HomeMy WebLinkAboutITEM VIII-B-3f
1 1* CITY OF
UBURN
WASHINGTON
AGENDA BILL APPROVAL FORM
Agenda Subject: Resolution No. 4394 Date: September 2, 2008
Department: Attachments : Budget Impact:
Human Resources Resolution No. 4394
Administrative Recommendation:
City Council adopt Resolution No. 4394.
Background Summary:
A resolution authorizing the Mayor and City Clerk to execute a lease agree ment between the City of
Auburn and Auburn Professional Plaza, LLC.
S0902-2
A3.17
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 2, 2008 Item Number: VIII.6.3
AUBURN *MORE THAN YOU IMAGINED
RESOLUTION NO.4 3 9 4
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF AUBURN, WASHINGTON, AUTHORIZING
THE MAYOR AND CITY CLERK TO EXECUTE A
LEASE AGREEMENT BETWEEN THE CITY OF
AUBURN AND AUBURN PROFESSIONAL PLAZA,
LLC
WHEREAS, due to growth, the City has determined that the City is in
need of additional office space that is close to the existing City Hall building;
and
WHEREAS, Auburn Professional Plaza, LLC is in the process of
developing and constructing a multi-tenant condominium building; and
WHEREAS, the City desires to lease office space from Auburn
Professional Plaza, LLC at a cost that is acceptable to the City.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
KING COUNTY, WASHINGTON, HEREBY RESOLVES as follows:
Section 1. The Mayor of the City of Auburn and the Auburn City Clerk
are hereby authorized to execute a Lease Agreement between the City of
Auburn and Auburn Professional Plaza, LLC for office space which agreement
shall be in substantial conformity with the Agreement a copy of which is
attached hereto, marked as Exhibit "A" and incorporated herein by this
reference.
Resolution No. 4394
August 13, 2008
Page 1 of 2
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 , 2008.
CITY OF AUBURN
PETER B. LEWIS
MAYOR
ATTEST:
Danielle E. Daskam, City Clerk
AS TO FORM:
-F?ioivyrney
Resolution No. 4394
August 13, 2008
Page 2 of 2
LEASE AGREEMENT
This lease ("Lease"), dated , 2008 (the "Effective
Date") is entered into between AUBURN PROFESSIONAL PLAZA, LLC, a Washington limited
liability company ("Landlord"), and THE CITY OF AUBURN, a code city of the state of Washington
("Tenant").
WITNESSETH:
WHEREAS, Landlord is the fee simple title owner of that certain real property legally
described on Exhibit "A" attached hereto (the "Property"); and
WHEREAS, Tenant was the former owner of that portion of the Property legally described on
Exhibit "J" attached hereto (the "Former City Property"); and
WHEREAS, Landlord proposes to develop and construct on the Property a multi-tenant
office building ("Building"); and
WHEREAS, Landlord shall create a condominium for the Building, which condominium shall
be created and initially operated pursuant to Condominium Documents (as defined in subsection 3.2
below); and
WHEREAS, the development of the Building includes Landlord's Work (hereinafter defined);
and
WHEREAS, Landlord has proposed to lease to Tenant certain condominium units and
associated space within the Building ("Premises", as more particularly defined hereinafter); and
WHEREAS, the Building is located across North Division Street from the existing Auburn City
Hall; and
WHEREAS, Tenant has determined that the Tenant is in need of office space related to
growth; that such office space should be located as near as possible to the existing Auburn City Hall;
and the size of the Former City Property was not adequate for development of such office space
without acquiring and assembling the remaining Property; and
WHEREAS, the Tenant is authorized by RCW Chapter 35.42 to lease with an option to
purchase the Premises as improved by Landlord's Work; and
WHEREAS, in consideration of Landlord performing Landlord's Work, and providing other
valuable consideration, Tenant has deemed it to be in the best interest of Tenant to lease the
Premises from Landlord; and
WHEREAS, by Resolution No. Tenant authorized the execution of this Lease.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and
conditions hereinafter contained, the parties hereto agree as follows:
SECTION 1. PARTIES.
The parties to this Lease are Auburn Professional Plaza, LLC, as Landlord, and the City of
Auburn, as Tenant. Each of the parties enters into this Lease by its own volition and choice, without
compulsion. Landlord acknowledges that Tenant, in its official capacity as the City of Auburn (a
code city under applicable Washington law) having jurisdiction, powers and rights afforded to it
under applicable laws, does not waive such jurisdiction, power and rights by virtue of its execution of
the Lease, including the power of eminent domain.
Landlord warrants that it is authorized to enter into this Lease and, subject only to the
recording of the Condominium Declaration (as defined in subsection 3.2) and the Condominium
Survey Map and Plans (as defined in subsection 3.2), to convey fee simple title to the Premises
(subject to the Title Exceptions hereafter defined) should Tenant exercise its Option (hereinafter
defined), and that the person executing this Lease on behalf of Landlord is authorized to do so.
Landlord warrants that, upon the satisfaction of Landlord's Contingencies as set forth in subsection
29.1 hereof, it is the owner of fee simple title to the Property, subject to the Title Exceptions
(hereinafter defined).
Tenant warrants that it is authorized to enter into this Lease and, subject only to the
recording of the Condominium Declaration and the Survey Map and Plans, to acquire fee simple title
to the Premises (subject to the Title Exceptions) should Tenant exercise its Option, and that the
person executing this Lease on behalf of Tenant is authorized to do so.
SECTION 2. PROPERTY; BUILDING; PREMISES.
The Property is legally described on Exhibit "A" attached hereto and incorporated herein by
this reference. Landlord intends to develop the Building on the Property. A plan depicting the
general location of the Building and its relation to the adjacent public streets is shown on the "Site
Plan" which is attached as Exhibit "B" hereto and incorporated herein by this reference.
Subject to the terms and conditions hereof, Landlord hereby leases to Tenant, and Tenant
hereby hires from Landlord, the following portions of the Building: (i) Unit 200 (to consist of the
entire Usable Area of the second floor of the Building), and (ii) Units 304 and 305 (to be located on
the third floor of the Building) (the "Premises"), together with (a) the exclusive right to utilize all
limited common element areas (including, without limitation, the limited common element parking
spaces and the limited common element third floor deck adjacent to Units 304 and 305) allocated or
assigned to the Premises under the Condominium Documents (as defined in subsection 3.2 below)
for the Building, (b) the non-exclusive right to utilize all common element areas under the
Condominium Documents for the Building (other than limited common elements allocated or
assigned to other units in the Building). Plans of the second and third floors, showing the
approximate areas of the Premises and substantially depicting the condition required upon
completion of Landlord's Work, are also attached hereto as Exhibit "B" (hereinafter "Floor Plans").
The Building and the Premises are to be improved as more particularly set forth in Landlord's Work.
The Gross Building Area, the Rentable Area(s) and the Usable Area(s) within the Building
shall be measured in accordance with the Standard Method for Measuring Floor Area in Office
Buildings approved by the American National Standards Institute on June 7, 1996, and published by
the Building Owners and Managers Association (BOMA) (ANSI/BOMA Z65.1-1996). The Building is
estimated to contain 92,535 square feet of Gross Building Area, which is 87,850 square feet of
Rentable Area and 74,057 square feet of Usable Area. The first floor is estimated to contain 25,030
square feet of Rentable Area, which is 21,679 square feet of Usable Area. The second floor is
estimated to contain 33,645 square feet of Rentable Area, which is 29,373 square feet of Usable
Area. The third floor is estimated to contain 29,175 square feet of Rentable Area, which is 23,005
2
square feet of Usable Area. Tenant (like other tenants of the Building), will only occupy the Usable
Area of its Premises (their premises), with the remaining portions of the Rentable Area being
allocable to common areas such as the Building lobby, corridors, hallways, and restrooms, but not
vertical penetrations such as stairs, elevators and utility shafts. Rent and other charges are based
upon the Rentable Area of the Premises, and not the Usable Area.
The Rentable Area of the Premises is currently estimated to be 51,903 square feet,
computed as follows: Unit 200 - 33,645 square feet; Unit 304 - 15,672 square feet; and Unit 305 -
2,586 square feet.
Upon substantial completion of Landlord's Work and prior to the Lease Commencement
Date, Landlord's Washington licensed architect shall confirm the Gross Building Area of the Building,
and the Rentable Area and Usable Area of the Premises (and all other premises) within the Building
and certify the same to both Landlord and Tenant, which areas shall also be incorporated into the
final revised Condominium Documents as provided in subsection 3.2. The square footage
calculations set forth in such certification shall be binding on the parties unless either party, within
fifteen (15) business days after receipt of such certification, disputes such measurement. If Landlord
and Tenant are unable to agree upon the measurement of the Premises within thirty (30) days after
notice of dispute, Landlord's architect and Tenant's architect shall select an independent architect to
determine Gross Building Area of the Building, and the Rentable Area and Usable Area of the
Premises (and all other premises) within the Building of the Premises and the determination of such
independent architect shall be binding upon the parties. The costs of such independent architect
shall be borne by the party whose prior measurement differs most greatly from determination of the
independent architect. After the Gross Building Area of the Building, and the Rentable Area and
Usable Area of the Premises (and all other premises) within the Building have been confirmed, the
parties shall execute a written memorandum confirming such measurements and the Rent payable
hereunder.
SECTION 3. INITIAL CONDITION OF PREMISES; CONDOMINIUM DOCUMENTS
3.1 Initial Condition of Premises. Landlord shall perform, at Landlord's expense,
"Landlord's Work", as set forth on Exhibit "C" attached hereto and no part of the cost of the
Landlord's Work shall ever become an obligation of the Tenant. Tenant shall perform, at Tenant's
expense, "Tenant's Work", as set forth on Exhibit "D" attached hereto. Upon delivery of the
Premises to Tenant, Tenant shall inspect the same, and shall advise Landlord in writing of any
discrepancies or objections to the condition of the Premises delivered by Landlord; Tenant's failure
to provide such notice to Landlord within thirty (30) days after Landlord's delivery of the Premises
shall be deemed as Tenant's full and final acceptance of the Premises and Tenant's unconditional
waiver of any claims against Landlord concerning the same; subject in all respects to "Valid Claims"
made during the Warranty Period (each as defined in Exhibit "C").
As compensation for the allocation of Landlord's Work and Tenant's Work set forth in
Exhibit "C" and Exhibit "D", respectively, Landlord shall pay Tenant the sum of Forty Dollars ($40.00)
per square foot of Usable Area within the Premises (the "Landlord Payment"). The Landlord
Payment shall be due and payable in full within thirty (30) days after Tenant completes Tenant's
Work and so advises Landlord of the same.
3.2 Condominium Documents. Landlord shall create a condominium for the Building (the
"Condominium"), which condominium shall be created and operated pursuant to the following
documents, each of which shall, except for the Condominium Rules and Regulations, the
Condominium Budget and the Management Agreement and except as provided below in this
subsection 3.2, be substantially in the form attached hereto in Exhibit "G" (collectively, the
"Preliminary Condominium Documents"):
(a) Condominium Declaration for Auburn Professional Plaza, a Condominium (the
"Condominium Declaration");
(b) Survey Map and Plans for Auburn Professional Plaza, a Condominium (the
"Condominium Survey Map and Plans");
(c) Articles of Incorporation for Auburn Professional Plaza Owners' Association (the
"Condominium Association Articles");
(d) Bylaws for Auburn Professional Plaza Owners' Association (the "Condominium
Association Articles");
(e) Rules and Regulations for Auburn Professional Plaza, a Condominium (the
"Condominium Rules and Regulations");
(f) Preliminary Budget for Auburn Professional Plaza, a Condominium (the
"Condominium Budget"); and
(g) Property Management Agreement for Auburn Professional Plaza (the
"Management Agreement").
Landlord shall provide Tenant initial drafts of the Condominium Rules and Regulations, the
Condominium Budget and the Management Agreement and final revised drafts of the other
Preliminary Condominium Documents with all schedules and exhibits attached, in each case, at
least five (5) days prior to execution, adoption and/or recording. The Condominium Rules and
Regulations, the Condominium Budget and the Management Agreement shall be consistent, and not
conflict, with the Declaration or this Lease. The Condominium Budget shall provide for the
establishment of adequate reserves to fund major maintenance, repair and replacement of common
elements in amounts mutually satisfactory to Landlord and Tenant. The fees payable under the
Management Agreement shall be reasonable and customary in accordance with the local
marketplace for comparable buildings. Landlord shall not make any amendment, modification or
change to the Preliminary Condominium Documents (or any other document that governs the use or
operation of the Condominium) that conflicts with any rights granted to Tenant under this Lease or
affects all or any portion of the Premises or the limited common elements assigned to all or any
portion of the Premises, without, in each case, the prior written consent of Tenant, including, but not
limited to, any amendment, modification or change to the permitted uses, leasing or improvement of
the Premises or the limited common elements, the maintenance or insuring of the foregoing, voting
rights allocated to the Premises, or the Assessments assessed, charged or levied against the
Premises; provided, for clarification, Tenant's consent shall not be required for any amendment,
modification or change (but Landlord shall provide written notice and a copy of any such
amendment, modification or change prior to execution or adoption) that solely relates to: (1) the final
confirmation of the Gross Building Area of the Building, and the Rentable Area and Usable Area of
the Premises (and all other units) within the Building under Section 2 above; and/or (ii) to other units,
premises or other aspects of the Property, Building or Condominium that do not adversely affect
Tenant. The final revised Preliminary Condominium Documents, as approved by Tenant, to the
extent required, shall be referred to herein as the "Condominium Documents".
From and after final approval by Tenant of the Condominium Documents and until exercise of the
Option (there being no obligation on the part of Tenant to exercise the Option), Landlord shall not
consent to, allow or permit any amendment, modification or change to the Preliminary Condominium
Documents (or any other document that governs the use or operation of the Condominium) that
conflicts with any rights granted to Tenant under this Lease or affects all or any portion of the
Premises or the limited common elements assigned to all or any portion of the Premises, without, in
each case, the prior written consent of Tenant, including, but not limited to, any amendment,
modification or change to the permitted uses, leasing or improvement of the Premises or the limited
common elements, the maintenance or insuring of the foregoing, voting rights allocated to the
Premises, or the Assessments assessed, charged or levied against the Premises Landlord may
cause or permit any amendment, modification or change to the Preliminary Condominium
Documents (or any other document that governs the use or operation of the Condominium) that
does not materially and adversely affect Tenant (but Landlord shall provide written notice and a copy
of any such amendment, modification or change prior to execution or adoption).
During the Term, Landlord shall promptly provide Tenant with true, correct and complete copies of
any and all notices, communications and other information received from the Association, including,
without limitation, all financial statements, budgets, invoices for Assessments, notices of violations of
the Condominium Documents, notices of any amendments to the Condominium Documents, notices
of any meetings of the board of the Condominium, and notices of any meetings of the owners of
units. Tenant shall have the right to attend any meetings of the board or the owners of the units.
SECTION 4. TERM AND TERMINATION OPTION.
4.1 Term. This Lease shall be for a term of approximately fifty (50) years, commencing
precisely as of the earlier of Tenant's entry (other than for inspection purposes) into the Premises or
delivery (by written notice from Landlord) of the Premises by Landlord to Tenant ("Lease
Commencement Date" or "LCD") with all of Landlord's Work substantially complete, and expiring
precisely at midnight on last day of the six hundredth (600th) full calendar month after the Lease
Commencement Date, unless sooner terminated as herein provided ("Term"). Landlord's Work shall
be deemed to have been "substantially completed" when the following shall have occurred: (a)
Landlord's Work has been completed in accordance with the provisions of this Lease including
Exhibit "C", except for minor details of construction, decoration and mechanical adjustments, if any,
the non-completion of which does not materially interfere with the performance of Tenant's Work,
which minor details shall be completed Landlord, at its sole cost and expense, in accordance with
the terms herein; (b) the Building and the Premises and Landlord's Work shall have been inspected
and approved by the appropriate authorities as evidenced by a final certificate of occupancy or
equivalent (or would be issuable but for non-completion of Tenant's Work); provided a temporary
certificate of occupancy or equivalent shall be sufficient pending issuance of a final certificate of
occupancy if the requirements of subsection (a) above have been satisfied; provided further, in any
event, Landlord shall still have the obligation to obtain a final certificate of occupancy as soon as
reasonably practical; (c) the mechanical, HVAC, plumbing, electrical, and sprinkler systems shall
have been completed such that the appropriate services to be rendered by such systems can be and
are being supplied and such systems are fully operational (or would be operational but for non-
completion of Tenant's Work); (d) Tenant has received final revised drafts of all of the Preliminary
Condominium Documents with all schedules and exhibits at least five (5) days prior to execution,
adoption and/or recording; and (e) to the extent required by subsection 3.2, any amendments,
modifications or changes to the Preliminary Condominium Documents attached hereto as Exhibit "G"
have been approved by Tenant (as approved by Tenant, the "Condominium Documents"). Within
thirty (30) days after the LCD, Landlord shall cause the Condominium Declaration and the
Condominium Survey Map and Plans to be recorded, the Condominium Articles to be filed, and the
Condominium Bylaws and Budget to be adopted; and Landlord shall provide to Tenant copies of
each of the final adopted, filed and recorded Condominium Documents.
4.2 Tenant's Right to Terminate. In addition to any other termination rights expressly set
forth in this Lease, Tenant shall have the right to terminate the Lease effective as of the dates herein
set forth, without cause, strictly and solely in accordance with the provisions of this subsection 4.2
("Tenant's Termination Right"). If Tenant exercises Tenant's Termination Right, the Lease and the
obligations of the parties hereunder shall cease to accrue as of the "Effective Date of Termination",
and the Term shall come to an end as of such date. To exercise Tenant's Termination Right, Tenant
shall give Landlord not less than three hundred sixty five (365) days advance written notice. The
Effective Date of Termination shall be the date selected by Tenant, but shall be limited solely to the
last day of the 360th or 480th month after the LCD. If Tenant exercises its right hereunder, Tenant
shall pay all rent and observe all of its obligations under the Lease accruing through the Effective
Date of Termination.
SECTION 5. RENT.
5.1 Rent. The terms "rent" and "rental" as used herein and elsewhere in this Lease shall be
deemed to be and mean the minimum rent, all additional rents, rental adjustments and any and all
other assessments, charges and sums, however designated, including but not limited to Taxes
applicable to the Premises (as hereinafter defined), under the terms of the Lease required to be paid
by Tenant to Landlord or to any third party hereunder.
5.2 Minimum Rent. During the Term, Tenant shall pay "minimum rent", as follows:
(a) for the period commencing upon the LCD and continuing through and including
the last day of the sixtieth (60th) full calendar month after the LCD, the sum of; (i) for the first 42,114
square feet of Rentable Area within the Premises, the sum of Thirty Two Dollars ($32.00) per square
foot of Rentable Area per annum, plus (ii) for the remainder of the Rentable Area within the
Premises, the sum of Twenty Six Dollars ($26.00) per square foot of Rentable Area per annum;
(b) for the period commencing upon the first day of the sixty first (61S) full calendar
month after the LCD and continuing through the last day of the one hundred twentieth (120th) full
calendar month after the LCD, the sum payable for the prior sixty (60) month period increased by
fifteen percent (15%);
(c? for each sixty (60) month period thereafter through and including the two hundred
fortieth (2401 ) full calendar month after the LCD, the sum payable for the prior sixty (60) month
period increased by the lesser of: (1) fifteen percent (15%); or (ii) eighty percent (80%) of the
increase in the "cost of living". The cost of living shall be defined as in the increase in the Consumer
Price Index between the base month (which shall be the month that is sixty-three (63) months prior
to the effective date of increase) and the measurement month (which shall be the month that is three
(3) months prior to the effective date of increase). The applicable Consumer Price Index is the
Consumer Price Index for All Urban Consumers (1982 -1984 = 100) for Seattle - Tacoma, as
published by the United States Government. If the Consumer Price Index is changed or replaced by
the United States Government, the conversion factor published by the United States Government on
a new comparable index shall be used to compute the periodic increase in the minimum rent.
(d) for each sixty (60) month period of time between the two hundred forty first (241S)
full calendar month after the LCD and the last day of the Term, Tenant shall pay, on a monthly basis,
as minimum rent the "fair market rental value" for the Premises. The "fair market rental value" shall
be determined in good faith between Landlord and Tenant not later than the last day of the sixth (6th)
full calendar month prior to the commencement of the applicable sixty (60) month period. If the
parties are unable to agree upon the fair market rental for the Premises, then the following appraisal
procedure shall be followed. Landlord and Tenant shall each engage a commercial real estate
appraiser or broker unaffiliated with the parties, which appraisers or brokers shall have at least ten
(10) years experience in the south King / north Pierce County area. The two appraisers and/or
brokers shall engage a similarly qualified third appraiser and/or broker. The three appraisers and/or
brokers shall individually determine in writing the fair market rental value for the Premises for the
applicable sixty (60) month period. In considering the fair market rental value for the Premises, the
appraisers and/or brokers shall consider the highest and best use for the Premises, and shall include
the highest and best use / rental value for all improvements on the Premises (but specifically
excluding any custom, exotic or non-standard improvements or alterations made by or at the cost of
Tenant). When each appraiser and/or broker has submitted his/her determination of the fair market
rental value for the applicable sixty (60) month period of the Term, the three submittals shall be
compared. If the highest submittal shall be 120% (or less) of the lowest submittal for each sixty (60)
month period, then the mean of the three submittals shall be fair market rental value for the
Premises applicable to such sixty (60) month period. If the highest submittal shall be more than
120% of the lowest submittal for each such sixty (60) month period, the two submittals closest to one
another shall be used (with the third submittal discarded), and the mean of the aforesaid two
submittals shall be the fair market rental value for the Premises for such sixty (60) month period.
Landlord and Tenant shall each pay for the appraiser and/or broker engaged by it, and shall equally
pay for the appraiser or broker engaged by the two appraisers and/or brokers. Notwithstanding the
foregoing, in no event shall the fair market rental value for the Premises for the applicable sixty (60)
month period be less than the minimum rent payable during the immediately preceding period prior
to such increase.
The minimum rent shall be due and payable, without prior notice or demand, in equal monthly
installments on the first day of each calendar month, without any set-off or deduction, during the
Term hereof.
5.3 Fractional Months. Should the Lease Commencement Date be a day of the month
other than the first day of such month, or should there be any other fractional month during the
Term, then Tenant shall pay, upon the Lease Commencement Date, or the first day of the month,
whichever is applicable, a pro rata portion of all rent, pro rated on a per diem basis, with respect to
said fractional month.
5.4 Place of Payment. Tenant shall pay rent herein provided to Landlord in care of Michael
John Klein, CPA, 5743 Corsa Avenue, Suite 216, Westlake Village, California 91362, or to such
other address as Landlord may from time to time designate at least thirty (30) days prior to the next
ensuing rent payment date.
5.5 Full Faith and Credit. During the period between the Lease Commencement Date and
the last day of Closing Period One (hereinafter defined) [the "Full Faith Period"], the obligation of
Tenant to make rental payments constitutes a limited tax general obligation of Tenant. During the
Full Faith Period, Tenant hereby pledges irrevocably to include in its budget and levy taxes annually,
within the constitutional and statutory limitations provided by law without a vote of the electors of the
Tenant, on all of the taxable property within the city limits of Tenant, in an amount sufficient, together
with other money legally available and to be used therefor, to pay when due the rental payments.
During the Full Faith Period, the full faith, credit and resources of Tenant are irrevocably pledged for
the annual levy and collection of such taxes and the prompt payment of the rental payments. The
foregoing covenants of Tenant shall not apply after the Full Faith Period, provided, however, Tenant
shall nonetheless be obligated to pay the full rent and perform all of its obligations and covenants
throughout the entire Term.
SECTION 6. TENANT'S USE OF PREMISES
6.1 Authorized Use. Tenant shall use and occupy the Premises during the Term only for
governmental purposes and such other purposes not prohibited or restricted by the Condominium
Documents.
6.2 Compliance with Laws; Hazardous Substances. Other than any certificate of
occupancies and other permits, licenses and approvals that must be obtained by Landlord in
connection with the completion of Landlord's Work and delivery of the Premises and subject in all
respects to "Valid Claims" made during the Warranty Period (each as defined in Exhibit "C"), Tenant
shall at its cost, obtain all permits, licenses and approvals necessary or appropriate for the conduct
of its business as herein specified. Tenant shall not use the Premises nor shall the Premises be
used, in whole or in part, during any portion of the Term for any purpose or use in violation of, and
Tenant shall comply with, any and all, present and/or future laws, ordinances, regulations or rules of
any public authority, including but not limited to the Americans with Disabilities Act and any similar
federal or state laws relating to the manner and use of the Premises; provided, Landlord has the
entire and sole responsibility to correct any portion(s) of the Landlord's Work which was or is not in
compliance with any applicable law as of the LCD (including, but not limited to, not being in
compliance with the Americans with Disabilities Act), all at its sole cost and expense without
expense, payment, cost or charge whatever to or contribution by Tenant for causing such
compliance.
Except for small quantities stored and used in accordance with the applicable law, Tenant shall not
keep within, on or around the Premises for use, disposal, treatment, generation, storage or sale any
substances designated as, or containing components designated as, a hazardous, dangerous, toxic
material or substance or any material or substance that is subject to regulation under any local, state
or federal law, statute, ordinance or regulation pertaining to health, hygiene, safety or the
environment or substance that is otherwise subject to such regulation as hazardous, dangerous,
toxic or harmful (collectively "Hazardous Substances"). Tenant shall be solely responsible for and
shall defend, indemnify and hold Landlord and any successors-in-interest to Landlord, including any
lender of Landlord, and their respective agents and employees harmless from all claims, costs,
damages, damage, liabilities, including attorneys' fees and costs, arising out of or in connection with
Tenant's breach of its obligations contained in this paragraph or arising out of or in connection with
removal, clean-up or restoration deemed reasonably necessary by any governmental entity or
Landlord to remove, clean-up or restore any portions of the Premises as the result of Hazardous
Substances used, disposed, treated, generated or stored by Tenant. Tenant's obligations under this
paragraph shall survive expiration and termination of the Lease.
6.3 Access. From and after the Lease Commencement Date, Tenant shall have access to
the Premises at all times during the Term, 365/366 days a year, 24 hours a day.
SECTION 7. OPERATING COSTS.
7.1 Definition. "Operating Costs" are defined as the following costs and expenses incurred by
Landlord, except for the Excluded Costs (as defined below): (i) any and all Assessments (as defined
in the Condominium Declaration) properly assessed, charged or levied against the Premises in each
fiscal year under the Condominium Documents for costs and expenses incurred by the owners'
association for the Condominium (the "Association") in connection with the upkeep, operation,
maintenance, repair, and management of the Building, the Property and the Premises; and (ii) any
costs and expenses incurred by Landlord in each fiscal year in connection with the upkeep,
operation, maintenance, repair, and management of the Premises. Unless Landlord elects
otherwise, the fiscal year shall be the calendar year. Tenant acknowledges and agrees that costs
and expenses may include, but are not limited to these costs and expenses: Taxes (hereinafter
defined), insurance premiums, utility costs, janitorial costs and expenses, property management staff
and/or contract services expenses and trash collection.
"Taxes", a component of Operating Costs, include: (a) any form of assessment (including without
limitation special assessments and local improvement districts), including real property taxes; (b)
any tax on Landlord's right to receive rent or other income from the Premises, or to conduct any
business at, from or in the Premises; and (c) any tax allocable to or measured by the area of the
Property, Building or Premises or the rental payable hereunder, including without limitation any gross
income tax or excise tax levied by or permitted by any governmental body with respect to the receipt
of such rental, or upon or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy of the Property or Building, or any portion thereof.
Notwithstanding the preceding sentence: (i) franchise, estate, inheritance, succession, capital levy,
transfer, income and excess profits taxes imposed upon Landlord shall be excluded from the
definition of "Taxes" (except that real property taxes altered by inheritance, succession, transfer or
sale of the Premises, or any portion thereof, shall not be excluded from the definition of "Taxes" with
respect to the Premises); (ii) Landlord shall pay, without being entitled to reimbursement from
Tenant under this or any other Section of this Lease, any and all assessments, impositions, cost of
mitigation, impact fee, connection fee, tap-in fee, similar one time charge or other charge imposed
as a condition of or in connection with the initial development of the Property, Building, or the
Premises any expansion of the Building; and (iii) with respect to any assessment which may be
levied against or upon the Property, Building or Premises and which under the laws then in force
may be evidenced by improvement or other bonds, or may be paid in annual installments, there shall
be included within the definition of "Taxes" with respect to any tax fiscal year only the amount
currently payable on such bond for such tax fiscal year, as hereinafter defined, or the current annual
installment for such tax fiscal year.
"Excluded Costs" are defined as the following costs and expenses, and Operating Costs shall
specifically exclude the following costs and expenses, whether or not properly assessed, charged or
levied by the Association against the Premises: (a) the cost to initially acquire, design, permit, and
construct the Property, Building and the Premises, including the amortization and depreciation
thereof; (b) leasing and marketing costs of any kind or nature; (c) any capital improvements whether
made by the Association or the Landlord, except for any repair and/or replacement which is of such
a nature that it should be considered under good accounting practice as a deferred expense and is
spread over a period of no more than 10 years; (d) repairs or other work whether made by the
Association or the Landlord including rebuilding occasioned by fire, windstorm, or other casualty or
condemnation; (e) any costs such as repairs, improvements, electricity, special cleaning or overtime
services to the extent such costs are expressly reimbursed to the Association or the Landlord by
tenants or owners of other units in the Building or are separately charged to and payable by tenants
or owners of other Units in the Building or to the extent the Association or the Landlord is
compensated by insurance proceeds; (f) leasing commissions and expenses of procuring tenants
including lease concessions; (g) interest on and amortization of debt (except any debt of the
Association permitted under the Condominium Documents); (h) any Assessments (as defined in the
Condominium Declaration), interest and/or penalties assessed, charged or levied against the
Premises resulting from or related to (1) late payments of Assessments by Landlord, except as a
result of Tenant failure to timely pay Operating Expenses, (2) failure of other owners or tenants of
units in the Building to pay their Assessments (including any legal fees or collection costs incurred
by the Association in collecting any such Assessments on other units in the Building); (3)
maintenance, repairs, replacement, or renovations of other units in the Building; or (4) any parking
spaces, drives or areas associated with or serving the Condominium other than those located on the
Mel's Plus Property; or (5) any real property, whether or not in the Condominium (and any
improvements located thereon), other than the real property described on Exhibit A" attached
hereto; (i) any Assessments (as defined in the Condominium Declaration), interest and/or penalties
assessed, charged or levied against Premises resulting from any violation by Landlord of the terms
of any Condominium Document, any contract, lease, or mortgage affecting the Property, Building
and/or Premises; 0) costs and expenses of enforcing leases including legal fees; (k) the cost
incurred by the Association or the Landlord within one year of the initial opening of the Building to
repair of any part of the Building that was inadequately designed or defectively constructed; (1) all
costs and expenses associated with the removal and cleanup of Hazardous Substances not arising
from Tenant's use of the Premises or the Building; and (m) Landlord's income, excess profits, estate,
inheritance, transfer or capital gains tax assessments.
As part of Landlord's Work, the Premises [and all other units in the Building] shall each have their
own electric and natural gas service and meter. In addition to Operating Costs, Tenant [and the
other tenants and owners of units in the Building] shall each pay directly to the electrical utility
company for the cost of providing electrical services to the Premises [and the units of all other
tenants and owners within the Building.].
If the Association or the Landlord is separately reimbursed or paid by any tenant or owner of a unit
within the Building (including Tenant) for services the cost of which would be otherwise included in
Operating Costs (such as payment for extraordinary consumption of utility services), such payment
(less any applicable management or other fee components thereof) shall offset Operating Costs.
Payments, credits, rebates or other sums received by the Association and/or the Landlord for the
installation of energy savings systems shall (after recovery of the cost to provide, install and operate
such energy savings systems) also be an offset to Operating Costs and such payments, credits,
rebates and other sums shall be property of the Association or Tenant, as applicable.
7.2 Payment by Tenant. Landlord shall be reimbursed by Tenant for Operating Costs. On the
same date that minimum rent is due each month, Tenant shall pay Landlord one-twelfth (1/12th) of
Landlord's reasonable estimate of Operating Costs for the then current fiscal year. Within a
reasonable time after the expiration of each fiscal year, Landlord shall submit to Tenant a statement
setting forth: (i) the total Operating Costs and (ii) the aggregate of the payments made by Tenant
with respect to the foregoing in such fiscal year. If actual Operating Costs exceeds the aggregate of
the payments received by Landlord, Tenant shall pay the deficiency to Landlord within ten (10) days
after receipt of Landlord's statement. If said payments exceed Operating Costs, Tenant shall be
entitled to reimbursement within ten (10) days after receipt of Landlord's statement. During any part
of the Term which shall be less than a full fiscal year, Operating Costs shall be pro rated on a
monthly basis (with the 15th day of the month being the measurement date) with the intent to
approximate the portion of the Operating Costs that are attributable to the portion of the fiscal year
occurring within the Term.
7.3 Tenant's Audit Right. Landlord's books and records of all Operating Costs, Taxes and any
other costs and expenses, any portion of which Tenant is to pay to or on behalf of Landlord, shall be
kept in a convenient place at Landlord's principal accounting office (or the office of Landlord's
accountant), and Tenant shall have the right, during normal business hours after fifteen (15) days
written notice to Landlord, to inspect, audit and copy them. In addition, upon fifteen (15) days written
notice to Landlord, Landlord shall exercise its rights under the Condominium Documents, as the
owner of the Premises, and authorize Tenant to inspect, audit and copy the financial records of the
Association. Tenant shall have one hundred twenty (120) days from the date Landlord renders a
final invoice for the applicable fiscal year during which to challenge any of the charges included in
such invoice and if a mathematical or other error is discovered, it will be corrected and appropriate
payments or credits made within fourteen (14) days of any said discovery. If it is found that Tenant
has been overcharged by three percent (3%) or more by Landlord, Landlord shall pay the related
auditing costs; and if by less than three percent (3%) [or if Tenant had been undercharged] said
auditing costs shall be borne by Tenant. If it is found that Assessments payable with respect to the
Premises have been overcharged by three percent (3%) or more by the Association, Landlord shall
pay (if Landlord is in control of the Association under the Condominium Document) or Landlord shall
10
assign its right to recover from the Association its right to receive (if Landlord is not in control of the
Association) the related auditing costs; and if by less than three percent (3%) [or if Tenant had been
undercharged] said auditing costs shall be borne by Tenant. Any said recovery shall be limited to
reasonable audit costs actually incurred.
