Exhibit 10.9
AMENDED AND RESTATED
LEASE WITH PURCHASE OPTION AGREEMENT
between
WENATCHEE EVENTS CENTER, LLC
(Lessor)
and
GREATER WENATCHEE REGIONAL EVENTS CENTER
PUBLIC FACILITIES DISTRICT
(Lessee)
and
CITY OF WENATCHEE
(Obligor)
May 30, 2007
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS .......................................................2
1.1 "ADA"..................................................................2
1.2 "Affiliate"............................................................2
1.3 "Agreement"............................................................2
1.4 "Architect"............................................................2
1.5 "Business Day".........................................................2
1.6 "Calendar Year"........................................................2
1.7 "Closing"..............................................................2
1.8 "Closing Date".........................................................2
1.9 "Construction Contract"................................................2
1.10 "Construction Documents"...............................................2
1.11 "Construction Drawings"................................................3
1.12 "Construction Lender"..................................................3
1.13 "Construction Loan" o.................................................3
1.14 "Contingency"..........................................................3
1.15 "Contract Documents"...................................................3
1.16 "Contract Savings".....................................................3
1.17 "Contractor(s)"........................................................3
1.18 "Design Development"...................................................3
1.19 "Detailed Specifications"..............................................3
1.20 "Drawings".............................................................3
1.21 "Effective Date".......................................................3
1.22 "Environmental Conditions".............................................4
1.23 "Environmental Reports"................................................4
1.24 "Environmental Law"....................................................4
1.25 "Escrow Agent".........................................................4
1.26 "Final Completion Date"................................................4
1.27 "Final Completion of Public Facilities District Improvements
(or Final Completion)"................................................4
1.28 "General Construction Contract"........................................5
1.29 "General Contractor"...................................................5
1.30 "Hazardous Substances".................................................5
1.31 "Indemnified Parties"..................................................6
1.32 "Land".................................................................6
1.33 "Law"..................................................................6
1.34 "Lease"................................................................6
1.35 "Lease Payment Date"...................................................6
1.36 "Lease Payments".......................................................6
1.37 "Leased Premises"......................................................6
1.38 "Lessee" or "Public Facilities District".......,.......................6
1.39 "Lessee's Architectural Representative"................................7
1.40 "Lessor"...............................................................7
1.41 "Mandatory Improvements"...............................................7
1.42 "Mediator".............................................................7
1.43 "Permit(s)"............................................................7
1.44 "Permit Allowance".....................................................7
1.45 "Permitted Exceptions".................................................7
1.46 "Person"...............................................................7
1.47 "Personal Property"....................................................7
1.48 "PFD"..................................................................7
1.49 "Project"..............................................................7
1.50 "Project Budget........................................................7
1.51 "Project Requirements".................................................8
1.52 "Project Schedule".....................................................8
1.53 "Property".............................................................8
1.54 "Public Facilities District Improvements"..............................8
1.55 "Punch-list"...........................................................8
1.56 "Real Property"........................................................8
1.57 "Regional Events Center"...............................................8
1.58 "Requirements of Law"..................................................8
1.59 "Savings"..............................................................8
1.60 "Schematic Design Documents"...........................................8
1.61 "Service Contracts"....................................................9
1.62 "Stated Contingency"...................................................9
1.63 "Substantial Completion Date"..........................................9
1.64 "Substantial Completion of Public Facilities District Improvements"....9
1.65 "Substantially Complete" or "Substantially Completed"..................9
1.66 "Taxes"...............................................................10
1.67 "Title Company".......................................................10
1.68 "Title Policy"........................................................10
1.69 "Unavoidable Delay"...................................................10
1.70 "Warranty Period".....................................................10
ARTICLE II GREATER WENATCHEE REGIONAL EVENTS CENTER DEVELOPMENT..............11
2.1 Development of Public Facilities District Improvements................11
