also deliver to City a written statement showing in reasonable detail the basis upon which such allocations were made, and City`s share of the premium calculated. (e) Evidence of Insurance. Promptly after the request of the other party, each party shall deliver to the other a copy of each policy of insurance which the party is required to maintain under this Section 3.3. As an alternative to providing a copy of any or all of such policies, each party shall have the right to provide the other a certificate of insurance,. executed by an authorized officer of the insurance company, showing that the required insurance is in full force and effect. (~ General Insurance Provisions. (1) Any insurance which each party is required to maintain under this Lease shall include a provision which requires the insurance carrier to give the other party not less than thirty (30} days' written notice before the effective date of any cancellation (including but not limited to cancellation for nonpayment of premium) or modification of such coverage. (2) If either party fails to obtain and continuously maintain any policy of insurance required of it, the other party may obtain such insurance, in which case the party in default shall reimburse the other for the cost of such insurance within thirty (30) days after receipt of an invoice therefor accompanied by a copy of the premium statement or other evidence of the cost of such insurancc. (3) The parties acknowledge insurance markets change and that insurance in the form and amounts described in this Section 3.3 may not be available in the future. If at any time during the Lease Term the precise form of any policy required under this Section 3.3 is not available because. of any change in insurance markets, the party required to obtain such policy shall nevertheless maintain insurance coverage that is customary and commercially reasonable in the insurance industry and as nearly the same as (or better than) that required under this Section 3.3. (Q) Unless prohibited under the applicable insurance policy, each party hereby releases and waives any and all rights of recovery against the other (and their respective officials, officers, employees, agents and representatives), for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this Lease) at the time of such loss or damage or would have been covered if the party had obtained the insurance it was required to obtain under this Section 3.3. Upon obtaining the policies of insurance required or permitted in this Section 3.3, -17- 2G78GS. n 06/26/82 the parties shall give notice to their respective insurance carriers of this mutual release and waiver of subrogation and use reasonable efforts, including payment of any additional premium, to cause their respective insurance carriers to consent to the provisions of this subpart. Notwithstanding the preceding, the release and waiver in this subpart shall not be effective if the effect would be to void coverage under the policy. 3.4 Self-hasurance. Any party to this lease, which is a municipal government, a regional transit authority or other governmental authority, has the right to self-insure (either alone or jointly with other like or similar entities) under any one or more of the .preceding provisions of this Article 3. However, if a party elects to self-insure, then for the purposes of this Lease it shall be obligated under all provisions of this Lease as if it had obtained the relevant policy or policies as described in this Article 3 from an insurance company. Without limiting the generality of the preceding sentence: (i) a party who elects to self-insure with respect to property damage shall be considered to have obtained a policy that does not prohibit the release and waiver of Section 3.4(iv) and such release and waiver shall be fully effective; and (ii) if Sound Transit elects to self-insure the risks that would otherwise be covered by the property insurance on the Parking Garage described in Section 3.3(b), then (A) City has no obligation to pay to Sound Transit any sums under Section 3.3(d) on account of premiums for such coverage and (B) Sound Transit is liable to City for what would have been City's share of the proceeds of such a policy under Sections 5.3 and 6.4. 3.5 Leasehold Excise Tax. City shall comply with any obligations imposed upon City under the provisions of Chapter 82.29A, Revised Code of Washington (and any amendments or replacements thereof) concerning leasehold excise taxes payable, if any, by City's subtenants and licensees of the Commercial Tenant Area arising from such subleases or licenses. ARTICLE 4: USE OF LEASED PREMISES 4.1 Permitted Uses. Subject to the provisions of Section 4.2 and this Section: (a) City's Parking Spaces and Other Parking Spaces. City, its subtenants and licensees shall use the City's Parking Spaces and, when permitted under Section 2.5(a), the Other Parking Spaces and the Kiss and Ride Spaces only for the temporary parking of motor vehicles. No overnight parking shall be permitted in the Other Parking Spaces or Kiss and Ride Spaces. (b) Commercial Tenant Area. Subject to the provisions of Section 4.1(c), City, its subtenants and licensees may use the Commercial Tenant Area for general o#fice, retail, and/or dining purposes. 4.2 Manger of Use. (a) General. City shall not cause or permit any part of the Leased Premises or the Other Parking Spaces to be used in any way that constitutes a violation of any law, ordinance, or governmental regulation or order or that constitutes a nuisance or waste. City or its various subtenants or licensees shall obtain and pay for all permits, including but not limited to one or more certificates of occupancy, required for occupancy and use of the Commercial Tenant -18- 267865. I I D626/02 Area. City shall promptly take, or cause its subtenants or licensees to promptly take, all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders, requirements and permits regulating their respective use of any part of the Leased Premises under lease, sublease, license or permit from the City. (b) Prohibited Uses. No portion of the Leased Premises may be used as an adult bookstore or videostore, "headshop", for the sale of weapons, for the sale of fortified wines, as a tavern, as office space for a bail bondsman, or for the sale of alcoholic beverages except when sold for consumption off the premises or for consumption on the premises in connection with a dining establishment which derives at least fifty percent (50%) of its gross revenue from the sale of food and beverages other than alcoholic beverages. (c) Rules. City, its subtenants, licensees and invitees shall abide by the reasonable rules and regulations established from time to time by Sound Transit for the safety, care, cleanliness and good order in and about the Station. However, except as provided in the next sentence, no such rule or regulation is binding upon City, its subtenants, licensees and invitees until fifteen (15) days after a written copy thereof is delivered to City and no such rule is binding upon City, its subtenants, licensees and invitees to the extent the rule or regulation is inconsistent with, or unreasonably interferes with the exercise of, City's rights under this Lease. Rules and regulations established by Sound Transit to address emergency situations shall become effective immediately. A copy of Sound Transit's rules and regulations in effect on the Commencement Date, if any, is attached hereto as Exhibit 4.2(c)_ 4.3 Hazardous Materials. As used in this Lease, the term "Hazardous Material" means any radioactive materials, hazardous or toxic substances, material or waste or related materials, including any substances defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous materials" or "toxic substances" now or subsequently regulated under any applicable federal, state or local laws or regulations, including but notlimited to petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, annmonia compounds and other chemical products, asbestos, and PCBs. City shall not cause or permit any Hazardous Material to be generated, produced, brought upon, used, stored, treated or disposed of in or about the Station by City, its subtenants or invitees without the prior written consent of Sound Transit, which shall not be unreasonably delayed, refused or conditioned. Sound Transit shall be entitled to take into account such factors or facts as are reasonably relevant in determining whether to grant or withhold consent to City's proposed activity with respect to Hazardous Material. Even though such vehicles, supplies or materials may or do contain Hazardous Material, nothing in this Section 4.3 prohibits: (a) vehicles from using any of City's Parking Spaces or the Other Parking Spaces; or (b) the City or its various subtenants and licensees, and the various contractors, agents, and employees of any of them, from bringing upon, using, storing, and disposing of supplies and materials that are usually and ordinarily used (i) in the normal course of repairing, replacing, maintaining, cleaning, and making improvements as permitted or required under this Lease or (ii) in the normal course of such businesses and other activities as may be conducted or permitted from time to time by City or its various subtenants and licensees as provided in this Lease. 4.4 Si ns. -19- 267865.1 1 06/26/02 {a) Permanent Signs. City may place or permit such signs on the Leased Premises (including the exterior walls and windows of the Commercial Tenant Area) as are usual and ordinary for the occupants thereof to identify and promote their respective businesses or affairs. However, signs placed on the exterior walls of the Parking Garage shall conform to the standards specified in Exhibit 4.4(a} attached hereto or to such other standards as Sound Transit and City may hereafter agree. Any sign installed by City or its subtenants or licensees on the exterior wall of the Parking Garage shall be removed at the end of the term of the respective sublease or license and the pari of the such wall affected by such installation or removal shall be restored to as nearly the same condition as practical to that immediately before such installation. City shall be responsible for such removal and restoration if City's subtenant or licensee fails to do so when required. At expiration or earlier termination of this Lease, City shall similarly remove all signs installed or permitted by it acid restore the affected parts of the Parking Garage. (b) Special Event Temporary Signs. City may place or permit signs and banners to be placed on or over the Plaza in connection with a special event permitted under Section 2.5(d) that are (i) usual and ordinary to the pertinent special event or participants in the special event, (ii) temporary, -and (iii) not attached to any part of the Station with any permanent fastening. All such signs placed. by City or its subtenants or licensees shall be removed at the end of the special event and City shall restore or cause to be restored all damage to the Station caused by the placement of any such signs. 4.5 Indemnity. City shall indemnify Sound Transit against and hold Sound Transit harmless .from any and all costs, claims or liability arising from: (a) use of the Leased Premises, the Other Parking Spaces or the Kiss and Ride Spaces by City, its subtenants, and licensees; (b) anything done or permitted by City to be done in or about the Leased Premises, the Other Parking Spaces, the Kiss and Ride Spaces, or the Common Areas, including any contamination of any property resulting from the presence or use of Hazardous Material caused or permitted by City, its subtenants and licensees; (c} any negligent or intentional misconduct of City; or (d) use of any portion of the Station by the City, its agents, licensees, subtenants, or any of the foregoing's licensees, agents, customers, guests, or invitees, for any of the City's special events. Sound Transit shall indemnify City against and hold City harmless from any and all costs, claims or liability arising from: {1) anything done or permitted by Sound Transit to be done in or about the Parking Garage or the Station, including any contamination of any property resulting from the presence or use of Hazardous Material caused or permitted by Sound Transit; or (2) any negligent or intentional misconduct of Sound Transit. The parties' obligations under this Section extend to, without limitation, injuries to their respective employees (as such employees are defined in the Industrial Insurance Act, Title 51, Revised Code of Washington) and, to that extent, each of the parties hereby waive any immunity otherwise afforded to them, respectively, under that Act or any other applicable workmen's or employees' compensation law. Notwithstanding the generality of the preceding, the scope of each party's obligation to indemnify the other in the case of damage or injury caused by the joint or concurrent negligent or intentional misconduct of both parties shall be limited to the extent the damage or injury is caused by the indemnifying party. 4.6 Sound Transit's Access. Sound Transit may enter any part of the Leased Premises, the Other Parking Spaces and the Kiss and Ride Spaces at all reasonable times to inspect such premises and spaces, to make repairs and replacements thereto Sound Transit is -20- 267B65.It 05RWO2 obligated or elects to do, to perform such other cleaning and maintenance thereto that Sound Transit is obligated or elects to do, and for any other proper purpose. However, except in the case of an emergency,-Sound Transit shall not enter any part of the Commercial Tenant Area or City's Parking Spaces for any of such purposes without first giving City and each of City's subtenants and licensees of such of the Area to be affected by such. entry not less than two (2) business days prior written notice of the entry, the purpose therefor, and the expected scope and duration thereof 4.'7 Quiet Possession. So long as City complies with its obligations under this Lease, Sound Transit covenants that City and its subtenants and licensees may quietly occupy and enjoy the Leased Premises for the full term of this Lease, subject however to the terms and conditions of this Lease. ARTICLE 5: CONDITION OF LEASED PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS 5.1 Condition and Suitability of Leased Premises. Subject to Sound Transit's obligations with respect to initial construction of and warranty work related to the Leased Premises under Section 2.3, City shall accept the Leased Premises in their condition as of the Commencement Date. City acknowledges that Sound Transit has not made any representation as to the suitability of the Leased Premises for City's intended use. 5.2 Exemption of Sound Transit from Liability. Except for any damage or injury caused by its negligence or intentional misconduct, Sound Transit shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares, merchandise or other property of City, its subtenants and licensees or any other person in or about the Leased Premises, whether such damage or injury is caused by or results from:. (a) fire, steam, electricity, water, gas or rain; (b) the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or Iighting fixtures or any other cause; or {c) conditions arising in or .about the Leased Premises or other parts of the Station. Sound Transit shall not be liable for any such damage or injury even though the cause of or the means of repairing such damage or injury are not accessible to City. The provisions of this Section 5.2 shall not, however, exempt Sound Transit from liability for Sound Transit's warranty obligations under Section 2.3 or from Sound Transit's obligations under this Lease of maintenance, repair, and rebuilding. 5.3 Sound Transit's Obligations to Repair. Except (i) as otherwise. provided in Section 5.4 and except (ii) for damage caused by the negligence or intentional misconduct of City or its subtenants or licensees and except (iii) to the extent of City's obligations under Sections 2.5(d) and subject to (iv) the provisions of Article 6 {Damage or Destruction) and Article 7 (Condemnation), Sound `Transit, at Sound Transit's expense, shall at all times keep neat and clean and maintain in good order, condition and state of repair the Station including but not limited to performing all appropriate service to and making all necessary replacements of all parts and systems thereof. It is the intention of Sound Transit and City that Sound Transit shall at all times maintain all parts and systems of the Station that Sound Transit is obligated to maintain in an attractive, first-class and fully operative condition. -21- 2678ti5. i 1 06/2N02 5.4 City's Obligations. Subject to the provisions of Article 6 (Damage or Destruction) and Article 7 (Condemnation), at its expense City shall keep (or shall cause its subtenants and licensees to keep) neat and clean and maintain in good order, condition and state of repair (including interior repainting and refinishing, as needed): (a) all parts of the Commercial Tenant Area bounded. by and including (i) the exterior plate glass and exterior doors, (ii) the interior surfaces of the perimeter walls, and {iii) everything within the air space above the upper surface of the concrete slab floor and beneath the underside surface of the ceiling that is also part of the floor of the second floor level of the Parking Garage; (b) any awnings at or below the second floor level along the north, south, and east exterior walls of the of the Parking Garage; (c) any signs on the exterior walls of the Parking Garage installed by City or its subtenants or licensees; and (d) the parts of any plumbing, mechanical, electrical and HVAC systems of the Parking Gazage which serve only the Commercial Tenant Area. Without limiting the generality of the preceding, at its expense City shall repair or cause to be repaired any damage caused to the Commercial Tenant Area by the negligence or intentional misconduct of City or any of its subtenants or licensees (or their invitees, contractors, and customers) but after completion of such work, City shall be entitled to receive the proceeds of Sound Transit's property insurance policy described in Section 3.3(b) to the extent of the policy's coverage for such damage. City shall provide Sound Transit and its insurer with a statement of City's costs of the work and, on request, copies of invoices and other billings for the various parts of such work. It is the intention of Sound Transit and City that at all times City shall maintain the portions of the Leased Premises that City is obligated to maintain in an attractive, first-class and fully operative condition. 5.5 Alterations, Additions and Improvements. City may make (or may permit any of its tenants and licensees to make) any non-structural alterations, additions, or improvements to all or any part of the Commercial Tenant Area and its various systems and parts (including installation of awnings and signs on the exterior walls thereof) without Sound Transit's prior written consent. City may not make {and shall not permit any of its tenants or licensees to make) any alterations, additions, or improvements to any part of the Plaza or any structural alterations, additions, or improvements to any of the Commercial Tenant Area without Sound Transit's prior written consent.. Sound Transit shall not unreasonably delay, condition or refuse such consent. All alterations, additions, and improvements made by City, its tenants or licensees, shall be done in a good and workmanlike manner and in conformity with all applicable laws and regulations. City shall pay, or cause its tenants or licensees who do the work to pay, when due all costs of such work. If requested by Sound Transit, then promptly after completion of any such work involving structural alterations, additions, or improvements, City shall provide, or cause its tenants or licensees who did the work to provide, Sound Transit with "as built" plans and reasonable evidence of payment. of the costs thereof. 5.6 Condition Upon Termination. Upon the expiration or earlier termination of this Lease, City shall. surrender the Leased Premises to Sound Transit, broom clean and in the same condition as received except for: {i) ordinary wear and tear; (ii) alterations, additions and improvements made as provided in Section 5.5; and (iii) alterations, additions and improvements made by Sound Transit, if any. However, City shall not be obligated to repair any damage that Sound Transit is required to repair under Section 5.3 nor any damage described in Article 6 (Damage or Destruction) or Article 7 (Condemnation). In addition, Sound Transit may require City to remove any alterations, additions, or improvements made by City, its tenants or licensees -22- 26TS65.11. O6l2e/02 for which Sound Transit's consent was required and, when given, such consent was conditioned on such removal. All alterations, additions and improvements which City is not obligated to remove shall become Sound Transit's property and shall be surrendered to Sound Transit upon the expiration or earlier termination of this Lease, except that City, its tena~rts and licensees may remove (i) their respective trade fixtures and (ii) all or any part of their respective machinery and equipment which can be removed without material damage to the Leased Premises. City shall repair at City's expense, or City shall cause City's tenants and licensees to repair at their expense, any damage to the Leased Premises, including any improvements thereon, caused by the removal of any such machinery, equipment or trade fxtures. ARTICLE b: DAMAGE OR DESTRUCTION 6.1 Partial Damage to Parking Garage. City shall notify Sound Transit in writing promptly after it learns of the occurrence of any damage to the Leased Premises. If as a result of any cause the Parking Garage is partially damaged, Sound Transit shall repair the damage, including any damage to the Leased Premises, as soon as reasonably possible and this Lease shall remain in effect. Sound Transit may elect (but is not required) to repair any damage to fixtures, equipment, or improvements made by City, its tenants or licensees. "Partially damaged" means the cost of repair, as reasonably estimated by Sound Transit, is not more than sixty. percent (60%) of what would be the cost of constructing at that time the Parking Garage as originally constructed. plus any improvements, alterations or additions made thereto by Sound Transit after completion of initial construction. 