SECTION 8. PERSONAL PROPERTY TAXES.
Tenant shall be liable for and shall pay when due all taxes levied against the Personal Property
(hereinafter defined) located on the Premises. If any taxes on Personal Property are levied against
Landlord or Landlord's property, including as part of any Assessment from the Association, or if the
assessed value of Landlord's property is increased by the inclusion of the value placed on the
Personal Property, and Landlord pays the taxes resulting therefrom, Tenant shall, at the option of
Landlord, pay to Landlord such taxes relating to Personal Property within thirty (30) days after
receipt from Landlord of a statement therefor.
SECTION 9. HOLD HARMLESS.
9.1 Indemnity by Tenant. To the extent permitted by applicable law, but subject to the waiver
of recovery and subrogation in subsection 10.7 below, Tenant shall defend, indemnify, and hold
harmless the Landlord, its officers and employees 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
on and/or after the Lease Commencement Date and/or from any action or activity of Tenant (or its
agents, officers, officials, employees, volunteers and/ or contractors) occurring at any time, except
only such injury or damage as shall have been occasioned by the sole negligence of the Landlord.
Notwithstanding the foregoing, the foregoing duty of Tenant to indemnify, defend and hold Landlord
harmless shall be expanded to afford Landlord the same protection Landlord would have received
had Tenant obtained a separate policy of commercial general liability ("CGL") insurance, including
contractual, on an occurrence basis, with coverage at least as broad as the most commonly
available ISO Commercial General Liability policy CG 00 01, on which Landlord had been named as
an "additional insured" as to claims relating to the Lease and/or the Premises, using ISO Additional
Insured-Managers or Lessors of Premises Form CG 20 11.
9.2 Indemnity by Landlord. To the same extent applicable law provides for indemnification
as set forth in subsection 9.1 above, but subject to the waiver of recovery and subrogation in
subsection 10.7 below, Landlord shall defend, indemnify, and hold harmless the Tenant, 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 before the Lease
Commencement Date and/or from any action or activity of Landlord (or its agents, members,
employees and/ or contractors) occurring at any time, except only such injury or damage as shall
have been occasioned by the sole negligence of the Tenant. Nothing herein shall be deemed to limit
or prohibit the protections and benefits afforded to Landlord under the policies of insurance that
Tenant is required to maintain under this Lease for the protection and benefit of Landlord and
Tenant, and in fulfilling its obligations under this subsection, Landlord may rely upon such policies of
insurance.
9.3 Waivers. The parties hereby stipulate and agree that the provisions of RCW 4.24.115
are not applicable to this Lease; however, should a court of competent jurisdiction determine that
this Lease is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily
injury to persons or damages to property caused by or resulting from the concurrent negligence of
the Landlord and Tenant or their respective officers, officials, employees, or volunteers, each party's
liability hereunder shall be only to the extent of that party's negligence. Nothing herein shall be
11
deemed to limit or prohibit the protections and benefits afforded to Landlord under the policies of
insurance that Tenant is required to maintain under this Lease for the protection and benefit of
Landlord and Tenant, and in fulfilling its obligations under this subsection, Landlord may rely upon
such policies of insurance. It is further specifically and expressly understood that the indemnification
provided herein constitutes each party's waiver of immunity under Industrial Insurance, Title 51
RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by
the parties.
9.4 No Time Limitation. It is the intention of the parties hereto that the provisions of this
Section of the Lease survive the termination or expiration of this Lease.
SECTION 10. INSURANCE.
10.1 Personal Property Fire, "All Risk" and Differences in Conditions Coverage by
Tenant. Beginning as of the Lease Commencement Date and continuing throughout the Term,
Tenant shall procure and maintain, at its expense, fire insurance with "all risk" and difference in
conditions (earthquake, earth movement, flood and volcanic event) coverage and/or endorsements
insuring Tenant's Personal Property (hereinafter defined) and the Unit Improvements (as defined in
the Condominium Declaration) in an amount equal to one hundred percent [100%] of the insurable
replacement value thereof [collectively "Personal Property Insurance Coverage"] (or such other
coverages or higher amounts required to be maintained by Landlord with respect to the Premises
under the Condominium Documents). The proceeds received from any claim made under Tenant's
Personal Property Insurance Coverage shall be used solely to satisfy Tenant's obligations under
Section 11 hereof.
10.2 Commercial General Liability Coverage by Tenant. Tenant shall procure and
maintain, at its expense, for the benefit of Landlord, Tenant and the Association, commercial general
liability (including bodily injury liability, property damage liability and contractual liability) insurance
with coverage and in the amounts required to be maintained by Landlord with respect to the
Premises under the Condominium Documents. The commercial general liability insurance policy
required hereunder is intended to cover claims arising out of Tenant's and its agents', contractors',
employees', licensees', lessees', or subcontractors' use of the Premises and the Building under this
Lease.
10.3 Worker's Compensation Insurance. Tenant shall procure and maintain, at its expense,
Worker's Compensation and Employer's Liability insurance to comply with Washington law.
10.4 Policy Provisions. All of the insurance required to be obtained by Tenant pursuant to
the provisions of this Section shall be with companies that are licensed to do business in
Washington, that have at all times a general policyholder's rating of not less than A and a financial
rating of not less than class X as rated in the then most current "Best's Insurance Reports" (or such
higher rating required under the Condominium Documents), and written on policy forms satisfactory
and acceptable to Landlord (or such policy forms required under the Condominium Documents).
Commercial general liability policies shall only be written on "occurrence forms". In the event
"occurrence forms" become no longer available, the insurance policy form obtained by Tenant shall
be subject to Landlord's approval. The commercial general liability insurance policy required
hereunder is intended to cover claims arising out of Tenant's and its agents', contractors',
employees', licensees', lessees', or subcontractors' use of the Premises and the Building under this
Lease and shall designate Landlord, the Association, and any other entity Landlord shall reasonably
require to be designated, as named insureds. Although named as an insured, Landlord shall not be
barred by reason of any willful act or the negligence of Tenant, its servants, agents and employees,
to recover under said policies procured by Tenant for any loss occasioned to Landlord. In lieu of
providing the policies or copies thereof, Tenant shall provide Landlord, and upon request, the
12
Association, with a certificate(s) of insurance issued by each of the insurance companies issuing any
of the policies required pursuant to the provisions of this Section (prior to entry by Tenant on the
Premises, and with respect to renewals, at least thirty days prior to the expiration of such expiring
policies), and said certificate(s) shall provide that the insurance issued thereunder shall not be
altered or canceled until after thirty (30) days written notice to Landlord. Tenant agrees to permit
Landlord, and upon request, the Association, at all reasonable times upon reasonable notice to
inspect the policies of insurance of Tenant covering risks upon the Premises for which policies or
copies of thereof are not required to be delivered to Landlord. In the event Tenant shall fail to
procure and maintain any of the insurance required pursuant to this Section, Landlord shall have the
right, but not the obligation, to obtain said policies and to pay any premium due thereon. The
amount of any such premiums shall be reimbursed by Tenant to Landlord within ten (10) days after
demand. All commercial general liability and other policies to be procured and maintained by Tenant
shall be written as primary policies for claims arising out of Tenant's and its agents', contractors',
employees', licensees', lessees', or subcontractors' use of the Premises and the Building under this
Lease, not contributing with and not in excess of coverage that Landlord may carry for claims arising
out of Tenant's and its agents', contractors', employees', licensees', lessees', or subcontractors' use
of the Premises and the Building under this Lease.
10.5 Blanket Insurance Policies. As long as not prohibited by the Condominium Documents,
notwithstanding anything to the contrary contained in this Section, Tenant's obligations to carry the
insurance provided herein may be brought within the coverage of a so-called blanket policy or
policies of insurance procured and maintained by Tenant, provided, however, with respect to any
commercial general liability insurance policies, that Landlord and the Association (and any entity
Landlord shall reasonably designate) shall be designated as an additional named insured(s)
thereunder as its (their) interests may appear, and that the coverage afforded Landlord and the
Association (and any Landlord designated entities) shall not be reduced or diminished by reason of
the use of such blanket policy of insurance, and provided further that the requirements set forth
herein are otherwise satisfied.
10.6 Association's Insurance. Landlord shall cause the Association to maintain the property
insurance and commercial general liability insurance required under the Condominium Documents.
All insurance premiums and other costs incurred by the Association in connection with such
insurance coverage shall be included within Common Expenses (as defined in the Condominium
Declaration) and included in Assessments (as defined in the Condominium Declaration) against the
Premises in accordance with formula set forth in the Condominium Declaration.
10.7 Waiver of Subrogation Rights. In any case in which Tenant shall be obligated under any
portion of this Lease to pay to Landlord any loss, cost, damage, liability or expense suffered or
incurred by Landlord, Landlord shall allow to Tenant, as an offset against the amount thereof, the net
proceeds of any insurance collected by Landlord for or on account of such loss, cost, damage,
liability, or expense. In any case in which Landlord shall be obligated under any provision of this
Lease to pay to Tenant any loss, cost, damage, liability or expense suffered or incurred by Tenant,
Tenant shall allow to Landlord, as an offset against the amount thereof, the net proceeds of any
insurance collected by Tenant (or would be collectible by Tenant if it carried the insurance required
to be carried by Tenant under this Lease) for or on account of such loss, cost, damage, liability, or
expense. Each of the parties to this Lease shall make its best efforts to procure an appropriate
clause in, or an endorsement to, any policy of insurance covering the Building, Premises and the
Personal Property, improvements, fixtures, and equipment located in or on the Premises, business
interruption or loss of income therefrom, or the employees of such parties, pursuant to which the
insurance companies waive subrogation or consent to a waiver of right of recovery. Neither party
shall make any claim or seek to recover from the other party losses, or damage to its property, or the
property of others, resulting from an incident or event: (a) covered by the insurance required to be
carried by a party hereto, regardless of whether such insurance is in fact actually carried; or (b)
13
covered by any non-required insurance so carried by such party
10.8 Increase in Premiums. Tenant shall do all acts and pay all expenses necessary to the end
that the Premises are not used for purposes prohibited by any applicable insurance carrier
regulation, and that the Premises comply with any and all reasonable requirements necessary to
obtain and to maintain casualty and public liability insurance on the Premises; provided, Landlord
has the entire and sole responsibility to correct any portion(s) of the Landlord's Work which was or is
as of the LCD not in compliance with any applicable insurance carrier regulation, all at its sole cost
and expense without expense, payment, cost or charge whatever to or contribution by Tenant for
causing such compliance. In the event Tenant uses or permits the Premises to be used or acts
occur on the Premises which increase the existing rate of any insurance obtained by Landlord,
regardless of whether Landlord consented to the same, Tenant shall pay the amount of any increase
in premium caused thereby, as well as Landlord's cost of obtaining other replacement insurance
policies, within ten (10) days after demand.
10.9 Self Insurance. Notwithstanding anything to the contrary contained in this Section 10 or
elsewhere in this Lease, if the Tenant at the time in question is the City of Auburn, or the County of
King or the State of Washington (that is, Tenant's interest has not been transferred to any private
entity or person, or to any governmental agency other than those described above), the
aforementioned insurance and self-insurance requirements of this Section 10 may be completely
met by Tenant's membership in the Washington Cities Insurance Authority ("WCIA"), a municipal
insurance pool. So long as Tenant is providing the insurance required hereunder through the
WCIA, Tenant will not be required to provide policies or certificates of insurance, and will not be
required to name Landlord, the Association or any other party or person as an "additional insured",
"additional named insured", "named insured," "loss payee," or any similar designation. Tenant shall,
prior to the Lease Commencement Date, and subsequently upon Landlord's or the Association's
request therefor, provide reasonable evidence of Tenant's continued participation from time to time
thereafter in the WCIA. The coverage afforded Landlord (and any Landlord designated entities)
shall not be reduced or diminished by reason of the use of such self insurance program.
SECTION 11. DESTRUCTION.
11.1 Damage to the Building. If the event of any damage or destruction to the Building to an
extent not greater than fifty percent [50%] of the then total cost of replacing the Building, and (i) any
damage or destruction to the Common Elements of the Building can be wholly repaired from
insurance proceeds made available to the Association (less the amount of the deductible) in
compliance with all the then applicable governmental rules and regulations; (ii) any damage or
destruction to the Premises can be wholly repaired from insurance proceeds made available to the
Landlord (less the amount of the deductible) in compliance with all the then applicable governmental
rules and regulations; (iii) the Building, the Premises and such other improvements so damaged or
destroyed can be fully restored to the condition at the Lease Commencement Date or existing
immediately prior to said damage or destruction, as designated by Landlord, within one hundred
eighty (180) days after commencement of repair and restoration work, taking into consideration the
availability of labor and materials, and (iv) the owners of units in the Condominium have not elected
to not repair the damage (Landlord shall use all of the votes allocated to any Units it or its affiliates
owns in the Building to vote in favor of the repair the damage), then Landlord shall cause the
Association to make said repair and restoration to the Common Elements of the Building and
Landlord shall make said repair and restoration to the Premises, in each case, to the extent of such
designated condition, as herein provided. If (a) the Building and Premises cannot be repaired and
restored to such extent within said time period; or (b) the insurance proceeds made available to the
Association and Landlord for such purpose (less the amount of the deductibles, which Landlord shall
fund) are insufficient to fully effect such repair and restoration; or (c) the damage or destruction to
the Building is to an extent greater than fifty percent [50%] of the then total cost of replacing the
14
Building, then Landlord shall have the option for one hundred (100) days after the date of such
damage or destruction to elect either to perform said repair and restoration, at its sole expense (to
the extent not reimbursed by insurance proceeds), or to terminate this Lease, effective upon the
expiration of a thirty (30) day notice period from Landlord stating such election. If (a) the owners of
units in the Condominium have elected to not repair the damage (despite Landlord using all of the
votes allocated to any Units it or its affiliates owns in the Building to vote in favor of the repair the
damage), (b) said repair and restoration cannot be performed within said one hundred eighty (180)
day time period; (c) the Association and/or Landlord fails to commence said repair and restoration
within one hundred twenty (120) days of the date of such damage or destruction; (d) the damage or
destruction to the Building is to an extent greater than fifty percent [50%] of the then total cost of
replacing the Building; or (e) Landlord does not elect to perform said repair and restoration requiring
funds in addition to the insurance proceeds (less the amount of any deductibles, which Landlord
shall fund), then, in each case, Tenant's sole remedy shall be to terminate this Lease by thirty (30)
days notice given to Landlord, which written notice, in the case of subsection (c), must be given prior
to the commencement of any such repairs or restoration. Notwithstanding the foregoing, if any such
damage or destruction occurs during the last two (2) years of the Term, then Landlord and Tenant
shall each have the right to terminate this Lease, upon notice given to the other party prior to the
commencement of any such repairs or restoration, effective upon the expiration of a thirty (30) day
period commencing upon the delivery date of any such notice of termination.
11.2 Restoration by Landlord. Should this Lease not be terminated pursuant to this Section,
subject to the provisions of the following subsection, Landlord shall (i) cause the Association, with
respect to the Common Elements of the Building, to promptly and diligently repair and restore the
same to the condition existing at the commencement of the Term or to the condition existing
immediately prior to such damage or destruction, as designated by Landlord, and (ii) promptly and
diligently repair and restore the Premises to the condition existing at the commencement of the Term
or to the condition existing immediately prior to such damage or destruction, as designated by
Landlord. For clarification, Landlord's obligation to repair and restore the Premises shall include all
work and improvements included in Landlord's Work and any work and improvements included in
Tenant's Work for which Tenant was granted an allowance under this Lease or that were completed
at Landlord's cost and expense.
11.3 Restoration by Tenant. If the Building is repaired and restored as aforesaid, Tenant shall,
at its sole expense, after completion of such restoration, promptly restore, replace and repair all
remaining improvements, additions, alterations, fixtures, trade fixtures, and Personal Property,
installed, built or owned by Tenant and located in the Premises.
11.4 Abatement of Minimum Rent. If the Building is damaged or destroyed, then during the
period from the date of such damage or destruction until the earlier of Tenant's reopening for
business or thirty (30) days after the completion of Landlord's repair and restoration work to
Premises (and reasonable access is provided thereto), the minimum rent payable hereunder shall be
reduced equitably in proportion to the degree the repair and restoration work interferes with the
normal business conducted in the Premises. Tenant shall continue the operation of its business in
the Premises during any such period to the extent reasonably practicable from the standpoint of
prudent business management, and shall pay all other rent provided in this Lease. Tenant shall not
be entitled to any compensation or damages from Landlord for loss of the use of the whole or any
part of the Building, including the Premises, or of Tenant's Personal Property, or for any
inconvenience, annoyance or loss of business or profit occasioned by any such damage, repair,
reconstruction or restoration to any other portion of the Property.
11.5 No Waiver of Condemnation Rights. Notwithstanding anything expressed or implied to
the contrary, Tenant (as a municipal government) does not waive its rights to take by eminent
domain or condemnation in the event of the occurrence of the events described in this Section 11.
15
SECTION 12. BUILDING SERVICES, REPAIRS AND MAINTENANCE
12.1 Landlord's Covenants. Landlord shall provide, or cause the Association to provide, the
following services to the Building during reasonable hours and days: (a) janitorial services to the
public areas; (b) building trash and recycling areas, facilities and receptacles (outside of the
Premises) for the use of Tenant sufficient to service the trash and recycling generated by normal
office uses in the Premises (c) electric, water and sewer services to the public area; (d) separate
electric and gas meters (with separate electric and gas service) for the Premises, with Tenant to pay
directly to the utility companies for the cost of such services within the Premises for the Premises (as
part of Landlord's Work, Landlord covenants and agrees that each separate unit in the Building shall
also have separate electric and gas meters with the owners or tenant thereof required to pay directly
to the utility companies for the cost of such services within the Premises, and, if applicable, any
separate water meters required to be installed under the Condominium Documents); and (e) such
other services as are customarily provided in similar office buildings in south King County,
Washington. Reasonable hours and days for the provision of the above services shall be
established by the Association in accordance with those customarily established for similar office
buildings in south King County Washington, but in no event shall the same require the Association or
the Landlord to provide janitorial services more than five nights per week, or to provide electricity
within the public area for active business operations for greater than 12 hours per day Monday -
Friday and 6 hours on Saturday. In addition, Landlord shall cause the Association to maintain and
repair the Common Elements in accordance with the terms and standards set forth in the
Condominium Documents. The Association and the Landlord shall not maintain, repair or be liable
for any damage to Tenant's Personal Property in performing its obligations under this Section 12,
nor to any custom, exotic or non-standard improvements or alterations made by or at the cost of
Tenant. Except to the extent covered by any insurance maintained on or with respect to the Building
or the Premises, in no event shall Landlord be liable for any interruption or failure in the supply of
any utility to the Premises.
12.2 Tenant's Covenants. Tenant shall pay the Association or the Landlord for the use of
janitorial services, electricity, and for other services beyond those required to provide pursuant to
subsection 12.1 above. Tenant shall not mark, deface, cut, make holes or otherwise damage or
remove any part of the Building or, to the extent installed by Landlord as part of Landlord's Work, the
Premises, or Landlord's personal or real property. Tenant shall maintain and repair its Personal
Property and the HVAC units serving the Premises; provided, Landlord shall be obligated to replace
(as opposed to maintain and repair) any such HVAC units in the event maintenance and repair is not
technically or economically feasible. If Landlord so requests, Tenant shall also maintain and repair
any improvements or alterations installed by Landlord as part of Landlord's Work in the interior of the
Premises that are custom, exotic or non-standard, or are more susceptible to damage absent
precautions greater than those afforded standard building improvements, wall coverings or floor
coverings.
Tenant shall at all times comply with the Condominium Rules and Regulations incorporated herein
by this reference.
SECTION 13. ALTERATIONS.
Tenant may, at its sole cost and expense, from time to time during the Term, make such alterations,
additions and changes in and to the interior of the Premises as it may find necessary or convenient
for its purposes. All alterations, additions, repairs, or changes to be made to the Premises shall be
made in accordance with plans and specifications fully complying with all applicable laws, codes and
ordinances. Tenant, at its sole cost and expense, shall obtain all necessary governmental permits
16
and approvals, shall comply with all present and future governmental laws, rules and regulations,
and shall pay for all assessments, fees, taxes and charges associated with such alterations,
additions, repairs, or changes. Tenant acknowledges and agrees that Landlord and/or the
Association shall have the right to (i) designate third party subcontractors for work involving these
Building systems and elements: structure, foundation, roof, electrical, mechanical, plumbing, life
safety and security, (ii) reasonably limit vertical transportation, hours and days when such work may
be performed, and (iii) impose reasonable safety, security and damage prevention measures. All
work with respect to any alterations, additions, repairs, or changes shall be done in good and
workmanlike manner, diligently prosecuted to completion to the end that the Premises shall at all
times be a complete unit except during the period of work and performed strictly in compliance with
applicable law. Copies of as-built plans or marked-up construction drawings for any such
alterations, additions, or improvements made by Tenant shall be promptly provided to Landlord
following final inspection and sign-off by the applicable building official. Tenant's Work (as defined in
Exhibit "D") shall be governed by Exhibit "D", not this Section 13.
SECTION 14. MECHANIC'S LIENS.
Except as provided in Section 3 and Exhibit "D", Tenant shall pay or cause to be paid all
costs for work done by it or caused to be done by it on the Premises, and Tenant shall keep the
Premises free and clear of all mechanic's liens and other liens on account of work done for Tenant or
persons claiming under it. Tenant hereby indemnifies and saves Landlord free and harmless against
liability, loss, damage, costs, reasonable attorney's fees and all other expenses on account of claims
of lien of laborers or material suppliers or others for work performed for or materials or supplies
furnished to Tenant or persons claiming under it. If Tenant shall desire to contest any claim of lien, it
shall furnish the security required by law to prevent foreclosure during the pendency of the contest.
If a final judgment establishing the validity or existence of a lien for any amount is entered, Tenant
shall pay and satisfy the same at once unless it is superseded in compliance with applicable law. If
Tenant shall be in default in paying any charge for which a mechanic's lien claim and suit to
foreclose the lien has been filed, or shall not have given the security to protect the Premises and
Landlord against such a claim, Tenant shall be in default of this Lease. If Tenant shall be delinquent
or otherwise in default in paying any charge for which a mechanic's lien claim and suit to foreclose
the lien have been filed, and shall not have given the security to protect the Premises and Landlord
against such claim of lien, Landlord may (but shall not be required to) pay said claim and any costs,
and the amount so paid, together with attorney's fees incurred in connection therewith, shall be due
and owing from Tenant to Landlord within thirty (30) days of demand therefor. Should Tenant
receive notice that a claim of lien has been filed against the Premises or notice of any action
affecting the title to such property, Tenant shall forthwith provide Landlord with a copy of such notice.
Landlord or its representatives shall have the right to go upon and inspect the Premises
at all reasonable times, and shall have the right to post and keep posted thereon notices such as
those provided for by Title 60 RCW, or which Landlord may deem to be proper for the protection of
Landlord's interest in the Premises. Tenant shall, before the commencement of any work which
might result in any such lien, give Landlord written notice of its intention to do so in order that
Landlord may timely post and record such notices.
It is the intention of the parties that the provisions of this Section survive the termination
or expiration of this Lease.
17
SECTION 15. WAIVER BY TENANT OF CODE SECTIONS AND RIGHTS.
To the maximum extent permitted under law and except as expressly set forth in this
Lease, Tenant hereby waives the benefit of all present or future laws, regulations or court decisions
inconsistent with the provisions of this Lease, including, but not limited to, those pertaining to self-
help, to make repairs at the expense of Landlord, to terminate this Lease upon destruction of the
Building (or any portion thereof) or the Premises, to abatement or reduction in rent due to damage or
destruction, and to offset from rent or other sums due Landlord any sums Tenant believes or are
actually due from Landlord to Tenant.
Except as otherwise expressly provided in this Lease, this Lease shall not terminate, nor
shall Tenant have any right to terminate this Lease or to be released or discharged from any
obligations or liabilities hereunder for any reason, including without limitation any damage or
destruction occurring on the Property and/or to the Building thereon, it being the intention of the
parties hereto that all rental payments payable by Tenant hereunder shall continue to be payable in
all events in the manner and at the times herein provided unless the obligation to pay the same shall
be temporarily abated or terminated pursuant to the express provisions of this Lease. In that
connection, Tenant hereby waives, to the extent permitted by applicable law, any and all rights that it
may now have or that may at any time hereafter be conferred upon it, by statute or otherwise, to
terminate, cancel, quit or surrender this Lease except in accordance with the express terms of this
Lease.
SECTION 16. SURRENDER OF PREMISES AND REMOVAL OF PERSONAL PROPERTY.
16.1 Improvements. Upon the expiration or sooner termination of this Lease, except only as
to Personal Property, Tenant shall surrender the Premises to Landlord in good condition and repair,
damage from casualties, ordinary wear and tear excepted, and without any payment therefor (except
applicable insurance proceeds), including any improvements, additions, machinery, apparatus,
equipment and fixtures therein or thereon, and the same shall thereafter be the property of Landlord.
Said property to be surrendered to Landlord shall include but not be limited to all components of the
Building's heating, air conditioning and/or ventilating system(s), (including any portion thereof within
or serving any portion of the Premises), plumbing and electrical systems, lighting fixtures, lighting
components, tubes and bulbs, elevators and dumbwaiters, ceiling tiles, all partitions (whether
removable or otherwise), back-up and emergency power generators and all components of systems
associated therewith, and those portions of the communications, security, computer and low voltage
electrical systems provided as part of Landlord's Work (except fiber communications equipment and
materials), and any replacements thereof that cannot be removed with damaging any portion of the
Building.
16.2 Personal Property. Trade fixtures, moveable equipment (except as noted in subsection
16.1 above) and Tenant's other personal property shall at all times be the property of Tenant
("Personal Property"). Personal Property shall also include all furniture, movable partitions, cabinets,
racks, computers, office equipment, communications equipment including fiber communications
equipment and materials [except as noted in subsection 16.1], and signs (except signs required by
applicable laws regardless of building occupancy or use). Tenant, at its sole cost, shall remove all
Personal Property prior to the expiration or termination of this Lease, and shall completely repair any
and all damage to the Premises resulting from or caused by such removal. If Tenant fails to remove
any of such Personal Property, Landlord may, at Landlord's option, retain all or any of the same
without payment therefor, thereupon vesting title thereto in Landlord; or Landlord may remove the
then remaining Personal Property from the Premises and dispose thereof in any manner, in which
latter event Tenant shall, within ten (10) days of demand, pay to Landlord the actual cost of such
removal and disposition, and the cost of repair of any and all damage to the Premises resulting from
18
or caused by such removal.
SECTION 17. HOLDING OVER.
If Tenant holds possession of the Premises after the expiration of the Term, any such
holding over shall be deemed to be a month-to-month tenancy terminable on thirty (30) days notice
from either party to the other, upon a monthly minimum rental equal to one hundred fifty percent
(150%) of the monthly minimum rental provided for the last full month of the Term, and otherwise
subject to all of the terms and provisions of this Lease, including, without limitation, any and all terms
and provisions relating to all other rent payable hereunder. Tenant hereby indemnifies and holds
Landlord harmless from any and all losses and liabilities resulting from Tenant's failure to timely
surrender the Premises upon the expiration or termination of the Lease.
SECTION 18. QUIET POSSESSION.
Subject to all other terms and provisions of this Lease, upon paying the rent and
performing the covenants and conditions of this Lease, Tenant may quietly have, hold and enjoy the
Premises during the Term, subject and subordinate, however, to the "Title Exceptions" set forth in
Exhibit "E" attached hereto and incorporated herein by this reference.
SECTION 19. ESTOPPEL CERTIFICATES.
Tenant shall execute, acknowledge and deliver to Landlord, within fifteen (15) days after
request by Landlord, a statement in writing, certifying, if such be the case: (a) that this Lease is
unmodified and in full force and effect (or if there have been modifications that the same is in full
force and effect as modified); (b) the Lease Commencement Date; (c) the expiration date of the
Term; (d) the dates and amounts for which the minimum rent and other rent has been paid; (e) that
Tenant has no offsets or deductions from rent payments (except as specified in such estoppel
certificate); (f) whether or not Tenant has exercised its right to purchase the Premises, and if so, the
particulars pertaining thereto; (g) that Landlord is not in default of any of the provisions of the Lease
to be kept and performed by Landlord (except as specified in such estoppel certificate); and (h) such
other information as Landlord shall reasonably request. Tenant hereby acknowledges that any such
statements are intended to be delivered by Landlord and relied upon by parties having or
prospectively having an interest in the Premises, including purchasers, mortgagees, beneficiaries
under deeds of trust, or assignees thereof. Similarly, Landlord shall execute, acknowledge and
deliver to Tenant, within the same time period, a similar statement if so requested by Tenant, and
Landlord acknowledges such statement is intended to be delivered by Tenant and relied upon by
parties having or prospectively having an interest in Tenant's leasehold estate.
SECTION 20. LANDLORD'S FINANCING REQUIREMENTS AND SUBORDINATION.
20.1 Subordination. At the request of any lender of Landlord, Tenant shall subordinate the
priority of this Lease to the lien of any mortgage or deed of trust of such lender, provided, however,
as a condition to such subordination where the Lease would otherwise have priority, Landlord,
Landlord's lender and Tenant shall execute and record a subordination, non-disturbance and
attornment agreement reasonably acceptable to Tenant. Notwithstanding the foregoing, the Option
(as defined in Section 31 hereof) and the Right of Repurchase (as defined in Section 32 hereof) shall
not be subordinated to any mortgage, deed of trust, or any other lien or encumbrance, and shall
survive any foreclosure or other exercise of remedies in connection therewith.
20.2 Attornment. Except as provided in any subordination, non-disturbance and attornment
19
agreement, in the event of any foreclosure of any mortgage covering the Premises, or any part
thereof, this Lease shall continue in full force and effect and Tenant shall attorn to and acknowledge
the foreclosure purchaser or purchasers as landlord, and Tenant as tenant; but such lessor,
transferee or purchaser shall not be liable for any act or omission of Landlord prior to such person's
succession to title, nor be subject to any offset, defense or counterclaim accruing prior to such
person's succession to title, nor be bound by any modification or amendment to the Lease made
without the express written consent of the mortgagee under the foreclosed mortgage if Tenant had
notice of such party, nor be bound by any payment of rent prior to such person's succession to title
for more than one (1) month in advance. In the event of any other sale or assignment of Landlord's
interest under this Lease or in the Premises, Tenant shall attorn to and recognize such purchaser or
assignee as landlord under this Lease without any further act by Landlord or such purchaser or
assignee.
SECTION 21. INTEREST ON PAST DUE OBLIGATIONS.
Any rent accruing to Landlord or any other sum due from one party hereunder to the other under the
terms and provisions of this Lease which shall not be paid when due shall bear interest at the
maximum lawful rate of interest, or in the event no such rate is specified under Washington law, then
at the rate of twelve percent [12%] per annum from the date which is thirty (30) days after the same
becomes due and payable by the terms and provisions hereof until paid.
SECTION 22. DEFAULTS AND REMEDIES.
22.1 Defaults. The occurrence of any of the following shall constitute a material breach and
default of this Lease by Tenant:
(a) any failure by Tenant to pay when due any of the rent required to be paid by
Tenant hereunder; however, Tenant shall have twenty (20) days after written notice to cure such
default;
(b) any failure by Tenant to observe and perform any of the other provisions of this
Lease to be observed or performed by Tenant where such failure continues for thirty (30) days after
written notice thereof from Landlord; provided that if the nature of such default is such that the same
cannot with due diligence be cured within said period, Tenant shall not be deemed to be in default if
it shall within said period commence such curing and thereafter shall diligently prosecute the same
to completion; or
(c) any abandonment of the Premises.
22.2 Termination of Lease and Remedies. In the event of any default as aforesaid by
Tenant, then in addition to any and all other remedies available to Landlord at law or in equity,
Landlord shall have the right to immediately terminate this Lease and all rights of Tenant hereunder
by giving written notice to Tenant of its election to do so. If Landlord shall elect to terminate this
Lease, then it may recover from Tenant:
(a) the worth at the time of the award of any unpaid rent that had been earned at
the time of termination;
(b) the worth at the time of the award of the amount by which the unpaid rent that
would have been earned after termination until the time of award exceeds the amount of the loss of
such rent that Tenant proves could have been reasonably avoided;
20
M the worth at the time of the award of the amount by which the unpaid rent for
the balance of the Term after the time of the award exceeds the amount of the loss of such rent that
Tenant proves could have been reasonably avoided;
(d) any other amount necessary to compensate Landlord for all detriment
proximately caused by Tenant's failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom, including but not limited to any costs or
expenses incurred by Landlord: (i) in retaking possession of the Premises, including reasonable
attorney's fees therefor; (ii) in maintaining or preserving the Premises after such default; (iii) in
preparing the Premises for reletting to a new tenant including repairs or alterations to the Premises
for such reletting; (iv) as brokerage fees, leasing commissions and reasonable attorney's fees in
connection with the reletting of the Premises to a new tenant; and (v) any other costs necessary or
appropriate to relet the Premises; and
(e) at Landlord's election, such other amount in addition to and/or in lieu of the
foregoing as may be permitted from time to time by applicable Washington law.