2.2 Parking Requirements..................................................11
ARTICLE III DESCRIPTION OF PROPERTY..........................................11
3.1 Agreement to Lease....................................................11
3.2 Agreement to Purchase.................................................11
3.3 Identification of Personal Property...................................12
3.4 Service Contracts.....................................................12
3.5 Ice Rink Fixtures and Equipment.......................................12
ARTICLE IV DUE DILIGENCE.....................................................12
4.1 Project
Information..................................................................12
ARTICLE V CONSTRUCTION OF REGIONAL EVENTS CENTER IMPROVEMENTS................12
5.1 Construction of Public Facilities District Improvements...............12
5.2 [This Section intentionally left blank.]..............................12
5.3 Schedule for Design and Construction..................................13
5.4 Selection of Development Team for Project.............................13
5.5 Plans and Specifications..............................................13
5.6 Dispute Resolution Process............................................14
5.7 Permits; Costs; Compliance with Legal Requirements....................15
5.8 Construction Contract.................................................15
5.9 Construction of Project...............................................16
5.10 Changes to the Work...................................................17
5.11 Inspections...........................................................17
5.12 Construction Loans....................................................18
5.13 Termination of Agreement..............................................18
5.14 As-Built Plans and Specifications; Manuals; Warranties; Permits
and Licenses.........................................................18
5.15 Construction Covenants and Warranties.................................18
5.16 Disclaimer............................................................20
5.17 Enforcement of Warranties.............................................21
5.18 Architect's Administration of the Contract............................22
5.19 Project Manager.......................................................22
ARTICLE VI LEASE TERM........................................................22
ARTICLE VII LEASE PAYMENTS...................................................23
7.1 Lease Payments........................................................23
7.2 Additional Rent.......................................................24
7.3 Defeasance............................................................24
ARTICLE VIII USE.............................................................24
8.1 Use of Premises.......................................................24
8.2 Quiet Enjoyment.......................................................25
ARTICLE IX ABSOLUTE NET LEASE................................................25
9.1 Absolute Net Lease....................................................25
9.2 Lease - Non-terminable................................................25
9.3 Taxes and Utility Charges.............................................26
9.4 Compliance with Laws..................................................26
9.5 Lessee's Right to Contest.............................................26
ARTICLE X ENVIRONMENTAL CONDITION OF THE PROPERTY............................27
10.1 Environmental Information.............................................27
10.2 Lessor's Representations and Warranties Regarding Environmental
Conditions...........................................................27
10.3 Survival..............................................................27
10.4 Supersedure...........................................................27
ARTICLE XI REPRESENTATIONS AND WARRANTIES....................................28
11.1 Lessor's Representations and Warranties...............................28
11.2 Lessee's Representations and Warranties...............................29
ARTICLE XII POSSESSION.......................................................29
ARTICLE XIII FIRE AND EXTENDED COVERAGE INSURANCE............................30
ARTICLE XIV LIENS............................................................30
ARTICLE XV OPTIONS TO PREPAY LEASE AND PURCHASE LEASED PREMISES..............30
15.1 Option to Purchase....................................................30
15.2 Exercise of Option....................................................31
15.3 Conveyance of Leased Premises.........................................31
15.4 Option to Partially Prepay Lease......................................31
15.3 Option Not Exercised..................................................31
15.6 Title to Real Property................................................31
15.7 Title to Personal Property and Intangible Property....................32
ARTICLE XVI CLOSING..........................................................32
16.1 Closing Procedures....................................................32
16.2 Delivery by Lessor....................................................32
16.3 Delivery by Lessee....................................................34
16.4 Proration's...........................................................34
16.5 Costs and Expenses....................................................34
16.6 Recordation...........................................................35
16.7 Effect of Damage or Destruction of Property...........................35
ARTICLE XVII DESTRUCTION OF LEASED PREMISES..................................35
ARTICLE XVIII DEFAULT; REMEDIES..............................................35
18.1 Corrective Work.......................................................35
18.2 Specific Performance..................................................36
18.3 Waiver................................................................36
ARTICLE XIX MISCELLANEOUS....................................................36