6.2 Substantial or Total Destruction. If the Parking Garage is substantially destroyed by any cause whatsoever (e.g., the damage to the Parking Garage is greater than partial damage as defined in Section 6.2), Sound Transit may elect to .restore the Parking Garage (including the Leased Premises}, in which case Sound Transit shall do so as soon as reasonably possible and this Lease shall remain in effect. Sound Transit may elect (but is not required) to repair any damage to Cxtures, equipment, or improvements made by City, its tenants. or licensees. Not later than ninety (90) days after the date of the destruction, Sound Transit shall give written notice to City of whether Sound. Transit will or will not restore the Parking Garage under this Section and, if Sound Transit elects to restore, whether its restoration will include fixtures, equipment, or improvements made by City, its tenants or licensees. If Sound Transit elects not to restore the Parking Garage under this Section, then (a) this Lease shall terminate as of the date of the damage and {b) after deducting therefrom the costs of demolition of the Parking Garage, the proceeds, if any, of the property insurance policy described in Section 3.3(b) including any optional flood or earthquake coverage) shall be paid to Sound Transit and to City in the proportion of their respective interests in the Parking Garage. 6.3 Abatement of Certain Charges; Setoff of Certain .Expenses. If this Lease remains in effect after damage or destruction under any of Sections 6.1 or 6.2, then to the extent that as a result of such damage or destruction to, or of the work of restoration of, the. Commercial Tenant Area or City's Parking Spaces is or are not reasonably useable for the purposes they were being used immediately before the damage or destruction occurred, then those charges to be paid by City under Sections 3.1 through 3.3 and Section 5.4 shall abate in the proportion that such Area or the City's Parking Spaces, or both, is or are not so useable. If Sound Transit elects not to restore under Section 6.2 but City does elect to restore under such Section, then the amount of -23- 267865.1 I 06/2402 City's costs of restoration which are not reimbursed from proceeds of insurance shall be setoff against all sums payable by City to Sound Transit under this Lease in the order in which such sums would otherwise be due until the entire amount, together with interest at eight percent (8%) per annum on the declining principal balance thereof, has been fully setoff. 6.4 Exceptions. Notwithstanding the preceding provisions of this Article 6, this Lease shall terminate as of the date of the damage and Sound Transit shall have no obligation to restore the damage if (a) the damage occurs within the last two years of what would otherwise be the Term of this Lease or (b) the work of restoration cannot reasonably be completed by a date on which there would be remaining at least two years in the Lease Term. For the purposes of the preceding, if not previously exercised, City may exercise its option under Section 2.2 to extend the Term of this Lease if such option is exercised within sixty (60} days after the date the damage occurred. ARTICLE 7: CONDEMNATION 7.1 Permanent Taking. (a) General Provisions. if all or any portion of the Leased Premises are permanently taken under the power of eminent domain or are conveyed under the threat of that power, this-Lease shall terminate as to the part taken or conveyed as of the date the condemning authority is entitled. to possession thereof. If twenty percent (20%) or more of the floor area of the Commercial Tenant Area is taken, City may terminate this Lease as to the remainder of the Commercial Tenant Area or as to all the Leased Premises as of the date the condemning authority is entitled to possession. If twenty percent (20%) or more of the City's Parking Spaces is taken,. City may terminate this Lease as to the remainder of City's Parking Spaces or as to all the Leased Premises as of the date the condemning authority is entitled to possession. If some but not .all of the parking spaces in the Parking Garage are taken and if this Lease remains in effect after such taking, then the remaining parking spaces in the Parking Garage shall be reallocated between City and Sound Transit so that, after such reallocation, the City's Parking Spaces bear the same proportion to the remaining parking spaces in the Parking Garage as the number 180 bears to the number 562. Notwithstanding the preceding sentence, if such reallocation would reduce the number of the Other Parking Spaces below four hundred eighteen (418), then. Sound Transit may elect to allocate to itself up all or any part of the remaining parking spaces in excess of thirty-six (36) of such remaining parking spaces (which shall be allocated to City) but in such case, and as a condition to such election, Sound Transit shall pay to City that sum of money calculated as follows: {i) first, determine the number of the remaining parking spaces that would have been allocated to City on the basis of the ratio of 180 to 562; (ii) second, determine the number of the remaining parking spaces allocated to City after Sound Transit's reallocation election; (iii) third, subtract the second of such numbers from the first of such numbers; (iv) fourth, divide the amount of the compensation for the taking that is allocable to the parking spaces taken by the number of the parking spaces that was taken; and (iv) fifth, multiply the number derived in the third step by the amount derived in the fourth step. Sound Transit and City shall each exercise their respective elections by written notice to the other given within sixty (60} days after receipt of final written notice from the condemning authority of the final extent of the taking (or in the absence of such notice, within sixty (60) days after the condemning authority is entitled to possession). if this Lease is not terminated according to the -24- 26~865 I I OW26/02 preceding parts of this Section, then this Lease shall remain in effect as to the portion of the Leased Premises nol taken and Sound Transit shall restore those portions of the Parking Garage that are not taken to as nearly as practical the condition immediately before such taking and in a eonftguration so that the various parts of the restored Parking Garage are economically functional and useable for their intended purpose. The plans and specifications for the work of restoration and any changes thereto shall be as agreed by both Sound Transit and City, neither of which shall unreasonably refuse, delay or condition their agreement. Copies of such plans and specifications, as they may b'e changed and as-built, shall be provided to City, all similarly to the provisions of Section 2.3 for initial construction of the Parking Garage.. Sound Transit and City shall each contribute to the costs of such restoration in the proportion that they received compensation for the taking (excluding any part of their respective compensation that was separately awarded in addition to the value of their respective property interests, such as compensation for moving or other relocation expenses). (b) Allocation of Award. In the case of a permanent taking or damaging of the Parking Garage or any part thereof, City and Sound Transit shall each receive the value of their respective interests in the property taken or damaged by eminent domain or conveyed under threat thereof, together with such interest thereon and attorneys fees and other costs to the extent awarded. City and Sound Transit shall each have the right, as against the condemning authority, to recover, to the extent of their respective interests, damages or other compensation for the permanent taking of or damage or injury to the Leased Premises or any. part thereof. City and Sound Transit shall each have the right to participate in any condemnation proceeding and be represented by counsel for the purpose of protecting their respective interests under this Section. If the City and Sound Transit do not agree on their respective shares (after engaging in the dispute resolution process set forth in Section 9.7), then such shares shall be as determined by the King County Superior Court in the condemnation proceedings, if any, or in a separate action between City and Sound Transit. In addition, each of City and Sound. Transit shalt have the right to recover from the condemning authority such other compensation as they may, respectively, be entitled in addition to compensation for the value of the property taken, damaged or injured. Such additional compensation may include but is not necessarily limited to loss of business and relocation costs. 7.2 Abatement and Adjustment of Charges Payable by City. If there is a permanent taking or damaging (collectively "taking"} and this Lease is not terminated under Section 7.1 then to the extent that as a result of the taking (or of the work of restoration) the Commercial Tenant Area or City's Parking Spaces is or are not reasonably useable for the purposes they were being used immediately before the. taking occurred, then those charges to be paid by City under Sections 3.1 through 3.3 and Section 5.4 shall abate in the proportion that such Area or City's Parking Spaces, or both, es or are not so useable. After the work of restoration is completed, the City's shaze of the costs and expenses described in Sections 3. I through 3.3 and Section 5.4 shall be adjusted equitably to the extent appropriate, if any, to reflect the changes in the Leased Premises as a part of the restored Parking Garage as compared to the Leased Premises as a part of the Parking Garage before the taking. 7.3 Temporary Taking. If the whole or any part of the Leased Premises is temporarily taken under the power of eminent domain or temporarily conveycd under threat of the exercise of such power, then this Lease shall continue and, except to the extent the parties are -25- ze~ses. i i nnizb/oz prevented from doing so pursuant to the terms of the taking, the City and Sound Transit shall each perform and observe all of the terms and conditions of this Lease as though the taking had not occurred. In the event of such a temporary taking, City shall be entitled to receive the entire amount of any award made for such taking, whether paid byway of damages, rent ar otherwise,. unless such period of temporary taking shall extend beyond the expiration date of the Term, in which case such awazd shall be apportioned between the City and Sound Transit as of such expiration date. For the purposes of the preceding, if not previously exercised, City may exercise its option under Section 2.2 to extend the Term of this Lease. ARTICLE 8: ASSIGNMENT AND SUBLETTING 8.1 Subletting. City shall exercise reasonable efforts to locate suitable tenants for the Commercial Tenant Area. City may sublease all or any part of the Commercial Tenant Area from time to time during the term of this Lease and no consent of Sound Transit is required on account thereof or to any assignment or sub-subleasing of all or any part of the subtenant's rights under its sublease with City, provided that: (i} City attaches a copy of this Lease to each such. sublease; (ii) the sublease requires the subtenant to maintain liability and property insurance as provided in Section 3.3{a) through {d) and 3.3, including naming Sound Transit as an additional insured; and {iii) if the subtenant provides alcoholic beverages anywhere on the Station, the subtenant shall also obtain a host liquor liability endorsement io its liability insurance. $.2 Assignment. City may assign all, but not a part, of its rights and obligations under this, Lease to any municipal government or any governmental agency that is a successor to the C.ity's municipal functions in the area where the Pazking Garage is located and no consent of Sound Transit is required on account thereof City may not otherwise assign all or any part of its rights or obligations under this Lease without Sound Transit's prior written consent, which Sound Transit shall not unreasonably refuse, delay, or condition. 8.3 Release of City. Except as provided below, no sublease by City and no assignment by City shall release City or change City's primary Liability to perform all its obligations under this Lease. Consent to one assignment where Sound Transit's consent is required is not consent to any subsequent assignment for which Sound Transit's conscnt is required. In the case of City's assignment to a successor municipal government or governmental agency, City shall be released and discharged from all obligations of performance under this Lease and the assignee shall be liable for payment and performance of all City's obligations under this Lease, including any which have not been fully paid or performed when the assignment is made. 8.4 Requesting Sound Transit's Consent. City's request for consent to any assignment described in Section 8.1 for which Sound Transit's consent is required shall be in writing and shall .describe the proposed transaction in sufficient detail so that Sound Transit is fully informed of the parties to and the nature and scope of the proposed assignment, including but not limited to the name of the proposed assignee, the proposed effective date of the assignment, and the proposed terms and conditions of the assignment. Promptly on Sound Transit's request therefor, City shall provide any additional information reasonably requested by Sound Transit in order to evaluate whether to give its consent to the proposed assignment. -26- 267865) l 06h6l02 8,5 Sound Transit's Right to Information. Promptly after Sound Transit's request at reasonable intervals from time to time, City shall provide Sound Transit a written statement identifying the name and address of all such City's then current subtenants and licensees, a copy of their then current written subleases and licenses and, in the case of any unwritten tenancies or licenses, a written statement in reasonable detail of the terms and conditions thereof. Sound Transit may inspect City's books and records to verify the accuracy of the information and copies provided by City to Sound Transit under this Section. ARTICLE 9: BREACH AND REMEDIES 9.1 Time is of the Essence. Time is of the essence in the performance of all covenants and conditions under this Lease of Sound Transit and of City. 9.2 Default and. Breach Defined. A party to this Lease shalt be in "default" of an obligation it has under this Lease if the party does not pay or perform the obligation as and when due, except that if such failure is later cured, then the party shall no longer be in default on the obligation. A party to this Lease shall be in "breach" of an obligation it has under this Lease: (a) If the party fails to make any payment required of it under this Lease within thirty (30) days after the other party's written notice of default specifying the amounts in default and the due date(s) thereof; (b) If the party fails to perform any of the party's other obligations under this Lease for a period of thirty (30) days after written notice from the other party specifying the obligation in default and the action required of the party in default to cure such default. However, if more than thirty (30) days are reasonably required to complete such performance, the party in default. shall not be in breach if the party commences such performance within the thirty (30} day period and thereafter diligently and continuously pursues such performance to completion. (c) If (i) a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against the party and is not dismissed within one hundred eighty (180) days; or if (ii) if a trustee or receiver is appointed to take possession of substantially all of the party's assets and such appointment is not dismissed or if possession of such assets is not restored to the party within one hundred eighty (180 days) after such appointment. The requirements for notice specified in subparts (a) and (b) of this Section 4.2 are intended to satisfy any and all notice requirements imposed by law and are not in addition to any such requirement. 9.3 Sound Transit's Remedies for City's Breach. (a) General Provisions. CM or at any time after the occurrence of any breach of one or more of City's material obligations under this Lease, Sound Transit may elect to: (1) Recover the sums owed by City under this Lease together with interest thereon at the rate of eight percent (8%) per annum on the unpaid priT~cipal balance -27- 269865.1 I 06/26/02 thereof from time to time beginning with the date the sums were due and ending when the sums have been fully paid; (2) Specifically enforce City's obligations under this Lease; {3) Recover damages caused to Sound Transit by City's breach; and/or (4) Perform the obligations of City that are in breach and recover from City the costs. incurred by Sound Transit in such performance. (b) Termination. If, during any period of thirty-six consecutive months during. the Terrn of this Lease, Sound Transit obtains a judicial order that is final and not appealable specifically enforcing one or more of City's material obligations under this Lease and {i} City fails to comply with such order within the time period set forth with the order (as it may be amended} for such compliance or (ii) Sound Transit obtains a second judicial order specifically enforcing one or more of City's material obligations under this Lease (whether the same or different obligations than involved in the first order), then Sound Transit may terminate City's right to possession of the Leased Premises by written notice to City if such notice is given not later than thirty days after the second order is final and not appealable and provided that such notice gives City not less than thirty (30) days after the date of the notice to surrender possession of the Leased Premises to Sound Transit. (c} Remedies Cumulative. The remedies provided in this Sections 9.3(a) and 9.3(b) .are cumulative with each other and cumulative with and in addition. to all other remedies as may be permitted by law or equity except that (except as. otherwise provided in Section 9.3(b)}, Sound Transit hereby waives and releases any and all rights, and shall have no right, to terminate -this Lease or City's rights of possession of any part of the Leased Premises on account of any breach by City of one or more of its obligations under this Lease. As a substitute for such termination, Sound Transit may obtain an order from a court with jurisdiction over the parties and the subject matter directing City's subtenants and licensees to attorn to and perform to and for the benefit of Sound Transit all of such subtenants' and licensees' respective obligations under their sublease or license until City has fully cured its breach, including payment (to the extent applicable) under subparts (i), (ii) and (iv) of this Section or such other time as the court may direct. (d) Emergencies. If City's default in any of its obligations under this Lease creates or enhances an emergency, a serious risk of death or injury to any person, or a serious risk of injury or damage to any property, Sound Transit may, without giving .City prior notice and opportunity to cure, immediately. exercise the remedy specified in Section 9.3(a)(iv) with respect to that default and, for that purpose, enter any part of the Leased Premises reasonably necessary to do so, 4.4 City's Remedies for Sound Transit's Breach. (a) General Provisions. On or at any time after the occurrence of any breach of one or more of Sound Transit's obligations under this Lease, City may elect to: -28- 267865 II ~ 06/26/02 { 1 } Terminate this Lease and recover and setoff under subparts (iv) and (v) of this Section; (2) Bring an action for specific performance of Sound Transit's obligations and recover under subpart (iv} of this Section; (3) Perform the obligations of Sound Transit which are in breach and recover under subpart (iv) of this Section; {4) Recover from Sound Transit (A) all monetary sums, if any, then due and unpaid to City by Sound Transit, (B) the costs of performing or completing obligations of which Sound Transit is in breach, and (C) damages caused to City by Sound Transit's breach; and (5) Setoff all or any part of the sums described in subpart (iv) of this Section against any sums payable by City to Sound Transit under this Lease in the order in which such sums would otherwise be duo until the entire amount, together with interest at eight percent {8%) per annum on the declining principal balance thereof, has been fully setoff. City shall give Sound Transit written notice of City's elections under this Section 9.4. City's election of any of the remedies under subparts {ii) through (v) shall not preclude City from electing at a subsequent time any other of such remedies or of electing to proceed under subpart (i)_ The election of the remedy under subpart {i} precludes the subsequent exercise of any other remedy. Except as provided in the preceding sentence, the remedies specified in this Section are cumulative with each other and cumulative with and in addition to all other remedies as may be permitted by law or equity. (b) Emergencies. If Sound Transit's default in any of its obligations under this Lease creates or enhances an emergency, a serious risk of death or injury to any person, or a serious risk of injury or damage to any property, City may, without giving Sound Transit prior notice and opportunity to cure, immediately exercise the remedy specified in Section 9.4(a)(iv) with respect to that default and, far that purpose, enter any part of the Parking Garage and of the Station reasonably necessary to do so. 9.5 Interest. Any amount owed by one party to the other under this Lease which is not paid when due shall bear interest at the rate of eight percent (8%) per annum. from the due date of such amount. The payment of interest on such amounts shall not excuse or cure any default under this Lease on account of the failure to pay the amount owed when due. 9.6 Attorneys' Fees and Costs. In any action between the parties arising out of or related to this Lease, the prevailing party shall recover from, and the losing party shall pay to the prevailing party, the prevailing party's reasonable expenses of the action. "Action" includes: (i) litigation or other adversary proceeding in any court or governmental body with jurisdiction (including but not limited to a bankruptcy court); appeals of the decision of any lower tribunal (including but not limited to an award in arbitration}; and, if such proceedings are required by law or agreed by the parties, alternative dispute resolution proceedings (such as but not limited to mediation and/or arbitration}. "Expenses of the action" include but are not limited to the reasonable fees and costs of witnesses, consultants, experts, and attorneys. However, anything -29- 26?865.11 06/26/02 appearing to the contrary notwithstanding, the provisions of this Section 9.6 do not apply to mediation under Section 9.7(b). 