22.3 Definitions. As used in subparagraphs (a) and (b) above, the "worth at the time of the
award" is computed by allowing interest at the rate of eighteen percent [18%] per annum. As used in
subparagraph (c) above, the "worth at the time of the award" is computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award
plus one percent [1 %].
22.4 Lease Not Terminated. In the event of any default as aforesaid by Tenant, then in
addition to any and all other remedies available to Landlord at law or in equity, Landlord may elect to
continue this Lease in effect and to enforce all rights and remedies under the Lease, including but
not limited to the recovery of all rent as it becomes due under the Lease. Although Tenant's right to
possession of the Premises has not been terminated upon such election by Landlord, Landlord shall
have the right at any time when Tenant has abandoned the Premises or the Premises are otherwise
unoccupied to preserve or maintain the Premises or to attempt to relet the Premises to another
party. Tenant covenants that the institution by Landlord of an unlawful detainer action or the service
of any notice pursuant to the unlawful detainer statutes of Washington and the surrender of
possession pursuant to such notice shall not (unless Landlord elects to the contrary in writing at the
time of or at a time subsequent to the institution of such action or the serving of such notices and
such election) be deemed a termination of this Lease.
Notwithstanding a prior election by Landlord not to terminate the Lease (or prior inaction pertaining
thereto), Landlord shall nevertheless have the right to terminate the Lease in the event of any default
or the continuance of any default, as aforesaid; a termination shall be effective only upon written
notice to Tenant of such termination. In the event of such termination, the provisions of subsection
22.2 of the Lease shall be applicable.
22.5 Indemnification. Nothing contained in this Section shall constitute a waiver of Landlord's
right to recover damages by reason of Landlord's efforts to mitigate the damage to it caused by
Tenant's default; nor shall anything in this Section adversely affect Landlord's right, as in this Lease
elsewhere provided, to indemnification against liability and claims arising or occurring prior to a
termination of this Lease.
21
22.6 Counterclaims. In the event Landlord files an action to recover, among other remedies,
possession of the Premises, Tenant hereby waives the right to interpose any non-compulsory
counterclaims against any portion of Landlord's action.
SECTION 23. ATTORNEY'S FEES.
The term "attorney's fees" as used herein and elsewhere in this Lease shall mean and
include all reasonable legal fees and charges, including appellate fees and charges, paralegal fees
and charges, court, filing, and process fees, marshal's and sheriffs fees and charges, investigative
fees and charges, and all other sums related thereto.
In any action or arbitration, as the case may be, brought to enforce the provisions of this
Lease, the prevailing party shall be entitled to recover attorney's fees.
SECTION 24. CONDEMNATION.
24.1 Taking. If the Building or any significant portion thereof is taken for public or quasi-pubic
use by the exercise of eminent domain, with or without litigation, or by judgment or agreement, then
as of the date that title vests in the condemning authority, this Lease shall terminate. If the whole or
any part of the Property (other than the Building) is taken for public or quasi-public use by the
exercise or the threat of the exercise of the right of eminent domain, with or without litigation, or by
judgment or agreement, then solely as to the area so taken, as of the date that title vests in the
condemning authority, this Lease shall no longer be applicable. In the event of a taking of more than
twenty percent (20%) of the Premises, Landlord and Tenant shall each have the option for a period
of thirty (30) days after such taking to terminate this Lease. If the Lease is not terminated, upon
receipt of the applicable portion of the condemnation award, Landlord shall (i) cause the Association
to promptly restore the Common Elements of the Building to an architectural unit as comparable and
practicable to the condition existing prior to such taking, and (ii) promptly restore the Premises to an
architectural unit as comparable and practicable to the condition existing prior to such taking. For
clarification, Landlord's obligation to repair and restore the Premises shall include all work and
improvements included in Landlord's Work and any work and improvements included in Tenant's
Work for which Tenant was granted an allowance under this Lease or that were completed at
Landlord's cost and expense. Tenant shall also do likewise, at Tenant's sole expense, with respect
to all Personal Property so as to bring the Premises and every portion thereof, to the condition
required under subsection 12.2 hereof. There shall be no abatement or reduction of the rent
payable under the Lease as a result of such taking.
24.2 Award. The Association or Landlord, as applicable shall receive all the proceeds of any
damages or award(s) paid for any such taking, including the value of the Property, Building, and the
leasehold estate created by this Lease; Tenant shall receive all the proceeds of any damages or
awards paid for any Personal Property. Tenant shall have no claim against Landlord or the
condemning authority for the unexpired portion of the Term, and Tenant hereby assigns to Landlord
all of its right in and to such award. Nothing herein shall prevent Tenant from making a claim for the
then value of the improvements paid for directly by Tenant and located in the Premises (or any
limited common elements assigned to the Premises), plus: (a) the value of any Personal Property
installed and paid for by Tenant; and (b) reimbursement of any relocation costs to be incurred by
Tenant.
24.3 Voluntary Sale. A voluntary sale by Landlord to any public or quasi-public body, agency
or person, corporate or otherwise, having the power of eminent domain, either under threat of
condemnation or while condemnation proceedings are pending, shall be deemed to be a taking by
22
eminent domain.
SECTION 25. ASSIGNMENT AND SUBLETTING
25.1 Prohibition Against Assignment by Tenant and Subletting. Except as set forth in this
subsection 25.1 and subject to subsection 31.4 hereof, Tenant shall be absolutely prohibited from
assigning this Lease, or any right or interest, voluntarily, involuntarily, or by operation of law, from
encumbering all or any part of Tenant's interest in this Lease (collectively, "assignment of this Lease
or "assign this Lease" and the proposed transferee "assignee"), without first obtaining Landlord's
written consent, which consent shall not be unreasonably withheld. Except as set forth in this
subsection 25.1 and subject to subsection 31.4 hereof, Tenant shall be permitted to sublease all or
any part of the Premises, without obtaining Landlord's written consent. Notwithstanding the
foregoing, Tenant shall have the right, without obtaining Landlord's consent but upon written notice
to Landlord: (a) to assign its interest in this Lease, in whole or in part, or sublease the Premises, in
whole or in part, to any City or local government entity, to the County of King, or to the State of
Washington, or any agency or political subdivision of any of the foregoing; (b) to assign this Lease,
in whole or in part, or sublease the Premises, in whole or in part, to any third party, provided that in
all instances the demands and use of the Common Areas and parking facilities serving the Building
are not significantly impacted thereby (unless Tenant makes alternate arrangements for such
matters and pays the cost thereof). Any such changes in the use of the Premises shall be subject to
the restrictions thereupon as set forth in the Condominium Declaration, and furthermore, if any
assignee or subtenant provides alcoholic beverages anywhere in the Premises, Tenant or such
assignee or subtenant shall also obtain host liquor liability endorsement to its liability insurance in an
amount reasonably acceptable to Landlord. No assignment or subletting shall relieve Tenant of its
primary and ongoing obligation and liability under this Lease, provided, however, if (i) the entirety of
the Tenant's interest in the Lease is assigned to any City or local government entity, to the County of
King, or to the State of Washington, or any agency or political subdivision of any of the foregoing;
and (ii) such assignee has a net worth greater than that of the Tenant named herein, then the
Tenant named herein shall be relieved of its future obligations and liability under the Lease upon the
assumption of such obligations and liability by such assignee.
25.2 Limitation of Landlord's Consent. Landlord's consent to any proposed assignment of
the Lease: (a) shall not be deemed to be a grant of waiver and/or consent to any subsequent
requested, attempted or proposed assignment of the Lease; and (b) shall not in any way relieve
Tenant and/or any subsequent assignee of liability under this Lease. Any requested, attempted or
purported assignment of the Lease made without obtaining the prior written grant of waiver and
consent of Landlord shall, at the option of Landlord, be null and void and/or constitute a default
under this Lease.
25.3 Limited Restriction on Original Landlord's Right to Assign. Auburn Professional
Plaza, LLC hereby warrants that its manager and managing member is Oliphant Real Estate
Services, Inc., a Washington corporation ("ORES") wholly owned by trusts controlled by Jeffrey
Oliphant ("Oliphant") and his wife Sandra Oliphant. Notwithstanding anything in this Lease to the
contrary, subject to the exceptions herein set forth, absent the written consent of Tenant, the herein
restrictions and limitations shall apply during the period between the execution of this Lease and the
last day of Closing Period One ("Landlord No Transfer Period"): (a) Auburn Professional Plaza, LLC
shall not have the right to sell the Premises or assign its interest in this Lease; and (b) Auburn
Professional Plaza, LLC shall not enter into any agreements or take or allow any action (and shall
prevent ORES and Oliphant from entering into any agreements or from taking or allowing any action)
whereby Oliphant, directly or indirectly, is no longer the president, responsible officer, manager
and/or managing member of Auburn Professional Plaza, LLC. Excepted from the foregoing are the
following: (i) transfers made to prospective or actual mortgagees, and the exercise of such
mortgagee's rights (including but not limited to the right of judicial and non-judicial foreclosure, and
23
subsequent resale of the Premises to any third party after any such foreclosure); (ii) transfers to any
entity or entities controlled and/or managed by Oliphant and/or members of his immediate family;
(iii) transfers made at any time after the death or incapacity of Oliphant; and/or (iv) transfers of fee
simple and/or easement interests to governmental authorities and/or utility companies necessary or
appropriate so that Landlord can complete Landlord's Work as required under this Lease. Subject to
the Option and Tenant's rights thereunder, after the end of the Landlord No Transfer Period, there
shall be no restrictions or prohibitions on Landlord's right to sell the Premises or assign its interest in
the Lease and there shall be no restrictions upon the ability of ORES and Oliphant to sell or transfer
their interests in Auburn Professional Plaza, LLC and ORES, respectively.
SECTION 26. NONWAIVER.
No covenant, term or condition of this Lease (or breach thereof) shall be deemed waived
except if expressly waived in a written instrument executed by the waiving party specifically reciting
the covenant, term or condition (or breach thereof) being waived, and any such waiver of such
covenant, term, condition or breach, shall not be deemed to be a waiver of any preceding or
succeeding, covenant, term, condition, or breach. Acceptance by Landlord of all or any portion of
rent at any time shall not be deemed to be a waiver of any covenant, term or condition, except as to
the rent payment accepted.
SECTION 27. NOTICES.
All notices, consents, approvals or demands required under this Lease shall be in writing
and shall be deemed delivered when either: (a) deposited in the United States mail, certified or
registered, postage prepaid; (b) transmitted by telegraphic or electronic means or by recognized
courier service, with proof of service provided, or (c) delivered in person; in any event addressed to
or delivered to the appropriate party at all addresses for such party, as follows:
Landlord: Auburn Professional Plaza, LLC
c/o Michael John Klein, Esq.
5743 Corsa Avenue, Suite 216
Westlake Village, California 91362
with concurrent copies to:
Auburn Professional Plaza, LLC
P.O. Box 1294
Auburn, Washington 98071-1294
Attention: Jeffrey Oliphant, President
and to:
Anthony L. Rafel, Esq.
Rafel Law Group, PLLC
999 Third Avenue, Suite 1600
Seattle, Washington 98101
Tenant: City of Auburn
25 West Main Street
Auburn, Washington 98001-4998
Attention: Mayor
with concurrent copies to:
24
City of Auburn
25 West Main Street
Auburn, Washington 98001-4998
Attention: Finance Director
and to:
City of Auburn
25 West Main Street
Auburn, Washington 98001-4998
Attention: City Attorney
and to:
Foster Pepper PLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101-8965
Attention: Hugh D. Spitzer
or to such other and additional addresses as either party may from time to time designate for this
purpose.
SECTION 28. MISCELLANEOUS.
28.1 Captions. Captions of Sections and subsections of this Lease are for convenience only
and shall not be considered in resolving any questions of interpretation or construction of any term,
covenant or provision.
28.2 Landlord Defined. The term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and include only the then
lessor under this Lease of the Premises at the time in question, and if they shall be different from the
then lessor under this Lease, shall not mean and shall not include any mortgagee, fee owner or
ground lessor. In the event of any transfer or transfers of title thereto not prohibited under
subsection 25.3, then the Landlord herein named (and in the case of any subsequent transfers or
conveyances, the then transferor) shall be automatically freed and relieved from and after the date of
such transfer or conveyance of all liability as respects the performance of any covenants or
obligations hereunder on the part of Landlord to be performed after the transfer date, provided the
then transferee assumes such liability thereafter.
28.3 Binding Effect. Except as otherwise expressly set forth in subsection 28.2 above, and
as otherwise expressly provided elsewhere in this Lease, each and all of the terms, covenants and
conditions of this Lease shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors in interest and assigns. Nothing in this
subsection shall be deemed to permit any assignment of the Lease or use of the Premises other
than as provided for in Sections 6 and 25 hereof.
28.4 Disclaimer. Nothing contained herein shall be deemed to create any relationship
between the parties other than the relationship of landlord and tenant. It is stipulated that the parties
are not partners, or joint venturers, or, except as expressly provided to the contrary herein, agents of
one another.
25
28.5 Void or Voidable. If any part of this Lease shall be determined to be void or voidable as
a result of the application of any statute or by any court of competent jurisdiction, such application or
determination shall not affect any other provision of this Lease, and all such other provisions shall
remain in full force and effect. It is the intention of the parties hereto that if any provision of this
Lease is capable of two constructions, one of which would render the provision void or voidable and
the other of which would render the provision valid, then the provision shall have the meaning which
renders it valid.
28.6 Governing Law. This Lease shall be governed and interpreted solely by the laws of the
State of Washington. Venue for any action hereunder or relating hereto shall solely be in King
County, Washington.
28.7 Gender. The terms "Landlord" and "Tenant" wherever used herein shall be applicable to
one or more persons as the case may be, and the singular shall include the plural, and the neuter
shall include the masculine and feminine. The word "person", "persons", "party" and "parties",
wherever used in this Lease, shall all include individuals, partnerships, firms, trusts, associations
and/or corporations or any other form or forms of business and governmental entity(ies), including
code cities and/or other municipal or county forms of government.
28.8 Time. Time is of the essence of this Lease and of each and every provision thereof.
28.9 Joint and Several. All of the terms, covenants and conditions contained in this Lease to
be performed by Tenant, if Tenant shall consist of more then one person or organization, shall be
deemed to be joint and several.
28.10 Force Majeure. In the event that either party hereto shall be delayed or hindered in or
prevented from the performance of any act required hereunder by reason of strikes, lockouts, labor
troubles, inability to procure materials, failure of power, restrictive governmental laws or regulations,
riots, insurrection, war or other reason of a like nature not the fault of the party delayed in performing
work or doing acts required under the terms of this Lease, then performance of such act shall be
excused for the period of the delay and the period for the performance of any such act shall be
extended for a period equivalent to the period of such delay. The insufficiency or the lack of funds,
or the filing of or against a party under Title 11 of the United States Code shall not excuse or delay
the timely performance by such party of its covenants under this Lease. The provisions of this
subsection shall not operate to excuse any party from the timely payment of the rent or other
amounts as required by the terms of this Lease.
28.11 Entire Agreement. This Lease contains the entire agreement of the parties. It is
understood that there are no verbal agreements between the parties hereto affecting this Lease and
this Lease supersedes and cancels any and all previous negotiations, arrangements,
representations, brochures, agreements and understandings, if any, between the parties hereto or
made or displayed by Landlord or agent of Landlord to Tenant with respect to the subject matter
thereof, and none shall be used to interpret or construe this Lease. It is further agreed by and
between the parties hereto that there shall be no modifications or amendment of this Lease, except
as may be executed in writing between the parties, or successors to the parties, hereto.
28.12 Landlord's Liability. Notwithstanding anything to the contrary in this Lease, there shall
be absolutely no personal liability of any person, firm or entity who constitutes Landlord with respect
to any of the terms, covenants, conditions and provisions of this Lease, and Tenant shall, subject to
the rights of any mortgagees, fee owners and ground lessors, look solely to the interest of Landlord,
its successors and assigns, in the Premises (and in no other property), for the satisfaction of each
and every remedy of Tenant in the event of default by Landlord hereunder; such exculpation of
personal liability is absolute and without any exception whatsoever. No other property or assets of
26
Landlord shall be subject to levy, attachment, execution or other enforcement procedures for the
satisfaction of any judgment (or other judicial process) or for the satisfaction of any other remedy of
Tenant arising out of, or in connection with, this Lease or the relationship of Landlord and Tenant or
Tenant's use of the Premises and, if Tenant shall acquire a lien on or interest in any other properties
or assets by judgment or otherwise, Tenant shall promptly release such lien on or interest in such
other properties and assets by executing, acknowledging and delivering to Landlord an instrument to
that effect prepared by Landlord's attorneys.
28.13 Landlord's Performance for Account of Tenant. If Tenant shall default in the
performance of any covenant on its part to be performed by virtue of any provisions of this Lease,
Landlord may after any notice and the expiration of any reasonable period with respect thereto as
required pursuant to the applicable provisions of this Lease, perform the same for the account of
Tenant. If Landlord, at any time, is compelled to pay or elects to pay any sum of money or do any
act which would require the payment of any sum of money by reason of the failure of Tenant, after
any notice and the expiration of any period with respect thereto as required pursuant to the
applicable provisions of this Lease, to comply with any provision of this Lease, or if Landlord is
compelled to or elects to incur any expense including attorney's fees, in bringing, prosecuting or
defending any action or proceeding instituted by reason of any default of Tenant hereunder, the sum
or sums so paid by Landlord with all interest, costs and damages, shall be paid by Tenant to
Landlord within ten (10) days of demand therefor.
28.14 Tenant's Performance for Account of Landlord. If Tenant is compelled to incur any
expense including reasonable attorney's fees, in bringing, prosecuting or defending any action or
proceeding instituted by reason of any default of Landlord hereunder, the sum or sums so paid by
Tenant with all interest, costs and damages, shall be due and payable from Landlord to Tenant
within ten (10) days of demand therefor. Tenant shall not withhold from the rent payable to Landlord
any of the aforesaid sums.
28.15 Tenant's Waiver of Any and All Rights of Set-Off. Except as may be specifically set
forth herein, Tenant hereby waives any and all rights it may now, hereafter or claim to have set-off or
deduct any sums due from Landlord from the rent payable by Tenant, and Tenant shall promptly
remit to Landlord the full rent hereunder as the same becomes due.
28.16 Remedies Cumulative. Except as otherwise expressly provided herein, the various
rights, options, elections, powers and remedies contained in this Lease shall be construed as
cumulative and no one of them shall be exclusive of any of the others, or of any other legal or
equitable remedy which either party might otherwise have, except as provided, restricted or waived
herein, in the event of default in the terms hereof, and the exercise of one right or remedy by such
party shall not impair its right to any other right or remedy, except as provided, restricted or waived
herein, until all obligations imposed upon the other party have been fully performed. For clarification,
notwithstanding the other provisions of this Lease, including this subsection 28.16, in the event of
Landlord's default or breach of its obligations under this Lease, it is the intent to the parties, and the
parties specifically agree, that unless this Lease expressly provides Tenant with a right of
termination or rescission of this Lease in the applicable instance, Tenant shall not have the right to
terminate or rescind this Lease (i.e., notwithstanding any language in this Lease that Tenant shall
have available to it all rights and remedies, it is the intent of the parties to so limit such rights and
remedies as expressly provided in this Lease).
28.17 No Merger. The voluntary or other surrender of this Lease by Tenant, or a mutual
termination thereof between Landlord and Tenant shall not result in a merger, but shall, at the option
of Landlord, operate either as an assignment to Landlord of any and all existing subleases and
subtenancies, or as a termination of all or any existing subleases or subtenancies.
27
28.18 Waiver of Jury Trial. The parties hereby waive the right to trial by jury. Any dispute
between Landlord and Tenant or in which they are joined as parties shall only be submitted to a
judge sitting without a jury.
28.19 Brokers. Landlord has engaged Northwest Corporate Real Estate, Inc., a Washington
licensed real estate broker ("Landlord's Agent") in connection with certain aspects of the
development of the Building; Landlord shall compensate Landlord's Agent pursuant to a separate
agreement. Except as to Landlord's engagement of Landlord's Agent, the parties represent to one
another that they have not engaged any real estate broker(s) in connection with this Lease.
Landlord hereby indemnifies Tenant against claims of any real estate and business brokers claiming
through Landlord (including Landlord's Agent) and Tenant hereby indemnifies Landlord against
claims of any real estate and business brokers claiming through Tenant. Landlord hereby discloses
that Oliphant is the Designated Broker of a Washington licensed real estate brokerage firm that is
not part of this transaction.
28.20 Rule Against Perpetuities. Notwithstanding anything contained in this Lease to the
contrary, if the Lease Commencement Date does not occur on or before twenty-four (24) months
after the Landlord Contingencies and Tenant Contingencies set forth is Section 29 have been
satisfied, with an extension equal to any delay caused by Force Majeure (as defined in subsection
28.10), this Lease shall, at the option of Tenant, be null and void, and of no force or effect as of such
date. If this Lease is so rendered null and void, the parties are hereby released and discharged of
all liabilities and obligations hereunder or in any manner pertaining to the Premises.
28.21 Restriction on Recordation of Lease. Tenant shall not nor shall it permit the
recordation of this Lease. However, the parties shall execute and record a Memorandum of Lease
in the form attached hereto as Exhibit "F".
SECTION 29. CONTINGENICES.
29.1 Landlord's Contingencies. Landlord's obligation to construct the Building and
perform its covenants set forth herein is contingent upon each of the following items being
accomplished or completed to Landlord's satisfaction, as determined by Landlord in it sole judgment
and discretion ("Landlord's Contingencies"):
(a) Acquisition of the Property from its current owners, including the City of Auburn.
(b) Entry into this Lease with Tenant, with Tenant having waived (or concurrently with
the waiver of Landlord's Contingencies waiving) all of Tenant's Contingencies.
(c) Receipt of all building permits and similar approvals from all governmental
agencies having jurisdiction to construct the Building upon the Property (the "Required Permits").
(d) Entry into an agreement between Landlord and the City of Auburn and/or third
parties, acceptable to Landlord, for the lease to Landlord of certain parking spaces in the parking
garage to be constructed on the real property legally described on Exhibit "H" attached hereto (the
"Parking Garage Property"), together with receipt of adequate assurances that such parking garage
will be completed concurrent with or prior to the completion of construction of the Building (the
"Parking Garage Agreement").
(e) Entry into, and recording of, an agreement between Landlord and Auburn on 1 st,
L.L.C. acceptable to Landlord, granting to and for the benefit of the Property a perpetual exclusive
easement on the real property legally described on Exhibit "I" attached hereto (the "Mel's Plus
28
Property") for a minimum of two parking spaces for each one thousand square feet (2/1000 sq ft) of
Rentable Area within the Premises, together with receipt of adequate assurances that such parking
will be completed concurrent with or prior to the completion of construction of the Building. Such
easement rights shall be part of the property in the Condominium and the parking spaces shall be
treated as limited common elements under the Condominium Documents and allocated and
assigned for the exclusive use of the Premises (the "Mel's Plus Parking Agreement")..
(f) Receipt of a construction loan commitment.
29.2 Tenant's Contingencies. Tenant's obligation to perform its covenants set forth herein is
contingent upon each of the following items being accomplished or completed to Tenant's
satisfaction, as determined by Tenant in it sole judgment and discretion ("Tenant's Contingencies"):
(i) Entry into, and recording of, the Parking Garage Agreement, in a form acceptable
to Tenant (including, without limitation, acceptable to Tenant with respect to the rental amount and
number of parking spaces).
(ii) Entry into, and recording of, the Mel's Plus Parking Agreement, in a form
acceptable to Tenant, which Mel's Plus Parking Agreement must be consented to by all mortgagees
of the Mel's Plus Property and expressly made superior to any liens held by such mortgagees.
(iii) Sale to Landlord of that portion the land comprising the Property currently owned
by the City of Auburn and acquisition of the remaining Property from the other owners.
(iv) Approval of this transaction and all related transactions by the City Council of the
City of Auburn.
(v) Entry into this Lease with Landlord, with Landlord having waived (or concurrently
with the waiver of Tenant's Contingencies waiving) all of Landlord's Contingencies.
(vi) Landlord's receipt of the Required Permits.
(vii) Entry by Landlord into a construction contract for the construction of Landlord's
Work (the "Landlord Construction Contract"). The amount and terms of the Landlord Construction
Contract shall remain proprietary as between Landlord and its general contractor.
(viii) Tenant's receipt of written confirmation from Landlord's construction lender
indicating that: (a) Landlord has deposited with such lender and/or has theretofore already invested
in the Property (along with pre-construction aspects of Landlord's Work, such as plans and
specifications) the equity funds required pursuant to the loan commitment; and (b) such lender is
prepared to begin funding its loan commitment subject to satisfaction of Landlord's Contingencies
and Tenant's Contingencies. The amount and terms of Landlord's construction loan commitment
shall remain proprietary as between Landlord and its construction lender.
(ix) Execution and recordation of a mutually-acceptable subordination, non-
disturbance and attornment Agreement (the "SNDA") by and between Landlord, Tenant and
Landlord's lender ("Mortgagee"), pursuant to which Tenant shall subordinate the priority of this
Lease to the lien of the Mortgagee's deed of trust (the "Landlord Deed of Trust"), provided, however,
Mortgagee expressly recognizes the Option (as defined in Section 31 hereof) and the Right to
Repurchase (as defined in Section 32 hereof) in favor of Tenant shall not be subordinate to the
Landlord Deed of Trust and shall survive any foreclosure or other exercise of remedies in connection
therewith, and upon proper exercise of the Option and the payment of the Purchase Price or the
proper exercise of the Right to Repurchase and the payment of the Repurchase Purchase Price to
29
Landlord or Mortgagee, the Premises (including any limited common elements assigned to the
Premises and its undivided interest in the common elements) shall be conveyed to Tenant by
Statutory Warranty Deed and the Landlord Deed of Trust and any other lien held by Mortgagee shall
be released from the Premises (including any limited common elements assigned to the Premises
and its undivided interest in the common elements) by a partial release duly recorded.
29.3 Contingencies Procedures. When appropriate, Landlord shall advise Tenant that
Landlord's Contingencies have been satisfied or waived. When appropriate, Tenant shall advise
Landlord that Tenant's Contingencies have been satisfied or waived. Upon the latter of the events
described in the preceding two sentences, the Contingency Satisfaction Date shall have occurred.
If the Contingency Satisfaction Date shall not have occurred prior to six (6) months after the Effective
Date, each party shall have the right to terminate this Lease. If the Lease is terminated pursuant to
the provisions hereof, then upon such termination there shall be no further liability from one party to
the other pursuant to this Lease, except for those obligations that expressly survive termination of
this Lease and the obligations of the parties under subsection 32.2.
SECTION 30. NO RIGHT TO USE PARKING FACILITIES.
This Lease does not confer upon Tenant any right to utilize any parking facilities within or associated
with the Building, except for any limited common element parking spaces (i.e., the parking spaces
located on the Mel's Plus Property) allocated or assigned to Premises under the Condominium
Documents.
SECTION 31 TENANT'S OPTION TO PURCHASE THE PREMISES.
31.1 Grant of Option. Landlord hereby grants to Tenant an irrevocable option to purchase
the Premises and all improvement and appurtenances thereto including, without limitation, the HVAC
units serving the Premises ("Option") from Landlord pursuant to the terms hereinafter set forth.
Tenant shall not exercise the Option unless it intends to acquire the Premises for public purposes.
The term of the Option ("Option Term") shall commence as of the Lease Commencement Date and
shall terminate at the end of the Term, provided, however, Tenant may also exercise its Option
herein within thirty (30) days after the occurrence of an event that terminates this Lease by operation
of law (as opposed to expiration by the terms of the Lease, by mutual consent or by Court Order in
the event of default by Tenant) or after the occurrence of an event or the delivery of notice under
Section 11 of this Lease that terminates this Lease. Subject to the foregoing, Tenant may exercise
the Option at any time starting after the Lease Commencement Date during the Term by giving the
Landlord the hereinafter set forth written notice of the Tenant's election to exercise its Option
("Exercise Notice"). The Exercise Notice shall specify Tenant's chosen closing date, which date
shall be any business day that is: (a) between ninety (90) days and five hundred forty (540) days
after the LCD, but, unless Landlord consents (determined in Landlord's sole discretion) in no event
prior to January 15, 2011 ("Closing Period One"), provided regardless of the date selected by Tenant
during Closing Period One, the Exercise Notice shall be delivered to Landlord not less than thirty
(30) days prior to the closing date selected by Tenant; and (b) within the last thirty (30) days of the
Term ("Closing Period Two"), provided regardless of the date selected by Tenant during Closing
Period Two, the Exercise Notice shall be delivered not less than three hundred (300) days before the
closing date selected by Tenant. If Tenant exercises Tenant's Termination Right, then Closing
Period Two shall continue to apply, with the last day of said Closing Period Two being the Effective
Date of Termination. Once chosen by Tenant, neither Landlord nor Tenant shall have the right to
extend the closing date without the consent of the other party. Tenant's Option shall remain in full
force and effect notwithstanding any transfer or assignment of Landlord's interest in the Lease and /
or Premises, including without limitation the granting of any mortgage or conveyance of any deed of
trust. Tenant shall not have the right to select any closing date that is not within either Closing
30
Period One or Closing Period Two, and if such a date were to be selected, the same shall be
deemed to not be an exercise of the Option. Time is of the essence.
31.2 Option Purchase Price.
(a) If Tenant exercises the Option where the closing date is in Closing Period One, the
purchase price for the Premises shall be equal to the sum of: (i) the product of 42,114 square feet of
Rentable Area times Four Hundred Seventy Five and xx/100 Dollars ($475.00) per square foot; plus
(ii) the product of the Rentable Area of the Premises in excess of 42,114 Rentable square feet times
Three Hundred Eighty Six and xx/100 Dollars ($386.00) per Rentable square feet; plus (iii) the
product of $112,444.38 per month multiplied by the number of months between the LCD and the
closing date, with partial months prorated; plus (iv) the product of the Rentable Area of the Premises
in excess of 42,114 square feet multiplied by Two Dollars and 17/100 Dollars ($2.17) per square foot
per month for each month between the LCD and the closing date, with partial months prorated
(together the "Option Purchase Price"), and all minimum rent paid by Tenant pursuant to subsection
5.2(a) hereunder up to and through the closing date shall be applied toward or credited against the
Option Purchase Price.
(b) If Tenant exercises the Option where the closing date is in Closing Period Two, the
Option Purchase Price for the Premises, shall be the "Fair Market Value," determined in the manner
set forth below, and no rent paid by Tenant hereunder shall be applied toward or credited against the
Purchase Price. The Fair Market Value shall be determined in good faith between Landlord and
Tenant during the sixty (60) days after the Exercise Notice. If the parties are unable to agree upon
the Fair Market Value during such period, then the following appraisal procedure shall be followed.
Landlord and Tenant shall each engage a commercial real estate appraiser or broker unaffiliated
with the parties, which appraiser or broker shall have at least ten (10) years experience in the south
King County / north Pierce County area. The two appraisers and/or brokers shall engage a similarly
qualified third appraiser and/or broker. The three appraisers and/or brokers shall individually
determine in writing the Fair Market Value as of the anticipate closing date. In considering the Fair
Market Value, the appraisers and/or brokers shall consider the highest and best use for the
Premises, shall include the highest and best use / rental value for all improvements on the Premises
(but specifically excluding any custom, exotic or non-standard improvements or alterations made by
or at the cost of Tenant), as well as the remaining length and rental under the Lease. When each
appraiser and/or broker has submitted his/her determination of the Fair Market Value, the three
submittals shall be compared. If the highest submittal shall be 120% (or less) of the lowest
submittal, then the mean of the three submittals shall be Fair Market Value and thus the Option
Purchase Price. If the highest submittal shall be more than 120% of the lowest submittal, the two
submittals closest to one another shall be used (with the third submittal discarded), and the mean of
the aforesaid two submittals shall be the Fair Market Value and thus the Option Purchase Price.
Landlord and Tenant shall each pay for the appraiser and/or broker engaged by it, and shall equally
pay for the appraiser or broker engaged by the two appraisers and/or brokers.
31.3 Closing. The closing shall occur on the closing date specified in the manner described
above. At the closing, Landlord shall convey the Premises to Tenant, or Tenant's designee, by
statutory warranty deed subject to the Title Exceptions and such matters as shall hereafter be
approved by Tenant, with or without terminating the Lease, and shall assign to Tenant, or to
Tenant's designee, all assignable construction, equipment, and supplier warranties. In connection
with the exercise of the Option and the transfer of fee title, Landlord and Tenant shall each pay their
own attorney's fees. Tenant shall pay the real estate transfer excise tax ["excise tax"] (if any),
recording and escrow fees and the title insurance premium.
31
31.4 Non-Assignability. Tenant shall not have the right to assign Option rights herein to a
third party independent of its leasehold estate, however, if Tenant so instructs, Landlord shall convey
fee simple title to a third party designated by Tenant, provided, nothing herein shall relieve Tenant of
its obligation to complete the sale / purchase of the Premises if the Option is exercised.
31.6 Landlord Cooperation Upon Exercise of Option. If Tenant does send the Exercise
Notice by the end of Closing Period One, Landlord shall cooperate with Tenant in effectuating such
modifications to the Lease and in effectuating such other matters as Tenant shall reasonably require,
provided all of the same shall be effective only upon the closing herein contemplated and provided,
further, Landlord shall not incur any costs or liability as a result of its cooperation as herein
requested by Tenant. Landlord's cooperation may include, but shall not necessarily be limited to,
modifications to the Lease so that after conveyance of Landlord's title to the successor owner of fee
title to the Premises: (a) the Lease shall satisfy such requirements so that the successor owner may
be able to issue Certificates of Participation in accordance with the regulations and provisions of the
Internal Revenue Code (the "Code"); (b) that would require such successor owner (as landlord) and
Tenant to act in such a manner so as to prevent such Certificates of Participation to be an obligation
not described in Section 103(a) of the Code, so as to prevent the Lease or such Certificates of
Participation to be treated as a "private activity bond" as defined in Section 141 of the Code, and/or
so as to prevent the Lease or such Certificates of Participation to be considered as an "arbitrage
bond" within the meaning of Section 148(a) of the Code; (c) that may be necessary to comply with
RCW 35.42.200 and RCW 35.42.210, as the same may be amended from time to time; and (d)
would allow Tenant (or a third party on Tenant's behalf) to set aside, place and pledge in a special
account money and/or Government Obligations (as defined in RCW Chapter 39.53) in amounts
necessary to pay or prepay all rental payments due hereunder, and as a consequence thereof, such
successor landlord would not be thereafter entitled to any lien, benefit of security in any
improvements constructed on the Premises (including but not limited to Landlord's Work and
Tenant's Work), except the right to receive the finds so set aside and pledged. None of the matters
described in this subsection 31.5 shall apply while the Original Landlord is the Landlord under this
Lease.