19.1 Incorporation of Recitals; Definitions................................36
19.2 Notices...............................................................36
19.3 Amendment, Waiver, Assignment.........................................37
19.4 Lessee's Disclaimer...................................................38
19.5 Survival..............................................................38
19.6 Captions..............................................................38
19.7 Brokerage Fees........................................................38
19.8 Joint Venture.........................................................38
19.9 Severability..........................................................39
19.10 Further Assurances....................................................39
19.11 Merger of Prior Agreements............................................39
19.12 Fair Construction.....................................................39
19.13 Authority.............................................................39
19.14 Time is of the Essence................................................39
19.15 Arbitration...........................................................39
19.16 Non-Waiver of Governmental Rights.....................................39
19.17 Agreement for Exclusive Benefit of Lessor and Lessee..................40
19.18 Interest on Past-Due Obligations......................................40
19.19 Governing Law.........................................................40
19.20 Memorandum of Agreement...............................................40
EXHIBITS
Exhibit A Legal Description of Land -- Regional Events Center Improvements
Exhibit B Construction Documents for Regional Events Center Improvements
Exhibit C Legal Description - Ice Rink Property
Exhibit D Schedule of Fixtures and Equipment
Exhibit E Project Budget (Revised)
Exhibit F First Revised Project Schedule
Exhibit G List of Environmental Reports
Exhibit H Lease Payments (Revised)
LEASE AGREEMENT
THIS AMENDED AND RESTATED LEASE WTTH PURCHASE OPTION AGREEMENT (the
"Agreement") is made and entered into as of this 30th day of May, 2007, by and
between WENATCHEE EVENTS CENTER, LLC, a Washington limited liability company
("Lessor"), and GREATER WENATCHEE REGIONAL EVENTS CENTER PUBLIC FACILITIES
DISTRICT, a Washington municipal corporation
("Lessee" or "Public Facilities District"), and the CITY OF WENATCHEE, a
Washington
Municipal Corporation ("Obligor") with reference to the following facts:
RECITALS
A. On June 15, 2006 Lessee was formed by an inter-local agreement to create
a regional (nine-jurisdiction) public facilities district ("PFD").
B. Lessee is interested in constructing and leasing a regional events
center to be located in Wenatchee.
X. Xxxxxx is the contract purchaser pursuant to a real estate purchase and
sale agreement for the purchase of the real property described on Exhibit "A"
which sale shall be closed by purchaser on or before August 1, 2007. Failure to
close as set forth herein shall be deemed a material default subject to
enforcement pursuant to Article XVIII of this Agreement.
X. Xxxxxx proposes to design, develop, finance, construct, complete and
thereafter lease to Lessee a regional events center with associated parking area
to be constructed on privately owned property of Lessor in Wenatchee,
Washington.
E. Lessee is interested in leasing a regional events center facility to
achieve multiple public facilities district objectives including, but not
limited to, improving the financial stability and general economic vitality of
the district, increasing tax revenues, creating jobs, providing artistic and
cultural opportunities and important public spaces for the residents of the
district
F. Lessee's desire to lease the regional events center is on the express
condition, among others, that construction of the project commence in accordance
with RCW 82.14.390, not later than February 1, 2007, which condition has been
satisfied.
G. Lessee desires to lease from Lessor and Lessor desires to lease to
Lessee the Property (as hereinafter defined) on the terms and conditions set
forth herein.
H. Lessee is authorized by RCW Chapter 35.57 to lease, acquire and transfer
real and personal property, and intends to finance its lease or purchase of the
regional events center facility and associated parking area with the proceeds of
tax exempt financing, to be repaid in part with sales taxes received pursuant to
RCW Chapter 82.14.
I. BBP Two, TLC was originally identified as Lessor in the September 28,
2006 original Lease Agreement. This Amended and Restated Lease with Purchase
Option Agreement is entered into as a replacement for the original Lease
Agreement which has been terminated by mutual agreement of BBP Two, LLC and the
Public Facilities District.
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
provisions contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby mutually acknowledged, the parties
agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
1.1 "ADA" means the Americans With Disabilities Act of 1990, 42 U.S.C.
Section 1201, et seq., as amended from time to time.
1.2 "Affiliate" means any Person or entity related to, owned by, in common
ownership with or affiliated with a person or entity that is a parent company or
constituting a shareholder or member of a person or in which such Person has or
holds an equity or other interest.
1.3 "Agreement" means this Amended and Restated Lease With Purchase Option
Agreement, as the same may be amended, supplemented or modified from time to
time.
1.4 "Architect" means Sink Xxxxx Xxxxxxxx Architects, collectively, or
such other architect licensed to practice in the State of Washington as may from
time to time be hired by Lessor in connection with the design of the Regional
Events Center Improvements.
1.5 "Business Day" means any day other than a Saturday, Sunday or legal
holiday that Lessee's offices are open.
1.6 "Calendar Year" means a calendar year commencing with January 1 and
ending with December 31.