9.7 Aispute Resolution. (a) Negotiation. The Parties agree to use their best efforts to resolve disputes and other matters arising out of the planning, design and construction of the Station and Station Area (including but not limited to the Parking Garage and the Plaza Areas), arising out of the' ongoing administration of the Parking Garage and Plaza Axeas facilities, and arising under this Lease. If an issue cannot be resolved between Sound Transit and City, either of them may invoke a formal Conflict resolution process. The first step in the process is a meeting including Sound Transit's Chief Operating Officer and City's Planning Director. If these persons do not resolve the dispute in a timely manner, the second step in the conflict resolution process shall be a meeting of Sound Transit's Executive Director and City's Mayor. if these persons do not resolve the dispute in a timely manner the third step in the conflict resolution process shall be a meeting of Sound Transit's Chairman of the Boazd and City's Mayor. Sound Transit and City agree to exhaust all three steps of this negotiation process before seeking mediation as next described. (b) Mediation. If the parties do not resolve the dispute in the conflict resolution process described in Section 9.7(a), then either party may by written notice to the other require that the dispute be submitted to mediation. Within fourteen (14) days after such notice, the parties shall agree on and mutually appoint a mediator. If such agreement and appointment is not made, then either parry may petition the King County Superior Court to appoint a mediator. Each party shall participate in good faith in the mediation process. with the appointed mediator. Sound Transit and City each agree to participate in good faith in the mediation process with appointed mediator before seeking redress in a court of law or other tribunal. The costs and fees of the mediator shall be paid one-half each by City and by Sound Transit. ARTICLE 10: MISCELLANEOUS PROVISIONS 10.1 Non-Discrimination. Neither City nor Sound Transit shall discriminate against any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in any way related to or arising out of the party's rights or obligations under this Lease. 10.2 Interpretation. The captions of the Articles and Sections of this Lease are intended only to assist in reading this Lease and aze not a part of the terms or provisions of this Lease nor shall they be considered in construing or interpreting any provision of this Lease. Whenever required by the context of this Lease, the singular shall include the plural and the plural shall include the singular. 'fhe masculine, feminine and neuter genders shall each include the other. In any provision relating to the conduct, acts or omissions of either party to this Lease, reference to the party shall also be to the party's agents, employees, contractors, and successors. 10.3 Notices. Any notice required or permitted to be given by one party to this Lease to the other related to this Lease shall be in writing and shall be sufficient if given to the other party either by personal delivery or by first class, postage prepaid, United States mail. Notices to City -30- 267865.1 1 06/26/02 shall be addressed to City's Director of Planning and delivered to the address specified in Section 1.4. Notices to Sound Transit shall be addressed to Sound Transit's Sounder Operations Manager and delivered to the address specified in Section 1.3. Either party may change its notice address by written notice to the other party. "Notice" includes but is not limited to a demand and a request. At the option of the sender, mailed notices may be mailed registered or certified mail with return receipt requested. Notices that are persona[ly delivered shall be deemed given on the date the notice is delivered. Notices that are mailed shall be deemed given on the third business day after the notice is mailed. Notices that are sent and received by courier or messenger service shall be considered to have been personally delivered. Notices that are sent and received in complete farm by facsimile transmission shall be considered to have been personally delivered when sent if the sending party receives a written send verification on its facsimile device. The preceding sentence does not obligate any party to accept a facsimile transmission. "Facsimile transmission" is a method of encoding a written document into data by a transmitting device, transmitting the encoded data to a receiving device, and decoding the transmission at the receiving device to reproduce a paper copy of the original document, including but not limited to any graphic material on the original document, including but not limited tv signatures, drawings, logos, notes, and photographs. The method of electronic communication commonly known as "e-mail" is not a facsimile transmission (even if accompanied by an attachment) and is not an acceptable means of giving notice. 10.4 Recording. This Lease shall not be recorded without the prior written consent of both parties. However, promptly after the request of either party, both parties shall execute, acknowledge, deliver to one ,another, and record a Memorandum of this Lease giving constructive notice of the terms and conditions hereof. The party requesting such recording shall pay the recording fees thereof. 10.5 Binding Effect; Governing Law, This Lease is binding upon the parties hereto and their respective successors and assigns in interest. However, the preceding sentence does not permit any assignment in contravention of other provisions of this Lease. This Lease is governed by and shall be construed and enforced according to the laws of the State of Washington, excluding that State's laws relating to choice of law. 10.6 Force Majeure. If either party cannot perform any of its obligations due to events beyond the party's control, the time provided for performing such obligations shall be extended by a period of time equal to the duration of such events. Events beyond a party`s control include, but are not limited to, acts of God, war, civil commotion, labor disputes, strikes, fire, flood or other casualty, shortages of labor or material, government regulation or restriction and weather conditions. 10.7 Authorized Persons. For the purpose of all provisions of this Lease that require Sound Transit's consent or approval or that require Sound Transit to consult or agree with City, the person authorized to act for Sound Transit in all such matters is Sound Transit's Chief Operating Officer. For the purpose of all provisions of this Lease that require City's consent or approval or that require City to consult with or agree with Sound Transit, the person authorized to act for City in all such matters is City's Director of Planning. Each party may from time to time change its authorized person by written notice to the other, -31- 26~865.11 06/26/02 10.8 Survival. Terms anal provisions of this Lease related to liability and indemnity obligations shall survive the expiration or earlier termination of this Lease. BY THEIR SIGNATURES BELOW, EACH OF THE PARTIES CERTIFY THE PROVISIONS OF SECTION 4.5 WERE MUTUALLY NEGOTIATED. "SOUND TRANSIT" "CITY" Central Puget Sound Regional Transit Authority City of Auburn -- • ~Cfir~ s.ca-1 P ame- o r ,. n G-iS Its ~(,~ 've APPROVED AS TO FORM By 'r r--"-~--' Peter B. Lewis, Mayor Dated: ~~~ N~ .,ZZ , 2002 ATTEST: Sound Transit egal Counsel Cathy Ri ,Deputy City Clerk APPROVED AS TO FORM: gel B. He Attorney -32- 267863.11 ~ ob/2~02 SOUND TRANSIT'S ACKNOWLEDGEMENT STATE OF WASHINGTON } ss. COUNTY OF KING ) I.certify that I know or have satisfactory evidence that J(7Q.t")fl Td, ~rdC~U ~ is the person who appeared before me, and said person acknowledged that ,'she signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the('1~i~'~ ~mL,SfiatltrF ~~c(of CENTRAL PUGET SOUND .REGIONAL TRANSIT AUTHORITY to be the free and voluntary act and deed of said Washington regional transit authority, for the uses and purposes mentioned in the instrument. and official seal hereto affixed this ~~~day of~ ' , , 2002. ~O "So i `~ :'fir ~O7AA y ~ ~ r~ ~i PUgLIG ~~~t'cTj9: ~p-9-~~" ,, ~~ofivi (Si tore of Notary) {Print or stamp name of No } NOTARY PUBLIC in and for the State of Washington My Appointment Expires: ~ Q -~~ .. ~ CITY'S ACKNOWLEDGEMENT STATE OF WASHINGTON COUNTY OF KING ss. I certify that I know or have satisfactory evidence that PETER B. LEWIS 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 Mayor of CITY OF AUBURN to be the free and voluntary act and deed of said Washington municipal corporation, for the uses and purposes mentioned in the instrument. WITNESS my hand and official seal hereto affixed thiso~ day of .tilt{../, 2002. _~..,,~` Q'P- Po B oT y~l ~lr i Q : ~~~Q~~RY 9N : +~i ~ L` ~ i ~~i -U_ ~ 03: O~~ ~ ~~ ~ Pc,~ ~~ OFW ~~ti~....--'' (Signature of Notary) (Print or stamp name of Notary) NOTARY PUBLIC in and for the State of Washington My Appointment Expires: 1(} -- 9 --~ 5j --~•--- -33- 267865. i I 06/lfi/0: Exhibit 1.1(b) Commercial Tenant Area and City's Parking Spaces 267865.11 Ilb/26/02 r- t I ~ 1 I I I ~ ~_ COMI Il:RGIAL tENANt AREA ~1 GROUND i=LOOR Horcrx ,_.~ '-l 1 I I I _J - "~ 7 I I I 1 .J -~ I t 1 t .J . , _J _i I I I 1 1 1 1 .J AUBURN STATION PARKING GARAGE Uf PRO$GT M~27N 1 SECOND ~ TH[RD >r~.ooR ~~,.,,-0. AUBURN STATION PARKING GARAGE FOURTH ~ F1FTH FLOOR ~~~.~~-~ Paarzr NCRYN AUBURN STATION PARKING GARAGE 1 51XTN ~1..o~oR ~a~~ STN AUBURN STATION PARKING GARAGE Exhibit 1.1{e) Station, Parking Garage, Plaza, Plaza Tenant Area and Kiss and Ride Spaces 267365. I I UW26/OZ 1~ 1 SITI: PLAN ,~.~-~ PRO lEC7 r~can+ 3 in w a f AUBURN STATION PARKING GARAGE Exhibit l.l(f) Legal Description of Parking Garage and Plaza Property That certain parcel of land situated in the City of Auburn, County of King, State of Washington, being all of Block 4 of the Town of Slaughter as shown on a plat thereof recorded in Volume 2 of Plats, at Page 56, records of said county, and that portion of the street vacated by Ordinance Nos. 481, 483 and 493 of said city, described as a whole as follows: BEGINNING at the northeast corner of said Block 4, said corner being the intersection of the southerly margin of First Street SW (60.00 feet wide) with the westerly margin of "A" Street SW (60.00 feet wide); thence along the northerly line of said block and said southerly margin of First Street SW, and its westerly extension, North 89°05'36" West 234.84 feet to the easterly line of The Burlington Northern and Santa Fe Railway Company Right-of--Way; thence along said easterly line, South 00°40'12" West 96.19 feet to the beginning of a tangent curve concave easterly and having a radius of 17138.74 feet; thence continuing along said easterly line and along said curve southerly 164.42 feet through a central angle of QO°32'59" to the westerly extension of the northerly margin of Second Street SW {60.00 feet wide); thence along said westerly extension and the southerly line of said block, South 89°05'36" East 232.85 feet to the southeast comer of said block and. said westerly margin of "A" Street SW; thence along the easterly line of said block and said westerly margin, North 00°S6'04" East 260.60 feet to the POINT OF BEGINNING. NOTE: THE FOREGOING LEGAL DESCRIPTION INCLUDES (a) ALL THE REAL PROPERTY ON WHICH ALL THE PARKING GARAGE AND SOME OF THE PLAZA ARE LOCATED, (b) SOME REAL PROPERTY WHICH IS PART OF THE STATION BUT ON WHICH NO PART OF THE PARKING GARAGE OR THE PLAZA IS LOCATED BUT (c) DOES NOT INCLUDE ALL OF THE REAL PROPERTY ON WHICH THE PLAZA IS LOCATED. _ON OR BEFORE THE DATE WHICH IS SIX {6) MONTHS AFTER TAE DATE OF THIS LEASE, SOUND TRANSIT SHALL AT ITS EXPENSE PROVIDE AN ACCURATE LEGAL DESCRIPTION OF THE REAL PROPERTY ON WHICH ONLY THE PARKING GARAGE AND THE PLAZA ARE LOCATED, PERFORMING ANY SURVEY REQUIRED THEREFOR. WHEN SUCH ACCURATE LEGAL DESCRIPTION IS PREPARF,D A NEW EXHIBIT 1.1(f) CONTAINING SUCH DESCRIPTION SHALL BE SUBSTITUTED FOR THE FOREGOING LEGAL DESCRIPTION. 267855.11 05/25/02 Exhibit 1.1(i) Parking Garage Operating Procedures I. Hours of Operation A. Standard Hours I. 6:00 am to 9:00 p.m. 2. Monday through Friday 3. Closed for Sounder Holidays (New Years Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day, Christmas Day) B. Special Event Service Hours of Operation -- Special events days (Mariner games, Seahawk games, etc.) will have operating hours as updated from time to lime and published on Sound Transit's website, www.soundtransit.org/Sounder/timetables/event. II. Authorized Vehicles A. Sounder rail commuters B. Other public transit and rideshare commuters C. City of Auburn employees and guests D. City of Auburn subtenants, licensees and their employees, customers, invitees and guests III. Authorized Access and Key Holder Protocol A. Authorized Key Holders I . Sound Transit 2. Agents of Sound Transit such as security personnel 3. Auburn Fire Dept. (through required fire key lockbox) 4. City of Auburn 5. City of Auburn tenants (commercial space only) B. Key Holder Protocol 1. All key holders will sign liability document, acknowledging responsibility for how key assigned will be used; 2. Key holders will agree to no unauthorized key duplication or distribution 3. Upon aecasional required "re-keying" of locks, authorized party responsible for duplication will provide duplicate copies for all other parties within a reasonable period of time; IV. Staff Contacts for Garage Related Issues Sound Transit Jeff Benoit, Security Manager 20E~-398-5506 City of Auburn Jim Kelley, Police Chief 253-931-3080* 267865.11 o~2aoz Rob Huyck, Safety Manager 206-398-533 2 Bob Hill, Facilities Manager 206-689-3378 Martin Young, Operations Manager 206-398-511 S Robert Johnson, Fire Chief 253-931-3080* Paul Krauss, Planning Director 253-931-3091 Jack Locke, Spec. Proj. Eng. Z53-804-5071 Michael Fuess, Traffic Manager 253-931-3022 *Non-emergency number 267865. ] I 06/2N02 Exhibit 2.3 Plans and Specifications for Sound Transit's Work Those drawings titled "Auburn Parking Garage, Central Puget Sound Regional Transit Authority, Auburn, Washington" wherein the general contractor is PCL Construction Services, Inc. of Bellevue, Washington and the architect is Integrus Architecture of Seattle, Washington, dated January 22, 2001 as revised on May 3, 2001. 2678bS.11 oandoz Exhibit 2.S(c) Holidays 1. each Sunday 2. the first day of each January (New Year's Day} 3. the third Monday of each January (anniversary of the birth of Martin Luther King, Jr.) 4. the third Monday of each February (President's Day) 5. the last Monday of each May (Memorial Day) 6. the fourth day of each July 7. the first Monday in each September (Labor Day) 8. the eleventh day of each- November (Veterans' Day) 9. the fourth Thursday of each November (Thanksgiving Day) 10. the twenty-fifth day of each December (Christmas Day) NOTE: If any of the foregoing (except Sunday) falls on a Sunday, the holiday is observed on the following Monday. If any of the foregoing (except Sunday) falls on a Saturday, the holiday is observed on the preceding Friday. 267865. I 1 OG/2W02 Exhibit 3.2 Parking Garage Operating Costs Categories of Billable Costs The following are categories of costs that will or may be incurred that would be covered or shared by the parties as agreed to (though costs are not limited to these categories}. Utilities a. Gas b. Electric c. Water d. Sewer e. Storm Sewer f. Refuse g. Supplies h. Telecommunications 2. Repairs/Maintenance a. Janitorial (sweeping, cleaning, trash removal) b. Garage Sweeper c. Landscape maintenance d. Surveillance System e. ITVAC f. Electrical g. Plumbing h. Elevator 1.). Maintenance 2.} Cleaning 3.) Permitting 4.) Associated Utilities 5.) Repair i_ Glass 1.) Routine Cleaning 2.) Replacement as required j. Structural Repairs as required k. Signage l.) Maintenance 2.) Repair 3.) Replacement as required 3. Mid-Life Costs a. Painting b. Damage from Natural Disasters 26T865 11 06/26!02 c. Items with expired warranties 4. Security S. Parking Management Insurance 7. Vandalism a. Cleaning b. Repair c. Replacement 267865 I l ~6~2W02 Exhibit 4.2(c) Station Rules and Regulations None as of the date of the Lease. 2fi7Rfi.5 11 Oti2W01 Exhibit 4.4(d) Exterior Wall Sign Criteria These criteria have been established for the purpose of controlling the size, design and location of all exterior signage for the retail subtenant spaces at the Auburn Station Parking Garage. Conformance to these criteria is required. Sound Transit may remove or correct any installed nonconforming signs at City's expense (which City may recover from its subtenant). Except as provided in paragraph 10 of this Exhibit, before Sound Transit exercises such right it shall give City not less than twenty-one days prior written notice of the nonconformity. 1. Two building attached signs will be allowed for each subtenant of the Commercial Tenant Area, one on the exterior wall of the building adjacent to each space above the canopies and one under the canopies near the entrance to each space. The attached drawings depict typical sizes and locations of these signs. 2. In addition to conforming to these criteria, a permit will be required from the City for these signs under City's sign ordinances. Approval. by City under this Lease or under a sublease by City of a particular sign is not compliance with, and does not bind City, under City's permitting requirements. 3. Signs on the exterior wall of the Parking Garage shall be attached to such wall according to one or more designs for such attachment proposed by City and approved by Sound Transit. Sound Transit shall not unreasonably refuse or condition such approval. 4. No signs with electrical components will be permitted. With Sound Transit's prior written approval of the design therefor, City may at its expense install lighting on the exterior wall of the Parking Garage to illuminate the signs on the exterior wall. Sound Transit shall not unreasonably refuse or condition such approval. 5. No projection above or below the sign band and/or panel as depicted in the attached drawings will be permitted. 6. No permanent window signs will be permitted except painted or decal applied lettering far purpose of store identification. Each subtenant will also be permitted to place upon each entrance to its demised premises not more than on hundred forty four {144) square inches of lettering not to exceed two inches (2") in height, indicating hours of business, emergency telephone, etc. Temporary window signs will be installed on the interior of windows only and will be allowed for a maximum of two weeks. 7. City may at its expense install numbers or letters on or near the primary entrance to each subleased space to identify the address thereof. 