31.6 No Obligation to Exercise Option. Unless Tenant does in fact send the Exercise Notice,
nothing herein shall be construed as an obligation by Tenant to purchase the Premises and/or to
exercise the Option.
SECTION 32. TENANT'S REMEDIES PRIOR TO LEASE COMMENCEMENT DATE.
32.1 Rent Abatement and Right to Terminate. Landlord shall use commercially reasonable
efforts to deliver possession of the Building and the Premises in the condition required hereunder
with all of Landlord's Work substantially complete (as defined in subsection 4.1) within eighteen (18)
months after the satisfaction of Landlord's Contingencies and Tenant's Contingencies (the "Outside
Delivery Date"). Landlord agrees that in the event of the inability of Landlord to deliver possession of
the Building and Premises by the Outside Delivery Date for any reason (other than as provided
below with respect to a Tenant Delay or Force Majeure), Landlord shall not be liable for any damage
resulting from such inability, but Tenant shall not be liable for any rent, and the Lease
Commencement Date shall not occur, until the time when Landlord can, after notice to Tenant,
deliver possession of the Premises to Tenant in accordance with the terms of this Lease. No such
failure to give possession on or before the Outside Delivery Date shall affect the other obligations of
Tenant under this Lease, except that if Landlord is unable to deliver possession of the Premises by
the Outside Delivery Date, for any reason (other than as provided below with respect to a Tenant
Delay or Force Majeure), Tenant is hereby granted an abatement of minimum rent equal to one (1)
day of such minimum rent for each three (3) days of delay after the Outside Delivery Date, such
abatement commencing with the first installment of minimum rent payable under this Lease;
provided, however, if Landlord is unable to deliver possession of the Premises by twenty-four (24)
32
months after the satisfaction of Landlord's Contingencies and Tenant's Contingencies (the "Outside
Lease Commencement Date"), for any reason (other than as provided below with respect to a
Tenant Delay or Force Majeure), Tenant shall have the additional right to terminate this Lease (upon
such termination Landlord shall promptly return any prepaid rent, security deposit or other sums);
provided, the foregoing time periods shall be extended for any delay that is a result of a Tenant Plan
Change (as defined in Exhibit "C" attached hereto) if Landlord's Work is delayed as a result of such
Tenant Plan Change (a "Tenant Delay") or if the delay is due to Force Majeure (as defined in
subsection 28.10). If any delay is the result of a Tenant Delay or Force Majeure, the Outside
Delivery Date and the Outside Lease Commencement Date shall be extended by the number of
days of such Tenant Delay or Force Majeure.
32.2 Right to Repurchase. Landlord shall use commercially reasonable efforts to commence
construction of the Building (as evidenced by completion of excavation and shoring and the pouring
of foundations) within eighteen (18) months after the satisfaction of Landlord's Contingencies and
Tenant's Contingencies (the "Outside Construction Commencement Date"). Landlord agrees that in
the event (1) Landlord fails to commence construction of the Building by the Outside Construction
Commencement Date for any reason or (2) Tenant elects to terminate this Lease under subsection
29.3 above, Tenant shall have the right, in Tenant's discretion, at anytime thereafter, to, purchase the
Former City Property (the "Right to Repurchase") for the purchase price paid by Landlord for the
Former City Property without reimbursement for any hard or soft costs incurred by Landlord in
connection with the development of the Former City Property (the "Repurchase Purchase Price"),
which Right to Repurchase must be exercised by written notice delivered to Landlord after the
Outside Construction Commencement Date and before Landlord commences construction, or, in the
event Tenant elects to terminate this Lease under subsection 29.3, within thirty (30) days of Tenant
electing to terminate this Lease under subsection 29.3; provided, in any event, the Right to
Repurchase must be exercised by Tenant with five (5) years after the date of this Lease. Tenant
may direct Landlord to convey title directly to Tenant or directly to any third party or other designee.
Landlord shall pay all excise taxes in connection with such transfer. Utilities costs will be prorated as
of the date of repurchase. Real estate taxes and assessments will be prorated as of the date of
repurchase. The deed and other documents will be in substantially the same form as used to
convey the Former City Property to Landlord. No additional encumbrances shall exist on title to the
Former City Property other than those that existed when title transferred to Landlord or those that
were approved in writing by Tenant. Landlord shall be responsible, at its cost, for removing any
such additional encumbrances on title and, if requested by Tenant, terminating the Condominium
Documents. In addition, as part of the repurchase of the Former City Property, Landlord shall (i)
assign to Tenant (or its designee), without representation or warranty and without additional
compensation, all of its right, title and interest in and to all permits, licenses, approvals, plans,
studies, condominium documents, and other similar documents and materials associated with the
Project and (ii) execute and deliver such other documents, certificates and instruments reasonably
necessary in order to effectuate the repurchase described herein or otherwise customarily delivered
in connection with the conveyance of property in King County, Washington.
32.3 Takeover Rights. If Tenant determines, in its reasonable judgment and in good faith, that
the performance of any significant portion of Landlord's Work described in Exhibit "C" attached
hereto is not proceeding so that Landlord's Work will be completed within twenty-four (24) months
after the satisfaction of Landlord's Contingencies (it being understood that time is of the essence),
Tenant may serve on the Landlord written notice of such determination. Thereafter, in the event
Landlord does not present to Tenant, within fifteen (15) days of receipt of Tenant notice of Landlord's
non-performance, reasonably satisfactory evidence that either such significant portion of Landlord's
Work will be completed as required by this Lease or that an extension of a completion date is
permitted and appropriate under the terms hereof, Tenant shall have the right, but not the obligation,
to assume control of the applicable portion of Landlord's Work, but only after giving Landlord an
additional fourteen (14) days advance written notice (coupled with an opportunity to cure during such
33
fourteen [14] day period). Upon such assumption of control by Tenant hereunder, Tenant agrees to
proceed with all reasonable dispatch to complete that significant portion of Landlord's Work for which
Tenant has given notice of the exercise of takeover rights. Anything in this Lease to the contrary
notwithstanding, Tenant shall have the right to modify the Landlord Construction Documents as
Tenant, in its reasonable business judgment, deems advisable in order to complete that significant
portion of Landlord's Work. Notwithstanding any exercise by Tenant of its takeover rights
hereunder, Landlord shall remain liable for the cost of Landlord' Work plus any increased costs
attributable to or resulting from Tenant exercise of its takeover rights hereunder, and Landlord
agrees to periodically pay such amounts upon demand. Interest shall accrue on such amounts from
date of demand until the date paid by Landlord or offset by Tenant (as provided below), at the
maximum lawful rate of interest, or in the event no such rate is specified under Washington law, then
at the rate of twelve percent [12%] per annum. If Landlord shall fail to pay for the cost of Landlord's
Work, accrued interest and/or any other sums provided in this subsection 32.3 within fifteen (15)
days of demand, Tenant shall have the right to offset such unpaid sums and interest from the next
payments due from Tenant to Landlord hereunder or commence legal action against Landlord for
collection of such unpaid sums and interest.
32.4 Remedies Cumulative. For clarification and without limiting subsection 28.16, the various
rights, options, elections, powers, and remedies contained in this Section 32 shall be construed as
cumulative and no one of them shall be exclusive of any of the others, or of any other legal or
equitable remedy which Tenant might otherwise have, and the exercise of one right or remedy by
Tenant under this Section 32 shall not impair Tenant's right to any other right or remedy. For
clarification, notwithstanding the other provisions of this Lease, including this Section 32, in the event
of Landlord's default or breach of its obligations under this Lease, it is the intent to the parties, and
the parties specifically agree, that unless this Lease expressly provides Tenant with a right of
termination or rescission of this Lease in the applicable instance, Tenant shall not have the right to
terminate or rescind this Lease (i.e., notwithstanding any language in this Lease that Tenant shall
have available to it all rights and remedies, it is the intent of the parties to so limit such rights and
remedies as expressly provided in this Lease).
[This Page ends here.]
34
(SEE EXHIBITS "A" THROUGH "J" ATTACHED HERETO
AND INCORPORATED HEREIN BY THIS REFERENCE.)
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as of the
day and year first above written.
AUBURN PROFESSIONAL PLAZA, LLC
a Washington limited liability company
By: Oliphant Real Estate Services, Inc.
a Washington corporation
its manager and managing member
By:
Jeffrey Oliphant, President
STATE OF
COUNTY OF
On , 2008 before me, ,
Notary Public, personally appeared Jeffrey Oliphant, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument the person(s), or the
entity upon behalf of which he acted, executed the instrument.
WITNESS my hand and official seal.
SIGNATURE OF NOTARY
35
THE CITY OF AUBURN
a municipal corporation
By:
Peter Lewis, Mayor
Approve
A
STATE OF WASHINGTON
COUNTY OF KING
On , 2008 before me,
Notary Public, personally appeared Peter Lewis, personally known to me to be the person whose
name is subscribed to the within instrument and acknowledged to me that he executed the same in
his authorized capacity, and that by his signature on the instrument the entity upon behalf of which
the person acted, executed the instrument.
WITNESS my hand and official seal.
SIGNATURE OF NOTARY
36
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
The Premises consists of the following real property, all of which is situated in the City of Auburn,
King County, Washington:
PARCEL A:
Lots 5 and 6, Block O, L.W. Ballard's Park Addition to Slaughter, according to the plat thereof
recorded in Volume 3 of Plats, page 91, in King County, Washington.
PARCEL B:
Lot 7, Block O, L.W. Ballard's Park Addition to Slaughter, according to the plat thereof recorded in
Volume 3 of Plats, page 91, in King County, Washington.
PARCEL C:
Lot 4, Block O, First Addition to the Town of Slaughter, according to the plat thereof recorded in
Volume 2 of Plats, page 84, in King County, Washington;
EXCEPT that portion conveyed to Yale Investment Company, a corporation, by deed recorded under
Recording Number 2601863, in King County, Washington, more particularly described as follows:
Beginning at the southeast corner of said lot;
Thence northerly along the east line of said lot to the northeast corner of said lot;
Thence west along the north line of said lot, 16.75 feet to a point in the center line of a concrete wall;
Thence south along the center line of said concrete wall, to a point in the south line of said lot, which
is 16.53 feet west of the point of beginning;
Thence east along south line of said lot, 16.53 feet to the point of beginning.
PARCEL D:
That portion of Lot 4, Block O, First Addition to the Town of Slaughter, according to the plat thereof
recorded in Volume 2 of Plats, page 84, in King County, Washington, more particularly
described as follows:
Beginning at the southeast corner of said lot;
Thence northerly along the east line of said lot to the northeast corner of said lot;
Thence west along the north line of said lot, 16.75 feet to a point in the center line of a concrete wall;
Thence south along the center line of said concrete wall, to a point in the south line of said lot, which
is 16.53 feet west of the point of beginning;
Thence east along south line of said lot, 16.53 feet to the point of beginning.
PARCEL E:
The west half of Lot 3, Block O, First Addition to the Town of Slaughter, according to the plat thereof
recorded in Volume 2 of Plats, page 84, in King County, Washington.
37
PARCEL F
The east half of Lot 3, Block 0, First Addition to the Town of Slaughter, according to the plat thereof
recorded in Volume 2 of Plats, page 84, in King County, Washington.
PARCEL &
The west half of Lot 2, Block 0, First Addition to the Town of Slaughter, according to the plat thereof
recorded in Volume 2 of Plats, page 84, in King County, Washington.
PARCEL H:
The east half of Lot 2, Block 0, First Addition to the Town of Slaughter, according to the plat thereof
recorded in Volume 2 of Plats, page 84, in King County, Washington.
PARCELI:
Lot 1, Block 0, First Addition to the Town of Slaughter, also land lying easterly of said lot between
said lot and Auburn Avenue and north of Main Street and south of the public alley extending east
and west on the north of said Block 0, being more particularly described as follows:
Beginning at the southwest corner on said Lot 1, Block 0, and running easterly along the south line
of said lot extended along the northerly line of Main Street to the intersection of said northerly line of
Main Street with the west line of Auburn Avenue;
Thence northeasterly along the west line of Auburn Avenue to the intersection of said west line of
Auburn Avenue with the southerly line of the above mentioned alley;
Thence westerly along the south line of said alley to the northwest corner of said Lot 1;
Thence southerly along the westerly line of said Lot 1 to the point of beginning
[This Exhibit ends here.]
38
EXHIBIT "B"
SITE PLAN
[THIS IS A PLACEHOLDER PAGE]
39
FLOOR PLAN
SECOND FLOOR
[THIS IS A PLACEHOLDER PAGE]
40
FLOOR PLAN
THIRD FLOOR
[THIS IS A PLACEHOLDER PAGE]
41
EXHIBIT "C"
LANDLORD'S WORK
Unless other specified herein, all items and obligations set forth in this Exhibit "C" shall be
performed by Landlord or its designee and shall be considered "Landlord's Work".
1. Before delivering possession of the Premises to Tenant, Landlord shall obtain all required
zoning and permits (other than Tenant's business licenses, if any are required) for the construction
and operation of the Building, except the portions thereof that do not impact Tenant's use or enjoyment
of the Premises or the Common Areas within the Building. The Building shall be of such exterior and
structural design and character as is reasonably acceptable to Tenant and as will also meet Tenant's
requirements for its use. The landscaping on the Property shall be of a design reasonably acceptable
to Tenant. If any statute, ordinance, rule or regulation prohibits or requires modifications to any
element of the Plans (hereinafter defined), Landlord or its architect shall: (a) so advise Tenant; (b)
revise the Plans as necessary to comply with governmental requirements; and (c) submit the revised
Plans to Tenant for its review and approval.
The Building and the Premises shall be constructed and completed by Landlord, generally in
accordance with the following plans and specifications, which are incorporated herein by this
reference, and which Landlord represents and warrants were prepared and certified by and under the
direct supervision of architects and engineers licensed and registered in Washington (collectively, the
"Plans").
Dorbritz 0 SHEET TITLE
Barghausen
Barghausen
Barghausen
Barghausen
Barghausen
Barghausen
Barghausen
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
NOTE: list of Plans to be completed prior to execution of this Lease.
42
PREPARE?
Dorbritz SHEET NO. SHEET TITLE
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Dorbritz
Sargent
Sargent
Sargent
Sargent
Sargent
Sargent
Sargent
Sargent
Sargent
Sargent
Sargent
Sargent
Fox
43
r Fox
SHEET NO.
SHEET TITLE
ISSUE ??
Fox
Fox
Fox
Fox
Fox
Fox
Fox
Fox
Fox
Fox
Fox
Fox
HER
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
44
EHR • I SHEET TITLE ISSUE DATE
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
EHR
Barghausen
Barghausen
Barghausen
Barghausen
Sierra
Notwithstanding the foregoing, but without limiting the foregoing, Landlord shall deliver the Premises
in this condition: (a) building shell with all exterior and perimeter improvements, including perimeter
walls, roof and foundation; (b) building lobby and common area areas within the Building, including
stairs, stairwells and elevator lobbies; (c) second floor: concrete slab and restrooms; (d) third floor:
concrete slab, restrooms, common corridors (hallways), metal stud demising walls (unfinished on
Premises side); (e) each floor: adequately-sized separate HVAC units on the roof, with unit(s)
exclusively serving each floor and stubbed to each floor of the Premises (to be distributed within the
Premises by Tenant); (f) each floor: adequately sized separate electrical panels installed within
each floor of the Premises or common utility room (and if to the common utility room, with conduit
stubbed to each floor of the Premises (with electrical service to be distributed within the Premises by
Tenant); (g) each floor: adequately sized separate sewer and water stubbed to each floor of the
Premises; (h) each floor: adequately sized separate conduits (for telephone and cable
communication services) delivered to each floor of the Premises or common utility room (and if to
the common utility room, with conduit stubbed to the Premises); (i) each floor: adequately sized
separate automatic fire protection shell distributed within Premises; and Q) one adequately sized
separate conduit (for large scale communication purposes) from the public right-of-way adjoining the
Building serving both floors of the Premises.
"Dorbritz" means Dorbritz Architects.
"Barghausen" means Barghausen Consulting Engineers, Inc.
"Sargent" means Sargent Engineers, Inc.
"Fox" means Fox Electric Company, Inc.
"ERH" means Evergreen Refrigeration and Heating, Inc.
"Sierra" means Sierra Construction Company, Inc.
2. Tenant, at Tenant's sole cost and expense, shall have the right to make changes,
substitutions and eliminations in the Plans ("Tenant Plan Changes") provided, however, that Tenant
shall pay all costs and expenses on account of any such Tenant Plan Changes. Costs shall include
45
an administrative fee to Landlord equal to fifteen percent (15%) of all other costs associated with
such Tenant Plan Changes, and if Landlord's Work is delayed as a result of Tenant Plan Changes,
such costs shall also include a sum equal to the per diem rental under this Lease for each such day
Landlord's Work is delayed. Landlord shall not be obligated to perform any work associated with
Tenant Plan Changes, and Tenant shall not be obligated to pay for Tenant Plan Changes until
Tenant provides Landlord with written authorization and approval for the same, which authorization
and approval shall include the cost associated with the specific Tenant Plan Change.
3. Landlord shall apply for and obtain, at its expense, all required permits and approvals from
all governmental agencies having jurisdiction, necessary for the construction contemplated by the
Plans to be completed ("Building Permits"). The parties acknowledge that Tenant, in its capacity as
the City of Auburn, has regulatory powers and is the primary governmental agency responsible for
the issuance of Building Permits. The parties acknowledge that Tenant, in its regulatory capacity,
shall treat this project and the related applications in the same and consistent manner using the
same standards as its treats all other projects and applications in the City.
4. Once all required Building Permits have been received, Landlord shall construct the Building
and make all other required improvements in accordance with the Plans and the associated Building
Permits. All such work shall be at Landlord's sole cost and expense, without any payment by Tenant
(except for Tenant Plan Changes, if any). All such work by Landlord shall be done by licensed
contractors selected by Landlord. Notwithstanding anything herein to the contrary, Landlord shall
provide in the construction contract between Landlord and its general contractor, and shall similarly
require the general contractor to similarly provide in the general contractor's agreements with its
subcontractors of all levels and tiers, that prevailing wages shall be paid to the workers, laborers and
mechanics working on the Premises, as prevailing wages are determined from time to time by the
Washington State Department of Labor and Industries for the particular craft in the particular
geographic area, pursuant to Washington Law RCW 39.04.260 ("prevailing wage law").
5. Subject to casualty, Landlord shall complete Landlord's Work (to the point of issuance of
Certificate of Occupancy by all governmental agencies having jurisdiction) not later than twenty-four
(24) months after the Required Permits are ready for issuance.
6. Except as herein provided, Tenant shall not have the right to inspect, review or monitor any
aspect of Landlord's relationship with its general contractor or subcontractors of any level or tier.
Notwithstanding the foregoing, Tenant shall have the limited right, but not the obligation, to: (a) verify
and confirm compliance with the prevailing wage law; and (b) verify and confirm costs associated
with any Tenant Plan Changes.
7. Prior to the Lease Commencement Date, Landlord's architect or structural engineer, as the
case may be, shall certify to Landlord and to Tenant (in form and substance reasonably acceptable
to Landlord and Tenant) that: (a) the Premises had been completed in conformity with the Plans and
in full compliance with all Building Permits; (b) the Building have been located as shown on the Site
Plan; and (c) the structural design of the Building has been completed in conformance with the
recommendations of the geotechnical report prepared for the Premises. Both Landlord and Tenant
shall be entitled to rely upon such certifications.
8. Upon notice to Landlord, Tenant may, from time to time, and at any time prior to the Lease
Commencement Date, enter upon the Premises for the purpose of inspecting any of Landlord's
Work, provided such entry does not unreasonably interfere with the performance of Landlord's Work.
Such entry shall be for the sole purpose of protecting Tenant's interest as Tenant, and Tenant shall
not be deemed to be responsible to Landlord, Landlord's general contractor or any subcontractor of
any level or tier as a result of such entry.
46
9. Landlord shall secure from the appropriate governmental authority and provide to Tenant
prior to the Lease Commencement Date, a final certificate of occupancy (or a temporary certificate of
occupancy permitting occupancy pending the issuance of a final certificate of occupancy in which
event the delivery to Tenant of a final certificate of occupancy shall be deemed a condition
subsequent) in accordance with Section 4 of the Lease.
10. Prior to commencement of Tenant's Work and again within thirty (30) after the Lease
Commencement Date, Tenant and Landlord (and their representatives) shall meet for pre-planned
formal inspections of the Building and the Premises, and every part thereof, to confirm Tenant's
satisfaction or dissatisfaction with Landlord's Work. Within five (5) business days of each such
inspection, Tenant shall prepare and deliver to Landlord a written statement as to Punchlist Items
(hereinafter defined). In the event that there are Punchlist Items as of the Lease Commencement
Date, Landlord shall promptly and properly complete the same. For purposes hereof, "Punchlist
Items" shall be defined as those incomplete items that, in Tenant's reasonable determination, do not
materially interfere with Tenant's ability to perform Tenant's Work or open or occupy the Premises in
accordance with Tenant's customary operational practices. If Landlord shall not complete the
Punchlist Items within forty-five (45) days after receipt of each of Tenant's Punchlists, then Tenant
shall notify Landlord of the same, identifying the then outstanding Punchlist Items that Landlord must
complete ("Second Punchlist Notice"). If Landlord fails to correct to Tenant's satisfaction the
remaining Punchlist Items within twenty five (25) days following Landlord's receipt of the Second
Punchlist Notice (or longer provided Landlord is diligently pursuing completion of the same as
reasonably determined by Tenant), then and in such event, Landlord shall be in default and Tenant,
at Tenant's option, may (without limitation of Tenant's other remedies as a result thereof) correct and
complete the Punchlist Items on behalf of Landlord in such manner as Tenant sees fit, and the full
cost and expense incurred by Tenant in doing so shall be immediately due by Landlord to Tenant. If
Landlord shall not pay the costs and expenses incurred by Tenant in completing the Punchlist Items
under this paragraph, then Tenant shall be entitled to deduct the full cost and expense from the
minimum rent payable under this Lease. Notwithstanding the foregoing, in no event shall Tenant
have the right to terminate the Lease as a result of Landlord's failure to correct Punchlist Items.
11. The original named Landlord hereunder ("Original Landlord") warrants to Tenant for the
"Warranty Period" hereinafter defined that: (a) as of the Lease Commencement Date, the Building
and the Premises as completed shall be structurally sound, well built and fit for Tenant's intended
use, free from defective materials, and constructed in accordance with sound engineering and
construction standards, and constructed in a workmanlike manner; (b) as of the Lease
Commencement Date, the Building and the Premises shall be constructed in accordance with
applicable law and the Plans; and (c) that the Building and the Premises is free and clear of all liens
and encumbrances for labor and materials furnished to Landlord. If Tenant alleges a breach of the
warranties set forth in this Paragraph, Tenant shall give to Original Landlord written notice of any
such allegation, together with a reasonably detailed explanation of the alleged breach (a "Claim"). If
Original Landlord (or Original Landlord's general contractor) agrees that the Claim is valid and timely
("Valid Claim"), which determination must be made within thirty (30) days after receipt of Tenant's
written notice, Original Landlord shall, promptly following concurrence that the same is a Valid Claim,
commence the cure of any defects covered by the warranties under this Paragraph. Original
Landlord shall diligently and continuously proceed with and complete such cure or correction at
Original Landlord's sole cost and expense in accordance with applicable law and in such a manner
as will minimize, to the extent reasonably possible, interference with Tenant's operations within the
Premises. If Original Landlord is still the Landlord hereunder, minimum rent hereunder shall abate to
the extent Tenant's use and enjoyment of the Premises are materially and adversely impaired. If
Original Landlord is not still the Landlord hereunder, Original Landlord shall pay Tenant an amount
equal to the minimum rent that would have abated under this Paragraph if Original Landlord was still
the Landlord hereunder. If Original Landlord fails to correct any Valid Claim, then and in such event:
(i) if Original Landlord is still the Landlord hereunder, Original Landlord shall be in default hereunder;
47
and (ii) Tenant, at Tenant's option, may (without limitation of Tenant's other remedies as a result
thereof) correct and complete such uncured Valid Claim(s) on behalf of Original Landlord in such
manner as Tenant reasonably sees fit, and the full cost and expense incurred by Tenant in doing so
shall be immediately due from Original Landlord to Tenant upon demand from Tenant (including
reasonable attorneys' fees incurred in pursuing such Claim). If Original Landlord shall not pay upon
demand the costs and expenses incurred by Tenant in completing such uncured Valid Claim(s)
under this Paragraph, and if Original Landlord is still the Landlord hereunder, then Tenant shall be
entitled to deduct the full cost and expense from the minimum rent due by Tenant under this Lease.
Original Landlord's warranties exclude any remedy for damage or defect caused by abuse or use by
Tenant outside its normal operations, modifications not made by, or with the consent of, Original
Landlord, improper and/or insufficient maintenance by Tenant and/or improper operation by Tenant.
The Warranty Period shall end: (x) one year after the Lease Commencement Date as to patent
defects and Claims pertaining thereto; and (y) three years after the Lease Commencement Date as
to latent defects and Claims pertaining thereto, provided, however, if a product's manufacturer gives
to Landlord a longer warranty and such warranty is assignable to Tenant, Landlord shall assign such
warranty to Tenant (on a non-exclusive basis) and Tenant shall not be prohibited hereby from
making a claim directly against such product's manufacturer (but shall not make a Claim against
Landlord or Landlord's general contractor after the end of the Warranty Period). Notwithstanding
anything herein to the contrary, with prior notice to the other party, Original Landlord shall have the
right to, and Tenant shall have the right to demand that Landlord, delegate Landlord's warranty
covenants herein to its general contractor (pursuant to a written delegation and assumption
agreement satisfactory to Tenant in its sole discretion), and upon acceptance of such delegation and
assumption of Original Landlord's warranty obligations by such general contractor and notice thereof
to Tenant, Tenant shall enforce such warranties initially against such general contractor and its
subcontractors of all tiers. If such general contractor fails to correct any Valid Claim within the time
periods provided in this Paragraph, Tenant may also enforce such warranties directly against
Original Landlord. Further, notwithstanding anything herein to the contrary, upon such delegation as
aforesaid, such warranties shall continue for the entire duration of (but in no event beyond the end
of) the Warranty Period. The Landlord Construction Contract shall provide that (1) the general
contractor under the Landlord Construction Contract acknowledges that Tenant shall have the right
to demand that Landlord delegate Landlord's warranty covenants herein to the general contractor
and (2) the general contractor shall execute and deliver a written delegation and assumption
agreement satisfactory to Tenant in its sole discretion. If Original Landlord (or Landlord's general
contractor) in good faith disputes the validity and/or timeliness of a Claim, which dispute must be
made by a written notice delivered to Tenant within thirty (30) days after receipt of Tenant's written
notice of Claim (any written notice of dispute shall have a reasonably detailed explanation of the
alleged dispute), upon the written request of either party (an "Arbitration Notice"), the dispute shall
promptly be submitted to arbitration under the auspices of a well-recognized experienced arbitration
service located in King County, Washington selected jointly by the parties, with the arbitration costs
divided equally between the parties and the arbitrator's decision binding and non-appealable (except
in the event of arbitrator fraud or misconduct). In the event the parties have not mutually agreed
upon an arbitration service within ten (10) days after the delivery of an Arbitration Notice, the
arbitration service shall be selected by Tenant without approval of Landlord. In the event of such
dispute, Landlord and Tenant shall each have the right to correct and complete the alleged defect
after ten (10) days notice to the other party (regardless if any arbitration is pending), initially at the
expense of the party correcting and completing the alleged defect, which such corrective work shall
not be deemed to be a waiver of that party's right to demand arbitration as herein provided. If the
arbitrator's decision shall be in favor of the party who corrected and completed the repair, then the
other party shall pay to the prevailing party the amount so awarded by the arbitrator. The foregoing
warranties and covenants of Original Landlord (and if delegated, Original Landlord's general
contractor) shall accrue throughout the Term (and, if applicable, thereafter) to the extent set forth
herein, and shall survive: (m) any termination of the Lease (other than if terminated by Court order
as a result of Tenant's breach of the Lease); (n) the exercise of the Option and closing of the sale of
48
the Premises (with or without a termination of this Lease); (o) any transfer of Tenant interest in this
Lease and/or the Premises; and (p) any transfer of Original Landlord's interest in this Lease and/or
the Premises, but shall in all events expire as of the end of the Warranty Period.
12. Within sixty (60) days after the Lease Commencement Date, Landlord shall cause the
following to be delivered to Tenant, at no expense to Tenant: (a) a complete set of "as-built"
drawings reflecting Landlord's Work, such drawings to be in both: (i) vellum or mylar format; and (ii)
computer disc format; (b) a complete set of all operating manuals, instruction booklets and similar
items furnished to Landlord for equipment and items incorporated into Landlord's Work; and (c) a
complete set of all warranties and guarantees received by Landlord in connection with Landlord's
Work, which warranties and guarantees shall be made in favor of or assigned (in either case, on a
non-exclusive basis) to Tenant.
13. By signing and being a party to this Lease, Tenant does not become responsible for nor
undertake or be deemed to have undertaken any duty in connection with any or all of the following
associated with Landlord's Work: (a) performance of Landlord's Work; (b) monitoring, supervising or
inspecting any performance by Landlord's general contractor or any subcontractor of any level or
tier; (c) monitoring loss prevention or safety procedures; (d) payment of Landlord's Work (except to
extent, if any, of Tenant Plan Changes); and/or (e) third party claims of any kind or nature, including
claims for bodily injury or property damage, for payments or for liens of any kind or nature, except for
matters arising from Tenant's active negligence or tortious acts.
[This Exhibit ends here.]
49
EXHIBIT "D"
TENANT'S WORK
Unless otherwise specified herein, all obligations set forth in this Exhibit "D" shall be
performed by Tenant or its designee and shall be considered "Tenant's Work". Tenant's Work shall
consist of: (a) Tenant's Building Work; (b) Tenant's Direct Communication Work; and (c) Tenant's
FF&E Work, as such terms are hereinafter defined.
1. Before performing any construction or other work on the Premises that would in any manner
alter the structure, would require a building or other governmental permit (if Tenant were not itself a
governmental entity) or might in any manner affect the warranties provided to Landlord by its general
contractor (if copies of such warranties have been provided to Tenant) and/or the warranties
provided to Tenant as part of Landlord's Work, Tenant shall obtain all required permits for the same
and, in, addition, shall obtain Landlord's written approval. In order to obtain Landlord's approval,
Tenant shall submit proposed plans and specifications for the proposed work. Landlord's approval
of such plans and specifications shall not be unreasonably withheld or delayed. Landlord agrees to
approve or reject said plans and specifications within twenty (20) days of Landlord's receipt thereof
and, if not approved or rejected within said period, said plans and specifications shall be deemed
approved. In the event Landlord shall reject said plans and specifications within the period provided
above, Landlord shall return said plans and specifications to Tenant indicating the items so rejected.
Tenant shall then have twenty (20) days to resubmit said plans and specifications to Landlord, and
Landlord shall have fifteen (15) days after resubmittal to approve or reject the same. If not approved
or rejected within said period, said plans and specifications shall be deemed approved. If said plans
and specifications are rejected after being resubmitted five times to Landlord, Tenant may cancel
this Lease. The work herein described, and the plans associated therewith, are hereinafter called
"Tenant's Building Work".
2. Once all required governmental permits and approvals have been received, and Landlord
has approved the plans associated with Tenant's Building Work, Tenant shall perform Tenant's
Building Work in accordance with such approved plans and the associated governmental permits
and approvals. All of Tenant's Building Work shall be performed after the Lease Commencement
Date, unless Landlord determines that the performance of such Tenant's Building Work will not
adversely affect Landlord's Work or the estimated completion date of Landlord's Work. All of
Tenant's Building Work shall be at Tenant's sole cost and expense, without any payment by
Landlord. All of Tenant's Building Work by Landlord shall be done by licensed contractors selected
by Tenant, provided, however, if any portion of Tenant's Building Work is to be performed before
Landlord's Work is completed, Landlord shall have the right to approve or disapprove Tenant's
contractor and further, Landlord shall have the right to instead designate Landlord's contractor to
perform Tenant's Building Work (provided the cost thereof is not greater than what Tenant would
have paid the contractor selected by Tenant).
3. Tenant shall furnish and install its Personal Property (as defined in the Section 16 of the
Lease) as shall be necessary for Tenant to conduct its intended operations on the Premises
collectively ("Tenant's FF&E Work"). [Notwithstanding the foregoing, Landlord, as part of Landlord's
Work, will be installing certain built in wiring, fire suppression and power systems to support Tenant's
FF&E Work, but only to the extent specifically set forth in the approved Plans or in Exhibit "C".]
Tenant shall complete Tenant's FF&E Work after the Lease Commencement Date, unless Landlord
determines that the performance of such Tenant's FF&E Work will not adversely affect Landlord's
Work or the estimated completion date of Landlord's Work. Tenant shall complete Tenant's FF&E
Work at Tenant's sole cost and expense. In performing Tenant's FF&E Work, Tenant shall not
50
damage or alter any portion of Landlord's Work without Landlord's express written approval.