1.7 "Closing" means the delivery of documents and funds to the Escrow Agent
with appropriate instructions that are necessary for the completion of the lease
and/or purchase of the Property in accordance with the terms and conditions of
this Agreement.
1.8 "Closing Date" means the date on which the Closing occurs.
1.9 "Construction Contract" means the General Construction Contract for
construction services entered into by Lessor, and the General Contractor, for
construction of the Public Facilities District Improvements.
1.10 "Construction Documents" means the Final Public Facilities District
approved Construction Drawings and related Project Manual, inclusive of Division
1 General
2
Requirements and Technical Divisions 2 through 14 for the Public Facilities
District Improvements approved by Lessor and Lessee for the construction of the
Public Facilities District Improvements, including technical drawings,
schedules, diagrams, plans and specifications setting forth in detail the
requirements for construction, itemization of furniture, fixtures, equipment and
furnishings to be installed and providing information customarily required for
the use of the building trades and the general construction contract for
construction of the Public Facilities District Improvements. The Construction
Documents shall be revised to reflect the Project as described in the Project
Budget (revised), Exhibit "E" to this Agreement
1.11 "Construction Drawings" means Drawings setting forth in detail the
requirements for the construction of the Public Facilities District
Improvements.
1.12 "Construction Lender" means the financial lending institution selected
by the Lessor.
1.13 "Construction Loan" means a loan obtained from the Construction Lender
for the purpose of paying Project construction costs. o
1.14 "Contingency" means Stated Contingency and Design Contingency.
1.15 "Contract Documents" means the documents identified in the General
Construction Contract as "contract documents."
1.16 "Contract Savings" means the amount, if any, by which a bid accepted
for each major subcontract element identified in the Project Budget is less than
the amount for the major subcontract element in the Project Budget, plus the
amount of unused Stated Contingency as of the Final Completion of the Public
Facilities District Improvements.
1.17 "Contractor(s)" means the General Contractor and any other
construction contractors with whom Lessor contracts for construction of all or
any portion of the Project
1.18 "Design Development" means that phase of design of the Project
providing for development of plans and specifications for the Project based upon
the Schematic Design Documents; as such term is generally understood in the
construction industry.
1.19 "Detailed Specifications" means the Final Public Facilities District
approved written detailed requirements for materials, equipment, construction
systems, standards and workmanship for the construction of the Project as issued
by the Architect as Final Construction Documents for the Project.
1.20 "Drawings" means all graphic and pictorial documents depicting the
design, location and dimensions of the elements of the Public Facilities
District Improvements and also include itemization of furniture, fixtures,
equipment and furnishings to be installed and include plans, elevations,
sections, details, schedules and diagrams for the Public Facilities District
Improvements.
1.21 "Effective Date" means the date this Lease was entered into as set
forth above.
3
1.22 "Environmental Conditions" means conditions involving the presence of
Hazardous Substances in soil, surface waters, groundwater and sediments.
1.23 "Environmental Reports" means all environmental reports, audits,
sampling results and other information in Lessor's possession or control
regarding the Environmental Conditions, a complete listing of which is set forth
on Exhibit G attached to this Agreement.
1.24 "Environmental Law" means, as amended from time to time, local, state
or federal laws, rules, ordinances, regulations, applicable permits and
applicable orders now or hereafter enacted relating to (a) the protection of
human health or the environment or (b) the use, storage, generation, production,
treatment, emission, discharge, remediation, removal or disposal of Hazardous
Substances; including, without limitation, the Federal Comprehensive
Environmental Response Compensation, and Liability Act of 1980, 42 U.S.C.
Section 9601 et 02., and the Washington Model Taxies Control Act, RCW Chapter
70.105D.
1.25 "Escrow Agent' means First American Title Insurance Company, or
another nationally recognized title insurance company selected by Lessor and not
objected to by Lessee which shall act as the escrow agent and provide the title
insurance policies to be delivered in connection with the Closing.
1.26 "Final Completion Date" means total Project will be substantially
complete not later than September 17, 2008.
1.27 'Final Completion of Public Facilities District Improvements (or Final
Completion)" means the date by which the following events have occurred:
(a) Certificate of Occupancy. The City of Wenatchee shall have issued a
final unconditional certificate of occupancy for the Public Facilities District
Improvements permitting their use and occupancy as a regional events center and
it is available for occupancy and normal operations.