8. Each subtenant will pay for the construction, installation and maintenance of all its signs. 2easbs. t t o~zs~az 9. At City's request from time to time, exceptions to these standards will be reviewed by the City and Sound Transit. However, and without limiting other possible reasons for refusal, the parties recognize deviations may result insubstantial inequities between City's subtenants and any such inequity is sufficient ground for eithei party to refuse permission for a requested exception. 10. No sandwich boards or banners will be displayed upon the exterior of or anywhere adjacent to the Parking Garage. Sound Transit has the right, without any notice to City or any of City's subtenants, to remove and dispose of any sandwich boards at City's expense (which City may recover from it subtenant}. 2ti7865. I I 06/2N02 a~«-aZS/~oz ~v~ t~«-aas/soz N~Ild/1313 lSb3 ti0'6ti10Z ~~~eload YOl96 tlM aN1~S OO~Z al!~S 'and V~~ OZL 3 a n 1 ~ 3 1 1 H~ a tl L"QQ~-~-~ :pea{~e~ S rl. 23 ~ 3 ~ ~ I ~OYNOIS Z ~ I :osBd ~ivl3a 3~rdv~ Nananv cn c~ z -ro~o z nArn -~ ~ n~ D ~ ~O o~ c~ rn ~~ --~, -~ ~, ~~ o ~, <~ rn C3 D ~} N ~ N ~ ~ z ~ rnz ~ D --~ ~ -t v O y, z c~ ~~ c~ ~n z~ rn ~ d z d ~ No 03 ~rn zrn d~ D Z _N --4 ww+sr.ou~ .~ z ~' N -~ rn rrn iZ O 4~ OQ QQ N ~~ r AUBURN OAAAGE RETAlL I N T E G R U S Rage: 2 OP 2 31Q~NAC3E A R C H I T E C T U R E Revlaad: ~-7-2017? 720 3rd Ave. Suite 2300, 5eattie, WA 98104 P~ofe~t: 2014.04 ELEVATION/WALL SECTLON 2o6/fi28-3137 FAX 206/628-3138 Exhibit F Tenant Improvement Plan The following work to be completed by landlord subject to the bids received for the cost of the work. Eost not to exceed $ : a. b. c. d. e. f. g. One (1) exterior sign placed under canopy, and One (1) sign attached to the building above the canopy. h. i. Internal electrical, data, telephone outlets. RENT RIDER LANDLORD and Tenant should complete only those provisions below which apply. Any provisions below which is not completed shall not apply to the Lease. 1. BASE: MONTHLY RENT SCHEDULE. Tenant shall pay Landlord base monthly rent during the Lease Term according to the following schedule. Base Rent does not include the Leasehold Tax as established by the State of Washington. Lease Period (Stated in Months) Months O1 - 12 Months 13 - 24 Months 25 - 36 Months 37 - 48 Months 49 - 60 Base Monthly Rent Amount Landlord's Initials Landlord's Initials Tenant's Initials Tenant's Initials 2/2/03 OPTION TO EXTEND RIDER PROVIDED tenant is not in default at the time of exercise or upon the commencement of any extension term, Tenant shall have One (1) (if not completed, zero) successive option to extend the term of this Lease for Five (5) years. Tenant shall exercise each option by delivering written notice to Landlord not less than one hundred eighty (180) days prior to the expiration of the then current Lease term. Upon the exercise of any option, the term of this Lease shall be extended for the period of the subject option upon all of the same terms, conditions and covenants as set forth herein, except for the amount of the base monthly rental stated in year 5 of the current Lease which shall be increased in accordance with the increase in the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index for All Urban Consumers up to a maximum of the CPI plus 2% when such index increases. In subsequent years the rent paid annually -will, at the landlord's option, increase by the CPI. TENANT IMPROVEMENT RIDER The Sublessor will improve the premises per the Tenant Improvement Plan as established in exhibit F of this document. Sublessor shall deliver to the tenant the premise pursuant to the lease to which this Rider is attached upon completion of the improvements provided in the Tenant Improvement Plan. All other terms and conditions of this lease shall remain in full force and effect. EXHIBIT 2 Sublease Agreement Between Auburn and PMF Enterprises SUBLEASE This Sublease ("Sublease") is entered into this~say of January, 2003 between the City of Auburn, a Washington municipal corporation ("Sublessor"), and. PFM Enterprises, Inc., a Washington Corporation ("Tenant"). RECITALS: :A. By that certain Sublease dated June 26, 20.02 Sublessor, as Tenant; leased from Central Puget Sourxd Regional Transit Authority, a regional transit authority organized and existing under Chapters 81.104 and 81.113, Revised Code of Washington {"Sound Transit"}, certain property located in the City of Auburn. A copy of such Sublease is attached~~lereto as Exh_ ibit E. Such Sublease, including any amendments hereafter made thereto by Sublessor and Sound Transit, is herein called the "Master Sublease". B. Tenant desires to sublease from Sublessor, and Sublessor is willing to sublease to Tenant, a portion of the property leased by Sublessor under the Master Sublease on the terms and. conditions set forth in this Sublease. ~1 ~k C. Accordingly, Sublessor and Tenant agree as follows: ~ ~ h~ SUBLEASE ~ ,fit ()h X• Y• Si:~MMARY OF SOME PROVISIONS. The following is a summary of some of the provisions of this Sublease. If there is any conflict between the information in .this paragraph and any other provision of this Sublease, the other provision controls. - ---- -------?:1----sublessor: --The-"Snbl~ssor'L-is_-tlie-C-ity-rof Auburn; a-V~Iaslrington_____f_ municipal corporation, acting in its proprietary capacity. ].2 Tenant. The "Tenant" is PFM Enterprises, Inc., a 'Washington Corporation.. 1.3 Leased Premises. The subleased premises ("premises") is that part of the interior space of the .ground floor of the parking garage ("Parking. Garage") at the Auburn Transit Station which part is outlined on the floor plan attached hereto as Exhibit A. The Parking Garage is located on the land legally described in Exh~ attached hereto and the location 'of the Parking Garage is outlined on the site plan of the Auburn Transit S#ation attached hereto as Exhibit C. if so~indicated in paragraph 1.4, the "Premises" also includes the part of the Plaza Tenant Area specified in such paragraph. The Premises is coYnmonly known as __110 `A' Street S.W., Suite A_~, Auburn, Washington 98001. The Premises includes ail windows and other .glass in the exterior wall(s) of the Parking Garage within the area outlined on the Exh~t A floor plan and all doors leading.irito and out of the Premises. The Premises do not include (a) the exterior walls of the Parking Garage, (b) the area beneath the upper surface of the concrete slab floor, (c) the area above the lower surface of the suspended ceiling, (d) the area beneath. the surface of the interior perimeter walls of the Premises, (e) all pipes and ducts,,conduits, wires, fixtures, and equipment located above the suspended ceiling of, or in structural elements of, the Parking Garage, or (f) any area within a closet or other enclosure around electrical, mechanical, or plumbing systems of the Parking Garage even though such closet or other enclosure may not be excluded or shown on the E~ floorplan. 1.4 . PIaza Tenant Area. The Premises (CHECK ONE): does ~ does not include all'or any part of the Plaza Tenant Area. 1.S Cotntneneement Date. The Term of this Sublease shall cornmence ou March 15 2003_,. or such earlier or later date as provided in paragraph 3 {"Commencement Date"). 1.6 . Expiration Date. Subject to earlier termination as elsewhere provided ih this Sublease, the Term of this Sublease shall expire at midnight on Ma I4 2008 , or such earlier or Later date as provided in paragraph 3 {"Expiration Date"). 1.7 Right to Extend. Tenant {CHECK ONE}: ~ does does not have a right to extend the Ter,~n of this Sublease_ If Tenant does have a ri _t to e te. _~t~e tern, ~_ -- aiid co~i ors o suc rig tare set. forth in the Right To Extend Rider attached hereto. 1.8 Base Monthl Rent. The bad. e` monthly rent {"Base Monthly Rent") is (CH)ECK ONE): per month. X according to the Rent Rider attached hereto. 1.9 Prepaid Rent. Upon execution of this Sublease, Tenant shall pay to Sublessor the sum of One Thousand Nine Hundred Twent Nine and 58/100 1929.58 as prepaid rent, to be applied to the Base Monthly Rent due for the third calendar month of the Term. 1.10 Late Charge. The late charge is five percent of each Late Payment due from Tenant to Sublessor. 1.~ I Seciu~ity Deposit. The amount of the security deposit is Two Thousand Dollars and No/100 ($2 000 00~ . I.12 Permitted Use. The Premises shall be used only for o ce uses 1.13 Sublessors. Notice Addresses: Subject to change as provided in paragraph 32, "Sublessor's Notice Address" is: City of Auburn Attention: Director of Planning 25 West Main Street Auburn, WA 98001-4998 1.14 Tenant's Notice Address: "Tenant's Notice Address" is, subject to change as provided in paragraph 32, the following: PFM Enterprises, Inc. Attention: Pat Muldary 1980 Island Parkway East Sumner, Washington 9$394 except that after the Commencement Date and before the expiration or earlier termination of the Term.the Premises is also a "Tenant's Notice Address" and~Sublessor may give notices to Tenant at either of such addresses. 1.15, Tenant's Prorata Share. "Tenant's Prorata Share" is 15.6%. 1.16 A,diustments to Tenant's Share. Tenant's Prorata Share is calculated as the percentage, which is the same percentage of the rentable square feet in the Premises bears to -------t~ho-rgntabl~-scluare~eet~f--the-Cozrnrrerciai- T`~enant-,~ro~-1~or~these~ p'~i`rposes, u essor an -". -- Tenant agree that, at commencement of the Term, the Premises has 2,105 rentable square feet and the Commercial Tenant Area has 13,490 rentable square feet. Sublessor m_ay recalculate the Tenant's Prorata -Share from time to time during the Term if there is a change in configuration of the Premises or any other space in the Commercial Tenant Area., if Sublessor recalculates Tenant's Prorata Share, Sublessor shall give Tenant written notice of the new calculations and of the new amounts of the Tenant's Prorata Share. T'1-e recalculated Base Monthly Rent and Tenant's Prorata Share shall become effective beginning on the first day of the first calendar month during the Term that occurs at least fifteen days after Sublessor's notice as given. 2. DErINITIONS. Wherever used in this Leased the following terms in quotation marks have the meanings specified below. 2.1 "Additional Rent" is defined in paragraph 7. 2.2 "Base Monthly Rent" is defined in paragraph 1.8. 2:3 "Commercial Te[tant Area" is that part of the interior space of the ground floor of the Parking Garage that is outlined and labeled "Commercial Tenant Area" on the Exhibit A floor plan. 2.4 "Common Areas" rxteans those portions, areas and facilities of the Commercial. Tenant Area and those portions of'the parking garage common.areas as defined in Section l , l (d) of the Master Sublease that Sublessor, from time to time and acting in Sublessor's discretion, makes available for the general, non-exclusive use, convenience or enjoyment of Tenant and the other tenants of the Commercial Tenant Area that are not ~Ieased or held for the exclusive use of a particular tenant. Common Areas may, but do not necessarily include, hallways, comdors, docks, loading areas, restrooms, and trash facilities. Common Areas may also include landscaping, if any, installed and/or maintained by Sublessor in or about the Commercial Tenant Area and the Plaza (including within "landscaping" plantings in planter boxes). _ 2.5 "Late Payment" is defined in paragraph 5. 2.6 "Law" means any and all applicable (i) common law, (ii) federal, state, municipal (including that of the City of Auburn in its governmental capacity) or other local law, statute, ordinance, code, fegulation, and rule, and (iii) decrees and orders of any court, governmental unit, or .governmental agency with. jurisdiction (including the City of Auburn and any of its agencies in its or their governmental capacity). 2.7 "Maintain" and "maintenance", in the context of "maintaining" all or any part of tlae Premises, the Parking Garage, the Commercial Tenant Area, and/or the Plaza or any part thereof includes service, repair, and replacement. 2.8 "Operating Costs" is defined in paragraph 8. 2:9 "Master Sublease" is defined in Recital A. 2.10 "Parking Garage" is defined in paragraph 1.3 and includes the Premises (except, if applicable, that part of the Premises that is all or part of the Plaza Tenant Area). 2.11 "Plaza" means those parts of tlic Auburn Transit Center that are outlined and labeled "Plaza" and "Plaza Tenant Area" on the Exhibit G site plan. 2.12 "Plaza Tenant Area" means tha# part of the Plaza that is outlined and labeled "Plaza Tenant Area" on the Exhibit C site plan. 2.13 "Premises" is defined. in paragraph l .3 and, if applicable, paragraph 1.4. 4 2.14 "Property" means the Commercial Tenant Area, the Plaza and the common areas, and includes the Premises. 2.15 "Rent" is defined in paragraph 7. 2.16 "Sound Transit" is defined in Recital A and except that such term also includes any successor or~assign of Sound Transit. 2.17 "Station" is the Auburn Transit Station 'that is depicted on the site plan a#tached hereto as Exhibit C and includes the Parking Garage, .the Property. 2.18 "Sublessor" is defined in the paragraph i .1. 2.19 "Sublessoz's Notice Address" is defined in paragraph I.13, 2.2t? "Tenant" is defined, in the paragraph 1.2. 2.21 "Tenant Alteration" is defined in paragraph 16. 2.22 "Tenant Cable" is defined in paragraph 13. 2.23 "Tenant Improvements" is defined in paragraph 33. 2.24 "Tenant's Notice Address" is defined in paragraph 1.14. . 2.25 "Tenant's Prorata Share" is defined in paragraph 1.15. 2.26 "Term" is defined in paragraph 4. The list of definitions in this paragraph is not'a11-inclusive. Other terms are defined elsewhere in this Sublease. . ~ --SEA~E~ -9n-#he-t~r~rs-and-eonditions-specifred~rrthis~r~e~; Su-b~less'or Leases the Premises to Tenant and Tenant leases the Premises from Sublessor. 4. TERM. Subject to (a) earlier termination as herein rovided p , {b) extension as herein provided, if applicable, and {c) the other provisions of this paragraph, the term of this Sublease (the "Term") shall commence on the date specified in paragraph 1(b) {the "Commencement Date") and shall expire at midnight on M_ ay 14 2(}OS _ (the "Expiratiosi Date"). 41 Early Occupancy. Without Sublessor's prior written consent Tenant shall not occupy the Premises before the Commencement Date for any purpose other than permitted according to paragraph 4.1. If Tenant does occupy the Premises before the Commencenent Date for any other purpose, then the Commencement Date shall be the date of occupancy but the expiration date shall not be changed, S 4.2 Delay In Tender of Possession. If for any reason whatsoever Sublessor is unable to tender possession of the Premises to Tenant by March 15 2003 ,neither Sublessor nor its agents, employees or officers {including without limitation its Mayor and its the members of its council) shall be liable for any damage or loss caused thereby, nor shall this Sublease thereby become void or voidable. However, as Tenant's sole and exclusive right acid remedy on account thereof (a} Tenant shall not be liable for any Rent or other obligation under this Sublease until such time as Sublessor does tender possession; and (b} Tenant may terminate this Sublease by not~less than thirty days` prior written notice to Sublessor unless Sublessor tenders possession before, the end of such time. If for any reason whatsoever Sublessor is unable to tender" possession of the Premises to Tenant. by six months after the date specified in this pazagraph or after the Commencement Date, and i1' Tenant has not terminated .this Sublease, then Sublessor may by written notice to Tenant terminate this Sublease. If this Sublease is terminated under this paragraph all prepaid rent and security deposits shall be refunded to Tenant, arzd neither Sublessor nor Tenant shall have any further obligations to the ~ other. If the Commencement Date is delayed under the provisions of this paragraph, then the Expiration Date shall be extended so that the Term shall have 62 full months plus any additional time necessary so that the Term will end on the last day of a calendaz month. 4.3 Confirmation Of Term. Promptly after the request of either Sublessor or 'T'enant made at any time=after the Commencement Date is lmown, Sublessor and Tenant shall execute and deliver to each other duplicate originals of a written agreement specifying the Commencement Date and the Expiration Date of this Sublease. . 5• LATE CHARGE. If any payment of money due from Tenant to Sublessor under this Sublease is not received by Sublessor in full on or before frve days after the due date the entire payment shall be considered late ("Late Payment") and Tenant shall also pay to Sublessor, as part of the Rent, a fate charge of five percent of the full amount of each Late Payment to compensate Sublessor for the additional administrative costs that will be incurred. by Sublessor on account of such Late Payment. Neither' this provision for a late charge nor the tender or payment of a late charge by Tenant shall impose any obligation on Sublessor to accept any payment (including but not limited to a payment of Rent) that is not paid when due. Sublessor may conditiwtLits~ccepiance-of~an3r~atg-P-ayment-en-eencurrerrt ~ayrnentrof~tlre-applicable~at~------ -- - charge. Sublessor's right to require a late chazge is in addition to and cumulative with alI other rights and remedies Sublessor may have on account of such late payment. "Late Payment" includes without limitation a payment that is not made at all. 6. SECURITY DEPOSIT, 6.1 Generally, Tenant has paid the amount specified in paragraph 1.11 as the Security Deposit which shall be security for Tenant's full and faithful performance when due of all Tenant's obligations under this Sublease. Sublessor may commingle the Security Deposit with Snblessor's other funds, no trust relationship is created with respect to the Security Deposit, and no~interest shall be paid or accrued for Tenant's beneft on the Security Deposit. If Tenant fully and faithfully performs during the'Term all of its obligations under this Sublease, then as an obligation surviving expiration or earlier tcmunation of the Tenn, Sublessor shall return to Tenant (or at Sublessor's option, to the last assignee, if any, .af Tenant's interest under this Sublease} the Security Deposit (or so much of it as has not been applied by Sublessor), without interest, within a reasonable time after the expiration or earlier termination of this Sublease; provided that Sublessor may hold back all or any portion of the Security Deposit until final detertnination and payment of Tenant's Share of Operating Costs. If Sublessoz transfers its interest under this Sublease, the Security Deposit will be transferred to the transferee and, in such event, Tenant shall look solely to such transferee for proper application and/or return of the Security Deposit. t.2 Sublessor's Ri t To A, 1 . If Tenant fails to pay any sum of money due to Sublessor from Tenant under this Sublease within five days after it is.due or if Tenant fails to perform any of its other obligations under this Sublease, Sublessor rnay, -but is not obligated to, apply all or any part of the Security Deposit in payment of such sums or in payment of Sublessor's costs of performing such obligation or in compensation for the damages caused to Sublessor on account of such- failure of performance. If Sublessor so applies all or any part of the Security Deposit, then within ten (10) days after Sublessor's written demand specifying the amount so applied and the amount, if any, remaining in the Security Deposit, Tenant shall pay to Sublessor such amounts as is necessary to fully restore the Security Deposit. 6.3 Increases in Security Deposit. 'If twice within any period of twelve consecutive months, late chazges are incurred by Tenant, Sublessor may, by written notice to Tenant, increase the amount of the Security Deposit by fifty percent of its then current amount and Tenant shall pay to Sublessor, within ten (10) days after Sublessor's notice of increase, the amount of the. increase, )f Sublessor applies all or any part of the Security Deposit as permitted in paragraph 6.2, then the amount of the Security Deposit shall be increased by f fty percent of the then current amount thereof and on Sublessor's demand, Tenant shall pay to Sublessor the amount of money required to restore the amount so applied and to pay the increased amount_ 6.4 Rights Cumulative. Sublessor's rights to apply and to increase -the Security Deposit are in addition to and cumulative with a1I other rights and remedies Sublessor may have on account of Tenant's failure to perform when due each of its obligations under this Sublease. 7• BASE MONTHLY RENT. Tenant shall pay to Sublessor the amount of the Base Monthly Rent for the Premises on the firs# day of each calendar month during the Term. In this Sublease the terra "Additional Rent" means all other sums to be paid to Sublessor under any other provision of this Sublease. The Base Monthly Rent shall be paid in.addition to any Additional Rent. In this Sublease the term "Rent" means ,the Base Monthl Rent. Additional Rent means those costs incurred for the maintenance and o eratian of the buildin .Tenant shall pay to Sublessor when due all Rent without offset or deduction and, except as expressly provided otherwise in this Sublease with respect to a particular type of Additional Rent, without prior natice.or demand. The Base Monthly Rent shall be apportioned for any partial calendar month at the cornrnencement and at the expiration or termination of the Terri in the proportion that the number of days in the month during the Term bears to the number of days In that month. All payments Tenant is required to pay to Sublessor under, arising from, or in connection with this Sublease shall be made to Sublessor at such place as Sublessor may designate from time to time. In the absence of, or in the case of lapse of, any such designation, such payments shall be made to Sublessor's Notice Address. 