4. If Tenant shall desire to establish a direct communication link between the Premises and any
other building or facility (e.g., a building or facility that is not part of the Premises, such as, by way of
example and not limitation, Auburn City Hall, Auburn Justice Center or any Valley Regional Fire
Authority fire station or emergency communications facility), Tenant shall be responsible for the
same ["Tenant's Direct Communication Work"] except for the conduit to be installed by Landlord as
part of Landlord's Work. Tenant shall, at its expense, design and perform Tenant's Direct
Communication Work in such a manner as to not interfere with the performance or completion of
Landlord's Work. Tenant's Direct Communication Work shall be governed by the same approval,
contractual and other requirements that govern Tenant's Building Work.
6. Tenant's Work shall comply with the requirements of public authorities, and shall be done
in a good, and workmanlike manner, free and clear of all liens and encumbrances for labor and
materials furnished to Tenant. Tenant and its independent contractors shall perform Tenant's Work
in a manner so as not to allow or permit any labor disputes or strikes. Notwithstanding anything
herein to the contrary, if required by law, Tenant shall provide in the construction contract between
Tenant and its general contractor, and shall similarly require the general contractor to similarly
provide in the general contractor's agreements with its subcontractors of all levels and tiers, and in
all other contracts with vendors performing Tenant's Work, that prevailing wages shall be paid to the
workers, laborers and mechanics working on the Premises, in accordance with the prevailing wage
law.
6. Except as herein provided, Landlord shall not have the right to inspect, review or monitor any
aspect of Tenant's relationship with its general contractor or subcontractors of any level or tier.
Notwithstanding the foregoing, Landlord shall have the limited right, but not the obligation, to verify
and confirm compliance with the prevailing wage law.
7. Upon notice to Tenant, Landlord may, from time to time, enter upon the Premises for the
purpose of inspecting any of Tenant's Work, provided such entry does not unreasonably interfere
with the performance of Tenant's Work. Such entry shall be for the sole purpose of protecting
Landlord's interest as Landlord, and Landlord shall not be deemed to be responsible to Tenant,
Tenant's general contractor or any subcontractor of any level or tier as a result of such entry.
8. Tenant shall secure from the appropriate governmental authority (if any) and provide to
Landlord upon reasonable request, written evidence of such governmental authority's approval of
Tenant's Work as completed (for those portions of Tenant's Work that required a governmental
permit or approval in order to begin).
9. Within sixty (60) days after the completion of Tenant's Building Work, Tenant shall cause the
following to be delivered to Landlord, at no expense to Landlord: (a) a complete set of "as-built"
drawings reflecting Tenant's Building Work, such drawings to be in both: (i) vellum or mylar format;
and (ii) computer disc format; (b) a complete set of all operating manuals, instruction booklets and
similar items furnished to Tenant for equipment and items associated therewith; and (c) a complete
set of all warranties and guarantees received by Tenant associated therewith, which warranties and
guarantees shall be made in favor of or assigned (in either case, on a non-exclusive basis) to
Landlord.
10. By signing and being a party to this Lease, Landlord does not become responsible for nor
undertake or be deemed to have undertaken any duty in connection with any or all of the following
associated with Tenant's Work: (a) performance of Tenant's Work; (b) monitoring, supervising or
inspecting any performance by Tenant's general contractor or any subcontractor of any level or tier;
(c) monitoring loss prevention or safety procedures; (d) payment of Tenant's Work, except payment
51
by Landlord of Landlord's Payment under Section 3 of the Lease; and/or (e) third party claims of any
kind or nature, including claims for bodily injury or property damage, for payments or for liens of any
kind or nature, except in all instances for matters arising from Landlord's active negligence or
tortious acts.
[This Exhibit ends here.]
52
EXHIBIT "E"
TITLE EXCEPTIONS
Real estate taxes not yet due and payable as of the Lease Commencement Date.
2. Any easements or other conveyances to be hereafter granted to public or franchise utility
companies or similar companies as are necessary or appropriate for Landlord to fulfill its obligations
to Tenant under the Lease and/or to other tenants under Landlord's agreements with such tenants
so long as the same could not reasonably be expected to have a material adverse impact on the
value, operation or use of the Premises and Tenant has given prior written approval of the same,
such approval not to be unreasonably withheld or delayed.
3. Any easements or other conveyances to be hereafter granted to any public authority for any
purpose as are necessary or appropriate for Landlord to fulfill its obligations to Tenant under the
Lease and/or to other tenants under Landlord's agreements with such tenants so long as the same
could not reasonably be expected to have a material adverse impact on the value, operation or use
of the Premises and Tenant has given prior written approval of the same, such approval not to be
unreasonably withheld or delayed.
4. Any easements or other vehicular and/or pedestrian access agreements to be hereafter
granted or made between Landlord and adjacent property owners so long as the same could not
reasonably be expected to have a material adverse impact on the value, operation or use of the
Premises and Tenant has given prior written approval of the same, such approval not to be
unreasonably withheld or delayed.
5. Deed of Trust and Assignment of Lease and Cash Collateral (the "Landlord Deed of Trust"),
to be executed from time to time by Landlord in favor of Landlord's lender ("Mortgagee"), and to be
recorded in the Official Records of King County, Washington, provided, however, this shall not be a
permitted title exception as of the close of escrow should Tenant exercise the Option. Further, this
permitted title exception shall be subject to the execution and recordation of a mutually-acceptable
subordination, non-disturbance and attornment Agreement by and between Landlord, Tenant and
Mortgagee, pursuant to which Tenant shall subordinate the priority of this Lease to the lien of the
Landlord Deed of Trust, provided, however, Mortgagee expressly recognizes the Option (as defined
in Section 31 hereof) and the Right to Repurchase (as defined in Section 32 hereof) in favor of
Tenant shall not be subordinate to the Landlord Deed of Trust and shall survive any foreclosure or
other exercise of remedies in connection therewith, and upon proper exercise of the Option and the
payment of the Purchase Price or the proper exercise of the Right to Repurchase and the payment
of the Repurchase Purchase Price to Landlord or Mortgagee, the Premises (including any limited
common elements assigned to the Premises and its undivided interest in the common elements)
shall be conveyed to Tenant by Statutory Warranty Deed and the Landlord Deed of Trust and any
other lien held by Mortgagee shall be released from the Premises (including any limited common
elements assigned to the Premises and its undivided interest in the common elements) by a partial
release duly recorded.
6. The Condominium Declaration and Condominium Survey Map and Plans, as approved and
recorded pursuant to Section 3 of the Lease.
[This Exhibit ends here.]
53
EXHIBIT "F"
MEMORANDUM OF LEASE
RECORDING REQUESTED BY:
City of Auburn
AND WHEN RECORDED MAIL TO:
City of Auburn
25 West Main Street
Auburn, Washington 98001-4998
Attn: City Attorney
Document Title: MEMORANDUM OF LEASE
Grantor: AUBURN PROFESSIONAL PLAZA, LLC
Grantees: CITY OF AUBURN
Abbreviated Legal
Description: Lots 5-7 Blk. O, L.W. Ballard's Park. Add. Vol. 3, pg. 91;
Lots 1-4 Blk. O, 1st Add. to Town of Slaughter, Vol. 2, pg. 84
(Full legal description on Exhibit A attached hereto)
Assessor's Tax
Parcel Numbers: 049200-0595; 049200-0605; 781620-0030; 781620-0035
781620-0025; 781620-0020; 781620-0015; 781620-0010;
781620-0005
Reference Number of None
Related Documents:
54
MEMORANDUM OF LEASE
WITH OPTION TO PURCHASE AND RIGHT OF REPURCHASE
AUBURN PROFESSIONAL PLAZA, LLC, a Washington limited liability company ("Landlord")
and THE CITY OF AUBURN, a code city of the state of Washington ("Tenant") entered into a lease
agreement dated , 2008, ("the Lease"), which provides among other
things, that for and in consideration of the rental therein reserved and upon the terms, conditions,
covenants and provisions set forth in length therein:
Landlord leases to Tenant and Tenant hires from Landlord the Premises described in said
Lease for a period commencing upon the Lease Commencement Date (defined in the Lease)
and expiring on the last day of the six hundredth (600th) full calendar month after the Lease
Commencement Date.
The Premises leased by Landlord to Tenant is a portion of a Building located on the real
property located in the City of Auburn, County of King, Washington, legally described on Exhibit
A attached hereto (the "Property").
3. Landlord has granted Tenant an option to purchase the Premises at the times, upon the
conditions and price set forth in the Lease. The Lease also sets forth the condition title is to be
delivered upon the completion of Tenant's purchase of the Premises, if Tenant so exercises
such option to purchase.
4. Landlord has also granted Tenant a right to repurchase the Property at the times, upon the
conditions and price set forth in the Lease, in the event construction of the Building is not
commenced within a certain period of time. The Lease also sets forth the condition title is to be
delivered upon the completion of Tenant's repurchase of the Property, if Tenant so exercises
such right to repurchase.
The herein referenced Lease is made upon the terms, conditions, covenants and provisions
set forth at length therein, each and all of which terms, conditions, covenants and provisions are
hereby incorporated herein with the same force and effect as if set out at length herein. To the
extent the provisions of this Memorandum of Lease conflict with the provisions of the Lease, the
provisions of the Lease shall prevail and control.
55
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Memorandum of
Lease as of the day and year first above written.
AUBURN PROFESSIONAL PLAZA, LLC,
a Washington limited liability company
By: Oliphant Real Estate Services, Inc.
a Washington corporation
its manager and managing member
By:
Jeffrey Oliphant, President
STATE OF
COUNTY OF
On , 2008 before me,
Notary Public, personally appeared Jeffrey Oliphant, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument the person(s), or the
entity upon behalf of which he acted, executed the instrument.
WITNESS my hand and official seal.
SIGNATURE OF NOTARY
56
THE CITY OF AUBURN
a municipal corporation
By:
Peter Lewis, Mayor
Approved:
City Attorney
STATE OF WASHINGTON
COUNTY OF KING
On , 2008 before me,
Notary Public, personally appeared Peter Lewis, personally known to me to be the person whose
name is subscribed to the within instrument and acknowledged to me that he executed the same in
his authorized capacity, and that by his signature on the instrument the entity upon behalf of which
the person acted, executed the instrument.
WITNESS my hand and official seal.
SIGNATURE OF NOTARY
57
EXHIBIT "G"
CONDOMINIUM DOCUMENTS
[See Attached]
58
Foster Pepper PLLC
Attention: Gary N. Ackerman
1111 Third Avenue, Suite 3400
Seattle, Washington 98101-3299
CONDOMINIUM DECLARATION FOR
AUBURN PROFESSIONAL PLAZA
A CONDOMINIUM
Grantor/Declarant: AUBURN PROFESSIONAL PLAZA, LLC, a Washington limited
liability company
Additional names on pg. N/A
Grantee: AUBURN PROFESSIONAL PLAZA, A CONDOMINIUM, and
AUBURN PROFESSIONAL PLAZA OWNERS ASSOCIATION
Additional names on pg. N/A
Legal Description: SE 1/ of NE 1/, S 13, T 21 N, R 4 E, W.M.
SW 1/ of NW 1/, S 18. T 21 N, R 5 E, W.M.
Official legal description on Schedule A
Assessor's Tax Parcel ID-#: 049200-0595-06; 049200-0605-04; 781620-0030-09;
781620-0035-04; 781620-0025-06; 781620-0020-01;
781620-0015-08; 781620-0010-03; 781620-0005-00
Reference# (if applicable): N/A
Additional numbers on pg. N/A
DEPARTMENT OF ASSESSMENTS
Examined and approved this day of
,200
Assessor
Deputy Assessor
CONDOMINIUM
DECLARATION
FOR
AUBURN PROFESSIONAL PLAZA
A CONDOMINIUM
50898610.6
TABLE OF CONTENTS
Page
Article 1. DEFINITIONS ......................................................................................................5
Section 1.1 Words Defined ..............................................................................................5
Section 1.2 Form of Words ...........................................................................................10
Section 1.3 Statutory Definitions ..................................................................................10
Section 1.4 Dollar Amounts ..........................................................................................10
Article 2. CONSTRUCTION AND VALIDITY OF DECLARATION .............................10
Article 3. NAME OF CONDOMINIUM ............................................................................10
Article 4. DESCRIPTION OF LAND; ADDITIONAL PROPERTY ................................10
Section 4.1 Description of Land ................................................................................... I l
Section 4.2 Addition of Additional Property ...............................................................11
Section 4.3 Expiration of Development Rights ............................................................ 11
Article 5. DESCRIPTION OF UNITS; ALLOCATED INTERESTS ................................11
Section 5.1 Number and Identification of Units ..........................................................11
Section 5.2 Unit Boundaries ......................................................................................... 11
Section 5.3 Unit Data ....................................................................................................11
Section 5.4 Allocated Interests ......................................................................................11
Article 6. COMMON ELEMENTS .....................................................................................12
Section 6.1 Description ..............................:...............................................................12
Section 6.2 Use ..............................................................................................................12
Section 6.3 Con-,,,eyance or Encumbrance of Common Elements .................................12
Article 7. LIMITED COMMON ELEMENTS ...................................................................12
Section 7.1 Description .................................................................................................12
Section 7.2 Use .............................................................................................................13
Section 7.3 Reallocation of Limited Common Elements; Enclosure of Third Floor
Deck ............................................................................................................13
Article 8. PARKING [AND STORAGE] ............................................................................13
Section 8.1 Number; Parking Permits; Assignment to Units ........................................13
Section 8.2 Use of Parking Spaces ................................................................................14
Article 9. PERMITTED USES; MAINTENANCE; CONVEYANCES .............................14
Section 9.1 Permitted Uses ............................................................................................14
Section 9.2 Use Restrictions ..........................................................................................14
Section 9.3 Leases .........................................................................................................16
-1-
50898610.6
Section 9.4 Maintenance of Units, Common Elements, and Limited Common
Elements; Association Records .................................................................. 16
Section 9.5 Exterior Appearance ................................................................................... 17
Section 9.6 Effect on Insurance ..................................................................................... 18
Section 9.7 Use or Alteration of Common Elements and Limited Common
Elements; Certain Installations Permitted .................................................. 18
Section 9.8 Signage ....................................................................................................... 18
Section 9.9 Trash Removal ............................................................................................ 19
Section 9.10 Offensive Activities Prohibited .................................................................. 19
Section 9.11 Conveyance by Owners; Notice Required ................................................. 19
Section 9.12 Hazardous Substances ................................................................................ 20
Section 9.13 Party Walls ................................................................................................. 20
Section 9.14 No Covenant to Operate ............................................................................. 21
Article 10. DEVELOPMENT RIGHTS; SPECIAL DECLARANT RIGHTS ..................... 21
Section 10.1 Development Rights ...........................................
........................................ 21
Section 10.2 Special Declarant Rights . ........................................................................... 22
Section 10.3 Transfer .................. ................................................................................... 22
Article 11. ENTRY FOR REPAIRS OR MAINTENANCE .................................................22
Article 12. OWNERS ASSOCIATION .................................................................................22
Section 12.1 Form of Association ................................................................................... 22
Section 12.2 Bylaws .......................................................................................................23
Section 12.3 Qualification and Transfer ..........................................................................23
Section 12.4 Powers of the Association .......................................................................... 23
Section 12.5 Financial Statements and Records ..............................................................25
Section 12.6 Inspection of Condominium Documents, Books and Records ...................25
Article 13. DECLARANT CONTROL PERIOD; TRANSFER OF PROPERTY BY
DECLARANT ..................................................................................................... 26
Section 13.1 Declarant Control Until Transition Date ....................................................26
Section 13.2 Transition Date ........................................................................................... 26
Section 13.3 Declarant's Transfer of Association Property ............................................26
Section 13.4 Termination of Contracts and Leases Made by the Declarant ...................28
Article 14. THE BOARD ...................................................................................................... 28
Section 14.1 Selection of the Board ................................................................................28
Section 14.2 Powers of the Board ...................................................................................28
Section 14.3 Managing Agent .........................................................................................28
Section 14.4 Limitations on Board Authority .................................................................28
Section 14.5 Right to Notice and Opportunity to Be Heard ............................................29
Article 15. BUDGET AND ASSESSMENTS ......................................................................29
-2-
50898610.6
Section 15.1 Fiscal Year .................................................................................................. 29
Section 15.2 Preparation of Budget ................................................................................. 29
Section 15.3 Ratification of Budget ................................................................................ 29
Section 15.4 Supplemental Budget .................................................................................. 30
Section 15.5 Monthly Assessments ................................................................................. 30
Section 15.6 Common Expenses ..................................................................................... 30
Section 15.7 Specially Allocated Expenses ..................................................................... 30
Section 15.8 Contribution to Initial Working Capital; Other Initial Assessments and
Deposits ..................................................................................................... 31
Section 15.9 Special Assessments ................................................................................... 31
Section 15.10 Creation of Reserves; Assessments ............................................................ 31
Section 15.11 Notice of Assessments ................................................................................ 31
Section 15.12 Payment of Monthly Assessments .............................................................. 31
Section 15.13 Proceeds Belong to Association ................................................................. 32
Section 15.14 Failure to Assess ......................................................................................... 32
Section 15.15 Certificate of Unpaid Assessments ........................................................... 32
Section 15.16 Recalculation of Assessments .................................................................... 32
Section 15.17 Reconciliation of Assessments to Actual Income and Expenses ............... 32
Article 16. LIEN AND COLLECTION OF ASSESSMENTS ............................................. 32
Section 16.1 Assessments Are a Lien; Priority' ............................................................... 32
Section 16.2 Lien May be Foreclosed; Judicial Foreclosure ........................................... 33
Section 16.3 Nonjudicial Foreclosure ............................................................................. 33
Section 16.4 Receiver During Foreclosure ...................................................................... 34
Section 16.5 Assessments Are Personal Obligations ...................................................... 34
Section 16.6 Extinguishment of Lien and Personal Liability .......................................... 34
Section 16.7 Joint and Several Liability ......................................................................... 34
Section 16.8 Late Charges and Interest on Delinquent Assessments .............................. 34
Section 16.9 Recovery of Attorneys' Fees and Costs ..................................................... 35
Section 16.10 Security Deposit ......................................................................................... 35
Section 16.11 Remedies Cumulative ................................................................................. 35
Article 17. ENFORCEMENT OF DECLARATION, BYLAWS AND RULES AND
REGULATIONS ................................................................................................. 35
Section 17.1 Rights of Action ......................................................................................... 35
Section 17.2 Failure of Board to Insist on Strict Performance No Waiver ..................... 35
Section 17.3 Board Enforcement .....................................................................................36
Article 18. TORT AND CONTRACT LIABILITY ..............................................................36
Section 18.1 Actions against Association .......................................................................36
Section 18.2 Limitation of Liability for Utility Failure, etc ............................................36
Section 18.3 No Personal Liability ..................................................................................36
-3-
50898610.6
Article 19. INDEMNIFICATION .........................................................................................37
Article 20. INSURANCE ...................................................................................................... 37
Section 20.1 General Requirements ................................................................................37
Section 20.2 Property Insurance ......................................................................................37
Section 20.3 Commercial General Liability Insurance ...................................................38
Section 20.4 Insurance Trustee; Power of Attorney ........................................................38
Section 20.5 Additional Policy Provisions ......................................................................39
Section 20.6 Fidelity Insurance ..................................................................................... 40
Section 20.7 Unit Owner's Insurance ..............................................................................40
Section 20.8 Use of Insurance Proceeds ..........................................................................41
Article 21. DAMAGE AND REPAIR OR DAMAGE TO PROPERTY ..............................42
Section 21.1 Initial Board Determination ........................................................................42
Section 21.2 Notice of Damage .......................................................................................42
Section 21.3 Definitions: Damage, Substantial Damage, Repair, Emergency Work...... 43
Section 21.4 Execution of Repairs ..................................................................................43
Section 21.5 Damage Not Substantial .............................................................................44
Section 21.6 Substantial Damage .................................................................................... 44
Section 21.7 Effect of Decision Not to Repair ........................ ...................................45
Article 22. CONDEMNATION ............................................................................................ 45
Article 23. EASEMENTS ......................................................................................................45
Section 23.1 In General ...................................................................................................45
Section 23.2 Encroachments ...........................................................................................46
Section 23.3 Easement Specifically Reserved by the Declarant ..................................... 46
Section 23.4 Utility Easements Granted by the Declarant . ............................................. 46
Section 23.5 [Other Easements.] .....................................................................................46
Article 24. PROCEDURES FOR SUBDIVIDING, COMBINING OR ALTERING UNITS.
46
Section 24.1 Submission of Proposal to Subdivide or Combine Unit .............................46
Section 24.2 Approval' Required for Subdivision or Combination .................................47
Section 24.3 Demising for Leasing .................................................................................47
Section 24.4 Improvement or Alterations of Units .........................................................47
Section 24.5 Adjoining Units ..........................................................................................47
Section 24.6 Board Review .............................................................................................48
Section 24.7 Procedure After Approval ..........................................................................48
Section 24.8 Relocation of Boundaries -- Adjoining Units .............................................48
Article 25. AMENDMENT OF DECLARATION SURVEY MAP AND PLANS,
ARTICLES OR BYLAWS ................................................................................... 49
Section 25.1 Procedures ..................................................................................................49
-4-
50898610.6
Section 25.2 Percentages of Consent Required ...............................................................49
Section 25.3 Limitations on Amendments ......................................................................50
Article 26. TERMINATION OF CONDOMINIUM ............................................................ 51
Section 26.1 Action Required .......................................................................................... 51
Section 26.2 Condominium Act Governs ........................................................................51
Article 27. NOTICES ............................................................................................................ 51
Section 27.1 Form and Delivery of Notice ...................................................................... 51
Section 27.2 Notices to Eligible Mortgagees .................................................................. 51
Section 27.3 Approval by Eligible Mortgagees ..............................................................52
Article 28. SEVERABILITY ................................................................................................52
Article 29. EFFECTIVE DATE ............................................................................................ 52
Article 30. REFERENCE TO SURVEY MAP AND PLANS ..............................................52
Article 31. ASSIGNMENT BY DECLARANT ....................................................................52
Schedule A Description of Property in Condominium
Schedule B Description of Additional Property
Schedule C Unit Data, Allocated Interests; Parking
Article 1. DEFINITIONS.
Section 1.1 Words Defined. For the purposes of this Declaration and any
amendments hereto, the following definitions shall apply.
Additional Property means the property the Declarant reserves the right to add to
the Condominium pursuant to Article 4.
Rentable Unit Area means the rentable area of a Unit as determined in
accordance with BOMA Standards, except as provided in Section 5.4.
Allocated Interests means the allocation of Common Expense Liability, interest
in Common Elements and voting for each of the Units in the Condominium in accordance with
Section 5.4 and as listed in Schedule C.
Articles means the articles of incorporation for the Association filed with the
Washington Secretary of State.
-5-
50898610.6
Assessments means all sums chargeable by the Association against a Unit,
including, without limitation: (a) general and special Assessments for Common Expenses and
Specially Allocated Expenses; (b) charges and fines imposed by the Association; (c) interest and
late charges on any delinquent account; and (d) costs of collection, including reasonable
attorneys' fees, incurred by the Association in connection with the collection of a delinquent
Owner's account.
Association means the owners association identified in Article 12.
Board means the board of directors of the Association, as described in Article 14.
BOMA means Building and Office Managers Association International.
BOMA Standards means the Standard Method for Measuring Floor Area in
Office Buildings approved by the American National Standards Institute on June 7, 1996, and
published by BOMA (ANSI/BOMA Z65.1-1996).
Building means the building known as Auburn Professional Plaza located on the
Property.
Bylaws means the bylaws of the Association as they may from time to time be
amended.
City means the City of Auburn, Washington. -
Common Building Services means all services which are provided to the
Common Elements or to more than one Unit, and which are typically required for the
practical and profitable use and enjoyment of buildings similar to the Condominium, and
which are provided by machinery, equipment and systems such as wires, pipes, ducts and
related equipment. Common Building Services include, but are not limited to, the provision
of energy (electricity, gas, etc., including emergency energy supplies), communications
(telephone, television, data, etc, whether wireless or wired), water, HVAC services, fire and
security monitors and alarms, fire sprinklers, sewer service and elevators. Common Building
Services do not include services provided only to one Unit.
Common Building Service Facilities shall mean all pipelines, conduits, wires,
chutes, ducts, fans, transformers, receivers, or other kinds of equipment or Improvement that
provides a Common Building Service.
Common Elements means all portions of the Condominium that are outside of
the boundaries of a Unit and those Improvements within the boundaries of a Unit that are
-6-
50898610.6
included within the definitions of Shell and Core and Common Building Service Facilities.
Common Elements include Limited Common Elements.
Common Expenses means expenditures made by or financial liabilities of the
Association which are related to the Common Elements and the general operation of the
Association and allocated in accordance with Common Expense Liability pursuant to this
Declaration, including allocations to reserves and the following utility services provided to the
Unit Owners: water and sewer (unless water is submetered) and garbage removal. Common
Expenses shall not include expenditures and/or financial liabilities related to the Limited
Common Elements, which are borne by or allocated to the Owners of the Units to which they are
assigned pursuant to this Declaration.
Common Expense Liability means the liability for Common Expenses allocated
to each Unit, as set forth in Schedule C.
Condominium means Auburn Professional Plaza, a condominium, created under
this Declaration and the Survey Map and Plans.
Condominium Act means the Washington Condominium Act, codified at
RCW 64.34, as it may be from time to time amended.
Convey means any transfer of the ownership of a Unit, including a transfer
by deed or by real estate contract, but shall not mean a Mortgage, Foreclosure, lease, license or
easement.
Declarant means Auburn Professional Plaza, LLC, a Washington limited
liability company, and its representatives, successors, and assigns.
Declarant Control means the right of the Declarant or persons designated by
the Declarant to appoint and remove officers and members of the Board pursuant to Article
13.
Declaration means this Condominium Declaration for Auburn Professional Plaza,
a condominium, as it may from time to time be amended.
Development Right means any right reserved by the Declarant in Section 10.1.
Eligible Mortgagee means a Mortgagee holding a first Mortgage on a Unit that
specifically requests status as an "Eligible Mortgagee under the Condominium Declaration for
Auburn Professional Plaza, a condominium" by document recorded in the land records of King
County, Washington.
Foreclosure means a forfeiture or judicial or nonjudicial foreclosure of a
Mortgage or a deed in lieu thereof.
-7-
50898610.6
Identi ing Number means the designation of each Unit in the Condominium, as
listed in Schedule C and as shown on the Survey Map and Plans.
Improvement means any manmade improvement, structure, fixture, Building,
now or hereafter located on the Property or within any Unit, and which is considered to
constitute real property at common law.
Limited Common Element means a portion of the Common Elements allocated
in Article 7 for the exclusive use of one or more but fewer than all of the Units.
Maintenance Standard means consistent with the overall appearance and quality
of maintenance of a first-class office project.
Managing Agent means the person, if any, designated by the Board under Section
14.3.
Mortgage means a mortgage or deed of trust secured by a Unit or real estate
contract for a Unit.
Mortgagee means any holder of a Mortgage on a Unit.
Notice and Opportunity to be Heard means the procedure described in Section
14.5.
Owner means the Declarant or other person who owns a Unit, but does not
include any person who has an interest in a Unit solely as security for an obligation.
[Parking Garage means the garage located across the intersection of 1st Street NE
and Division Street from the Condominium which includes parking spaces to be
allocated to Units as Limited Common Elements pursuant to Section 8. 1.]
Parking Permit means the right to park an automobile in the parking areas of the
Condominium issued by the Declarant pursuant to Section 8.1.
Person means a natural person, corporation, partnership, limited partnership,
limited liability company, trust, governmental subdivision or agency, or other legal entity.
Propert y means the land in the Condominium as described in Schedule A, as
Schedule A may be amended upon the addition of all or a portion of the Additional Property
pursuant to Article 4, and all Improvements thereon to the extent they are included in the
Condominium, together with all easements, rights and appurtenances now or hereafter
belonging thereto.
-8-
50898610.6
RCW means the Revised Code of Washington.
Rentable Unit Area means the rentable area of a Unit as determined generally in
accordance with BOMA Standards pursuant to Section 5.4.
Shell and Core shall mean the exterior surface of the Building, including glass,
fireproofing, insulation, sealants, weather proofing assemblies and materials including the
roof and roof membrane, all elevator shafts, fire stairs, and common chases and the like, and
all Structural Elements.
Special Declarant Rights means any rights reserved for the benefit of the
Declarant as specified in Section 10.2.
Structural Elements shall mean all foundations, bearing walls, pillars, beams,
braces, shear walls, and ceiling/floor slabs, and other structural items that are contained within
or are a part of the Building.
Specially Allocated Expenses means those expenses of the Association that are
allocated to Units on some basis other than Common ExpenseLiability, as provided in
Section 15.7 or elsewhere in this Declaration.
Subsequent Phase means the addition of all or a portion of the Subsequent Phase
Property to the Condominium and the creation by the Declarant of additional Units and
associated Limited Common Elements on that property pursuant to Article 4.
Subsequent Phase Amendment means an amendment to this Declaration recorded
by the Declarant adding Subsequent Phase Property and creating Units and Limited Common
Elements on the Subsequent Phase Property pursuant to Article 4.
Subsequent Phase Property means the property described in Schedule B, which
the Declarant reserves the right to add to the Condominium pursuant to Article 4.
Survey Map and Plans means the survey map and plans filed simultaneously with
the recording of this Declaration and any amendments, corrections, and addenda thereto
subsequently filed.
Transition Date means the date upon which the period of Declarant Control
terminates pursuant to Article 13.
Unit means a physical portion of the Condominium designated for separate
ownership, the boundaries of which are described in Section 5.2 and shown on the Survey Map
and Plans.
-9-
50898610.6
Unit Improvements means Improvements within the boundaries of a Unit other
than Common Elements. This Declaration provides in general that Unit Improvements are
under the control of the Unit Owner (subject to certain limitations or restrictions set forth or
referenced in this Declaration) and are to be insured, maintained, repaired and replaced by and
at the sole expense of the Owner of the Unit.
Section 1.2 Form of Words. The singular form of words shall include the plural
and the plural shall include the singular. Masculine, feminine, and gender-neutral pronouns
shall be used interchangeably.
Section 1.3 Statutory Definitions. Some of the terms defined above are also
defined in the Condominium Act. The definitions in this Declaration are not intended to limit
or contradict the definitions in the Condominium Act. If there is any inconsistency or
conflict, the definition in the Condominium Act will prevail.
Section 1.4 Dollar Amounts. Any dollar amounts stated in this Declaration shall
be increased by five percent per year commencing on the first day of the second year
following the recording of this Declaration.
Article 2. CONSTRUCTION AND VALIDITY OF DECLARATION.
This Declaration and the Condominiurn Act provide the framework by which the
Condominium is created and operated. In the event of a conflict between the provisions of this
Declaration and the Condominium Act, the Condominium Act shall prevail. In the event of a
conflict between the provisions of this Declaration and the Bylaws, this Declaration shall prevail
except to the extent this Declaration is inconsistent with the Condominium Act. The creation of
the Condominium shall not be impaired and title to a Unit and its interest in the Common
Elements shall not be rendered unmarketable or otherwise affected by reason of an insignificant
failure of this Declaration, the'Survey Map and Plans, or any amendment thereto to comply with
the Condominium Act.
Article 3. NAME OF CONDOMINIUM.
The name of the Condominium created by this Declaration and the Survey Map and
Plans is Auburn Professional Plaza, a condominium.
Article 4. DESCRIPTION OF LAND; ADDITIONAL PROPERTY.
-10-
50898610.6
Section 4.1 Description of Land. The real property included in the Condominium
and submitted to the Condominium Act is described in Schedule A, as it may be amended by
the Declarant upon the addition of the Additional Property to the Condominium in a
Subsequent Phase as provided in this Article.
Section 4.2 Addition of Additional Propert y. The Declarant reserves the right,
but shall not have the obligation, to add the Additional Property described in Schedule B as a
Subsequent Phase to the Condominium and to create Limited Common Element parking
spaces on that property by recording: (a) an amendment to the Declaration amending
Schedule A adding the Additional Property to the Condominium and amending the number of
parking spaces in Section 8.1 and (b) an amendment to the Survey Map and Plans showing the
Additional Property added to the Condominium and Limited Common Element parking
spaces on that property.
Section 4.3 Expiration of Development Rights. The Development Rights
specified in this Article shall terminate on the earlier of (a) the twentieth anniversary of the
recording of this Declaration or (b) the recording of a notice signed by the Declarant that it no
longer wishes to exercise any of the Development Rights.
Article 5. DESCRIPTION OF UNITS; ALLOCATED INTERESTS.
Section 5.1 dumber and Identification of Units. The Condominium has
Units. The Identifying Number of each Unit is set forth in Schedule C and shown on the
Survey Map and Plans.
Section 5.2 Unit Boundaries. Where there are walls, floors and ceilings, the
boundaries of the Units are the unfinished interior surfaces of their perimeter walls, floors,
and ceilings, including within their boundaries all lath, furring, drywall, wallboard, insulation,
plasterboard, plaster, paneling, tiles, wallpaper, paint, finished flooring, and any other
materials constituting any part of the finished surfaces thereof; provided, the Unit shall not
include those Common Elements specified in Section 6.1. Where there are no walls, floors
and/or ceilings, the Units will be the planes shown on the Survey Map and Plans. All spaces,
interior partitions, fixtures, betterments and improvements within the boundaries of a Unit,
other than the Common Elements described in Section 6. 1, are a part of the Unit.
Section 5.3 Unit Data. Schedule C sets forth the approximate area, floor level
and Allocated Interests of each Unit. Because the Units are restricted to nonresidential uses,
the number of bedrooms, bathrooms and fireplaces are not stated. The location of each Unit
is shown in the Survey Map and Plans.
Section 5.4 Allocated Interests. The Allocated Interests for the Units in the
Condominium for the purposes of Common Expense Liability, interest in the Common
-11-
50898610.6
Elements and voting in the Association are stated in Schedule C. The formula for
determining the Allocated Interests of each Unit is the ratio of the Rentable Unit Area of the
Unit to the aggregate Rentable Unit Areas of all Units.