(b) Contractor's Certification. The contractor shall have issued its
"Certificate of Substantial Completion" for the Public Facilities District
Improvements together with its Affidavit of Payment of Debts and Claims, AIA
Forms 706 and 706A together with final waivers and releases of lien in form
satisfactory to Lessee from such material men, laborers, contractors and
subcontractors as Lessee may require.
(c) Punch-list Items Completed. Following Substantial Completion of the
Public Facilities District Improvements, Lessor, the Architect and Lessee shall
prepare a Punch-list for the Public Facilities District Improvements. All
Punch-list items for the Public Facilities District Improvements shall have been
completed to the reasonable satisfaction of Lessee, or if not completed, the
parties shall have agreed upon a holdback of 150% of the cost estimated by
Lessee to complete the Punch-list items.
(d) Construction Lessor shall have provided evidence reasonably
satisfactory to Lessee that all construction costs for the Public Facilities
District Improvements have been paid in full including evidence of full payment
for any Personal Property. The issuance of the Title Policy insuring the Lessee
4
against any material or labor liens and the submission of invoices with evidence
of payment by Lessor shall be evidence acceptable to Lessee of the payment of
all construction costs.
(e) No Construction Liens. The period for filing construction liens for the
Public Facilities District Improvements shall have expired or releases or
discharges of construction liens in form and substance satisfactory to Lessee
have been obtained by the contractor in accordance with the articles and
conditions of the construction contract for the Public Facilities District
Improvements.
(f) As-Built Plans and Specifications. Lessor shall have provided Lessee
with a complete and detailed set of "as-built" plans and specifications for the
Project (to be provided on CAD or other format satisfactory to Lessee) together
with all technical, service, instruction and procedure manuals, warranties,
permits and licenses and an as- built survey of the Real Property showing all
improvements located thereon.
1.28 "General Construction Contract" means the agreement between the Lessor
and the General Contractor; for construction of the Public Facilities District
Improvements.
1.29 "General Contractor" means Xxxx Construction Group or other General
Contractor as selected by the Lessor.
1.30 "Hazardous Substances" means:
(a) Those substances included within the definitions of "hazardous
substances," "hazardous materials," "toxic substances," or "solid waste" in the
Federal Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901
et the Federal .Comprehensive Environmental Response, Compensation, and
Liability act of 1980, 42 U.S.C. Section 9601 et mg., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et and the Toxic Substance Control
Act, 15 U.S.C. Section 2601 et seq., and in the regulations promulgated pursuant
to said laws, all as amended from time to time;
(b) Those substances defined as "dangerous wastes," "hazardous wastes" or
as "hazardous substances" under the Water Pollution Control Act, RCW 9048.010 et
seq., the Hazardous Waste Management Statute, RCW 70.105.010 et mi., the
Washington Toxic Substance Control Act RCW 70.1058.010 et seq., the Washington
Model Toxics Control Act, RCW 70.105D.010 et seq., and the Toxic Substance
Control Act, 15 U.S .C. Section 2601 et seq., and in the regulations promulgated
pursuant to said laws, all as amended from time to time;
(c) Those substances listed in the United States Department of
Transportation Table (49 C.F.R. 172.101 and amendments thereto) or by the
Environmental Protection Agency (or any successor agency) as hazardous
substances (40 C.F.R. Part 302 and amendments thereto);
(d) Storm water discharge regulated under any federal, state or local law,
ordinance or regulation relating to storm water drains, including, but not
limited to, Section 402(p) of the Clean Water Act, 33 U.S.C. Section 1342 and
the regulations promulgated hereunder, all as amended from time to time.
5
(e) Such other substances, material and wastes which are dangerous or
injurious to human health or become regulated under applicable local, state or
federal law, or the United States government, or which are classified as
hazardous or toxic under federal, state or local laws or regulations, all as
amended from time to time, or which are deemed dangerous or injurious to human
health; and
(f) Any material, waste or substance which is (A) petroleum, (B) asbestos,
(C) polychlorinated biphenyls, (D) designated as a "hazardous substance"
pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251, et gm.
(33 U.S.C. Section 1321) or listed pursuant to Section 307 of the Clean Water
Act (33 U.S.C. Section 1317), (E) flammable explosives, (F) radon gas, (0) lead
or lead-based paint, (H) radioactive materials, (1) coal combustion by-products,
(J) urea formaldehyde foam insulation, or (K) mold. Mold includes any form of
multicellular fungi that live on plant or animal matter and in indoor
environments.