8. pPERATIIVG COSTS. 8.1 Definitions. The following terms in quotation marks have the meanings specified below; 8.1.1 "Tax Costs" means: (a) the amount of all taxes and assessments, if any, levied on Sublessor's interest in the Property, (b) .the amount of all taxes and assessments, if any, on the personal property owned or leased by.Sublessor and used in connection with the maintenance, ownership, and operation of the Property; (c) all assessments in lieu of .taxes (excluding, however, the leasehold excise tax that is described in paragraph 9); and (d) any expenses, including the costs and fees of attorneys, experts, consultants, witnesses and appraisers, reasonably incurred by Sublessor in seeking a reduction in or return of any Tax Cost attributable to a period of time during.the Term or any assessment or valuation which is part of the basis of any Tax Cost that is attributable to a period of time during the Term, including any appeals. if a Tax Cost is payable in periodic installments, then "Tau Costs" shall include the installments (including interest). Tax Costs shall not include any net income, franchise, capital stock, estate,. or inheritance taxes, and shall be reduced by any refunds or recoveries of Tax Costs to or by Sublessor from axiy taxing authority to the extent attributable to any period of time wifhin the Term. 8.1.2 "Maintenance Costs" means the amount of all costs (other thaix Tax Costs) incurred by Sublessor in leasing, maintaining and operating the Property. (i) Without limiting the ~ generality of the foregoing, Maintenance Costs include those of (a) premiums and deductibles for insurance; (b) refuse xemoval from the Property; {c) electrical, water, gas, sewer, drainage, and other utility and services to the Property (excluding any separately metered to and paid' by one or more tenants of the Property); (d) xefuse and trash removal provided to the Property; (e) maintenance of heating, ventilating, and air- conditioning equipment, ofplumbirig and electrical systems, and of all other parts and systems of ____ ~~ the 1'ro e ~(f} repainting and re~ujhishing, inclue3in~mplacement-of--carpet-or-ether-floor covering and drapes or other window treatmenfi (g) pest .control; (h) fire -detection and security systems or services; (i) independent contractors and Sublessor's employees, if applicable,. providing services in connection with the ownership, maintenance, or operation of the Property (including without limitation janitorial, landscape, security, accounting, legal, management, and other services); (j} parts, tools, equipment, and supplies (including without limitation cleaning and restroom supplies, light bulbs, ballasts, fuses, other electrical supplies, and paper goods); (k) amortized amounts of any capital expenditures made by Sublessor in good faith with a reasonable expectation of reducing other operating costs or to otherwise improve the operating efficiency of the Property or to comply with any Law first effective after the initial construction of the Property was substantially completed (the amortization to be based on the useful life of such improvements as reasonably determined by Sublessor); (1) costs of leasing or acquiring personal property used in the ownership, maintenance, or operation of the Property; and (rn) maintenance of all o#lter parts of the 1'rbperty, including without Iiniitation foundations, exterior walls and glass, roofs, utility facilities, and common areas, In the case of Sublessor's employees, if any, attributable costs of such employees include wages, salaries, social security taxes, Medicare taxes, employment taxes, medical and other types of insurance, other benefits, traihing, and uniforms. (ii) klowever, "Maintenance Costs" do not include: {a) the costs of items furnished for the exclusive use of any particular tenant which such tenant has agreed to reimburse or pay; (b) the costs of improvements Sublessor has agreed to make at Sublessor's expense for the exclusive use of any particular tenant; {C) leasing commissions; (d) debt service;. (e) depreciation; (#} costs of capi#al improvements except as provided in paragraphs 8.1.2(i) and $.1.2(ii); and (g) costs. which are paid or reimbursed by insurance. 8.1.3 "Operating Costs" means the total of Tax Costs and Maintenance Costs. Any Operating Cost incurred for a period of time part of which is in a calendar year and part of which is not in the same calendar year, shall be prorated between the calendar years in the proportion of the number of days in each such year during the period for which the Operating Cost was incurred. In the year the Term commences and in, as applicable, the year the Term expires or terrnina#es, that part of the Operating Costs for the year on which the Additional Rent provided in this paragraph shall be calculated shall be that prorated in the proportion that the part of the year doling the Terxu bears to that part of the year which is not wiithin the Term. Any reasonable method of calculating and allocating all or any part of Operating Costs or other amounts in order to determine the amount of all or any part of Operating Costs consistent with Sublessor's accounting methods used by Sublessor in goad faith. shall be binding and conclusive on Tenant. _ 8.2 Additional Reut. In addition to the Base Monthly Rent provided in paragraph 7, Tenant sha13 pay as Additional Rent of the Premises Tenant's Prorata Share of the Operating Costs for each calendar year during the Tenn. To the extent the Term does z~ot include all of any particular calendar year, Sublessor shall allocate the Operating Costs for which Tenant is responsible in any manner consistent with Sublessor's accounting methods so as to fairly apportion the Operating Costs for that year beriveen those for which Tenant is obligated and those which are not. All payments on account of Tenant's Prorata Share of Operating Costs --_shalLbesnade~,uhen-due-as,-and-w#thout f~r~oi-notfee-thanes; provided-in-this~aragaph~$-and-- shall be made without offset or deduction. 8.3 Sublessor's Estimates and Statements. 8.3.1 At Commencement. By no later than the start of the third month of this lease, the Sublessor shall furnish Tenant a state~tnent in reasonable detail estimatic~g the amount of Operating Costs Sublessor expects to incur during the year in which the 'T'een commences and Tenant's Share thereof. Beginning with the first day of the third calendar month during the Tenn .which is at least fi$een days after Sublessor's statement is .furnished and continuing on the first day of each subsequent month, Tenant shall pay an amount on account of the.Additional Rent provided in this Paragraph 8 which is computed by dividing the Tenant's estimated share thereof by the number of foil calendar months during the 'Perm in the first year. Such payments shall be made together with and i~~ addition to the Base Monthly Rent provided in 9 Paragraph 7. In addition, with the first such payment on account of such Additional Rent, `T'enant shall pay any deficiency in estimated payments on account of such Additional Rent. This "deficiency" shall be the amounts which would have been due from Tenant on account of that part of the Term preceding the day on which the first paymen# on account of Additional Rent is due as provided in this Paragraph 8.3.1 as if the Term commenced on the first day of a calendar month and Sublessor's statement had .been fitznished at least fifteen days before the first day of the Term. 8.3.2. Subse uent Calendar Years. As soon as practical after the end of each calendar year during the Tema; Sublessor shall furnish Tenant a statement in reasonable detail (a) estimating the amount of Operating Costs Sublessor expects to incur during the current calendar year and Tenant's Share thereof; (b) the amount of Operating Costs actually incurred for the preceding calendar year and Tenants Share thereof, ,and (c) to the extent applicable, the amount overpaid or underpaid by Tenant on account of Tenant's Share of the Operating Costs actually incurred for the preceding year. In addition, beginning on the first day of the first calendar. month which is at least fifteen days after Sublessor's statement is furnished and continuing on the first day of each subsequent calendar month, Tenant shall pay {fj an amount on account of the estimated Tenant's Share of Operating Costs for the current year calculated by dividing the estimated Tenant's Share of Operating Costs for the current year. by the number of full calendar months during the Term in that year. Deficiencies in prior payments during the current year before the sums described in part {f) become payable shall be calculated on the basis of there being due an the first day of each calendar month during the. current year the amount specified ict part (~, Until Sublessor's statement under this paragraph is furnished, Tenant shall pay together with and when the $ase Monthly Rent is due for the current year the amount which is equal to that amount payable by Tenant in the last month of the preceding year for estimated Operating Costs for the preceding year. Any adjustments in actual costs .will be prorated on the next years NNN costs. 8.3.3 Overpayments for Preceding Year. If Sublessor's statement furnished according to paragraph 8.3.2 shows estimated payments made by Tenant on account of Operating Costs in the preceding year were more than Tenant's Share of the Operating Costs for the preceding year, then Sublessor shall apply the excess to sums then due for the current year ~. anri to the PY±P„+~~an3~r~m~ing-balance-ofsueh-exeess;-xt Subiessorzs-elECt~on; either-refund~ -- the balance to Tenant or apply the balance to the sums next due from Tenant for the current year. The obligations with respect to Operating Costs for the calendar year in which the Term expires or is terminated survive such expiration or other termination of this Sublease. Any adjustments in actual costs -will be prorated on the_ next years NNN costs. 8.4 Tenant's Ri~E-t of Review. ~ As provided in and subject to the conditions of this paragraph 8.4, Tenant shall have the right to examine Sublessor's books and records far the purpose of reviewing the accuracy of Sublessor's statements of actual Operating Costs ("Cost Statement"). Within thirty days after Tenant's receipt of a Cost Statement, Tenant shall by written notice ("Review Notice") to Sublessor make its election to examine Sublessor's books and records for the purpose of reviewing the accuracy of Cost Statement. Within IO days after receipt of the Review Notice, Sublessor shall by written notice ("Records Notice") describe the 10 location ar locations at which Sublessor shall make i#s books and records available for such examination. Within forty-five days after receipt of the Records Notice, Tenant shall complete its examination and give Sublessor a written report thereof ("Objection Notice") in reasonable detail stating the amount of Operating Costs for the preceding year according to such examination and the reasons and amounts for any variation from the Cost Statement. Sublessor will make its books and records available for Tenant's examination and copying at reasonable times on reasonable prior notice at such place or places where such books and records are kept in ordinary course. Tenant's examination shall be made by an independent certified public accountant selected by Tenant and the costs and fees thereof shall be paid by Tenant except as provided otherwise in the next sentence. If as a result of Tenant's examination, it is adjudicated or Tenant and Sublessor agree the Cost Statement overstated the amount of Operating Costs actually incurred for the year in question by an amount exceeding five percent of the Operating Costs claimed by the Cost Statement, then Sublessor shall reimburse Tenant's reasonable costs and fees of its examination. To the extent that as a result of Tenant's review it is adjudicated or Sublessor.and Tenant agree that there was such an overpayment, then notwithstanding anything else to .the contrary in this Sublease, there shall be. credited to all sums then due from Tenant to Sublessor (and to the extent of any balance, all sums next becoming due from Tenant to Sublessor) the amount of such overpayment, If Tenant does not timely give a Review Notice with respect to a Cost. Statement or if Tenant does not timely give its Objection Notice with respect to a Cost Statement, then Tenant is and shall be barred. from (and waives, releases, and discharges any claim of right) to challenge the accuracy. of that Cost Statement. Even if Tenant exercises its right to examine Sublessor's books and records concerning actual Operating Costs incurred for the previous year, Tenant shall nevertheless pay when due all sums indicated by that state,~ent and any subsequent statements as being due from Tenant for the preceding and current years, all when and as provided in paragraphs 8.3.2 through 8.3.4, and shall not delay or make any deductions from such amounts. 9. LEASEHOLD EXCISE TAX. Ln' addition to the Base Monthly Rent, Tenant shall pay to Sublessor in advance on the firs# day of each month during the Tenn the leasehold excise tax required by Chapter 82.29A of t17e Revised Code of Washington and regulations adopted pursuant thereto, as such law and/or regulations may hereafter be amended or replaced, on account of the taxable rent payable by Tenant under this Sublease on such data For - --inf~rrr-atiet3al -purposes; the current-rate-of the loasehold - ------ . p r en . 10. PEkMITTEID USE. The Premises shall be used only for the_use specified in paragraph 1.12 (the "Permitted Use"), aril for no otherbusiness or purpose without the prior written consent of Sublessor, which Sublessor may refuse or condition in its discr-etion. 11, RE UIRElVIENTS CONCERNIlVG TENANT'S USE. 11.1 General Matters. Tenant shall not do or suffer anything to be done in the Premises or the Parking Garage or on or about the Auburn Transit Station that will increase the insurance rates for or cause any insurer to cancel or to impose exclusions on any of Sublessor's policies of insurance on or relating to the Property or any part thereof or the Sublessor's contents therein or Sublessor's liability insurance related to the Property or any part thereof. 1^or fhc purposes of the preceding sentence, to the extent that Sublessor self insures any risks jointly with other governmental units and pays assessments relating to such self-insurance, then in the preceding sentence the term "premiums" includes such.assessments. Tenant shall not in any way exceed the design load limits of the floor of the Premises. Tenant shall not commit or permit waste of any part of the Property. Tenant shall not commit or permit any public or private nuisance or any other act or thing that obstructs, interferes with, or otherwise disturbs (in Sublessor's good faith. opinion) any of the other. tenants of the Commercial Tenant Area and/or Plaza Tenant Area or any of their licensees, permittees or invitees in their use, occupancy, or enjoyment o~'~heir respective premises, the Common Areas or which (in Sublessor's good- faith opinion) interferes with Subiessor's ownership or operation of the Building. Tenant shall not commit or permit any act or thing that obstructs, interferes with, or otherwise disturbs {in Sublessors good faith, opinion) Sound Transit ~or any of its .tenants, licensees, permittees or invitees {including members. of the general public) in their respective use, occupancy, or enjoyment of the Parking Garage or any other part of the Auburn Transit Center Station (except as permitted in the Plaza Tenant Area Rider}. Tenant shall not. use or place any apparatus, machinery, or device which causes any substantial noise or vibration in or about the Property wi#hout Sublessor's priorwritten consent, which Sublessor may refuse or condition in its discretion. Tenant shall at all times keep access to enclosures within the Prerruses for any Parking .Garage systems .that are excluded from the Premises, if any, free from obstruction or hindrance, and Tenant shall not keep, place, or store anything in such enclosures. Tenant shall comply with and shall cause its employees, agents, visitors, and contractors to comply with such reasonable rules as Sublessor from time to time may deem necessary or desirable for the protection of the Leased Premises, the Common Areas, other parts of the~Parlcing Garage and/or the Plaza Tenant Area, its -safety, care, and cleanliness, and good order therein. A co Sublessor's rules.presently in effect is attached hereto as Exhibit D: py of 1i.2 Corrtpliahce With Law. Without limiting the generality of any provision of paragraph 11.1, in its use and occupancy of the Premises, the making of any Tenant Alteration, and Tenant's performance of its obligations under~this Sublease, Tenant shall conform to and comply with every applicable Law, including but not limited to state and federal occupational and health safety acts and the Americans With Disabilities Act. Tenant recognizes that the Americans With Disabilities Act may require modifications be made to the Premises because of Tenant's use (hereof and, in such case, Tenant shall at its expense make such _ r. modifications_(,~~bj~~, how~y~,, to the,~~uirements_-of .paraggraph-16}; ~~ ~~~etment-or -- enforcerrient of any Law requires any changes to the Premises during the Term, then, subject to the requirements of paragraph 16, Tenant shall make all such changes a# ~ its expense if the changes are required due to the nature of Tenant's activities at the Premises, Qr to Tenant ;4lterations that were made by Tenant or that Tenant seeks.to make. _ _ i1.3 Environmental Matters. Without limiting the generality of any provision of paragraph l I.I or l I.2, Tenant shall comply, and shall cause alI its employees, contractors. and agents to comply, with alI requirements of every applicable Law concerning use, handling, storage, disposal, removal, and encapsulation of any hazardous, toxic, or dangerous substance or waste brought onto, released onto, used in or about, ~or generated in or about _the Parking Garage or the Auburn Transit Center by Tenant or by any of its employees, agents, visitors, or contractors, or by any other person with Tenant's consent or permission, express or implied. Tenant shall indemnify, defend, and hold harmless Sub]essor, Sublessor Related l2 -...-'_-ii-~.._....~ ~ ~.-vvv Parties, and the Property from and against all demands, claims, liabilities, damages, awards, judgments, costs, and expenses incurred by or. asserted against Sublessor, Sublessor Related Parties, and/or the Property arising from or in any way related to any failure by Tenant or any of its contractors or agents to perform as required by the preceding sentence or arising from or in any way related . to the assertion of any such failure. Tn the preceding. sentence: (a) "costs" include, but are not limited to, fines, penalties, costs of any investigation, costs of any remedial action, costs of restoration or replacement of any part of the Auburn Transit Sta#ion or any improvements thereon (including but not limited to the Parking Garage), and the costs of settlement; and (b) "expenses" include, but are not limited to, the costs and fees of attorneys, consultants, experts, and witnesses. Tenant's obligations under this paragraph survive the expiration or termination of this Sublease- . 12. COMMON AREAS. Tenant shall have the right to nonexclusive -use of the corridor portions of the Common Areas for ingress and egress to the Premises; provided that such use shall not interfere with the reasonable use of such areas by other tenants of the Building. 'T'enant shall also have the right to nonexclusive use of the other Common Areas for the uses for which they are intended and provided by Sublessor from time to time. Sublessor reserves The right from time to .time.to change the size, location, nature, use,~configuration, or otherwise alter the Common .Areas and may change the Common Areas available to tenants of the Commercial T'enan# Area and may eliminate or reduce parts of the Common Areas, erect improvements on the. Common Areas or .convert any portion of the Common Areas. to the exclusive use of Sublessor or one or more tenants of the Commercial Tenant Area. 1~Towever, Sublessor shall not make any changes to the Common-Areas that unreasonably interferes with Tenant's access to the Premises or other rights under this Sublease. Sublessor reserves the use of exterior walls, the interior of the demising walls, and the right to install, maintain, use, repair and replace pipes, ducts, conduits, and wires leading through the Premises in areas which will not materially interfere with Tenant's use thereof. 