Article 6. COMMON ELEMENTS.
Section 6.1 Description. The Common Elements of the Condominium are
defined in Section 1.1.
Section 6.2 Use. Each Owner shall have the right to use the Common Elements,
other than the Limited Common Elements, in common with all other Owners and a right of
access from the Owner's Unit across the Common Elements to the public streets. Such right
extends not only to each Owner, but also to his agents, servants, tenants, invitees, and
licensees and shall be governed by the provisions of the Condominium Act, this Declaration,
and the rules and regulations of the Association.
Section 6.3 Conveyance or Encumbrance of Common Elements. Portions of the
Common Elements not necessary for the habitability of a Unit may be conveyed or subjected
to a security interest by the Association of the Owners having at least 67% of the votes in the
Association, including 67% of the votes excluding votes held by the Declarant or an affiliate
of Declarant (as defined in the Condominium Act); but all of the Owners of Units to which
any Limited Common Element is allocated must agree in order to convey that Limited
Common Element or subject it to a security interest. Any conveyance, encumbrance, judicial
sale, or other transfer (voluntary or involuntary) of an individual interest in the Common
Elements shall be void unless the Unit to which that interest is allocated is also transferred.
Article 7. LIMITED COMMON ELEMENTS.
Section 7.1 Description. The Limited Common Elements allocated to specific
Units are as follows:
7.1.1 Any parking spaces assigned from time to time as Limited Common
Elements to specific Units as provided in Article 8;
7.1.2 Any storage areas assigned from time to time as Limited Common
Elements to specific Units as provided in Article 8;
7.1.3 The exterior decks adjacent to certain Units as shown on the Survey
Map and Plans;
7.1.4 Any signs for specific Units; and
-12-
50898610.6
7.1.5 Any other portions of the Common Elements shown on the Survey
Map and Plans as Limited Common Elements.
Section 7.2 Use. An Owner shall have the exclusive right to use the Limited
Common Elements allocated or assigned solely to that Owner's Unit. The right to use the
Limited Common Elements extends not only to the Owner of that Unit, but also to the
Owner's agents, servants, tenants, invitees, and licensees. The Board may adopt rules and
regulations governing the use of the Limited Common Elements which are not inconsistent
with any provision of this Declaration.
Section 7.3 Reallocation of Limited Common Elements; Enclosure of Third Floor
Deck. A Limited Common Element may be reallocated between Units only with the written
approval of the Board and by an amendment to this Declaration executed by the Owners of
the Units to which the Limited Common Element was and will be allocated. The Board shall
approve the request of the Owner or Owners under this Section within 30 days, or within such
other period provided by this Declaration, if any, unless the proposed reallocation does not
comply with the Condominium Act or this Declaration. The failure of the Board to act upon a
request within such period shall be deemed approval thereof. The amendment shall be
recorded in the names of the parties and of the Condominium. (1) A Common Element may
be reallocated as a Limited Common Element or (2) a Common Element or Limited Common
Element may be incorporated into an existing unit, in either case, with the approval of
Owners holding at least 75% of the votes in the Association, including the Owner of the Unit
to which the Limited Common Element will be allocated or incorporated. Such reallocation
or incorporation shall be reflected in an amendment to this Declaration and the Survey Map
and Plans at the cost of the requesting Owner. Notwithstanding the foregoing, the Owner of
Unit [the City's third floor unit] shall have the right to enclose all or a portion of
the Limited Common Element third floor deck adjacent to that Unit and incorporate it into the
Unit. Plans for the enclosure will be subject to approval by the Board as a Substantial
Alteration under Section 24.6, which approval shall not be unreasonably withheld. The Board
may authorize the Owner to construct the Common Elements of the enclosure or have the
work perfonned by a contractor acceptable to the Board at the cost of the Owner. Upon the
completion of the enclosure the Declaration and the Survey Map and Plans will be amended
to reflect the incorporation of the deck into the Unit, including, but not limited to, changing
the Allocated Interests of the Units in accordance with the formula set forth in Section 5.4 to
reflect the increased area of Unit , with the cost of the amendments being borne by the
Owner of the Unit.
Article 8. PARKING [AND STORAGE]
Section 8.1 Number-, Parking Permits; Assignment to Units.
There are exterior parking spaces adjacent to the Building (the "Exterior Parking
Spaces") and parking spaces in the Parking Garage (the "Garage Parking Spaces") [and
-13-
50898610.6
storage areas in the Building] that are designated by number on the Survey Map and
Plans. The storage areas shall be assigned as Limited Common Elements to specific Units or
designated for common use by the Association in Schedule C or by amendment to Schedule C
signed only by the Declarant. Except for any parking spaces assigned to a particular Unit, the
parking spaces are joint Limited Common Elements of the Units to which the Parking Permits
are assigned in Schedule C or by amendment to Schedule C signed only by the Declarant.
The Declarant reserves the right to create and assign to Units Parking Permits equal to
% of the unassigned parking spaces in the Condominium. Each Owner of a Unit to
which a Permit Parking is assigned shall be entitled to park one passenger motor vehicle at a
time in one of the parking spaces in the Permit Parking portion of the garage on a first come,
first served basis between the hours of 7:00 am and 6:00 pm on non-holiday weekdays
("Business Hours"), subject to such reasonable rules and regulations as the Board may from
time to time establish. The Declarant shall have the right to create and assign after-hours,
holiday and weekend Parking Permits ("After-Hours Parking Permits") and assign them to
one or more Units. During Business Hours, use of the parking spaces is limited to Owners
and tenants of the Units to which Parking Permits have been issued and their respective
customers and invitees. At hours other than Business Hours., to the extent permitted by law,
all parking spaces may be used by any persons authorized by the Owner of the Unit or Units
to which the After-Hours Parking Permits are assigned.
Section 8.2 Use of Parking Spaces. Parking spaces are to be used only for the
parking of currently licensed and operable motor vehicles, which do not exceed the
dimensions of the parking spaces, in connection with the occupancy of the Units or operation
of the businesses within the Units or as otherwise authorized in Section 8.1. Storage of motor
vehicles or other items in the parking spaces is prohibited. Working on vehicles in the
parking spaces is prohibited. The Board or its designated agent may cause improperly parked
vehicles to be removed at the risk and cost of the owner thereof.
Article 9. PERMITTED USES; MAINTENANCE; CONVEYANCES.
Section 9.1 Permitted Uses. Subject to the use restrictions below in Section 9.2,
the Units are intended for and restricted to office, retail, banking, restaurant and medical uses
and such other lawful uses as may be permitted under applicable ordinances and regulations
of the City and approved in writing by the Board (which other lawful uses shall be subject to
such additional use restrictions as may be adopted in writing by the Board at the time such
other lawful use or uses are approved by the Board), and in compliance with all applicable
federal, state or local statutes, ordinances, rules, regulations or other laws.
Section 9.2 Use Restrictions.
9.2.1 The Owners of the Units shall not allow or permit any continuing
vibration ("Vibration") or any offensive or obnoxious and continuing noise ("Noise") or any
offensive or obnoxious and continuing odor ("Odor") to emanate from the Owner's Unit into
-14-
50898610.6
the other Units or the Common Elements, nor shall the Owner allow or permit any machine or
other installation therein to constitute a nuisance or otherwise to unreasonably interfere with
the safety or comfort of any of the Owners of other Units. Upon the failure of the Owner to
remedy Vibration, Noise, or Odor after Notice and Opportunity to be Heard, the Board may at
its option either: (1) attempt to resolve the matter by agreement with the Owner; or (2) submit
the matter to arbitration by a panel of three independent arbitrators, in which case one
arbitrator shall be chosen by the Board, the second arbitrator shall be chosen by the Owner,
and the third arbitrator shall be chosen by the other two arbitrators. Construction, remodeling
and maintenance of the Units and activities reasonably necessary to accomplish the same shall
not be deemed to be Vibration, Noise or Odor within the meaning of this Subsection.
Conditions in existence at the time of purchase of any Unit shall not be deemed to be
Vibration, Noise or Odor within the meaning of this Subsection.
9.2.2 Except for Unit (and any other Unit or Units to which the Owner
of that Unit consents in its sole discretion), no portion of the Property may be: (i) operated as
a bank, savings and loan association or credit union and/or- (ii) include within its operation an
automated teller machine (collectively, 'Bank Use"). The following operations shall be
allowed by an occupant of the Building of the Property: stock brokerage firm; insurance
company; accounting firm; investment advisory firm, provided that it is not part of a Bank
Use; mortgage lender, provided that that it is not part of a Bank Use; or any government-
owned entity or function related thereto.
9.2.3 No portion of the Property shall be used or occupied for any purpose or
in any manner which, in the judgment of the Board, is offensive, disreputable, immoral or
illegal, which prohibition shall include, but not be limited to use of all or any portion of the
Property as a brothel or for the sale of paraphernalia related to the use of illegal drugs, adult
entertainment, adult books and magazines, adult videos and other adult products. Without
limiting the foregoing, no portion of the Property shall be used or occupied by an occupant
that (i) engages in the business of off track betting, (ii) operates a bar or nightclub (provided
restaurants that serve alcoholic beverages shall not be prohibited hereby), or (iii) engages in a
retail liquor store use for off-premises consumption or sells intoxicants.
9.2.4 The Owner of a Unit shall neither use nor occupy the Unit nor do or
permit anything to be done thereon in any manner which shall make it impossible for the
Association to carry any insurance required or reasonably deemed to be necessary, or which
will invalidate or unreasonably increase the cost thereof or which will cause structural injury
to the Building, or which would constitute a public or private nuisance or which will violate
any laws, regulations, ordinances or requirements of the federal, state or local governments or
of any other governmental authorities having jurisdiction over the Property.
9.2.5 The Units may not be used for residential purposes.
-15-
50898610.6
9.2.6 The Board may adopt rules and regulations governing the times during
which the Condominium is open or closed to the general public (not including the Owners and
their employees). The Board may require access or identification cards for access to the
Parking Garage and, during times that the Building is closed to the general public, to the
Building.
Section 9.3 Leases. The Owner of a Unit may lease all or any portion of the Unit
for any lawful purpose permitted under this Article 9. All leases and rental agreements for
Units shall be in writing and shall provide that its terms shall be subject in all respects to the
provisions of this Declaration and the Bylaws and rules and regulations of the Association and
that any failure by the tenant to comply with the terms of such documents, rules, and
regulations shall be a default under the lease or rental agreement. If any lease or rental
agreement does not contain the foregoing provisions, such provisions shall nevertheless be
deemed to be part of the lease and binding upon the Owner and the tenant by reason of their
being stated in this Declaration. Each Owner shall be responsible for assuring that each
tenant or occupant of its Unit does not violate the provisions of the Declaration, the Bylaws
and the rules and regulations of the Association. If any tenant or occupant of a Unit violates
or permits the violation by his guests and invitees of any provisions hereof or of the Bylaws or
of the rules and regulations of the Association, the Owner shall give notice to the tenant or
occupant of the Unit to forthwith cease such violations and take such other commercially
reasonable action as is prudent under the circumstances to cause the tenant or occupant to
cease such violations.
Section 9.4 Maintenance of Units, Common Elements, and Limited Common
Elements; Association Records.
9.4.1 Responsibilities of Association. Except as provided below, in
Subsection 9.4.2 or elsewhere in this Declaration, the Association is responsible for the
operation, maintenance, repair, and replacement of the Common Elements and the Limited
Common Elements (including all finishes), including, without limitation, all building systems,
equipmentand fixtures that serve the entire Building or the Common Elements, all in
accordance with the Maintenance Standard.
9.4.1.1 Exterior. Except as provided in Subsection 9.4.1.2 with
respect to doors and windows, the Association shall be responsible for the maintenance, repair
and replacement of the exterior of the Building, including the roof.
9.4.1.2 Doors; Windows. The Association shall be responsible for
the maintenance, repair and replacement of any broken and damaged doors and glass in the
windows and doors of the Building. The Association shall, as a Common Expense, periodically
(as determined by the Board) clean all exterior windows of the Condominium. The Association
shall specially assess the Owner of the Unit for the cost of replacing any broken or damaged
-16-
50898610.6
exterior doors or windows of the Owner's Unit if such breakage or damage was caused by the
act, inaction or negligence of the Owner or its tenants, employees, agents or contractors.
9.4.1.3 Outside Areas. The Association shall be responsible for the
maintenance, repair and replacement of the landscaping, planters and sidewalks of the
Condominium, including any portion in the public rights-of-way for which the property owner is
responsible under applicable laws.
9.4.1.4 Janitorial. The Association shall be responsible for providing
janitorial service for all of the Common Elements, other than the Limited Common Elements;
provided that the Association shall, at the cost of the Owners, provide janitorial services with
respect to the Limited Common Element parking spaces and the portion of Unit that is
open to the elements and may, with the consent and at the cost of the Owner, provide janitorial
service to specific Units and Limited Common Elements decks.
9.4.2 Responsibilities of Owners. Each Owner, at the Owner's sole expense,
is responsible for maintenance, repair and replacement of all Unit Improvements and keeping
them in a neat, clean and sanitary condition in accordance with the rules and regulations of the
Association, free of rodents and pests, and in good order, condition, and repair, and shall do
all redecorating and painting at any time necessary to maintain the good appearance and
condition of the Unit. Each Owner shall be responsible for the operation, maintenance, repair,
or replacement of any signage, interior glass, plumbing, plumbing fixtures, wiring, water
heaters, air conditioning units, fans, heating or other equipment or appliances which serve
only that Unit, whether or not located in the Unit. The Owner of a Unit shall bear the
expenses relating to any changes in electrical, gas, water, sewer, trash or other utility services
necessitated by the use of the Unit. The Unit Owner will be responsible for keeping the
Limited Common Elements deck, if any, allocated to the Owner's Unit in a neat, clean and
sanitary condition, tree of rodents and pests and for repairing and replacing the finished
surface, but not the waterproof membrane, thereof. The Board may, as a Common Expense,
provide for the inspection of any portion of a Unit or Limited Common Element. If the
inspection discloses the need for maintenance, repair or replacement, the Board may either
require that the responsible Owner perform the maintenance, repair or replacement or cause
the maintenance, repair or replacement to be done by a third party and allocate the cost
thereof to the Owner. Except to the extent covered by the Association's insurance, each
Owner shall be responsible for any damage to its Unit, to the Common Elements or to another
Unit caused by activities within the Owner's Unit.
Section 9.5 Exterior Appearance. The Board shall provide for the maintenance,
repair and replacement of the exterior of the Building. Except as expressly set forth in this
Declaration, in order that a coherent and aesthetically pleasing exterior appearance of the
Building is preserved, no Owner may modify or decorate the exterior of the Building or the
exterior screens, windows, doors or awnings of any Unit or any other portion of any Unit
visible from outside the Unit without the prior written consent of the Board or in accordance
-17-
50898610.6
with the rules and regulations of the Association; provided that the Declarant may install or
approve the installation of awnings for the businesses being conducted within the Units
initially, which awnings may be changed by the Owner or occupant to reflect changes in the
business being conducted within the Unit. The Board may establish uniform requirements for
window coverings visible from the outside the Unit. No solar panels, radio, satellite dishes,
television antennas, or other appliances may be installed on the exterior of the Building
without the prior written consent of the Board or in accordance with the rules and regulations
of the Association. If approved, the Owner shall bear all the costs of installation, operation,
maintenance, repair, and replacement of such equipment and its connection to the Unit and
shall be responsible for any damage done to the Common Elements or to another Unit in
connection therewith.
Section 9.6 Effect on Insurance. Nothing shall be done or kept in any Unit or in
any Common Element or Limited Common Element that will increase the rate of insurance on
the Property without the prior written consent of the Board. Nothing shall be done or kept in
any Unit or in any Common Element or Limited Common Element that will result in the
cancellation of insurance on any part of the Property, or that would be in violation of any
laws.
Section 9.7 Use or Alteration of Common Elements and Limited Common
Elements; Certain Installations Permitted. Use of the Common Elements and Limited
Common Elements shall be subject to the provisions of this Declaration and the rules and
regulations adopted by the Board. Except as provided in this Declaration or in rules and
regulations adopted by the Board, nothing shall be altered or constructed in or removed from
any Common Element or Limited Common Element without the prior written consent of the
Board. Notwithstanding the forgoing, each Owner may install, operate, maintain, repair and
replace, at the Owner's expense, beating and air conditioning equipment and connections to
the Owner's Unit and shall be responsible for repairing any damage to the Common Elements
or to another Unit resulting therefrom. Furthermore, the City as Owner or tenant of a Unit
shall have the right to install, at the City's expense, (a) a skybridge in the approximate
location shown on the Survey Map and Plans connecting Auburn City Hall and the second
floor of the Building and (b) a direct communications system between Auburn City Hall and
Units owned or leased by the City. The City shall be responsible for all costs of installation,
operation, maintenance, repair and replacement of the skybridge and the communications
system and for repairing any damage to the Common Elements or to another Unit resulting
from such installation, operation, maintenance, repair or replacement.
Section 9.8 Signage. Signage for the Condominium, in the Common Elements
(including on the exterior of the Building), Limited Common Elements or in or on the
windows or doors of the Units, shall be subject to the prior approval of the Board or pursuant
to sign design guidelines approved by the Board and otherwise in compliance with all local
zoning or land use laws and regulations. The Board may erect, on the Common Elements, a
master directory listing occupants of the Units. Notwithstanding the foregoing, no signs
-18-
50898610.6
advertising Units for sale or lease shall be allowed without the prior approval of the Board,
who may prohibit any such signs or regulate the size and location thereof; provided that the
Declarant, as long as the Declarant owns a Unit, may post such signs on the Property as it
deems necessary or appropriate for the sale or lease of Units in the Condominium and may
change the name and/or signage for the Building. Notwithstanding the foregoing, the
Declarant may install or approve the installation of signs for the businesses being conducted
within the Units initially, which signs may be changed by the Owner or occupant to reflect
changes in the business being conducted within the Unit.
Section 9.9 Trash Removal. Unless provided by the Association as part of
janitorial service, each Owner shall be responsible for properly disposing of all trash or
garbage from the Owner's Unit and depositing it promptly in proper receptacles as designated
by the Board in accordance with such rules and regulations as the Board may adopt. Without
limiting the provisions of Section 9.12, in no event shall any Hazardous Substance, including,
without limitation, infectious or medical waste, be disposed of on, under, or in the Common
Areas, including any trash enclosures. Each Owner shall and will cause all of the Owner's
agents, servants, tenants, invitees, and licensees to use, maintain, store, and treat any such
Hazardous Substances only within their Unit and dispose of any such Hazardous Substances
off-site by licensed, reputable contractors, in each case, in compliance with all applicable
federal, state or local statutes, ordinances, rules. regulations or other laws now or hereafter in
effect pertaining to the use, handling, storage, treatment and disposal of Hazardous
Substances. Each Owner shall comply with any recycling program established by the Board
or otherwise applicable to the Condominium.
Section 9.10 Offensive Activities Prohibited. No noxious or offensive activity
shall be carried on in any Unit, Limited Common Element or Common Element, nor shall
anything be done therein that may be or become an annoyance or nuisance to other Owners.
Owners shall not permit any condition to exist that will induce, breed or harbor infectious
plant diseases or noxious insects or vermin.
Section 9.11 Conveyance by Owners; Notice Required. The right of an Owner to
convey a Unit shall not be subject to any right of approval, disapproval, first refusal, or
similar restriction by the Association or the Board, or anyone acting on their behalf. An
Owner intending to convey a Unit shall deliver a written notice to the Board, in accordance
with the notice provisions in Section 27.1, at least two weeks before closing, specifying
(a) the Unit being sold; (b) the name and address of the purchaser, of the closing agent, and of
the title insurance company insuring the purchaser's interest; and (c) the estimated closing
date. The Board shall have the right to notify the purchaser, the title insurance company, and
the closing agent of the amount of unpaid Assessments and charges outstanding against the
Unit, whether or not such information is requested. Promptly upon the conveyance of a Unit,
the new Owner shall notify the Association of the date of the conveyance and the Owner's
name and address. The Association shall notify each insurance company that has issued an
insurance policy under Article 20 of the name and address of the new Owner and request that
-19-
50898610.6
the new Owner be made a named insured under such policy. At the time of the first
conveyance of each Unit, every Mortgage, lien or other monetary encumbrance affecting that
Unit and any other Unit or Units or real property, other than the percentage of undivided
interest of that Unit in the Common Elements, shall be paid and satisfied of record, or the Unit
being conveyed and its undivided interest in the Common Elements shall be released
therefrom by partial release duly recorded or the purchaser of that Unit shall receive title
insurance from a licensed title insurance company against such Mortgage, lien or other
encumbrance.
Section 9.12 Hazardous Substances. The Owner of each Unit shall not permit any
Hazardous Substance, including, without limitation, infectious or medical waste, to be
illegally or improperly generated, processed, stored, transported, handled or disposed of on,
under, in or through the Owner's Unit or the Property; and each Owner shall indemnify,
defend, and hold harmless the other Owner or Owners and the Association from all fines,
suits, procedures, claims and actions of any kind arising out of or in any way connected with
any spills or discharges of Hazardous Substances or wastes arising from the operation or use
of the Unit or the Property by the Owner or the tenants or invitees of the Unit. As used
herein, the term "Hazardous Substance" means any hazardous, toxic or dangerous substance,
waste or material which is or becomes regulated under any federal, state or local statute,
ordinance, rule, regulation or other law now or hereafter in effect pertaining to environmental
protection, contamination or cleanup, including without limitation any substance, waste or
material which now or hereafter is designated as a "Hazardous Substance" under the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601
et seq.), or under any local or state rule or regulation. Without limiting the foregoing,
Hazardous Substances shall include, but not be limited to, infectious or medical waste and any
substance which after being released into the environment and upon exposure, ingestion,
inhalation, or assimilation, either directly from the environment or indirectly by ingestion
through food chains, will or play reasonably be anticipated to cause death, disease, behavior
abnormalities, cancer and/or genetic abnormalities.
Section 9.13 Party Walls. Non-structural demising walls common to Units shall be
regarded and treated as "Party Walls." This Section shall govern the maintenance and all
other obligations of Owners with respect to Party Walls.
9.13.1 The cost of the repair and maintenance of a Party Wall shall be borne
by the Owners sharing the Party Wall. If the need for any maintenance or repair work is
caused through the willful or negligent act of an Owner or his tenants, employees, invitees or
licensees, the cost of such maintenance or repairs shall be borne by that Owner alone.
9.13.2 Each Owner of a Unit with a Party Wall shall have the right, at the
Owner's sole expense, to drill or cut into or otherwise gain access to, the interior of a Party
Wall for the purpose of maintaining, repairing or restoring it and, upon the prior written
consent of the Owner of the adjoining Unit, for the purpose of remodeling or altering, water,
-20-
50898610.6
utility, soundproofing or other services or amenities to the Owner's Unit subject to an
obligation to restore the Party Wall to the same condition it was in immediately before such
act, and to indemnify the Owner of the Unit adjoining the Party Wall for any damages caused
thereby. No such act shall adversely affect noise transmission between Units or the fire rating
of the wall assembly.
9.13.3 Interior decoration excepted, no Owner of a Unit with a Party Wall
may make any changes to or alterations of a Party Wall without the prior written consent of
the Owner of the Unit adjoining the Party Wall. Speakers shall not be attached to a Party
Wall unless they are properly supported and sound baffles installed to protect the Unit on the
other side of the Party Wall.
9.13.4 Appurtenant to each Unit with a Party Wall located thereon shall be
an easement over the adjoining Unit sharing the Party Wall for the purpose of accommodating
any encroachment due to engineering errors, errors in original construction, or the settling or
shifting of the Building. If any Unit is partially or totally destroyed and then repaired and
rebuilt substantially in accordance with the original plans and specifications, there shall also
be appurtenant to the Unit an easement to accommodate minor encroachments by the
successor structure from similar causes.
9.13.5 If the Owner (the "Defaulting Owner") of a Unit fails to perform its
obligations under this Section including, without limitation, the obligation to pay that
Defaulting Owner's share of maintenance, repair or restoration of a Party Wall, the Owner of
the adjoining Unit may perform such action or make such payment. The Defaulting Owner
shall promptly reimburse that Owner for all costs and expenses (including attorneys' fees and
costs) incurred with interest thereon at the maximum rate permitted under RCW 19.52.020 on
the date on which the request for reimbursement is made and any amounts not so paid shall
become a lien on the Unit of the Defaulting Owner in accordance with the provisions of RCW
60.04.
Section 9.14 No Covenant to Operate. Nothing, either expressed or implied,
contained in this Declaration or the Bylaws shall require or obligate any Owner or any tenant
or occupant of a Unit to open or continuously operate any type or business in its Unit.
Article 10. DEVELOPMENT RIGHTS; SPECIAL DECLARANT RIGHTS
Section 10.1 Development Rights.
The Declarant reserves the Development Rights to (a) add, from time to time, all or part of
the Additional Property to the Condominium and create Limited Common Element parking
spaces on the Additional Property; (b) assign, from time to time, parking spaces to Units
pursuant to Section 8.1; (c) subdivide or combine, from time to time, Units it owns pursuant
to Section 24.1; and (d) change, from time to time, the name and/or signage for the Building.
-21 -
50898610.6
Section 10.2 Special Declarant Rights.
The Declarant reserves the following Special Declarant Rights so long as the Declarant owns a
Unit: (a) to complete any improvements to the Condominium shown on the Survey Map and
Plans; (b) to maintain sales and/or leasing offices, management offices, interior and exterior
signs advertising the Condominium, and model units in Units owned by the Declarant and in the
Common Elements of the Condominium; (c) to conduct marketing events and other activities
relating to the sale or lease of Units in the Common Elements of the Condominium; (d) to use
easements through the Common Elements for the purpose of making improvements within the
Condominium; and (e) to elect, appoint or remove any officer of the Association or any
member of the Board during the period of Declarant Control as provided by Article 13.
Section 10.3 Transfer.
The rights described in this Article shall not be transferred except by instrument evidencing the
transfer executed by the Declarant or the Declarant's successor and the transferee, and recorded
in the county in which the Condominium is located. The rights and liabilities of the parties
involved in such a transfer and of all persons who succeed to any Development Rights or Special
Declarant Rights are set out in RCW 64.34.316.
Article 11. ENTRY FOR REPAIRS OR MAINTENANCE.
The Association (acting through the Board) and its agents or employees may enter any
portion of a Unit or the Limited Common Elements allocated thereto to effect repairs,
improvements, replacements, maintenance or sanitation work deemed by the Board to be
necessary in the performance of its duties, to do necessary work that the Owner has failed to
perform, or to prevent damage to the Common Elements, the Limited Common Elements or to
another Unit. Except in cases of emergency that preclude advance notice, the Board shall cause
the Owner and occupant to be given Notice and Opportunity to be Heard at least three (3) days in
advance of entry. Such entry shall be made with as little inconvenience to the Owners and
occupants as, practicable. The Board may levy a special Assessment against the Owner of the
Unit for all or part of the cost of work that the Owner has failed to perform, which special
Assessment may be collected and foreclosed by the Association in the same manner as
Assessments are collected and foreclosed under Article 16.
Article 12. OWNERS ASSOCIATION.
Section 12.1 Form of Association. The Owners of Units shall constitute an owners
association to be known as the Auburn Professional Plaza Owners Association. The
Association shall be organized as a nonprofit corporation, no later than the date the first Unit
in the Condominium is conveyed. It will be governed by the Board, the number of directors
and qualifications of which shall be specified in the Bylaws. The rights and duties of the
- 22 -
50898610.6
Board and of the Association shall be governed by the provisions of the Condominium Act,
this Declaration and the Bylaws.
Section 12.2 Bylaws. The Board will adopt Bylaws to supplement this Declaration
and to provide for the administration of the Association and the Property and for other
purposes not inconsistent with the Condominium Act or this Declaration.
Section 12.3 Qualification and Transfer. Each Owner of a Unit, including the
Declarant, shall be a member of the Association and shall be entitled to one membership for
each Unit owned, which membership shall be considered appurtenant to that member's Unit.
Ownership of a Unit shall be the sole qualification for membership in the Association with the
voting rights of members being based on Allocated Interests, as provided in Section 5.4. A
membership shall not be transferred in any way except upon the transfer of title to the Unit
and then only to the transferee of title to the Unit; provided, that if a Unit has been sold on
contract, the contract purchaser shall exercise the rights of the Owner for purposes of the
Association, this Declaration, and the Bylaws, except as hereinafter limited, and shall be the
voting representative unless otherwise specified. Any attempt to make a prohibited transfer
shall be void. Any transfer of title to a Unit shall operate automatically to transfer the
membership in the Association to the new Owner.
Section 12.4 Powers of the Association. In addition to those actions authorized
elsewhere in this Declaration, the Association, acting through the Board, unless otherwise
provided in the Condominium Act or this Declaration, shall have the power to:
12.4.1 Adopt and amend the Bylaws and the rules and regulations for the
Condominium;
12.4.2 Adopt and amend budgets for revenues, expenditures, and reserves
for Common Expenses and Specially Allocated Expenses, and impose and collect regular and
special Assessments from Owners;
12.4.3 Hire and discharge or contract with Managing Agents and other
employees, agents, and independent contractors;
12.4.4 Institute, defend, or intervene in litigation or administrative
proceedings in its own name on behalf of itself or two or more Owners on matters affecting
the Condominium;
12.4.5 Make contracts and incur liabilities;
12.4.6 Provide for the maintenance, repair, replacement, and modification of
Common Elements, including the Limited Common Elements (except as provided in this
Declaration);
- 23 -
50898610.6
12.4.7 Cause additional improvements to be made as a part of the Common
Elements and Limited Common Elements;
12.4.8 Acquire, hold, encumber, convey, and dispose of, in the Association's
name, right, title, or interest to real or tangible and intangible personal property, and arrange
for and supervise any addition or improvement to the Condominium, provided that:
12.4.8.1 If the estimated cost of any separate property acquisition or
addition or improvement to the Condominium exceeds $50,000, the approval of either of the
following shall be required: (a) the Declarant and the Owners holding a majority of the votes in
the Association or (b) the Owners holding a 75% of the votes in the Association; and
12.4.8.2 The beneficial interest in any property acquired by the
Association pursuant to this Section shall be owned by the Owners in the same proportion as
their respective interests in the Common Elements and shall thereafter be held, sold, leased,
mortgaged or otherwise dealt with as the Board shall determine;
12.4.9 Grant easements, leases, licenses, and concessions through or over
the Common Elements (but not including Common Elements within Units and Limited
Common Elements) and petition for or consent to the vacation of streets and alleys;
12.4.10 Impose and collect any payments, fees, or charges for the use, rental,
or operation of the Common Elements (but not including Common Elements within Units and
Limited Common Elements) and for services provided to Owners;
12.4.11 Acquire and pay for all goods and services reasonably necessary or
convenient for the efficient and orderly functioning of the Condominium;
12.4.12 Impose and collect charges for late payment of Assessments as
further provided in Article 16 and, after Notice and Opportunity to be Heard by the Board or
by such representative designated by the Board and in accordance with such procedures as
provided in this Declaration, the Bylaws, or rules and regulations adopted by the Board, levy
reasonable fines in accordance with a previously established schedule thereof adopted by the
Board and furnished to the Owners for violations of this Declaration, the Bylaws, and rules
and regulations of the Association;
12.4.13 Impose and collect reasonable charges for the preparation and
recording of amendments to this Declaration and statements of unpaid Assessments;
12.4.14 Provide for the indemnification of its officers and Board and maintain
directors' and officers' liability insurance;
-24-
50898610.6
12.4.15 Assign its right to future income, including the right to receive
Assessments;
12.4.16 Subject to Section 15.7, assess, as a Common Expense, the following
utility services to the Units: water and sewer (unless water is submetered) and garbage
removal;
12.4.17 Exercise any other powers conferred by this Declaration or the
Bylaws;
12.4.18 Exercise all other powers that may be exercised in this state by the
same type of corporation as the Association; and
12.4.19 Exercise any other powers necessary and proper for the governance
and operation of the Association.
Section 12.5 Financial Statements and Records. The Association shall keep
financial records in accordance with generally accepted accounting principles. All financial
and other records shall be made reasonably available for examination by any Owner and the
Owner's authorized agents. At least annually, the Association shall prepare, or cause to be
prepared, a financial statement of the Association in accordance with generally accepted
accounting principles. The annual financial statement shall be audited at least annually by a
certified public accountant who is not a member of the Board or an Owner unless Owners
holding at least 60% of the votes, excluding votes held by the Declarant, waive the audit for
that year. The financial statement shall be completed within 120 days following the end of
the fiscal year and furnished to all Unit Owners. Any Mortgagee shall, upon written request,
be entitled to receive a copy of the annual financial statement within a reasonable time. The
Board, or persons having 35% of the voting' power of the Association, may require that an
audit of the Association and management books be presented at any special meeting. An
Owner, at the Owner's expense, may at any reasonable time conduct an audit of the books of
the Board and Association. Upon request, the Association shall provide Mortgagees with the
financial statement of the Association for the preceding fiscal year.
Section 12.6 Inspection of Condominium Documents, Books and Records. The
Association shall make available to Owners, Mortgagees, prospective purchasers and their
prospective Mortgagees, the Declarant, and the agents or attorneys of any of them, current
copies of this Declaration, the Articles, the Bylaws, the rules and regulations of the
Association, and other books, records, and financial statements of the Association.
"Available" shall mean available for inspection upon request within three business days
during normal business hours or under other reasonable circumstances. The Association may
require the requesting party to pay a reasonable charge to cover the cost of making the copies.