1.31 "Indemnified Parties" means Lessee and its successors and assigns,
including any Person who acquires all or any part of the Real Property by any
sale, assignment, deed-in-lieu of foreclosure under any deed of trust on
Lessee's interest in the Real Property, or otherwise.
1.32 "Land" means that certain real property located in the City of
Wenatchee, Chelan County, Washington, more particularly described in Exhibit A
attached hereto and by this reference incorporated herein.
1.33 "Law" means any constitution, statute, ordinance, regulation, rule,
resolution, judicial decision, administrative order or other requirement of any
federal, state, county, municipal or other governmental agency or authority
having jurisdiction over the parties or the Property, or both, in effect either
at the time of execution of this Agreement or at any time during the term of
this Agreement, including without limitation, any regulation or order of a quasi
official entity or body (e.g. board of fire examiners, public utilities, design
review boards or hearing examiners); all rules, laws and regulations arising
under Title 111 of the Americans with Disabilities Act and the regulations
issued hereunder by the United States Department of Justice.
1.34 "Lease" means this Lease by and between Lessor and Lessee.
1.35 "Lease Payment Date" means commencing thirty (30) days after
substantial Completion Date, either (i) if certificates of participation are
issued as provided in Exhibit H, principal payments shall be due each December 1
and interest payments shall be due each June 1 and December 1 during the
remaining term of the Lease, or (ii) if certificates of participation are not
issued as provided in Exhibit H, the first day of each month during the
remaining term of the Lease.
1.36 "Lease Payments" means as provided in Exhibit H.
1.37 "Leased Premises" means the Land together with the Improvements.
1.38 "Lessee or "Public Facilities District" means Greater Wenatchee
Regional Events Center Public Facilities District; a Washington municipal
corporation.
6
1.39 "Lessee's Architectural Representative" means Xxxxxx Xxxxxxx, or such
other Person as may be designated by Lessee to Lessor in writing nuns time to
time.
1.40 "Lessor" means Wenatchee Events Center, LW, a Washington limited
liability company.
1.41 "Mandatory Improvements" means those improvements that are part of the
Project and are described in the Construction Documents.
1.42 "Mediator" means a natural person not employed by Lessor, Lessee or
any affiliate or subsidiary of either of them who shall also be a professional
mediator with at least five (5) years experience in complex commercial real
estate disputes approved by Lessor and Lessee whom Lessee and Lessor shall
mutually designate to act as a dispute' resolution mediator to assist in
resolution of such dispute pursuant to Section 5.6 below.
1.43 "Permit(s)" has the meaning stated in Section 5.15(b) below.
1.44 "Permit Allowance" means the sum of Seventy-Five Thousand Dollars
($75,000.00), which amount is included within the Lease Payments as the
anticipated cost to be Incurred by Lessor in obtaining permits and licenses from
the applicable regulatory agencies required to construct the Project.
1.45 "Permitted Exceptions" has the meaning set forth in Section 15.6
below.
1.46 "Person" means a natural person, corporation, trust, partnership,
limited partnership, Limited Liability Company, government subdivision or
agency, Municipal Corporation, city or other legal entity.
1.47 "Personal Property" means all personal property located on or in or
used in connection with the Public Facilities District Improvements or which
will be Stalled or incorporated into the Public Facilities District Improvements
as part of the Project including but not limited to those items of personal
property identified in the Detailed Specifications.
1.48 "PFD" means that certain inter-local agreement approved June 15, 2006
to create a regional public facilities district.
1.49 "Project" means the total design, development, and construction,
including all professional design services, and all labor, materials and
equipment used or incorporated in the design, development and construction of
the Public Facilities District Improvements, all as more fully described in the
Schematic Design Documents. The Project shall include work consistent with and
reasonably inferable from the approved Project Requirements as being necessary
to produce the intended results and all work necessary to render the Public
Facilities District Improvements fully operational.
1.50 "Project Budget" means the budget for the development and construction
of the Project approved by Lessee and Lessor, a copy of which is attached to
this Agreement as Exhibit E.