13. REPAIRS A1VD CARE OF FREMISES, Tenant shall at its expense maintain, take good care of and keep in good condition, good state of repair and good working order the Premises and the fixtures and appurtenances therein or related thereto, including but not limited to: (a} floor coverings; {b) window coverings; (c) interior walls and partitioning; {d) doors (if ~~TM~go- is-caused-1}y-the~enantj;-{e}-relights-and-vthor-glass-(including-exterior-win-da da.rnage is caused by the Tenant); (~ the interior side of demising walls; (g) electronic, phone, and data cabling. and related equipment installed by or for the exclusive benefit of Tenant, wherever located in the Parking Garage (collectively "Tenant Cable"); (h) any supplemental heating or air-conditioning equipment, private showers and kitchens, including ho#:water heaters, plumbing, and similar facilities serving Tenant exclusively; {i) all Tenant Alterations, whether made with or without Sublessor's consent, including any related balancing of the heating and air- conditioning systems serving the Premises and/or any other part of the Parking Garage, (j) any ventilation equipment installed by or for the exclusive benefit of Tenant, wherever located in the Parking Garage, and (k) wires, cables, conduits, pipes, valves, faucets, and other components of the systems providing utilities. Tenant shall not make holes in or fasten hardware, bulletin boards, shelving, cupboards, blackboards, decorator ifems, or any other object to the walls, doors, woodwork, or ceilings or hang things from ceiling support fr-arnes without Sublessor's prior written consent, v~fiich Sublessor may refuse or condition in its discretion. Sublessor 13 hereby consents to the hanging from walls of the Premises pit=tares and other decorator items weighing ~Iess than'25 pounds each using picture books fastened to the-walls with nails.. All damage or injury to any part of the Premises or the Parking Garage caused by any such holes or fastenings (including any consented to by Sublessor), or by installation of Tenant Cable or other of Tenant's equipment and fixtures, or by moving Tenant`s fiutiiture, equipment, supplies or inventory into or about the Parking Garage or the Premises, or by the act or omission of Tenant or any of its employees, agents, visitors, contractors, or customers .shall be repaired at Tenant's expense. Work of repair or replacement shall be performed by firms and workmen selected; engaged, and supervised by Sublessor. Sublessor has no obligation during the Term to: (i) clean, repair or replace carpets, other floor-coverings, drapes, other window coverings or treatments in the Premises even if furnished by Sublessor; (ii} to make any improvements to the Premises, or {iii) repaint walls or refinish woodwork in the Premises. Subject to all the preceding parts of this paragraph, Sublessor shall maintain the Property in good order and repair. Tenant shall promptly notify Sublessor of any matters in or about the Property in need of maintexiance ~ for which Sublessor is responsible and of which Tenant learns or has notice. Notwithstanding the preceding provisions of this paragraph, to the extent maintenance of any part of the Property or the Parking Garage that is under the provisions of this paragraph the responsibility of one patty is required because of the act or neglect of the. other party (or the otheF party's agents, contractors, invitees or licensees), then the other party shall pay the costs thereof. At the election of the party otherwise responsible for such maintenance, the other party's payment of the costs shall be made (a) within ten days after demand which demand is made after completion of the wont and final determination of the costs thereof or (b} in installments as and when due as the work progresses. 14. SERVICES AND >LITILITIES. .14:1. General Provisions. Sublessor has the exclusive right to determine who' shall provide electricity or any other utility service to the Property or any part thereof and who shall provide facilities at the Property or any part thereof for broadband access to the lntemet (excluding any such access which is availab'Ie through ordinary telephone Lines or television cable} and to negotiate and enter into contracts or other agreements or arrangements therefore. Sublessor shall provide facilities to furnish to the Premises and the Common Areas (a) electricity for li~htingand customary ~uinme~nt, c~mn~ters,~aohinesand~tl~,er_devises-usual-and-otdirr to retail and/or general office use of space in buildings in the general area of downtown Auburn and (b} water. Sublessor shall provide (c) Lamp repIaeement service for light fixtures in the Common Areas, {d).cleaning and supplying the restrooms that are part of the Conunon Areas, and (e} air-conditioning and heat to the Premises and the interior Common Areas Tenant shall provide facilities for fiarnishing all other utilities to the Premises, including but not limited to telephone and, if available, television cable service and any other services that Tenant requires or desires with respect to the Premises (including but not limited to janitorial and window-cleaning services). Tenant shall- make arrangements with those providing the utilities and other services to the Premises for the provision of such utilities and other services and shall pay when due all fees and charges for utilities consumed in or services provided to the Premises, including but not limited to any utilities provided by the City of Auburn. I4 14.2 . Ener Conservation. After IO p.m. (or later) until. 7 a.m. (or earlier) during weekdays and Saturdays and all day on Sundays and holidays, Sublessor may reduce heating anti air-conditioning service and may reduce or turn off lighting in the Common Areas. Froze tune to time Sublessor may institute and change other ,measures to conserve energy, water, or other utilities and Tenant shall comply therewith.., 14.3 Excess Re alrements. Except as provided in subpart (a) of the fast sentence of this paragraph, Sublessor is not required to provide air-conditioning or facilities for electricity for other computers or equipment installed by Tenant. If Tenant installs any such other computers or equipment. or other heat generating equipment, machinery, ~ or other devices which it~aterially increases the load on-Sutilessor's present air-conditioning equipment or if Tenant installs any devices which require greater eleotric service than -that described above, Sublessor leas the election to do -any one or more of (a) require that Tenant remove such computers, equipment, machinery, or devices, (b) make at Tenant's expense necessary improvements or replacements to the air-conditioning equipment serving or electric service to the Premises, and (c) charge Tenant for such extra load which charge shall be conclusive on Tenant if established by Sublessor in good faith with the objective of reasonable reimbursement of Sublessor's additional expenses (including but not limited to extra expenses of additional maintenance). If Sublessor .makes this Last election, Tenant ~ shall ~ pay the charge monthly in advance as Additional Rent an the f~st'day of each calendar month during the 't'erm. 1.4.4 Failure or Interru lion of Utilities or Sez-vi!ces. Sublessor shall not be liable for and Rent shall not abate, in .whole or in part, because of any loss, injury, or damage regardless of the nature thereof caused by or resulting froze, in whole or in part, any variation in,' interruption of, or failure of any utility service or services described iri this paragraph 14 to be provided by Sublessor incident to making of repairs, alterations, or improvements, or because of accident, strike, or any other event or circumstance beyond Sublessoi-'s reasonable control. 15. LIMITATION QN SUBLESSUR L)(A.BTT,ITX. Rent shall not abate, in whole or in part, nor shall there be any allowance'to Tenant for diminution of rental value, nor shall Sublessor be otherwise liable to Tenant by reason of inconvenience, annoyance, loss of use of the Premises, or interference wifh Tenant's business arising from the making {whether . by -----~blessor;-Seund~ransi~-er- ~riy-other--perso~}~y~-repairs; ~aiter~atidrrs~ ~d~titia~zs; -o~-- --~ improvements to any part of the Station. Sublessor and Sublessor Related Parties shall not be liable to Tenant for and Rent shall not abate, in whole or in part, because of any damage to any part of the Station or loss of use of any part,of the Property ar the Premises or for any lass, damage, or injury to Tenant or any of its property or its business occasioned b}c (a} bursting, rupture, leakage, overflow, or other failure of any plumbing or other pipes ar appurtenances, including without limitation, water, sewer, refrigerant, and fire,spritzlder systems, water tanks, and dishwashers; {b) backing up of any sewer line, drain, drainpipe, downspout, or gutter; (c) water, snow ar ice upon or coming through the root; skylights, stairs, doorways, windows, walks, or any other place on the Property; or (d) any act or omission of any party other than Sublessor or Sublessor Related Parties. Sublessor and Sublessor Related Parties shall not be liable for and Rent shall not abate, in whole or in part, because of any Loss or damage fo persori or property sustained by Tenant or by any other person which may be caused in whole or in part by any part of the Station, the Parking Garage, or the Premises being out of repair, by burglary, theft or IS vandalism, or by any act or neglect of the any tenant or other occupant of the Station or the Parking Garage or any part of either, or of any other person, including but not limited to Sound Transit and its agents, employees, and contractors. Tenant shall insure itself against the risk of all such losses described in this paragraph. 16. TENANT ALTERATIONS. After completion of any Tenant Improvements provided in the attached Tenant )<mprovement Rider, if arty, Tenant shall make no changes, additions, alterations, or improvements in or to the Premises or any other part of the Property . (including but not limited to the installation of any Tenant Cable) ("Tenant Alteration") without Sublessor's prior written consent (which Sublessor may refuse or condition in its discretion) as to the nature, extent, quality, plans and specifications of the proposed work, the materials to be used, and whether any or all of such matters shall be removed and the affected parts of the Property restored at Tenant's expense at the expiration or termination of the Term. "Tenant Alteration" does not include installation of shelves; movable partitions, Tenant's equipment and trade fixtures that may be, and are, installed without darrtaging the Property oz the existing improvements therein or the structural, integrity of any part of the Parking Garage or the Station and Sublessor's consent is not required for installation of such items. Tenant Alterations consented to by Sublessor shall be made and installed at Tenant's expense but under the direction and supervision of Sublessor by firms and workmen selected or approved by Sublessor. All .Tenant Alterations shall become Sublessor's property at the expiration or termination of the Term, subject to any obligation 'of Tenant to remove all or any part thereof and restore the Property. Unless otherwise specified by Sublessor in its consent to a Tenant Alteration, the Tenant Alteration shall belong to Tenant and, at the expvration or earlier termination of the `T'erm, . .- Tenant shall at its expense remove the Tenant Alteration and restore the Property to its condition before the Tenant Alteration. In addition and whether or not Sublessor approves all or any part of the proposal, Tenant shall reimburse Sublessor's costs and fees of third parties engaged by Sublessor to assist and advise Sublessor in its consideration of the proposal. Such reimbursement shall be paid within fifteen days after Sublessor's demand therefore which shall be accompanied by reasonable evidence of the amount and purpose of such costs and fees and the identity of the persons rendering the services. If Sublessor consents to any Tenant Alteration, then Tenant shall perform the Tenant Alterations in accordance with all applicable Law and in a manner so as not to unreasonably disturb or interfere with other tenants or occupants of the .` n.,rtr;r.g.F7arage-aF ari art-thereo gScnind~'rarrszt-and-zts~iicertsees ~nd~ 3~P f {ineludin j, p~ayrtlre-cnsts - thereof as and when due. Tenant shall also pay Sublessor a fee for Sublessor's oversight and eooz-dination of the work of the Tenant Altera#ion in the amount equal to five percent of the cost of the Alteration, Such fee shall be paid when the Tenant Alteration is completed and the total cost. thereof is determined. Promptly after completion of each Tenant Alteration made by Tenant, Tenant shall furnish to Sublessor as-built plans, drawings, and specifcations thereof. The requirements of this paragraph are in addition to any requirement of Law that Tenant obtain a permit from the City of Auburn acting in its governmental capacity for the proposed work. Without limiting the generality of the preceding sentence, Sublessor's consent to such proposal {with or without conditions) is not the equivalent of a permit or approval for such proposal in its governmental capacity and does not obligate the City of Auburn to approve the proposal in its governmental capacity under any such applicable Law and does not otherwise limit or prejudice the City of Auburn's discretion or freedom of decision-nnaking acting in its govertunental capacity pursuant to any such applicable Law. 1b ••....~~~..o.w a..~~ v,ql iuglY Ivy LVVJ 27.LIEI~CS. Without Sublessor's prior written consent thereto, Tenant shall not permit any lien, encumbrance, security interest or claim thereof (collectively in this paragraph "lien") to attach to the Property or any part thereof or to az~y fixture thereof or to ail or any part of Tenant's rights to the Premises or under this Sublease because of any work done by Tenant or at Tenant's request or because of any goods sold to or .leased by Tenant or because of any services rendered to or at the request of Tenant or because of any loan made to or other debt incurred by Tenant. Sublessor may refuse or condition any consent requested of it under this paragraph in Sublessor's discretion. Promptly after Sublessor's demand, Tenant shall either ~(a) cause any claim of such . lien which has been recorded in the real property records or filed iu the persozial property or Uniform Commercial Code records of the county, the state, or any other public authority to be released of record even if that cannot be done without paying the elaimant~ or, (b) to provide a bond against any claim of such lien if a law or an agreement with the cIairnant provides the effect of posting the bond has the effect of releasing the claim of lien from the property or rights against which the lien was filed or otherwise created. 1$. ASSIGNMENT AND SUBLETTING. 18.2 General Provisions. None of Tenant`s rights or obligations under this Sublease are assignable without Sublessor's prior written consent, which Sublessor may refuse or condition in Sablessor's -discretion. Any assignment made without Sublessor's consent or without the occurrence of all conditions to such consent. shall'be void and of no force or effect whatsoever, except Sublessor may at Sublessor's election treat such attempted assignment as a breach as provided in paragraph 29. Any consent given by Sublessor to an assignment shall apply only to the specific transaction then. consented to and sha1I not be a consent to any other or further assignment. Despite any assignment, with or without Sublessor's consent, Tenant shall remain fully and primarily liable to Sublessor for ail obligations. of the Tenant under this Sublease jointly and severally with the assignee and its successors, if any, even if such obligations were assigned to and assumed by the assignee. Regardless of whether Sublessor consents to the request, Tenant shall reimburse Sublessor's costs and fees of third parties engaged by Sublessor to assist Sublessor in its consideration of the request. Such reimbursement -shall-be-paid-wi#2rzrrfiffe~en~3~ys~#i~er-Sujsl-~sor s'---demand-th re ore w ~ch`s1~tl~~be accomparue by reasonable evidence of the amount and purpose of such costs and fees and the identity of the persons rendering the services. 28.2 Definitions. For the purposes of this Sublease, "assignee." includes an assignee of an assignee as well as an assignee directly of Tenant and "assignment" includes without limitation any of the following: {a) creation of any mortgage, deed of trust; or other security interest in all or any part of Tenant's rights under this Sublease; (b) a subletting of all or any part of the Premises; (c) the use or possession with Tenant's permission, consent, or acquiescence of all or any part of the.Premises by any person or entity other than Tenant; (d) if Tenant is a corporation, limited liability company, or limited partnership any change in Tenant's identity by merger, consolidation, or dissolution; (e) if Tenant is a corporation, any change after the date of this Sublease of ownership of Z5% or more of the corporation's shares of stocfc, whether such change occurs by transfer of existing shares or issuance of new shares or a 17 combination thereof or in one or more transactions or at one time or over any period of time; {fj if Tenant is a limited liability company any change after the date of this Sublease of ownership of 25% or more of the company's membership interests, whether such change occurs by transfer of existing interests or issuance of netiv interests or a combination thereof or in one or more transactions or at one time or over any period of tirrAe; {g) if Tenant is a partnership (general or limited) or a joint venture, any change after the date of this Sublease in its general partners or joint venturers; and (h) any transfer by operation of law. For the purposes ofpart (g}, if a general partner or a joint venturer is a corporation or a limited liability company, a change in identity and a transfer of ownership interests as described in parts (d), (e), and (f} shall each be considered a change in the general partner or joint venturer. 19. .SURRENDER. On expiration or earlier termination of the Term, Tenant shall: 19.1 quit and surrender the Prerriises broom clean and otherwise in the same condition and in as goad order and repair as at the commencement of the Term or, if applicable, as at the completion of .any repairs or restoration after damage under paragraph 21 or condemnation under paragraph 22, excepting only ordinary wear and tear, damage from fire or elements, and alterations or other changes which are to remain under paragraph I5; 19.2 deliver to Sublessor all keys and other items or devices opening or operating any door, lock, or other security device pertaining to the Premises or the Parking Garage; and 19.3 remove all its property from the Property and the Parking Garage. Any maintenance or restoration of the Premises required to conform to the requirements of the preceding or to repair any damage to any part of the Property caused by Tenant or any of its employees, agents, invitees, licensees, or contractors or to bring the Premises and all components . and systems thereof to the condition they would. have been if Tenant had fully and faithfully performed its obligations under paragraphs 1~ and 16 shall be performed by firms and workmen selected, engaged, and supervised by Sublessor but at Tenant's expense. If Tenant fails to remove its property, then Tenant shall be deemed to. have abandoned the same and Sublessor - "~a-; renwv-emend-store tlto-sarxre-At~T~nant'~isk-and-e~cpertse~rsell tbe-samevr-discard-the~samE. All of the foregoing obligations and alI obligations to make or pay,for repairs under paragraph 14, to restore the Premises under paragraph 16 survive expiration or termination of this Sublease and to indemnify Sublessor under paragraph 24. 20. ' SUBLESSOR'S ACCESS. After not less than two days' prior notice {except iri the case of emergency in which case no prior notice is required} Sublessor and its employees, agents and contractors shall-.have the right of access to the Premises and Tenant shall permit Sublessor and its employees, agents and contractors to enter the Premises at all reasonable times for the purpose of inspecting, main#aining, altering, or improving the Premises, the Property, equipment or fixtures, or showing the Premises to prospective purchasers, lenders or any other person having a legitimate interest therein, or exercising any of Sublessor's rights herein or under Law. After not less than ttivo days' prior notice, Sublessor and its employees and agents shall have the right of access and Tenant shall permit such access to _the Premises for the purpose of 18 showing them at any' time to prospective purchasers, lenders or any other person having a .legitimate interest therein or showing them at any time within the six months before expiration or sooner termination of the Term. Tenant shall not alter or make any other changes in any locks or other security devices or install additional Locks or other security devices in any door anywhere in the Premises or the Parking Garage. Nothing in this paragraph imposes any obligation on Sublessor to perform any maintenance or to make any alteration or improvement that Sublessor is not otherwise obligated to perform under some other provision of this Sublease or by Law. Approval of installation of additional tenant security shall not be unreasonable denied. . 