- 25 -
50898610.6
Article 13. DECLARANT CONTROL PERIOD; TRANSFER OF PROPERTY BY
DECLARANT
Section 13.1 Declarant Control Until Transition Date. Until the Transition Date,
the Declarant shall have the right to appoint and remove all members of the Board, provided
that: (a) not later than 60 days after conveyance by the Declarant of Units having 25% of the
Allocated Interests, Owners other than the Declarant shall elect at least one member and not
less than 25% of the members of the Board and (b) not later than 60 days after conveyance by
the Declarant of Units having 50% of the Allocated Interests, Owners other than the Declarant
shall elect at least one-third of the members of the Board.
Section 13.2 Transition Date. Declarant Control of the Association shall terminate
on the Transition Date. The Transition Date shall be on a date specified by the Declarant,
which date shall be not later than the earliest of: (a) 60 days after conveyance by the Declarant
of Units having 75% of the Allocated Interests to Owners; (b) five years after the date of
recording of this Declaration; (c) two years after the last conveyance of a Unit; or (d) the date
on which the Declarant records an amendment to this Declaration pursuant to which the
Declarant voluntarily surrenders the right to further appoint and remove officers and members
of the Board. If the Declarant voluntarily surrenders control pursuant to (d) above, the
Declarant may require that for the duration of what would have been the period of Declarant
Control but for Declarant's voluntary termination thereof., specified actions of the Association
or the Board, as described in a recorded instrument executed by the Declarant, be approved by
the Declarant before they become effective.
Section 13.3 Declarant's Transfer of Association Property. Within 60 days after
the Transition Date, the Declarant shall deliver to the Association or the Managing Agent all
property of the Owners and of the Association held or controlled by the Declarant including,
but not limited to, the following:
13.3.1 The original' >or` a photocopy of the recorded Declaration and each
amendment to this Declaration;
13.3.2 The certificate of incorporation and a copy or duplicate original of the
Articles as filed with the secretary of state;
13.3.3 The Bylaws;
13.3.4 The minute books, including all minutes and other books and records
of the Association;
13.3.5 Any rules and regulations that have been adopted;
- 26 -
50898610.6
13.3.6 The financial records, including cancelled checks, bank statements,
and financial statements of the Association, and source documents from the time of
incorporation of the Association;
13.3.7 Association funds or the control of the funds of the Association;
13.3.8 All tangible personal property of the Association, represented by the
Declarant to be the property of the Association and inventory of the property;
13.3.9 Except for alterations to a Unit done by an Owner other than the
Declarant, the copy of the Declarant's plans and specifications utilized in the construction of
the Condominium, with a certificate of the Declarant or a licensed architect or engineer that
the plans and specifications represent, to the best of such Person's knowledge and belief, the
actual plans and specifications utilized in the construction of the Condominium;
13.3.10 Insurance policies then in effect, or copies thereof, for the
Condominium and the Association;
13.3.11 Copies of any certificates of occupancy that may have been issued for
the Condominium;
13.3.12 Any other permits issued by governmental bodies applicable to the
Condominium currently in force
13.3.13 All original warranties that are still in effect for the Common
Elements, or any other areas or facilities which the Association has a responsibility to
maintain and repair, from the contractor, subcontractors, suppliers, and manufacturers and all
owner manuals or instructions furnished to the Declarant with respect to installed equipment
or building systems;
13.3.14 A roster of Owners and Eligible Mortgagees and their addresses and
telephone numbers, if known, as shown on the Declarant's records and the date of closing of
the first sale of each Unit sold by the Declarant;
13.3.15 Any leases of the Common Elements or Limited Common Elements
and other leases to which the Association is a party;
13.3.16 Any employment contracts or service contracts in which the
Association is one of the contracting parties or service contracts in which the Association or
the Owners have an obligation or a responsibility, directly or indirectly, to pay some or all of
the fee or charge of the person performing the services; and
13.3.17 All other contracts to which the Association is a party.
- 27 -
50898610.6
Section 13.4 Termination of Contracts and Leases Made by the Declarant If
entered into before the Board elected pursuant to Section 14.1 takes office, (1) any
management contract, employment contract, or lease of recreational or parking areas or
facilities or (2) any other contract or lease between the Association and the Declarant or an
affiliate of the Declarant, as defined by RCW 64.34.020(1), may be terminated without
penalty by the Association at any time after the Board elected pursuant to Section 14.1 takes
office upon not less than 90 days' notice to the other party or within such less notice period
provided for without penalty in the contract or lease. This Section does not apply to any
lease, the termination of which would terminate the Condominium or reduce its size, unless
the real property subject to that lease was included in the Condominium for the purpose of
avoiding the right of the Association to terminate a lease under this Section.
Article 14. THE BOARD
Section 14.1 Selection of the Board. Prior to the Transition Date, election or
appointment of members of the Board shall be governed by Article 13. Within 30 days after
the Transition Date, the Owners shall elect a Board, a majority of whom must be Unit
Owners. If a Unit Owner is an entity and not a natural person. any officer, director, member
or employee of the Owner shall be considered as a Unit Owner solely for the purpose of this
Section. The number of Board members and their terms of services shall be specified in the
Bylaws. The Board shall elect officers in accordance with the procedures provided in the
Bylaws. The members of the Board and officers shall take office upon election. Removal of
Board members, and their terms of service shall be as provided in the Bylaws.
Section 14.2 Powers of the Board. Except as provided in this Declaration, the
Bylaws or the Condominium Act, the Board shall at all times act on behalf of the Association.
The Board may exercise all powers of the Association, except as otherwise provided in the
Condominium Act, Declaration, or the Bylaws. All actions of the Board shall require
approval of a majority of Board members. Any dispute among Board members that cannot be
resolved shall be determined by arbitration in accordance with the dispute resolution
procedures specified in the Bylaws.
Section 14.3 Managing Agent. Upon the vote of a majority of Board members, the
Board shall contract with experienced professional Managing Agents to assist the Board in the
management and operation of the Condominium and may delegate such of its powers and
duties to the Managing Agent as it deems to be appropriate, except as limited herein.
Section 14.4 Limitations on Board Authority. The Board shall not act on behalf of
the Association to amend this Declaration in any manner that requires the vote or approval of
the Owners or Eligible Mortgagees pursuant to Article 25, to terminate the Condominium
pursuant to Article 26, or to elect members of the Board or determine the qualifications,
-28-
1,0898610.6
powers, and duties, or terms of office of members of the Board. The Board may, in
accordance with the Bylaws, fill vacancies in its membership for the unexpired portion of any
term.
Section 14.5 Right to Notice and Opportunity to Be Heard. Whenever this
Declaration requires that an action of the Board be taken after "Notice and Opportunity to be
Heard," the following procedure shall be observed: The Board shall give written notice of the
proposed action to all Owners, tenants or occupants of Units whose interest would be
significantly affected by the proposed action. The notice shall include a general statement of
the proposed action and the date, time and place of the hearing, which shall be not less than
five days from the date notice is delivered by the Board. At the hearing, the affected person
shall have the right, personally or by a representative, to give testimony orally, in writing or
both (as specified in the notice), subject to reasonable rules of procedure established by the
Board to assure a prompt and orderly resolution of the issues. Such evidence shall be
considered in making the decision but shall not bind the Board. The affected person shall be
notified of the decision in the same manner in which notice of the meeting was given.
Article 15. BUDGET AND ASSESSMENTS.
Section 15.1 Fiscal Year. The Board may adopt such fiscal year for the
Association as it deems to be convenient. Unless another year is adopted, the fiscal year of
the Association will be the calendar year.
Section 15.2 Preparation of Budget. Not -less than 30 days before the end of the
fiscal year the Board shall prepare a budget for the Association for the coming year. In
preparing its budget, the Board shall estimate the Common Expenses and Specially Allocated
Expenses of the Association to be paid during the year, make suitable provision for
accumulation of reserves, including amounts reasonably anticipated to be required for the
operation, maintenance, repair, and replacement of the Common Elements and the Limited
Common Elements for which the Association is responsible, and shall take into account any
surplus or deficit carried over from the preceding year and any expected income to the
Association. The Declarant shall prepare the initial budget for the first fiscal year of the
Association.
Section 15.3 Ratification of Budget. Within 30 days after adoption of any
proposed budget for the Condominium, the Board shall provide a copy of the budget to all the
Owners and shall set a date for a meeting of the Owners to consider ratification of the budget
not less than 14 nor more than 60 days after mailing of the budget. Unless at that meeting the
Owners to which a majority of the votes in the Association are allocated reject the budget, the
budget is ratified, whether or not a quorum is present. In the event the proposed budget is
rejected or the required notice is not given, the periodic budget last ratified by the Owners
- 29 -
50898610.6
shall be continued until such time as the Owners ratify a subsequent budget proposed by the
Board.
Section 15.4 Supplemental Budget. If during the year the budget proves to be
inadequate for any reason, including nonpayment of any Owner's Assessments, the Board
may prepare a supplemental budget for the remainder of the year. A supplemental budget that
results in an increase in an Owner's Assessments shall be subject to ratification by the Owners
pursuant to Section 15.3.
Section 15.5 Monthly Assessments. The amounts required by the Association for
Common Expenses, as reflected by the annual budget and any supplemental budgets, shall be
divided into installments to be paid each month over the period of time covered by the budget
or supplemental budget. The monthly Assessment for each Unit is the Common Expense
Liability of that Unit times the total monthly installment for Common Expenses for all Units.
Assessments may be rounded to the nearest dollar. Monthly Assessments begin accruing for
all Units upon the closing of the sale of the first Unit by the Declarant; provided that the
Declarant may delay the commencement of Assessments for Common Expenses and pay all
actual Common Expenses (but no allocations to reserves).
Section 15.6 Common Expenses. Common Expenses shall include the cost of
operation, maintenance, repair and replacement of the Common Elements, the general
expenses of the Association, including management and professional fees and costs,
insurance, utilities and any other costs that the Board determines benefits all Units. Except as
provided in Section 15.7 and Section 15.9, Common Expenses shall be allocated to all
Owners in accordance with their Common Expense Liability.
Section 15.7 Specially Allocated Expenses. The following Specially Allocated
Expenses of the Association shall be allocated to Units on a basis other than Common
Expense Liability:
15.7.1 If submeters for water usage by the Units are installed, the cost of
water and sewer for the Units shall be allocated to the Units based upon water usage as
determined by submeters. If a Unit or any portion of a Unit is for a restaurant or other use
than an office, a submeter for water shall be installed at the cost of the Unit Owner for that
Unit or portion thereof so used. In which event, the cost of water and sewer for that Unit or
portion thereof shall be specially allocated to the Owner of the Unit based on water usage as
determined by the submeter and the balance of the cost of water and sewer will be allocated to
all Units in accordance with their Common Expense Liability.
15.7.2 The cost of maintenance, repair and replacement of the finished
surfaces of the Limited Common Element decks shall be borne by or specially allocated to the
Unit to which they are allocated and the cost of maintenance, repair and replacement of the
-30-
50898610.6
waterproof membrane under the finished surface shall be a Common Expense allocated to all
Units.
15.7.3 The cost of janitorial, maintenance, operation, striping, repair and
replacement of the parking and driving areas of the Condominium, except the drive-through
area of Unit , shall be allocated among the Unit Owners to which Parking Permits are
assigned pro rata in proportion to the number of Parking Permits assigned to each Owner,
with the Declarant deemed to be the assignee of any unassigned Parking Permits.
Section 15.8 Contribution to Initial Working Capital; Other Initial Assessments
and Deposits. In connection with the earlier of the closing of first conveyance of each Unit or
commencement of the first lease of a Unit (or portion thereof), the grantee of the Unit in the
case of conveyance or the Declarant in the case of lease shall pay to the Association, as a
nonrefundable contribution to an initial working capital fund, an amount equal to two times
the initial monthly Assessment against the Unit, which amount shall not be considered as an
advance payment of regular Assessments.
Section 15.9 Special Assessments . For those Common Expenses which cannot
reasonably be calculated and paid on a monthly basis, the Board may levy special
Assessments for such expenses against the 'units, subject to ratification by the Owners
pursuant to Section 15.3. To the extent that any Common Expense is caused by the
misconduct of an Owner or tenant of any Unit, the Association may, after Notice and
Opportunity to be Heard, levy a special Assessment for the expense against the Unit.
Section 15.10 Creation of Reserves; Assessments. The Board shall create reserve
accounts for anticipated expenses for repairs, replacement and improvements to the Common
Elements (including the Limited Common Elements other than those portions of the Limited
Common Elements that are the responsibility of or allocated solely to one Unit Owner) which
will occur in the future in order to accumulate sufficient funds to pay such expenses when
they occur. The operation of reserve accounts and Assessments for reserve accounts shall be
further governed by the Bylaws.
Section 15.11 Notice of Assessments. The Board shall notify each Owner in
writing of the amount of the monthly general and special Assessments to be paid for the
Owner's Unit and shall furnish copies of all budgets and the Common Expense Liability of
the Unit on which the general and special Assessments are based. The Board shall furnish the
same information to an Owner's Mortgagee if so requested.
Section 15.12 Payment of Monthly Assessments. On or before the first day of each
calendar month each Owner shall pay or cause to be paid to the treasurer or designated agent
of the Association all Assessments against the Unit for that month. Any Assessment not paid
by the tenth (10th) day of the calendar month for which it is due shall be delinquent and
subject to late charges, interest charges and collection procedures as provided in Article 16.
-31-
50898610.6
Section 15.13 Proceeds Belong to Association. All Assessments and other receipts
received by the Association on behalf of the Condominium shall belong to the Association.
Section 15.14 Failure to Assess. Any failure by the Board or the Association to
make the budgets and Assessments hereunder before the expiration of any year for the
ensuing year shall not be deemed a waiver or modification in any respect of the provisions of
this Declaration, or a release of the Owners from the obligation to pay Assessments during
that or any subsequent year, and the monthly Assessments amounts established for the
preceding year shall continue until new Assessments are established.
Section 15.15 Certificate of Unpaid Assessments. Upon the request of any Owner
or Mortgagee of a Unit, the Board will furnish a certificate stating the amount, if any, of
unpaid Assessments charged to the Unit. The certificate shall be conclusive upon the Board
and the Association as to the amount of such indebtedness on the date of the certificate in
favor of all purchasers and mortgagees of the Unit who rely on the certificate in good faith.
The Board may establish a reasonable fee to be charged to reimburse it for the cost of
preparing the certificate.
Section 15.16 Recalculation of Assessments. If Common Expense Liabilities are
reallocated, Assessments, special Assessments, and any installment thereof not yet due shall
be recalculated in accordance with the reallocated liabilities.
Section 15.17 Reconciliation of Assessments to Actual Income and Expenses. The
Association shall establish and maintain its accounts and records in such a manner that will
enable it to credit Assessments for Common Expenses and Specially Allocated Expenses,
including allocations to reserves, and income to the Association and to charge expenditures to
the account of the appropriate Units. In order that the Unit Owners are correctly assessed for
the actual expenses of the Association, the accounts of the Association shall be reconciled at
least annually, unless the Board detennines that a reconciliation would not result in a material
savings to any Unit Owner; and any surpluses (or deficits) in the accounts shall be credited to
the benefit of or paid to (or charged to the account of or assessed against) the Owners of the
Units who paid the surplus (or owe the deficit).
Article 16. LIEN AND COLLECTION OF ASSESSMENTS.
Section 16.1 Assessments Are a Lien; Priority. To the extent permitted by law, the
Association has a lien on a Unit for any unpaid Assessment levied against a Unit from the
time the Assessment is due. The lien shall be prior to all other liens and encumbrances on a
Unit except: (a) liens and encumbrances recorded before the recording of this Declaration;
(b) a Mortgage on the Unit recorded before the date on which the Assessment sought to be
enforced became delinquent, EXCEPT to the extent of Assessments for Common Expenses,
-32-
50898610.6
excluding any amounts for capital improvements, based on the periodic budgets adopted by
the Association pursuant to Article 15 which would have become due during the six months
immediately preceding the date of a sheriffs sale in an action for judicial foreclosure by
either the Association or a mortgagee, the date of a trustee's sale in a nonjudicial foreclosure
of a mortgage, or the date of recording of the declaration of forfeiture in a proceeding by the
vendor under a real estate contract; PROVIDED that the priority of the Association's lien
against Units encumbered by a mortgage held by an Eligible Mortgagee or by a Mortgagee
which has given the Association a written request for a notice of delinquent Assessments shall
be reduced by up to three months if and to the extent that such lien priority includes any
delinquencies which relate to a period after such Mortgagee becomes an Eligible Mortgagee
or has given such notice and before the Association gives such Mortgagee a written notice of
the delinquency; and (c) liens for real property taxes and other governmental assessments or
charges against the Unit. Recording of this Declaration constitutes record notice and
perfection of the lien for Assessments; however, the Association may record a notice of claim
of lien for Assessments in the real property records of the county in which the Condominium
is located. Such recording shall not constitute the written notice of delinquency to a
Mortgagee referred to above.
Section 16.2 Lien May be Foreclosed: Judicial Foreclosure. The lien arising under
this Article may be enforced judicially by the Association or its authorized representative in
the manner set forth in RCW 61.12, or nonjudicially in the manner set forth in Section 16.3.
The Association or its authorized representative shall have the power to purchase the Unit at
the foreclosure sale and to acquire, hold, lease, mortgage, or convey the same. Upon an
express waiver in the complaint of any right to a deficiency judgment in a judicial foreclosure
action, the period of redemption shall be eight months. Nothing in this Section shall prohibit
the Association from taking a deed in lieu of foreclosure. Except as provided in the exception
to (b) in Section 16. 1, the holder of a Mortgage or other purchaser of a Unit who obtains the
right of possession of a Unit through foreclosure or deed in lieu of foreclosure shall not be
liable for any Assessments or installments thereof that became due prior to such right of
possession. Such unpaid Assessments shall be deemed to be Common Expenses collectible
from all the Owners, including such Mortgagee or other purchaser of the Unit. Foreclosure of
a Mortgage does not relieve the prior Owner of personal liability for Assessments accruing
against the Unit prior to the date of such sale.
Section 16.3 Nonjudicial Foreclosure. A lien arising under this Article may be
foreclosed nonjudicially in the manner set forth in RCW 61.24 for nonjudicial foreclosure
deeds of trust. For the purpose of preserving the Association's nonjudicial foreclosure option,
this Declaration shall be considered to create a grant of each Unit in trust to Pacific Northwest
Title Insurance Company of Washington, Inc. or its successors or assigns ("Trustee"), to
secure the obligations of each Owner ("Grantor") to the Association ("Beneficiary") for the
payment of Assessments. Grantor shall retain the right to possession of Grantor's Unit so
long as Grantor is not in default of an obligation to pay Assessments. The Trustee shall have
a power of sale with respect to each Unit, which becomes operative in the case of a default in
- 33 -
50898610.6
a Grantor's obligation to pay Assessments. The Units are not and shall not be used for
agricultural or farming purposes. If the Association forecloses its lien nonjudicially pursuant
to this Section, it shall not be entitled to the lien priority over Mortgages provided in
exception (b) of Section 16.1.
Section 16.4 Receiver During Foreclosure. From the time of commencement of an
action by the Association to foreclose a lien for nonpayment of delinquent Assessments
against a Unit that is not occupied by the Owner thereof, the Association shall be entitled to
the appointment of a receiver to collect from any tenant thereof the rent for the Unit as and
when due. If the rent is not paid, the receiver may obtain possession of the Unit, refurbish it
for rental up to a reasonable standard for rental Units in this type of Condominium, rent the
Unit or permit its rental to others, and apply the rents first to the cost of the receivership and
attorneys' fees thereof, then to the cost of refurbishing the Unit, then to applicable charges,
then to costs, fees, and charges of the foreclosure action, and then to the payment of the
delinquent Assessments. Only a receiver may take possession and collect rents under this
Section, and a receiver shall not be appointed less than 90 days after the delinquency. The
exercise by the Association of the foregoing rights shall not affect the priority of preexisting
liens on the Unit.
Section 16.5 Assessments Are Personal Obligations. In addition to constituting a
lien on the Unit, all sums assessed by the Association chargeable to any Unit, including all
charges provided in this Article, shall be the personal obligation of the Owner of the Unit
when the Assessments are made. Suit to recover personal judgment for any delinquent
Assessments shall be maintainable without foreclosing or waiving the liens securing them.
Section 16.6 Extinguishment of Lien and Personal Liability. A lien for unpaid
Assessments and the personal liability for payment of Assessments is extinguished unless
proceedings to enforce the lien or collect the debt are instituted within three years after the
amount of the Assessments sought to be recovered becomes due.
Section 16.7 Joint and Several Liability. In addition to constituting a lien on the
Unit, each Assessment shall be the joint and several obligation of the Owner or Owners of the
Unit to which the same are assessed as of the time the Assessment is due. In a voluntary
conveyance, the grantee of a Unit shall be jointly and severally liable with the grantor for all
unpaid Assessments accruing against the Unit up to the time of the grantor's conveyance,
without prejudice to the grantee's right to recover from the grantor the amounts paid by the
grantee therefor. Suit to recover a personal judgment for any delinquent Assessment shall be
maintainable in any court of competent jurisdiction without foreclosing or waving the lien
securing such sums.
Section 16.8 Late Charges and Interest on Delinquent Assessments. The Board
may from time to time establish reasonable late charges and/or a rate of interest to be charged
on all subsequent delinquent Assessments or installments thereof. In the absence of another
-34-
50898610.6
established nonusurious rate, delinquent Assessments shall bear interest from the date of
delinquency at the maximum rate permitted under RCW 19.52.020 on the date on which the
Assessments became delinquent.
Section 16.9 Recovery of Attorneys' Fees and Costs. The Association shall be
entitled to recover any costs and reasonable attorneys' fees incurred in connection with the
collection of delinquent Assessments, whether or not such collection activities result in suit
being commenced or prosecuted to judgment. In addition, the Association shall be entitled to
recover costs and reasonable attorneys' fees if it prevails on appeal and in the enforcement of
a judgment.
Section 16.10 Security Deposit. An Owner who has been delinquent in paying his
monthly Assessments for three of the five preceding months may be required by the Board,
from time to time, to make and maintain a security deposit not in excess of three months'
estimated monthly Assessments, which shall be collected and shall be subject to penalties for
nonpayment as are other Assessments. The deposit shall be credited to such Owner, and may
be resorted to at any time when such Owner is ten (10) days or more delinquent in paying
Assessments. If used to cover delinquent Assessments, the Owner shall promptly restore the
security deposit. Any security deposits held by the Association pursuant to this Section shall
not bear interest, and there shall be no requirement to segregate such funds from the
Association's other funds or into a separate bank account.
Section 16.11 Remedies Cumulative. The remedies provided herein are cumulative
and the Board may pursue them, and any other remedies which may be available under law or
in equity although not expressed herein, either concurrently or in any order.
Article 17. ENFORCEMENT OF DECLARATION, BYLAWS AND RULES AND
REGULATIONS.
Section 17.1 Rights of Action. Each Owner, the Board and the Association shall
comply strictly with this Declaration, the Bylaws, and the rules and regulations adopted
pursuant thereto, as they may be lawfully amended from time to time, and the decisions of the
Board. Failure to comply with any of the foregoing shall be grounds for an action to recover
sums due, and/or for damages, and/or for injunctive relief, or any or all of them, maintainable
by the Board on behalf of the Association or by an Owner. No action to enforce the
provisions hereof may be brought by any tenant, licensee, agent or invitee of any Owner or by
any third party.
Section 17.2 Failure of Board to Insist on Strict Performance No Waiver. The
failure of the Board (or the Declarant) in any instance to insist upon the strict compliance with
this Declaration or the Bylaws or rules and regulations of the Association, or to exercise any
right contained in such documents, or to serve any notice or to institute any action, shall not
-35 -
50898610.6
be construed as a waiver or a relinquishment for the future of any right, term, covenant,
condition, or restriction. The receipt by the Board of payment of an Assessment from an
Owner, with knowledge of a breach by the Owner, shall not be a waiver of the breach. No
waiver by the Board of any requirement shall be effective unless expressed in writing and
signed for the Board.
Section 17.3 Board Enforcement. The Board has the authority to enforce this
Declaration and the Bylaws and rules and regulations of the Condominium by imposing the
remedies provided herein. After repeated violations of the Declaration, Bylaws, or rules and
regulations by an Owner and after an Owner's Right to Notice and Opportunity to be Heard,
the Board shall have the authority to file an action for damages and for injunctive relief.
Article 18. TORT AND CONTRACT LIABILITY.
Section 18.1 Actions against Association. An action alleging a wrong done by the
Association (including the officers and directors) must be brought against the Association and
not against any Owner or any officer or director of the Association. An Owner is not
precluded from bringing an action contemplated by this Section because he or she is an
Owner or a Board member or officer of the Association.
Section 18.2 Limitation of Liability for Utility Failure, etc. Except to the extent
covered by the Association's insurance, neither the Association, the officers or directors of the
Association, the Managing Agent nor the Declarant shall be liable for: (a) the failure of any
utility or other service to be obtained and paid for by the Association; (b) any injury or
damage to person or property caused by the elements, or resulting from electricity, water,
rain, dust, or sand which may leak or flow from outside or from any parts of the Building, or
from any of the pipes, drains, conduits, appliances, or equipment in the Building or from any
other place; or (c) any inconvenience or discomfort resulting from any action taken to comply
with any law, ordinance, or orders of a governmental authority. No diminution or abatement
of Assessments shall be claimed or allowed for any such utility or service failure, or for such
injury or damage, or for such inconvenience or discomfort.
Section 18.3 No Personal Liability. So long as a Board member, or Association
committee member or Association officer, or the Declarant, or the Managing Agent has acted
in good faith, without willful or intentional misconduct, upon the basis of such information as
is then possessed by such person, no such person shall be personally liable to any Owner, or
to any other person, including the Association, for any damage, loss, or prejudice suffered or
claimed on account of any act, omission, error, or negligence of such person; provided, that
this Section shall not apply where the consequences of such act, omission, error, or negligence
is covered by the Association's insurance.
- 36 -
50898610.6
Article 19. INDEMNIFICATION.
Each Board member, Association committee member, Association officer, and the
Declarant and the Managing Agent shall be indemnified by the Association against all expenses
and liabilities, including attorneys' fees, reasonably incurred by or imposed in connection with
any proceeding to which such person may be a party, or in which such person may become
involved, including appeals of such proceedings, by reason of holding or having held such
position, or any settlement thereof, whether or not such person holds such position at the time
such expenses or liabilities are incurred, except in such cases wherein such person is adjudged
guilty of willful misfeasance in the performance of such person's duties; provided, that in the
event of a settlement, the indemnification shall apply only when the Board approves such
settlement and reimbursement as being for the best interests of the Association.
Article 20. INSURANCE.
Section 20.1 General Requirements. Commencing not later than the time of the
first conveyance of a Unit to a person other than the Declarant, the Association shall maintain,
to the extent reasonably available, a policy or policies and bonds necessary to provide
(a) property insurance; (b) commercial general' liability insurance; (c) fidelity insurance;
(d) worker's compensation insurance to the extent required by applicable laws; (e) directors
and officers liability insurance; and (f) such other insurance as the Board deems advisable.
The Board shall review the adequacy of the Association's insurance coverage at least
annually. All insurance shall be obtained from insurance carriers that are generally acceptable
for similar projects and authorized to do business in the state of Washington. All such
insurance policies shall provide that coverage may not be cancelled or substantially reduced
without at least thirty (30) days' prior written notice (10 days for cancellation for nonpayment
of premium) to the Association as the first named insured therein and all Owners.
Section 20.2 Property Insurance. The property insurance shall, at the minimum
and subject to such reasonable deductible as the Board may determine, provide all risk or
special cause of loss coverage in an amount equal to the full replacement cost of the Common
Elements (but not the portions of the Limited Common Elements allocated to Units that
Owners have the responsibility to repair and replace under Section 9.4.2) and personal
property of the Association with an "Agreed Amount Endorsement" or equivalent
endorsement, and, if available at commercially reasonable rates, as determined by the Board,
construction code endorsements, such as a "Demolition Cost Endorsement," a "Contingent
Liability from Operation of Building Laws Endorsement," an "Increased Cost of Construction
Endorsement," and such other endorsements as any Mortgagee shall deem necessary and are
available; provided, that the additional cost, if any, of any such other endorsements requested
by a Mortgagee shall be paid by the Owner of the applicable mortgaged Unit. The
Association's policy shall provide a separate loss payable endorsement in favor of any
Mortgagee of a specific Unit, as its interest may appear, which shall be subject to the
- 37 -
50898610.6
provisions of Section 20.4 and Section 20.8. The policy shall cover damage due to
earthquake, earth movement, flood and difference in conditions unless Owners holding at
least a majority of the votes in the Association agree to forego such coverage. The
Association or insurance trustee, if any, shall hold insurance proceeds in trust for the Owners
and their Mortgagees, as their interests may appear. Each Owner and the Owner's Mortgagee,
if any, shall be beneficiaries of the policy in accordance with the interest in the Common
Elements appertaining to the Owner's Unit. Certificates of insurance shall be issued to each
Owner and Mortgagee upon request. Each Owner shall be responsible for all damage or loss
to Unit Improvements (including all interior partitions), fixtures and equipment within or
serving the Owner's Unit, and those portions of the Limited Common Elements allocated to
Owner's Unit that the Owner has the responsibility to repair and replace under Section 9.4.2,
whether installed by the Declarant, the Owner, tenants or others, and, as provided in Section
20.7, each Owner shall be responsible for property insurance for such improvements, fixtures
and equipment. If there is damage to the Common Elements or another : Unit or to the
Common Elements resulting from the negligence or rnisconduct of an Owner, or the tenant,
agent or contractor of the Owner's Unit, the Owner shall be responsible for the damage up to
the amount of the deductible under the Association's policy for damage to the Common
Elements and up to the amount of the deductible under the other Unit Owner's policy for
damage to another Owner's Unit (but no greater than the amount of the deductible under the
Association's policy). Only the Board is authorized to file claims under the Association's
policy.
Section 20.3 Commercial General Liability Insurance. The liability insurance
coverage shall insure the Board, the Association, the Owners, the Declarant, and the
Managing Agent, and cover all of the Common Elements in the Condominium with a
"Severability of Interest Endorsement" or equivalent coverage which would preclude the
insurer from denying the claim of an Owner or the Association because of the negligent acts
of the Association, the Board or another Owner, and shall cover liability of the insureds for
property damage and bodily injury and death of persons arising out of the operation,
maintenance, and use of the Common Elements, liability in connection with employment
contracts of the Association, host liquor liability, employers' liability insurance, automobile
liability insurance, and such other risks as are customarily covered with respect to
condominium projects of similar construction, location and use. The limits of liability shall
be in amounts generally procured for projects of similar construction, location and use but
shall be at least $2,000,000 combined single limit for bodily injury and property damage per
occurrence and $5,000,000 general aggregate. Only the Board is authorized to file claims
under the Association's policy.
Section 20.4 Insurance Trustee; Power of Attorney. The named insured under the
policies referred to in Section 20.2 and Section 20.3 shall be the Association, as trustee for
each of the Owners in accordance with their respective interests in the Common Elements.
The insurance proceeds may be made payable to any trustee with which the Association
enters into an insurance trust agreement, or any successor trustee, who shall have exclusive
-38 -
50898610.6
authority to negotiate losses under the policies. Subject to the provisions of Section 20.8, the
proceeds must be disbursed first for the repair or restoration of the damaged property, and
Owners and lienholders are not entitled to receive payment of any portion of the proceeds
unless there is a surplus of proceeds after the Property has been completely repaired or
restored or the Condominium is terminated. Each Owner appoints the Association, or any
insurance trustee or successor trustee designated by the Association, as attorney-in-fact for the
purpose of purchasing and maintaining such insurance, including the collection and
appropriate disposition of the proceeds thereof, the negotiation of losses and execution of
releases of liability, the execution of all documents and the performance of all other acts
necessary to accomplish such purposes.
Section 20.5 Additional Policy Provisions. The insurance obtained pursuant to
Section 20.2 and Section 20.3 shall contain the following provisions and limitations:
20.5.1 Each Owner is an insured person under the policy with respect to
liability arising out of the Owner's interest in the Common° Elements or membership in the
Association.
20.5.2 Such policies shall not provide for contribution by or assessment
against Mortgagees or become a lien on the property superior to the lien of a first Mortgage.
20.5.3 If, at the time of the loss under the policy, there is other insurance in
the name of the Owner covering the same risk covered by the policy, the Association's policy
provides primary insurance.
20.5.4 Coverage shall not be prejudiced by: (a) any act, omission or neglect
of the Owners of Units when such act or neglect is not within the scope of the Owner's
authority on behalf of the Association, or (b) failure of the Association to comply with any
warranty or condition with regard to any portion of the Property over which the Association
has no control.
20.5.5 A waiver of subrogation by the insurer as to any and all claims
against the Association, the Owner of any Unit, and/or their respective agents, employees, or
tenants, and of any defenses based upon co-insurance or upon invalidity arising from the acts
of the insured and its employees and tenants.
20.5.6 A standard mortgagee clause which shall:
20.5.6.1 Provide that any reference to a mortgagee in the policy shall
mean and include all Mortgagees of any Unit or Unit lease or sublease in their respective order of
preference, whether or not named therein;
-39-
50898610.6
20.5.6.2 Provide that such insurance as to the interest of any Mortgagee
shall not be invalidated by any act or neglect of the Board or Owners or any persons under any of
them;
20.5.6.3 Waive any provision invalidating such mortgage clause by
reason of the failure of any Mortgagee to notify the insurer of any hazardous use or vacancy, any
requirement that the Mortgagee pay any premium thereon, and any contribution clause; and
20.5.6.4 Provide that, without affecting any protection afforded by such
mortgagee clause, any proceeds payable under such policy shall be payable to the Association or
the insurance trustee.
Section 20.6 Fidelity Insurance. The required fidelity insurance shall afford
coverage to protect against dishonest acts on the part of officers, directors, trustees, and
employees of the Association and all other persons who handle or are responsible for handling
funds of or administered by, the Association, including the Managing Agent and any of its
officers, employees, and agents who handle or who are responsible for handling such funds.