2Y. DAMAGE AND" DESTRUeTIQN. If any part of the Premises or of the Property or ofthe Parking Garage is damaged or destroyed by fire or any other casualty during the Term, Sublessor shall have the election whether to repair or rebuild or to terminate this Sublease and the Ter~x- effective as of the date of the casualty. Sublessor shall give Tenant notice in writing of its election within Winery days after the date of the casualty. If Sublessor does not give its notice within such period, as Tenant's sole and exclusive right and remedy on account of such casualty, Tenant shall. have the right.to declare this Sublease and the Term terminated as of the date of the casualty by giving notice of termination to Sublessor but only if Tenant's notice is given before Sublessor gives Tenant Sublessor's notice of election, In case of termination under this paragraph liy Sublessor or by Tenant, Tenant shall pay Rent and otherwise perform all of its obligations under this Sublease up to the effective- date of termination (and those that survive sueh.termination) and Sublessor shall refund any Rent previously paid which is applicable to the period after such date. In addition, if all or a part of the Prerruses are tenantable despite the casualty and Tenant uses all or any.part of the Premises despite the casualty, Tenant shall also pay Rent and perform its other obligations under this ."Sublease through the date Tenant " surrenders the Premises after termination under this paragraph. In such cases, Kent shall abate in the proportion, if any, that the untenantable part of the Premises bears to the whole thereof unless the .damage or destruction results from, or is contributed to directly or indirectly by the act, fault or neglect of Tenant or any of its employees, agents, invitees, customers, licensees, pennittees or contractors (in which case there shall not be any abatement of Rent). If Sublessor elects to repair or rebuild, that work will be accomplished with reasonable promptness and during the period from the date of the casualty to the date the work or repair or rebuilding is substantially completed, Base Monthly Rent for the Premises shall abate "in the same proportion as the ntenantable-portion-o-Fth~Prensisos~ -if-att~b~~s-tfl,tlze_wholo._th~reo , ~hts u "]ease s a remain in full force and effect. If Sublessor elects to repair or rebuild, such repairs or rebuilding shall include the Tenant Improvements {if any and to the extent damaged or destroyed) but otherwise Sublessor has no obligation to repair, rebuild, restore, or replace any fixtures or other property of Tenant or any improvements or alterations to any part of the Property made by Tenant or at Tenant's request or at Tenant's expense. Sublessor shall not be liable for any damages or compensation for annoyance or inconvenience, loss of use of all or part of the Premises or Common Areas, or loss of business of Tenan# by reason of or arising from the casualty or of the repairs or rebuilding. 22. El1~lINENT DOMAIN. If all of the Premises are taken by any person or public authority under the power of eminent domain, then the Tenn and this Sublease shall terminate as of the date the taking person or authority is entitled to possession under such power. 1f any part of the Premises, the Property, the Parking Garage or any of Sublessor's interest therein shall be 19 taken by any person or public authority under the power of eminent domain, Sublessor may elect to terminate this Sublease and the Term as of the day such person or authority is entitled to possession under such power. A "taking" under this paragraph includes but is no# limited to~a conveyance made by Sublessor to a grantee under threat of the exercise of the power of eminent domain. Sublessor shall give Tenant written notice of its election within sixty days after the condemning person or authority gives Sublessor written notice of the final extent of the taking or sixty days before the date such person or authority shall be entitled to possession, whichever is Later. If Sublessor does not give Tenant Sublessor's notice of election within such period, then as Tenant's sole and exclusive right and remedy on account of such taking, Tenant shall have the 'right to declare this Sublease and the Term terminated as of the date the taking authority is entitled tb possession by giving notice of termination to Sublessor but only if Tenant's notice is given before Sublessor gives Tenant Sublessor's notice of election. Notwithstanding the preceding-provisions, Tenant shall have the right to terminate this Sublease and the Term terminated as of the date the taking authority is entitled to possession thereof by giving notice of .termination to Sublessor (but only if Tenant's notice is given within thirty {30) days after Tenant is given written notice of the final extent- of the taking or sixty (ti0) days before the date the taking authority is entitled to possession, whichever is later) in the event of a taking which includes {a) part of the Premises and {b) {i) more than twenty percent (20%) of the floor area of the Premises is included in the taking or {ii) the .taking person or authority is entitled to possession of any part of the Premises on a date that is within six months of the expiration date of the then existing Term. Tn addition, and notwithstanding any of the preceding provisions of this paragraph, Tenant may terminate the Term and this Sublease if not previously tenniuated the - taIcing includes a part of the premises and Sublessor has not completed any resto><^ation of the - remaining part of the Premises within six months after'the date the taking person or authority was entitled to possession of the part of the Premises that were taken. Tenant's election under .the preceding sen#ence may be made only by written notice of termination specifying an effective date of temunation which is at least two weeks after such notice which notice is given to Sublessor after the date the such six month period has elapsed without restoration having been accomplished bu# not more than thnty days after such date. ~ In addition, Tenant's notice of .terminate shall be void and of no force or effect if Sublessor completes the restoration before the effective date specified in Tenon#'s notice. Sublessor shall be entitled to all compensation or damages awarded for any taking, except that Tenant is entitled to any award which is both (a) ---~oparately-made ur~dditien-to-the-valuero€ the~roperty-taicetr(and; -if=apPiicahle;~iarrrago-to the--~ `~-- remainder of Sublessor's Property) and (b} identified as (i) compensation for Tenant's relocation expenses or {ii) compensation for the taking of Tenant's fixtures. If the Term and the Sublease is terminated as provided in this paragraph, then Tenant shall pay Rent and otherwise perform a1I of its obligations under this Sublease up to the effective date of such termination. {and those that survive such termination) and Sublessor shall refund any Rent previously paid which is applicable to the period a8er such date. If the taking includes a partial taking of the Premises and the Term and this Sublease is not terminated under the provisions-of this paragraph, then the Base Monthly Rent shall be reduced in proportion to the amount of the Premises taken, Sublessor shall make appropriate restoration of and alterations to the Property and the part of the Premises remaining, so that the remaining parts of the Property and the Premises are a functional whole for the purposes of the Permitted Use, and this Sublease and the Term shall otherwise continue with respect thereto. 20 23. IhISUR.ANCE. 23.1 Liabili Insurance. At all times during the Term, at its expense Tenant shall obtain and maintain in full force and effect a policy of general commercial liability insurance insuring the activities of Tenant, its employees, agents, visitors, and contractors in, about, upon, and with respect to the Premises, the Property and the Station against liability for personal injury and death and loss or damage to property, including liability for operation of owned and rionowned motor vehicles and coverage for contractually assumed liabilities. Such policy shall name Sublessor and Sound Transit as additional insureds. Such policy shall also .provide the insurer's obligation to pay all defense costs in addition to limits of coverage for • liability. Such policy shall have limits of coverage of not less than $2,000,000 for personal injury or death and $3,000,000 for loss or damage to property for a siztgle occurrence and shall have only those deductibles of kinds and amounts reasonably satisfactory to Sublessor. 23.2 Pro ert Insurance. At all times during the Term, at its expense Tenant shall obtain and maintain in full force and effect a policy of property insurance insuring alI 'Tenant's property located in or about the Premises, the Property and the Station against Ioss by fire or other casualty, theft, vandalism, and other hazards covered by an "all risk" form of such policy with limits of liability equal to the fuI] replacement value of such property without deduction for. depreciation and with such other deductibles of kinds and .amounts reasonably satisfactory to Sublessor. Such policy shall include coverage for losses due to business interruption. 23.3 tether Tenant Insurance. Sublessor has the right to require Tenant to' obtain and maintain such other insurance and bonds {such as but not linuted to professional liability insurance and/or fidelity bonds) as Sublessor in good faith.deterrnines reasonable and appropriate to the particular type of business in which Tenant is engaged. Such other insurance .and bonds shall have such limits, deductibles, and other provisions as are usual and ordinary to such matters but consistent with the nature, size, and scope of Tenant's business, all as determined by Sublessor in good faith. In this paragraph, "policy" includes any such bonds. 23.4 Proof of Insurance. Tenant shall deliver to Sublessor before the Term --------coim~ences--and~efore-Tenant-occupies~~ ~rs~os~n ~~ o e r raises or any purpose copies of the policies required of Tenant under this paragraphs 23 and the respective insurer's written certification to Sublessor that the policy is in full force and effect with premiurris fully paid. At the same time, Tenant shall also deliver to Sublessor proof reasonably sa#isfactory to Sublessor that Tenant did not borrow money to pay the premiums for such polices or~.that any such borrowing has been fully repaid or otherwise satisfied. Not later than thirty days before expiration or any earlier cancellation of each policy, Tenant shall deliver similar copies, certifications, and. proof of and concerning a renewal of or replacement for each insurance policy required by this paragraph. From time to time, Sublessor may request a copy of one or more of Tenant's policies of insurance required under this paragraph 23 certified by the insurer to be a true and correct copy of the policy and all endorsements and amendments thereto and Tenant shall promptly comply with such request. 23.5 Re ~iirements Concernin Tenant's Insurance Policies. 21 _...__ _._J, ....~ ~......~ ~v, c.VVJ 23.5.1 General I2eatiirements. Each policy of insurance Tenant is required to maintain under this Sublease shall: (a} be issued by an insurance carrier reasonably 'satisfactory to Sublessor; (c) provide that the policy is primary and not e~ccess to or contributing with any of Sublessor's insurance policies or Tenant's other insurance policies; and (c) include a provision that requires the insurance carrier to give Sublessor riot less than thirty (30) days' written notice before the effective date of any cancellation (including but not limited to cancellation for nonpayment of premium) or of any modification of such coverage (including.but not limited to a chaiage in deductible amounts). 23.5.2 O tional Reined For Breach. If Tenant fails to obtain and continuously maintain any policy of insurance required of it, Sublessor may obtain such insurance, in which case the Tenant shall reimburse Sublessor for the cost of such insurance within fifteen (15) days after receipt of an invoice therefor accompanied by a copy of the premium statement or other evidence of the cost of such insurance. 23.5.3 Nanun Governtuental Unit. As Additional Insured. Each policy. required of Tenant under this Sublease that is to name either or both of Sublessor or Sound Transit as additional insured shall expressly name as additional insured Sublessor and/or Sound .Transit, as applicable, and all members of their respective council or other legislative body'and all of their respective officers, directors, employees and agents. . 23.5.4 Waiver of Subro anon.. Unless prohibited under the applicable insurance policy, Sublessor and Tenant each hereby releases and waives any and all rights of recovery against the other (and their respective officials, officers, employees, agents and representatives), for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this Sublease} at the time of such loss or damage or would have been covered if the party had obtained the insurance it was required to obtain under this Section 3.3. Upon obtaining..the policies of insurance required or permitted in this Section 3.3, the parties shall give notice to their respective insurance carriers of this mutual release and waiver of subrogation and use reasonable efforts, including payment of any additional premium, to cause their respective -"---~3suranGe-cantors-ta-consent~to t1to~~visions o 's sup o stare in e r m the release and waiver in this subpart shall not be effective if the effect would be to vo ~ coverage under the policy. In addition, the release and waiver in this subparagraph do not apply to the extent of the. deductible amounts to any such policies or to the extent of liabilities exceeding the limits of such policies_ For the purpose of this provision, seltizzstirance by Sublessor is no# the.equivalent of having an insurance policy. 24, INDEMNIFICATION. 241 General. Tenant shall defend, indemnify, and save harmless Sublessor and Sublessor Related Parties from and against: {a) any and all demands, claims, liabilities, damages, and judgments, including without limitation for injury to person or property, arising from or related to (or alleged to have arisen from or be related to) any act or omission of Tenant or any of Tenant's employees, agents, visitors, invitees, licensees, perznittees or contractors; (b) 22 vveunesaay, aanuary 15, 2003 any and all losses, damages, and costs arising from or related to any breach of or default. in any of Tenant's obligations under this Sublease; and (c) any and all expenses incurred by Sublessor arising from or related to any such demand, claim, liability, damages, judgment, Ioss, or cost or arising from, or related to any such breach or, default. In the preceding sentence, "expenses" include, without being limited to, the fees and costs of attorneys, consultants, experts, and witnesses. Tenant's obligations under this paragraph survive the expiration or other termination of this. Sublease. In the case of concurrent fault of Sublessor and Tenant (and their respective employees, agents, visitors, invitees, licensees, permittees and contractors), Tenant's obligations under part (a) of this paragraph do not extend to any demand, claim, liability, or judgment for which Sublessor is or would be severally .liable only for Sublessor's proportionate share of the total damages under the provisions of Chapter 4.22 Revised Code of Washington. However, Tenant's obligations under this paragraph extend to that part of Sublessor's several liability which is in excess of what it what have been if determined by taking into account Tenant's proportionate share despite any immunity of Tenant to the claimant under Title 51 Revised Code of Washington. Tenant's obligations under this paragraph are not limited in any way' by the requirements of or by Tenant's compliance with the requirements of paragraph 23. 24.2 Waiver of Immunity. Tenant's obligations under paragraph 24.1 extend to, without limitation, injuries to Tenant's employees (as such employees are defined iir the Industrial- Insurance Act (Title 51 Revised Code of Washington) and, to that extent and for the benefit of Sublessor and Sublessor's employees, agents, and contractors, Tenant hereby waives the immunity otherwise afforded Tenant under that Act or any other applicable workmen's compensation laws. 25. TENANT TAXES AND O'TH>~R GOVERNMENTAL CHARGES. Tenant shall pay when due all taxes, assessments, license fees and other governmental charges {including any imposed by the City of Auburn in its governmental capacity) on or with respect to Tenant, any of Tenants property, Tenants income, gross receipts, or other revenues, Tenan#`s use of the Premises, and Tenant's business. , 26. SIGNS. ~~ ' --2t;.I~ genera equrremen s. xcept as provided in this paragraph 26, Tenant shall not erect, install, or display any signs at the Premises or on the Property or Station without Sublessor's prior written consent which Sublessor may refuse or condition in its discretion. All of Tenant's signs must comply with all requirements of Law. Approval by Sublessor in or under this Sublease of any proposed sign does not bind Sublessor, acting in its governmental capacity, under any applicable Law of the City of Auburn with respect to that or any other sign. Iri addition, all Tenant's signs must comply with the applicable requirements of Section 4.4(a) and Exhibit 4.4(d) of the Master Sublease. Irr this regard, Exhibit 4.4{d) of the Master Sublease is mistakenly referred to as Exhibit 4.4(a} in Section 4.4{a) of the Master Sublease. At the expiration or earlier termination of the Tenn, Sublessor shall remove all signs from the Station and shall restore the Premises, the awning of the Parking Garage adjacent. to the Premises, and the Parking Garage to as nearly as practical the condition before installation of the sign. 23 26.2 Permanent Si ns. Tenant shall not erect, install, or display any permanent signs at the Premises or on the Property or the Station without Sublessor's prior written consent. All permanent signs placed on the exterior of the Parking Garage shall comply with the provisions of the Exhibit 4.4(d) of the Master Sublease (mistakenly referred to as Exhibit 4.4(a) in Section 4,4{a) of the Master Sublease) and shall also be first approved by Sublessor as to size, design, materials, colors, and method of affixation to, as applicable, the awning or the exterior wall of the Parking Garage. Sublessor hereby consents to painted or decal signs on the exterior window of and exterior entrance door to the Premises provided such signs comply with the requirements of Exhibit 4.4(d) of the Master Sublease. 26.3 Tem ~ ora Si s. Tenant may display temporary window sings on are in front of the exterior window of the Premises of size, style, content and design that are usual and ordinary for occupants.of premises in the City of Aubum, Washington for uses that are the same or substantially the same as the~Permitted Use to identify and promote such use provided that no such temporary sign shall be displayed for longer than two weeks and otherwise comply with the requirements of Exhibit 4.4(d) of the Master Sublease. 27. SUBORDINATi(ON. This Sublease shall be subordinate to any sublease hereafter made by Sublessor to one person or entity of all of the Commercial Tenant Area (a "Master Subtenant") provided that the Master Subtenant shall not disturb Tenant's occupancy and other rights under this Sublease so long as no uncured Event of Default under this Sublease exists. Tenant shall attorn to any such Master Subtenant provided such the Master Subtenant assumes Sublessor's obligations to Tenant under this Sublease. This subordination is automatic and requires no further action or agreement of Tenant, Nevertheless, Tenant shall promptly and in no event later than fifteen {15) days execute, acknowledge and deliver such documents and agreements that Sublessor or the Master Subtenant may reasonably require as further evidence of this subordination and attornment, which agreement may also contain additional provisions that are consistent with the provisions of this paragraph and reasonably requested by Sublessor and/or the Master Subtenant. . 28. ESTOPPEL CERTIFICATES. From time to time during the Term, any then existing or prospective Master Subtenant or then existing or prospective purchaser or other -ansfor~e-of--all-or-any-part-of--the-property- ~ r ues~t~ enan execute and deliver specific written statements ("estoppel certificate"} concerning the status and provisions of this Sublease, including any amendments or modifications thereof, Rent and other payrinents made or payable thereunder, the Term, the existence of any defaults in the obligations of Sublessor or Tenant, and such other matters as to which the requesting person-("Requester") rt~ay reasonably .inquire. After each such request, whether made by the Requester or by Sublessor, Tenant shall promptly and in no event later than seven (7} days comply therewith and such writing shall be reasonably satisfactory in form and substance to the Requester. However, nothing in the preceding sentence obligates Tenant to make any untruthful statement or a positive or negative statement on a matter as to which Tenant has no knowledge; provided, however, Tenant shall be required to represent such matters as to which or to the extent that Tenant does have knowledge and state that it has no knowledge, if such be the case, of other matters. if Tenant does not sign acid deliver an estoppel certificate within seven days after it is delivered to Tenant with a request from the Requestor or from Sublessor then if the Requestor does become a 24 .~~-~~vv.w ~..~~ ytA~~uulr IJ~ GVVJ transferee or Master Subtenant, Tenant shall be deemed to have, and shall be bound to the Requester (a} as if Tenant had given such certificate as above provided without modification and, in addition, (b) as if Tenant admitted to the Requester the accuracy of any information supplied to it by Sublessor in any way concerning Tenant or this Sublease. 29. BREACH. 29.1 General Provisions. Time is of the essence hereo#; Tenant shall be in "default" of its obligations under this Sublease if Tenant does nat pay or perform all obligation imposed by it by this Sublease or by Law arising from and on account of this Sublease where and as such obligation is due, Tenant shall_be in "breach" of its obligations under this Sublease: 29.1.1 if Tenant or any Guarantor of this Sublease makes a transfer in fraud of creditors or makes any assignment for the benefit of creditors or admits in writing its ,inability to.payits debts when due; or 29.1.2 if Tenant attempts to assign any. of its rights under this Sublease without Snblessor's prior written consent or without occurrence of all conditions to such consent, or if Tenant vacates or abandons fhe Premises, with or without removal of pez-sonalEy or fixtures. 29.1.3 if Tenant fails to pay when due anypayment of money required of it under this Sublease and such faiIuxe continues for a period of three days; or 29.1.4 if Tenant ~ fails to perform when due any of its other obligations under this Sublease and such fai]ure is not coxed within twenty days after notice from Sublessor to Tenant thereof; or 29.1.5 if Tenant creates, permits, ~or suffers any lien, encumbrance, or security interest to attach to or be claimed through 't'enant against the Property or any part thereof or any fixtures located therein or to all or any.part of Tenant's rights to the Premises or under this Sublease and any such lien, encumbrance, or security interest is not released within twenty days after Sublessor's notice to Tenant; or if any liquidation, reorganization, or -~n~angemcrrt-proce~linbn5 ~'rl~d~fiYor~g t~nst enan~ ~n er any e or s a e p cy or insolvency laws and any such proceeding is not vacated or dismissed within sixty days after Subiessor's notice to Tenant; or if any receivership, conservatorship, or any other proceeding to take away from Tenant control over all or any substantial part of its assets is filed by or agaunst Tenant under any federal or state law and anysuch proceeding is not vacated or dismissed within sixty days after Sublessor's notice to Tenant,• or if Tenant causes or. acquiesces in any plan of arrangemen#, assignment, composition, or liquidation with or for the b~nefrt of creditors and any such plan or condition is not rescinded, released, or removed within a period of twenty days after notice from Sublessor to Tenant. If.Tenant is in breach of its obligations under this Sublease, then or at any time thereafter Sublessor may enter into and upon the Premises and repossess the same with or without terminating this Sublease and without ptejudice to any of its other remedies for Runt or breach of covenant. At Sublessor's election, Sublessor may tcnninate this Sublease at any time after 25 --~.. .....-. ...~~ vtillN{AlJ IVY LV VJ Tenant's breach (even if Sublessor had previously elected not to do so) by giving notice of-its election to do so or, without terminating this Sublease, Sublessor may let the Premises or any part thereof on such .terms and conditions as Sublessor determines. in its absolute discretion. Such terms and conditions may include concessions of rent and improvement of or alteration to the Premises and may be for a rental term or terms greater or less than the balance of the Term and inay be for all or any part of the Premises and may be of space which includes all or~any part of the Premises and any other part of the Building. Whether Sublessor elects to temninate this Sublease or elects not to do so, Sublessor has no duty to and is not required to relet or attempt to reI~t the Premises or any part thereof either for Tenant's benefit or in mitigation of Sublessor's damages for Tenant's breach. If Sublessor elects to relet. with or without terminating this Sublease, "Sublessor`s costs .of reletting" include without limitation $ie costs of repairs, restoration, renovation, alteration, and improvement which shall be prorated to the extent, if any, the term of the reletting exceeds what would have been the balance of the Term, arzd the portion of any leasing commission paid on account of the reletting attributable to the balance (or what would have been the balance) of the Term and the part of the Premises relet. Tenant shall pay all of Sublessor's costs and expenses arising in any way from or in any way related to Tenant being in default of or in breach of any of its obligations under this Sublease, including without limitation any related to giving of notices, to recovering possession and reentry, to reletting, and to perforniing an obligation of which Tenant is in default or breach. In the preceding sentence, "expenses" include, but are not limited to, the costs and fees of attorneys, consultants, experts, and' witnesses. 29.2 Sublessor's Election To 3'erminate. If Sublessor elects to terminate this Sublease and relet, as an obligation surviving such. termination Tenant shall pay on dennand to Sublessor any unpaid Rent and other amounts which have become payable under the terms of this Sublease for the period before termination, the amount of Rent and other sums payable under the terms of this Sublease for the period after termination reasonably required to accomplish a reletting, the amount by which, if any, the present value of the amount of Rent and other sums payable under the terms of this Sublease for the balance of what the Term would have been after the reletting exceeds the present value of the amount that Sublessor is,entitled to receive under the reletting (prorated if the reletting includes any other portion of the Building), and any other damages suffered by Sublessor on account of Tenant's breach. Such other damages include --;:~~out-timitation Sublessors-eosts-of~eeovering-possession-and-r ee~'Y;~e~rorata ~portio~of-~ ~--_--- any leasing commission paid by Sublessor on account of this Sublease applicable to what would have been the balance of the Tenn after Tenant's breach, and Sublessor's costs of reletting. Present value shall be determined assuming investrnent of funds at a ra#e of return equal to the interest rate on long term United States federal government Treasury notes established at the auction thereof held immediately before Snblessor's election to terminate. 29.3 Sublessor Does blot Elect To Termluate. If Sublessor does not elect to terminate this Sublease, Tenant's Iiability to Sublessor shall include the total Rent and other sums payable hereunder for the fiill Term, plus all of Sublessor's costs of repossession and reentry and, if any, reletting, less the net proceeds of any reletting actually paid to and received by Sublessor during the Term, prorated if the reletting includes any other portion of the Building. 26 ___...~.. ~....,~ ..Hi nwuir ice, LVVJ 29.4 Sublessar's Ri ht To Perform. In addition to any other rights and remedies which .Sublessor may have, if Tenant is in default or breach of any of its obligations ender this Sublease, Sublessor may, at Sublessor's election, take such action as maybe required to cure such default or breach and all costs and expenses incurred by Sublessor on account of ar arising from such failure or incident to such action shall be reimbursed by Tenant on demand. In the preceding sentence, "expenses" has the meaning specified in~paragraph 29.1. Sublessor shall (in addition to any other right or remedy of Sublessor provided bylaw) have the same rights and remedies in the event of the nonpayment of sums due under this Section as in the case of default by Tenant in the payment of Rent. 29.5 Provisions Related To Bankruntcy. If a petition (in this paragraph 29.5, "the petition") is filed by ar against Tenant under the federal Banlauptcy Code (in this paragraph 29.5, "the Code"j the following provisions apply: 29.5,1 Adequate protection for Tenant's obligations under this Sublease accruing after the filing shall be provided within fi#}een days afrer the filing in the form of a deposit equal to the then current Base Monthly Rent for one month and the then current monthly payment on account of estimated Operating Costs. 29.5.2 A11 amounts payable by Tenant to Sublessor under this Sublease represent reasonable compensation for Tenant's occupancy of the Premises. 5 29.5.3 Tenant or the trustee in bankruptcy (in this paragraph 29.5, "the- trustee") for Tenant shall give. Sublessor at least thirty days prior written notice of any abandonmen# of the Premises or of any proceeding relating to administrative claims concerning the Premises or this Sublease. If Tenant or the trustee abandons without notice, Tenant or the trustee shall stipulate to entry of an order for relief from stay to permit Sublessor to reenter and relet the Premises. 29.5.4 If Tenant had failed to perform when due any of its obligations under this Sublease and such failure had not been cured before the petition was filed, then for all purposes under the Code Tenant shall be deemed to have been in breach of such obligations on ---`--~~~t~ dr~~p ~ io ~ ed regar ess o w e ier u~b essor arc gYVen notice o any one or more V' of such defaults and regardless of whether any cure period applicable to any one or more of such defaults had expired before such filing. 29.5.5 For the purposes of Section 365(b)(1) of the Code (as hereafter arxiended or replaced), prompt cure of the defaults iri Tenant's obligations under this Sublease shall mean cure within thirty days after assumption and shall include cure of any defaults under any other agreements between Sublessor and Tenant. 29.5.6 ~ lior the purposes of Section 365(b)(1) of the Code (as hereafter amended or replaced), adequate assurance of future performance of this Sublease by Tenant, the trustee, or any proposed assignee of Tenant's rights under this Sublease, will require that Tenant, the trustee, or the proposed assignee deposit two months of Base Monthly Rent and the then monthly payment on account of Operating Costs into an escrow fund (to be held by the 27 court or an escrow agent approved by Sublessor and the court) as security for such future performance. In addition, if Tenant's rights under this Sublease are to be assigned, adequate assurance of future performance by the proposed assignee shat! require that: (a) the proposed assignee have a tangible net worth of not less than $500,000 or that the proposed assignee's performance be unconditionally guaranteed by a person or entity that has a tangible net worth not less than such amount; and (b) the proposed assignee assume in writing all of Tenant's obligations urider this Sublease. 29.5.7 If Tenant or the trustee intends to assume and/or to assign Tenant's rights under this.Sublease, Tenant or the trustee shall provided Sublessor with thirty days prior written notice of.the proposed action, separate from and in addition to any notice provided to all creditors. Notice of a proposed assignment and/or assumption shall state the assurance of prorrxpt cure, compensation for loss,. and assurance of future performance to .be provided to Sublessor. Notice of a proposed assignment.shall also sta#e: (a) the name, address, and federal tax identification numbers and registration numbers of the proposed assignee; (b) all of the terms and conditions of the proposed assignment; and (c) the assignee's proposed adequate assurance of future performance to be provided to Sublessor, 29.6 Interest, All Rent and other sums payable to Sublessor by Tenant under this-Sublease not paid when due shall bear and Tenant shall pay interest from the date they are due until they are fully paid at the rate of 18% per year or, if applicable, such lower rate, if any, as is the highest rate permitted by Law, taking into account all the provisions of such Law, including but not limited to that differentiate based on the nature of the, parties and those that differentiate between transactions for personal, family or household use and other transactions. 29.7 Rights and Remedies Cumulative. Sublessor's rights and remedies provided in this paragraph 29 and elsewhere in this Sublease are cumulative with and in addition to each and also to such other and further rights granted to Sublessor by Law. The exercise of one right or remedy shall not be deemed to be or otherwise operate as an election that excludes Sublessor's exercise at any time of a differentror inconsistent right or remedy. Sublessor's failure at any time to exercise any right or remedy it has under the terms of this Sublease or bylaw shall not be deemed to be or otherwise operate as waiver by it of its right to-exercise such right or eti-der-ar~~ other~ightrorrernedy at-any-other-ar-future-time; ~v ~ ~ - or a different event or circumstance. 30. HOLDOVER. If with Svblessor's consent Tenant holds over after expiration or termination of this Sublease, such tenancy shall be a month-to-month tenancy which may be ternninated in accordance with applicable Law and Tenant shall pay to Sublessor the same Rent and other surns payable to Sublessor as last applicable under this Sublease and shall otherwise be bound by all applicable provisions of this Sublease consistent with amonth-to-month tenancy including without limitation those which survive expiration or termination. 31. POSSESS);ON. If for any reason whatsoever Sublessor is not able to tender possession of the Premises at the time for commencement of the Term, neither- Sublessor nor its agent shall be liable for any damage caused thereby, nor shall this Sublease thereby become void or voidable, nor shall the Tenn be in any way extended. However, as Tenant's sole and 28 •,••~ «;~.~c~ y, jai coal y I v, GUU3 exclusive rights and remedies on account thereof, Tenant shall not be liable for any Rent until such tune as Sublessor terxders possession and Tenant may terminate this Sublease by not less than thirty days' prior notice to Sublessor unless Sublessor tenders possession before the end of such time. 32. NOT)tCES.. Any notice provided for in or otherwise related to this Sublease to be given by one party to' the other shall be in writing and shall be sufficient if given either by personal delivery to or by first class, postage prepaid, United States mail to Sublessor's Notice Address or Tenant's Notice Address, as~ the case may be,. or to such other sirigle substitute address (which shall thereafter be the party's Notice Address) as may be designated ~by notice to the other ,party or, in the case of Tenant, to the Premises, "Notice" includes without limitation a demand or a request, Notices that are mailed shall be deemed given on the date mailed. At the option of the sender, mailed notices may be mailed registered or certified mail with return receipt requested. Notice given by Sublessor to any one or more of those jointly and severally liable on Tenant's obligations.under this Sublease shall. be effective as notice given to all such persons. Notices that are sent and received by courier or messenger service shall be considered to have been personally delivered when received. Notices that are sent and received in complete form by electronic facsimile devices shall b.e considered to have been personally delivered when sent if the sending party receives a written send verification on its facsimile device. Tlie preceding sentence does not obligate any party to' accept a facsimile .transmission. "Facsimile transmission" is a method of encoding a written document- into data at a transmitting station, transmitting the encoded data electronically, and decoding the transmission to reproduce a paper copy of the document at the receiving station, including but not limited to any graphic material on the original document, such 'as signatures, drawings, notes, photographs, and the like. The method of electronic camumnication commonly known as "e-mail" is not a facsimile transmission (even if accompanied by an attachment) and is not an acceptable means. of giving notice. . 33. TENANT IMPR0~4yEMENTS AND ACCEPTANCE. Unless expressly provided otherwise in the Tenant Improvement. Rider attached to this Sublease, if any, Sublessor has no obligation to make or pay for any improvements to or other alterations of or to do any other work to the Premises for Tenant's benefit at or before commencement of the Term "'~_~f `T''ezranrt 1~in~srov-etnents~"j: If~ublessor as no suc ob r1 ga~"ioii-;~e"n enan ac o~v ges it as inspected the .Premises and accepts them in their current condition, as is. If a Tenant Improvement Rider is attached hereto that includes an obligation of Sublessor to make or pay for any Tenant Improvements, then Tenant acIrnowledges it has inspected the Premises and accepts them in their current condition subject to modification substantially in accordance with Sublessor's obligation to make or pay~for one or more Tenant Improvements as provided in such Rider. NO REPRESENTATION OR WARRANTY IS MADE BY SUBLESSOR OR BY ANY OF YTS OFFICERS, EMPLOYEES OR AGENTS REGARDING THE CONDITION OF THE PREMISES, T)BE PROPERTY, THE PARIffNG GARAGE, OR THE STATION OR ANY PART OF ANY OF THE FOREGOING OR THE SI7ITABILITY OF ANY OF THE FOREGOING FOR TENANT OR FOR THE PERMITTED USE. 34, BROKERS. Tenant represents to Sublessor that Tenant has not made any agreement for payment of any commission, tnder's fee, or other compensation to any real estate 29 broker, sales agent, leasing agent, or other third party in connection with this Sublease and agrees to defend, indemnify, and save harmless Sublessor from and against any such claim based on an allegation of any such agreement by Tenant. Tenant further represents to Sublessor that Tenant has not dealt with any real estate broker, sales agent, leasing agent, or other third party in connection with this Sublease except Northwest Corporate Real Estate. Inc. . 35. TENANT'S i2EPRESENTATIONS. Tenant represents and warrants to Sublessor that: (a} Tenant is a Corporation duly organized; existing, and good standing under the law of the state of Washington; (b) Tenant is engaged in the business of)~inanncial.Services; and (e) Tenant has obtained all licenses and other governmental permits; and has otherwise complied with all Laws, so that it is authorized to conduct such business at the )?remises. Tenant shall at all times during the Term obtain'and maintain all such licenses and other permits and otherwise comply with all such Laws. 36. TRANSFER O)F LANDi,ORD'S INTEREST. This Sublease shall be assignable by Sublessor without the consent of Tenant, including but not limited to assignment to a 1Vlaster Subtenant as permitted under paragraph 27. In the event of any~transfer or transfers of Sublessor's interest in the Premises or in the event of any transfer or transfers of Sublessor's 'interest in this Sublease; other than a transfer for security purposes only, upon the assumption of Sriblessor's obligations under this Sublease by the transferee, Tenant shall attorn to the transferee and Sublessor shall be automatically relieved of obligations and liabilities accruing from and after the date of such transfer, except for any security deposit or prepaid rent retained by Sublessor and not delivered by it to the transferee. 37. MISCELLANEOUS. 37.>! Tenant Financial Statements. Promptly a$er Sublessor's request therefor front time to time, Tenant shall provide to Sublessor copies of Tenant's most recent financial statements and tax returns. 37.2 Light, View and Air. Tenant has not been granted an easement or other. right for, and Sublessor has not otherwise guaranteed and is.not obligated to maintain, the ----- ----present-statjrs-af; light; -air-aryiew--to-ar-fr a rertuses om an roe including but not limited to the Plaza or any other part of the Station. p Any duninutron or shuttrng off of light, air or view by any structure which may be erected anywhere {including but not limi#ed to the Station, adjacent to the Station, or in the vacinity of the Station} shall in no way affect this Sublease or Tenant obligations under this Sublease or impose any liability on Sublessor. Sublessor does not guarantee and shall not be required to maintain the. present status of light, air, or view of the Premises over any part of the Property nor the present status of light, air, or view of any part of the Property over any. property adjoining or in the vicinity of the Property. . 37.3 Waiver. Sublessor's failure to insist on strict performance of any provision of this Sublease or of Sublessor's Rules and Regulations shall not be construed or operate as a waiver of Sublessor's right,to insist on strict performance of any other provision at all times or of strict perfornance of such provision in the fixture. Sublessor shall not be deemed 30