All such fidelity insurance shall name the Association as an obligee and shall be not less than
the estimated maximum of funds, including reserve funds, in custody of the Association at
any time during the term of each policy, but, in no event, shall the aggregate amount of
insurance be less than three months' aggregate Assessments. The policy shall contain waivers
of any defense based upon the exclusion of persons who serve without compensation from
any definition of "employee" or similar expression.
Section 20.7 Unit Owner's Insurance. Each Owner of a Unit shall be required to
obtain and maintain, subject to such reasonable deductible as the Board may determine,
property insurance on all Unit Improvements (including all interior partitions and all finished
surfaces), fixtures, appliances,' betterments, equipment and all other personal property within
or serving only the Owner's Unit (but not including Common Elements within the Unit) and
those portions of the Limited Con-non Elements allocated to the Owner's Unit that the
Owner has the responsibility to repair and replace under Section 9.4.2 with the same coverage
and endorsements as the Association's policy unless waived by the Board. The Association
shall be listed as an additional named insured and a co-loss payee on the property insurance
policies obtained by the Owners. Each Owner shall also obtain and maintain, or cause to be
obtained and maintained, commercial general liability insurance in the same amounts required
for the Association under Section 20.3 and designating the Association as a "first named
insured" under the Owner's policy. The Association shall have the right but not the
obligation to monitor the maintenance of the insurance required under this Section and shall
have to right, but not the obligation, to obtain such insurance if the party fails to obtain or
maintain it and specially assess the cost thereof to the applicable Owner. Each purchaser of a
Unit shall deliver to the Association at closing a certificate of insurance or other proof that
such insurance has been obtained. The Owners shall, upon request from time to time, furnish
the Board written evidence that the required insurance has been obtained and is in force.
- 40 -
50898610.6
Notwithstanding anything to the contrary contained in this Section 20.7 or elsewhere in this
Declaration, if the Owner or tenant of a Unit is the City of Auburn, or the County of King or
the State of Washington (the "Governmental Tenant"), the aforementioned insurance and self-
insurance requirements of this Section 20.7 may be completely met by Owner or
Governmental Tenant's membership in the Washington Cities Insurance Authority ("WCIA"),
a municipal insurance pool. So long as the Owner or Governmental Tenant is providing the
insurance required hereunder through the WCIA, the Owner will not be required to provide
policies or certificates of insurance, and will not be required to naive the Association or any
other party or person as an "additional insured", "additional named insured", "named
insured," "loss payee," or any similar designation. The Owner or Governmental Tenant shall,
upon the Association's request therefor, provide reasonable evidence of the Owner or
Governmental Tenant's continued participation from time to time thereafter in the WCIA.
The coverage afforded the Association shall not be reduced or diminished by reason of the use
of such self insurance program.
Section 20.8 Use of Insurance Proceeds. Any portion of the Common Elements of
the Condominium that is damaged or destroyed shall be repaired or replaced promptly by the
Association pursuant to Article 21 unless: (a) the Condominium is terminated; (b) repair or
replacement would be illegal under any state or local health or safety, statute or ordinance; or
(c) Owners holding at least 80% of the votes in the Association vote not to rebuild, including
the Owner of any Unit or Limited Common Element that would be lost if the Common
Element was not rebuilt. The cost of repair or `replacement of the Common Elements in
excess of the deductible, available insurance proceeds and reserves or other Association funds
determined by the Board to be available shall be a Common Expense. Any portion of the
improvements, fixtures and equipment within a Unit that is damaged or destroyed shall be
repaired or replaced promptly by the Owner, with insurance proceeds from the Owner's
insurance to the extent they are available and sufficient or at the Owner's expense if they are
not, unless the Board, upon request of the Owner, determines that it is not necessary, in the
best interests of the Condominium and other Owners, to make such repair or replacement. If
all of the damaged or destroyed portions of the Common Elements are not repaired or
replaced: (1) the insurance proceeds attributable to the damaged Common Elements shall be
used to restore the damaged area to a condition compatible with the remainder of the
Condominium;' (ii), the insurance proceeds attributable to the Limited Common Elements
which are not rebuilt shall be distributed to the Owners of the Units to which those Limited
Common Elements were allocated, or to their lienholders, as their interests may appear; and
(iii) the remainder of the proceeds shall be distributed to all the Owners or lienholders, as their
interests may appear, in proportion to the interest in Common Elements of each Unit. If the
Owners vote not to rebuild any portion of the Common Elements which results in the loss of a
Unit or portion of a Unit, that Unit's Allocated Interests shall be reallocated among the
remaining Units in accordance with the formula specified in Section 5.4, and the Association
promptly shall prepare, execute, and record an amendment to this Declaration reflecting the
reallocations. Notwithstanding the provisions of this Section, Article 26 governs the
distribution of insurance proceeds if the Condominium is terminated.
-41 -
50898610.6
Article 21. DAMAGE AND REPAIR OR DAMAGE TO PROPERTY.
Section 21.1 Initial Board Determination. In the event of damage to any Common
Element, the Board shall promptly (but not later than 60 days after the date of damage) make
the following determinations with respect thereto, employing such advice as the Board deems
advisable:
21.1.1 The nature and extent of the damage, together with an inventory of
the improvements and property directly affected thereby;
21.1.2 A reasonably reliable estimate of the cost to repair the damage, which
estimate shall, if reasonably practicable, be based upon two firm bids obtained from reputable
contractors;
21.1.3 The expected insurance proceeds, if any, to be available from
insurance covering the loss based on the amount paid or initially offered by the insurer;
21.1.4 The amount of the deductible to be paid by an Owner with respect to
damage or loss damage for which the Owner is responsible under Section 20.2;
21.1.5 The amount of available reserves or other Association funds, although
the Board is not required to use any reserves or other Association funds; and
21.1.6 The amount, if any, by which the estimated cost of repair exceeds the
portion of the deductible to be paid by an Owner, expected insurance proceeds, available
reserves or other Association funds, and the amount of the Assessments that would have to be
made against each Unit if the excess cost were to be paid as a Common Expense and assessed
against all of the Units in proportion to their Common Expense Liabilities.
Section 21.2 Notice of Damage. The Board shall promptly, and in all events
within 60 days after the date of damage, file a proof of loss statement with the insurance
company if the loss is covered by insurance and abide by all terms and conditions of its
insurance policies, unless the Board determines it would not be in the best interest of the
Association to file a proof of loss. The Board shall then provide each Owner with a written
notice describing the damage and summarizing the initial Board determinations made under
Section 21.1. If the damage affects a material portion of the Condominium, the Board shall
also send the notice to each Eligible Mortgagee; and if the damage affects a Unit, the Board
shall send the notice to the Eligible Mortgagee of that Unit. If the Board fails to do so within
the 60-day period, any Owner or Eligible Mortgagee may make the determinations required
under Section 21.1 and give the notice required under this Section.
-42-
,0898610.6
Section 21.3 Definitions: Damage, Substantial Damage, Repair, Emergency.
As used in this Article:
21.3.1 Damage shall mean all kinds of damage, whether of slight degree or
total destruction due to an occurrence or event and shall not include construction defects,
deterioration, or wear and tear.
21.3.2 Substantial Damage shall mean that in the judgment of the Board the
estimated Assessment determined under Subsection 21.1.6 for any one Unit exceeds ten
percent of the full, fair market value of the Unit before the damage occurred, as determined by
the then current assessment for the purpose of real estate taxation.
21.3.3 Repair shall mean restoring the improvements to substantially the
condition they were in before they were damaged, with each Unit and the Common Elements
(including the Limited Common Elements) having substantially the same boundaries as
before. Except as may be covered by the Association's insurance policy, the obligation of the
Association shall be limited to repairing the Common Elements and restoring the boundary
walls of the Units and shall not include repairing or restoring any Unit Improvements (which
shall be the responsibility of the Owner). Modifications to conform to applicable
governmental rules and regulations or available means of construction may be made.
21.3.4 Emergency Work shall mean work that the Board deems reasonably
necessary to avoid further damage or substantial diminution in value to the improvements and
to protect the Owners from liability from the condition of the site.
Section 21.4 Execution of Repairs.
21.4.1 The Board shall promptly repair the damage to the Common
Elements and use the available insurance proceeds therefor as provided in Section 20.8. If the
cost of repair exceeds the amount of the deductible to be paid by an Owner, expected
insurance proceeds and available reserves or other Association funds, the Board shall impose
special Assessments against all Units in proportion to their Common Expense Liabilities in an
aggregate amount sufficient to pay the excess costs.
21.4.2 The Board shall have the authority to employ architects and
engineers, advertise for bids, let contracts to contractors and others, and take such other action
as is reasonably necessary to make the repairs. Contracts for the repair work shall be awarded
when the Board, by means of insurance proceeds and sufficient Assessments, has provided for
paying the cost. The Board may authorize the insurance carrier to make the repairs if the
Board is satisfied that the work will be done satisfactorily, and if such authorization does not
contravene any insurance trust agreement or requirement of law.
- 43 -
50898610.6
21.4.3 The Board may enter into a written agreement with a reputable
financial institution or trust or escrow company that the institution or company shall act as an
insurance trustee to adjust and settle any claim for casualty loss in excess of $50,000, or for
the institution or company to collect the insurance proceeds and carry out the provisions of
this Article.
Section 21.5 Damage Not Substantial. If the damage as determined by the Board
does not constitute Substantial Damage under Subsection 21.3.2, the provisions of this
Section shall apply.
21.5.1 Either the Board or the requisite number of Owners, within 15 days
after the notice required under Section 21.2 has been given, may but shall not be required to
call a special Owners' meeting in accordance with Section 12.4 and the Bylaws to decide
whether to repair the damage.
21.5.2 Except for emergency work, no repairs shall be commenced until
after the 15-day period and until after the conclusion of the special meeting if such a special
meeting is called within the 15-day period.
Section 20.8.
21.5.3 A decision to not repair or rebuild may be made in accordance with
Section 21.6 Substantial Damage. If the damage as determined by the Board
constitutes Substantial Damage under Subsection 21.3.2, the provisions of this Section shall
apply.
21.6.1 The Board shall promptly, and in all events within 60 days after the
date of damage, call a special Owners' meeting to consider repairing the damage. If the
Board fails to do so within 60 days, then notwithstanding the provisions of Section 12.4 and
the Bylaws, any Owner or Eligible Mortgagee of a Unit may call and conduct the meeting.
21.6.2 Except for emergency work, no repairs shall be commenced until the
conclusion of the special Owners' meeting.
apply:
21.6.3 At the special meeting, the following consent requirements will
21.6.3.1 The Owners shall be deemed to have elected to repair the
damage unless the Owners of at least 80% of the total voting power of the Condominium,
including the Owner of any Unit or Limited Common Element that would be lost if the Common
Elements are not rebuilt, have given their written consent not to repair the damage. In addition to
the consent by the Owners specified above, any election not to repair the damage will require the
50898610.6
-44-
approval of Eligible Mortgagees of Units to which at least 51% of the votes of Units subject to
Mortgages held by Eligible Mortgagees are allocated.
21.6.3.2 Failure to conduct the special meeting provided for under
Section 21.6.1 within 90 days after the date of damage shall be deemed a unanimous decision to
repair the damage.
Section 21.7 Effect of Decision Not to Repair. In the event of a decision under
either Subsection 21.5.3 or 21.6.3 not to repair the damage, the Board may nevertheless
expend so much of the insurance proceeds and Association funds as the Board deems
reasonably necessary for emergency work (which emergency work may include but is not
necessarily limited to removal of the damaged improvements and clearing, filling, and
grading the land), and the remaining funds, if any, and the property shall thereafter be held
and distributed as provided in Section 20.8.
Article 22. CONDEMNATION.
If any Unit or portion thereof or the Common Elements or Limited Common Elements
or any portion thereof is made the subject matter of any condemnation or eminent domain
proceeding or is otherwise sought to be acquired by a condemning authority, notice of the
proceeding or proposed acquisition shall promptly be given to each Owner and Mortgagee
and the provisions of RCW 64.34.060 shall apply. Any reconstruction and repair necessitated
by condemnation shall be governed by the procedures specified in Article 21.
Article 23. EASEMENTS.
Section 23.1 In General. The Association and each Unit has an easement in and
through each Unit and the Common' Elements and Limited Common Elements for all support
elements and utility, wiring, heating, and service elements, and for reasonable access thereto,
as required to effectuate and continue proper operation of the Condominium and each Unit
and its Limited Common Elements. Each Owner shall afford to the Association and the other
Owners, and to their agents or employees, access through the Owner's Unit and Limited
Common Elements reasonably necessary for the Association and/or each other Owner to carry
out their respective maintenance, repair and replacement obligations under this Declaration,
including without limitation those obligations under Section 9.4 and Section 9.5. No Owner
shall modify any structural support element in any manner that could affect the support or
structural integrity of the Condominium, any other Unit, or any Common Element or Limited
Common Element, without the prior written consent of the Board and the Owner of the other
Unit.
- 45 -
50898610.6
Section 23.2 Encroachments. To the extent not provided by the definition of
"Unit" in this Declaration and in the Condominium Act, each Unit and all Common Elements
and Limited Common Elements are hereby declared to have an easement over all adjoining
Units and Common Elements and Limited Common Elements for the purpose of
accommodating any present or future encroachment as a result of engineering errors,
construction, reconstruction, repairs, settlement, shifting, or movement of any portion of the
property, or any other similar cause, and any encroachment due to building overhang or
projection. There shall be valid easements for the maintenance of the encroaching Units and
Common Elements and Limited Common Elements so long as the encroachments shall exist,
and the rights and obligations of Owners shall not be altered in any way by the encroachment;
provided, however, that in no event shall a valid easement for encroachment be created in
favor of a Unit after original construction of Improvements by the Declarant if the
encroachment was caused by the willful act with full knowledge of the Owner. The
encroachments described in this Section shall not be construed to be encumbrances affecting
the marketability of title to any Unit.
Section 23.3 Easement Specifically Reserved by the Declarant. The Declarant
reserves an access easement over, across, and through the Common Elements and Limited
Common Elements of the Condominium for the purpose of completing any unfinished Units
or other improvements, exhibiting and preparing Units for sale or lease, making repairs
required pursuant to any contract of sale or under the Act, and discharging the Declarant's
obligations or exercising Development Rights or Special Declarant Rights. This Section may
not be altered or amended without the written consent of the Declarant.
Section 23.4 Utility Easements Granted by the Declarant. The Declarant reserves
the right to grant easements to the various companies or municipalities who provide, or wish
to provide, utility services to the Condominium or to the Units in the Condominium for the
installation, construction, maintenance, repair and reconstruction of all utilities that serve or
are intended to serve the Condominium or the Owners, including, without limitation, such
utility services as water, sanitary sewer, storm sewer, electricity, gas, communications, cable
television, data and telephone, and an easement for access in, over, across and under the
Common Elements and Limited Common Elements of the Condominium to the utility service
facilities.
Section 23.5 [Other Easements.]
Article 24. PROCEDURES FOR SUBDIVIDING, COMBINING OR ALTERING UNITS.
Section 24.1 Submission of Proposal to Subdivide or Combine Unit. No Unit or
Units shall be subdivided or combined either by agreement or legal proceedings, except as
provided in this Article 24. Except in the case of the Declarant exercising its Development
Right to subdivide a Unit pursuant to Section 10. 1, an Owner may propose subdividing a Unit
or combining Units by submitting the proposal in writing to the Board and to all other Owners
- 46 -
50898610.6
and Mortgagees of the Unit to be subdivided or Units to be combined. The proposal must
include complete plans and specifications for accomplishing the subdivision or combination
and proposed amendments of this Declaration and the Survey Map and Plans which
amendments shall be executed by the Owner of the Unit to be subdivided or the Owners of the
Units to be combined upon approval pursuant to Section 24.2, and which amendments assign
an Identifying Number to each Unit created, and, in the case of the subdivision of a Unit,
reallocate the Allocated Interests formerly allocated to the subdivided Unit based on the
relative areas of the new Units or such other reasonable method as the Owner of the
subdivided Unit shall propose, or, in the case of a combination of Units, aggregate the
Allocated Interests of the combined Units to the new Unit. The Owner of the Unit to be
subdivided or Units to be combined shall bear all costs of the subdivision or combination,
including the cost of professional consultants, such as architects and engineers, retained by the
Board to review the Owner's plans and specifications.
Section 24.2 Approval Required for Subdivision or Combination. A proposal that
contemplates subdivision of a Unit or combination of Units will be accepted only if approved
in writing by all Owners and Mortgagees of the Unit or Units to be subdivided or combined
and the Board. The Board may not withhold its approval unless it determines that the
structural integrity of the Building (including the floors of the Building) would be adversely
affected by the proposed subdivision or combination. Notwithstanding the foregoing, the
Declarant shall have the Development Right from time to time to subdivide or combine Units
it owns without approval of the Board.
Section 24.3 Demising for Leasin-. This Article shall not restrict the right of an
Owner to make such changes to the Owner's Unit as the ' Owner deems necessary or
appropriate to partition the Unit in connection with the leasing thereof, provided that the prior
written approval of the Board shall be obtained before any Substantial Alteration, as defined
in Section 24.4.
Section 24.4 Improvement or Alterations of Units. After the initial build-out of
each Unit by the Declarant, a Unit may not be altered in any way except in accordance with
this Article. Each Owner may make such improvements or alterations to the Owner's Unit
and its Limited Common Elements as the Owner deems appropriate; provided that, without
the approval of the Board pursuant to Section 24.6, an Owner may not make any improvement
or alteration (each a "Substantial Alteration"): (a) to any other Unit; (b) to the Common
Elements; (c) to the plumbing, mechanical or electrical systems serving the Common
Elements or any other Unit; (d) to the exterior or roof of the Building; (e) that is visible from
the public streets adjacent to the Building; or (f) that affects the structural integrity of the
Building. Substantial Alteration does not include the construction of such improvements to
the Units and the Common Elements as the Declarant deems appropriate in connection with
their initial occupancy.
Section 24.5 Adjoining Units. After acquiring an adjoining Unit, an Owner may,
with approval of the Board pursuant to Section 24.6, remove or alter any intervening partition
- 47 -
50898610.6
or create apertures therein, even if the partition in whole or in part is a Common Element, if
those acts do not adversely affect the structural integrity, fire/life/safety, or acoustical
properties of the Building (including the floors of the Building) or the plumbing, mechanical
or electrical systems serving another Unit or the Common Elements or lessen the structural
support of any portion of the Condominium. Removal of partitions or creation of apertures
under this Subsection is not a relocation of boundaries or a combination of Units. The
Owner's proposal to act under this Section shall be submitted to the Board and shall include
the plans and specifications for the proposed removal or alteration.
Section 24.6 Board Review. A proposal that contemplates a Substantial Alteration
of one or more Units is subject to approval by the Board. The Board shall review and respond
to an Owner's request under this Section within 30 days of receipt of plans and specifications.
The Board may also retain, at the Owner's expense, an architect or engineer to review the
plans and require evidence satisfactory to it that all permits necessary for the work have been
obtained. The failure of the Board to act upon a request within such period shall be deemed
approval thereof.
Section 24.7 Procedure After Approval. Upon approval of a proposal under this
Article, the Owner making it may proceed according to the approved plans and specifications
and the rules and regulations of the Association; provided that the Board may in its discretion
require that the Board administer the work or that provisions for the protection of other Units
or Common Elements or that reasonable deadlines for completion of the work be inserted in
the contracts for the work. The Board may require that the Owner and/or its contractor
provide public liability insurance for the work, naming the Association as a first named
insured and establish reasonable hours and conditions for performance of work within Units.
Any changes in the Survey Map and Plans and Declaration shall be paid by the Owner or
Owners requesting the same and placed of record as amendments thereto.
Section 24.8 Relocation of Boundaries -- Adjoining Units. The boundaries
between adjoining Units may only be relocated by an amendment to this Declaration,
pursuant to Article 25, upon application to the Board by the Owners of those Units. If the
Owners of the adjoining Units have specified a reallocation between their Units of their
Allocated Interests, the application must state the proposed reallocations. Unless the Board
determines within 30 days that the reallocations are unreasonable, the Association shall
prepare an amendment that identifies the Units involved, states the reallocations, is executed
by the Owners, contains words of conveyance between them, and is recorded in the name of
the grantor and the grantee. The Association shall obtain and record survey maps or plans
complying with the requirements of RCW 64.34.232(4) necessary to show the altered
boundaries between adjoining Units and their dimensions and Identifying Numbers. The
Owner or Owners benefited by a reallocation of Unit boundaries shall bear all costs associated
therewith in proportion to the relative benefits to each such Unit as determined by the Board
or as the Owners of such Units agree.
- 48 -
50898610.6
Article 25. AMENDMENT OF DECLARATION SURVEY MAP AND PLANS,
ARTICLES OR BYLAWS.
Section 25.1 Procedures. Except in cases of amendments that may be executed by
the Declarant under this Declaration or the Condominium Act, this Declaration, the Survey
Map and Plans, the Articles and the Bylaws may be amended only by vote or agreement of
the Owners, as specified in this Article. An Owner may propose amendments to this
Declaration or the Survey Map and Plans, the Articles or the Bylaws to the Board. A majority
of the members of the Board may cause a proposed amendment to be submitted to the
members of the Association for their consideration. If an amendment is proposed by Owners
with 20% or more of the votes in the Association, then, irrespective of whether the Board
concurs in the proposed amendment, it shall be submitted to the members of the Association
for their consideration at their next regular or special meeting for which timely notice must be
given. Notice of a meeting at which an amendment is to be considered shall include the text
of the proposed amendment. Amendments may be adopted: (a) at a meeting of the
Association after notice of the meeting has been given to all persons (including Eligible
Mortgagees) entitled to receive notice of the amendment or (b) by written consent of the
requisite number of persons entitled to vote after text of the proposed amendment has been
furnished to all persons (including Eligible Mortgagees) entitled to receive notice of the
amendment. Upon the adoption of an amendment and the obtaining of any necessary
consents of Eligible Mortgagees as provided below, the amendment to this Declaration or the
Survey Map and Plans will become effective when it is recorded or filed in the real property
records in the county in which the Condominium is located. The amendment shall be indexed
in the name of the Condominium and shall contain a cross-reference by recording number to
this Declaration and each previously; recorded amendment thereto. Such amendments shall be
prepared, executed, recorded and certified on behalf of the Association by any officer of the
Association designated for that purpose or, in the absence of designation, by the president of
the Association. No action to ` challenge the validity of an amendment adopted by the
Association pursuant to this Article may be brought more than one year after the amendment
is recorded. An amendment to the Articles shall be effective upon filing the amendment with
the Secretary of State. An amendment to the Bylaws shall be effective upon adoption.
Section 25.2 Percentages of Consent Required. Except as provided in this
Declaration in connection with (a) the exercise of the Development Rights by the Declarant;
(b) subdivision or combination of Units pursuant to Article 24; (c) reallocation of Limited
Common Elements or incorporation of the Limited Common Element third floor deck into
Unit by the Owner thereof Unit pursuant to Section 7.3; or (d) damage or condemnation
of the Property pursuant to Article 21 and Article 22, respectively, the percentages of consent
of Owners and Mortgagees required for adoption of amendments to this Declaration, the
Survey Map and Plans, the Articles and the Bylaws are as follows:
- 49 -
50898610.6
25.2.1 The consent of Owners holding at least 75% of the votes in the
Association and the consent of Eligible Mortgagees of Units to which at least 51% of the
votes of Units subject to Mortgages held by Eligible Mortgagees are allocated shall be
required to materially amend any provisions of this Declaration, the Survey Map and Plans,
the Articles or the Bylaws, or to add any material provisions thereto, which establish, provide
for, govern, or regulate any of the following: (a) voting rights; (b) Assessments, Assessment
liens, or subordination of such liens; (c) reserves for maintenance, repair, or replacement of
the Common Elements; (d) responsibility for maintenance and repair of any portion of the
Condominium; (e) rights to use Common Elements and Limited Common Elements (except
that the right to use a Limited Common Element may not be reallocated or materially
restricted without the consent of the Owner of the Unit to which it is allocated);
(f) reallocation of interests in Common Elements; (g) redefinition of Unit boundaries;
(h) convertibility of Units into Common Elements or Common Elements into Units;
(i) expansion or contraction of the Condominium or the addition, annexation or withdrawal of
property to or from the Condominium; 0) hazard or fidelity insurance' requirements;
(k) restoration or repair (after damage or partial condemnation) in a manner other than
specified in this Declaration or Survey Map and Plans; or (1) any provisions that are for the
express benefit of holders of Eligible Mortgages.
25.2.2 Except as provided in Article 24 or elsewhere in this Declaration, an
amendment that creates or increases Development Rights or Special Declarant Rights,
increases the number of Units, changes the boundaries of any Unit, the Allocated Interests of
a Unit, the uses to which any Unit is restricted or restricts the sale or leasing or Units shall
require the vote or agreement of (a) the Owner of each Unit particularly affected; (b) the
Declarant; and (c) Owners other than the Declarant holding at least 90% of the votes in the
Association, excluding votes held by the Declarant.
25.2.3 All other amendments 'shall be adopted if consented to by the Owners
holding at least 75% of the votes in the Association.
25.2.4 An Eligible Mortgagee who receives a written request to consent to an
amendment who does not deliver or post to the requesting party a negative response within 30
days shall be deemed to have consented to such request, provided the request was delivered
by certified or registered mail, return receipt requested.
Section 25.3 Limitations on Amendments. No amendment may restrict, eliminate,
or otherwise modify any Development Right or Special Declarant Right provided in this
Declaration without the consent of the Declarant and any Mortgagee of record with a security
interest in the Development Right or Special Declarant Right or in any real property subject
thereto, excluding Mortgagees of Units owned by Persons other than the Declarant.
-50-
50898610.6
Article 26. TERMINATION OF CONDOMINIUM.
Section 26.1 Action Required. Except as provided in Article 21 and Article 22, the
Condominium may be terminated only by agreement of Owners of Units to which at least
75% of the votes in the Association are allocated and with the consent of Eligible Mortgagees
of Units to which at least 51% of the votes in the Association are allocated and in accordance
with the Condominium Act. An Eligible Mortgagee who receives a written request to consent
to termination who does not deliver or post to the requesting party a negative response within
30 days shall be deemed to have consented to such request, provided the request was
delivered by certified or registered mail, return receipt requested.
Section 26.2 Condominium Act Governs. The provisions of the Condominium
Act relating to termination of a condominium contained in RCW 64.34.268, as it may be
amended, shall govern the termination of the Condominium, including, but not limited to, the
disposition of the real property in the Condominium and the distribution of proceeds from the
sale of that real property.
Article 27. NOTICES.
Section 27.1 Form and Delivery of Notice. Unless provided otherwise in this
Declaration, all notices given under the provisions of this Declaration or the Bylaws or rules
or regulations of the Association shall be in writing and may be delivered either personally or
by facsimile transmission or by mail. If delivery is made by mail, the notice shall be deemed
to have been delivered upon being deposited in the United States mail, first class, postage
prepaid, addressed to the person entitled to such notice at the most recent address known to
the Board. Notice to the Owner of any Unit shall be sufficient if mailed to the Unit if no other
mailing address has been given to the Board. Mailing addresses may be changed by notice in
writing to the Board. Notices to the Board shall be given to the president or secretary of the
Association.
Section 27.2 Notices to Eligible Mortgagees. The Association shall send to each
Eligible Mortgagee timely written notice of. (a) any proposed amendment of this Declaration
or Survey Map and Plans effecting a change in (i) the boundaries of the Unit subject to the
Eligible Mortgagee's Mortgage (the "Mortgaged Unit), (ii) the exclusive easement rights, if
any, appertaining to the Mortgaged Unit, (iii) the interest in the Common Elements or the
liability for Common Expenses of the Mortgaged Unit, (iv) the number of votes in the
Association allocated to the Mortgaged Unit, or (v) the purposes to which the Mortgaged Unit
or the Common Elements or Limited Common Elements are restricted; (b) any proposed
termination of condominium status or transfer or mortgage of any part of the Common
Elements; (c) any condemnation loss or casualty loss that affects a material portion of the
Condominium or that affects the Mortgaged Unit; (d) any delinquency which has continued
for 60 days in the payment of Assessments or charges owed by the Owner of the Mortgaged
-51 -
50898610.6
Unit; (e) any lapse, cancellation, or material modification of any insurance policy maintained
by the Association pursuant to Article 20; (f) any proposed action that requires the consent of
Eligible Mortgagees pursuant to this Declaration, the Articles or the Bylaws; and (g) any
proposed special Assessment or supplemental budget.
Section 27.3 Approval by Eligible Mortgagees. An Eligible Mortgagee who
receives a written request to consent to termination who does not deliver or post to the
requesting party a negative response within 30 days shall be deemed to have approved such
request, provided the request was delivered by certified or registered mail, return receipt
requested.
Article 28. SEVERABILITY.
The provisions of this Declaration shall be independent and severable, and the
unenforceability of any one provision shall not affect the enforceability of any other provision, if
the remaining provision or provisions comply with the Condominium Act.
Article 29. EFFECTIVE DATE.
This Declaration shall take effect upon recording.
Article 30. REFERENCE TO SURVEY MAP AND PLANS.
The Survey Map and Plans Nvere filed with the Recorder of King County, Washington,
simultaneously with the recording of this Declaration under Recording
No. in Volume of Condominiums, pages
through
Article 31. ASSIGNMENT BY DECLARANT.
The Declarant reserves the right to assign, transfer, sell, lease, or rent all or a portion of
the Property then owned by it and reserves the right to assign all or any of its rights, duties, and
obligations created under this Declaration.
DATED: 200
DECLARANT: AUBURN PROFESSIONAL PLAZA, LLC, a
Washington limited liability company
- 52 -
50898610.6
By
Its
- 53 -
50898610.6
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that is the
person who appeared before me, and said person acknowledged that said person signed this
instrument, on oath stated that said person was authorized to execute the instrument and
acknowledged it as the of Auburn Professional Plaza, LLC, a
Washington limited liability company, to be the free and voluntary act of such party for the
uses and purposes mentioned in the instrument.
Dated this day of 200_.
Signature of Notary
(Legibly Print or Stamp Name of Notary)
Notary public in and for the state of Washington,
residing at
My appointment expires
-54-
50898610.6
SCHEDULE A
AUBURN PROFESSIONAL PLAZA, A CONDOMINIUM
Description of Property in Condominium
PARCEL A:
Lots 5 and 6, Block O, L.W. Ballard's Park Addition to Slaughter, according to the plat thereof
recorded in Volume 3 of Plats, page 91, in King County, Washington.
PARCEL B:
Lot 7, Block O, L.W. Ballard's Park Addition to Slaughter, according to the plat thereof recorded
in Volume 3 of Plats, page 91, in King County, Washington.
PARCEL C:
Lot 4, Block O, First Addition to the Town of Slaughter, according to the plat thereof recorded in
Volume 2 of Plats, page 84, in King County, Washington
EXCEPT that portion conveyed to Yale Investment Company, a corporation, by deed recorded
under Recording Number 2601863, in King County, Washington, more particularly described as
follows:
Beginning at the southeast corner of said lot;
Thence northerly along the east line of said lot to the northeast corner of said lot;
Thence west along the north line of said lot, 16.75 feet to a point in the center line of a concrete
wall;
Thence south along the center line of said concrete wall, to a point in the south line of said lot,
which is 16.53 feet west of the point of beginning;
Thence east along south line of said lot, 16.53 feet to the point of beginning.
PARCEL D:
That portion of Lot 4, Block O, First Addition to the Town of Slaughter, according to the plat
thereof recorded in Volume 2 of Plats, page 84, in King County, Washington, more particularly
described as follows:
Beginning at the southeast corner of said lot;
Thence northerly along the east line of said lot to the northeast corner of said lot;
50898610.6
Thence west along the north line of said lot, 16.75 feet to a point in the center line of a concrete
wall;
Thence south along the center line of said concrete wall, to a point in the south line of said lot,
which is 16.53 feet west of the point of beginning;
Thence east along south line of said lot, 16.53 feet to the point of beginning.
PARCEL E:
The west half of Lot 3, Block O, First Addition to the Town of Slaughter, according to the plat
thereof recorded in Volume 2 of Plats, page 84, in King County, Washington.
PARCEL F:
The east half of Lot 3, Block O, First Addition to the Town of Slaughter, according to the plat
thereof recorded in Volume 2 of Plats, page 84, in King County, Washington.
PARCEL G:
The west half of Lot 2, Block O, First Addition to the Town of Slaughter, according to the plat
thereof recorded in Volume 2 of Plats, page 84, in King County, Washington.
PARCEL H:
The east half of Lot 2, Block O, First Addition to the Town of Slaughter, according to the plat
thereof recorded in Volume 2 of Plats, page 84, in King County, Washington.
PARCEL I:
Lot 1, Block O, First Addition to the Town of Slaughter, also land lying easterly of said lot
between said lot and Auburn Avenue and north of Main Street and south of the public alley
extending east and west on the north of said Block O, being more particularly described as
follows:
Beginning at the southwest corner on said Lot 1, Block O, and running easterly along the south
line of said lot extended along the northerly line of Main Street to the intersection of said
northerly line of Main Street with the west line of Auburn Avenue;
Thence northeasterly along the west line of Auburn Avenue to the intersection of said west line
of Auburn Avenue with the southerly line of the above mentioned alley;
Thence westerly along the south line of said alley to the northwest corner of said Lot 1;
Thence southerly along the westerly line of said Lot 1 to the point of beginning;
50898610.6
[PARCEL J:
Parking Unit of Parking Garage, a condominium, per Condominium
Declaration recorded under King County Recording No. and Survey Map
and Plans recorded under King County Recording No. .]
50898610.6
SCHEDULE B
AUBURN PROFESSIONAL PLAZA, A CONDOMINIUM
Description of Additional Propert
y
Lots 8, 9 and 10, Block O, EXCEPT that portion of Lot 10 taken for street and highway
purposes, L.W. Ballard's Park Addition to Slaughter, according to the plat thereof recorded in
Volume 3 of Plats, page 91, in King County, Washington.
50898610.6