7
1.51 "Project Requirements" means the Construction Documents and Detailed
Specifications and as issued by the Architect and as otherwise specifically
agreed to by Lessor and Lessee.
1.52 "Project Schedule" means the schedule for design, development, repair,
renovation and construction of the Project as revised from time to time by
Lessor and lessee. The First Revised Project Schedule is set forth in Exhibit F
attached hereto and by this reference incorporated herein.
1.53 "Property" means the Real Property, Personal Property, Service
Contracts, and other items to be leased, sold and transferred to Lessee as
described in Section 3.1 below.
1.54 "Public Facilities District Improvements" means the Regional Events
Center and associated facilities.
1.55 '2,Ea" means a list of items required to be completed prior to Final
Completion that are minor items which do not affect Lessee's ability to use the
Public Facilities District Improvements for their intended use.
1.56 "Real Property" means the Land and the Public Facilities District
Improvements, together with all rights, privileges, easements and appurtenances
thereto.
1.57 "Regional Events Center" means a multi-purpose event center facility,
consisting of a total of approximately 161,000 square feet, which shall include
a main arena, a practice ice facility, exhibition and meeting rooms, restaurant
and food service facilities, team changing and showering rooms, viewing suites,
offices, media and broadcasting suites, and technical support areas, and related
support facilities including service areas, sidewalks, public stairs, corridors,
hallways, lobbies, public restrooms, retail space, loading dock, storage and
administrative spaces and on-site parking area. The main arena fixed seating
capacity shall be approximately 4,300 with a maximum variable seating capacity
of approximately 5,600 for certain event configurations.
1.58 "Requirements of Law" means all requirements relating to land and
building construction (including those specifically applicable to Lessee's
contemplated use of the Public Facilities District Improvements), including,
without limitation, planning, zoning, public works and procurement, prevailing
wage, subdivision, environmental, air quality, flood hazard, fire safety, the
Americans with Disabilities Act and other governmental approvals, permits,
licenses and/or certificates as may be necessary from time to time to comply
with all the foregoing and other applicable statutes, rules, orders,
regulations, laws, ordinances, and covenants, conditions and restrictions, which
now apply to and/or affect the design, construction, existence, intended use
operation and/or occupancy of the Real Property, the Project or any part
thereof.
1.59 "Savings" means the amount equal to eighty percent (80%) of the
Contract Savings, as defined in Section 1.16.
1.60 "Schematic Design Documents" means the Construction Documents and
other documents illustrating the scale and relationship of the Regional Events
Center and its various components including, but not limited to, furniture,
8
furnishings and equipment, sidewalks, lighting, landscaping and other ancillary
improvements. The Schematic Design Documents shall include a conceptual site
plan and preliminary building plans, sections, elevations and Detailed
Specifications.
1.61 "Service Contacts" means all architectural drawings, plans and
specifications, consulting agreements, engineer's reports, design contracts,
utility contracts, water and sewer service contracts, other contracts of any
nature, maintenance contracts, management contracts, certificates of occupancy,
warranties, permits, licenses, approvals, soil reports, and other contracts or
documents of any nature relating to the Project entered into by Lessor pursuant
to the provisions of this Agreement.
1.62 "Stated Contingency" means the amount of $500,000 identified as the
general contingency in the Project Budget which may be used in the manner
described in Section 5.10(6) of this Agreement.
1.63 "Substantial Completion Date" means the date on which Substantial
Completion of the Public Facilities District Improvements has occurred.
1.64 "Substantial Completion of Public Facilities District Improvements"
means the date on which the following events have occurred:
(a) Completion of Construction. The Regional Events Center is
SubstantiallyComplete.
(b) Architect's Certification. The Architect shall have issued its
"Certificate of Substantial Completion ALA Document 0704," stating that the
construction of the Public Facilities District Improvements is substantially
completed in strict accordance with the o Construction Documents.
(c) Certificate of Occupancy The City of Wenatchee shall have issued a
temporary certificate of occupancy for the Public Facilities District
Improvements permitting the use and occupancy of the Regional Events Center as a
multi-purpose regional events center.
(d) Lessee Acceptance. Lessee shall have confirmed that the Public
Facilities District Improvements have been completed in strict accordance with
the Construction Documents subject to completion of normal punch-list items.
(e) Fixtures and Equipment. All furniture, furnishings, fixtures and
equipment specified in the Construction Documents for the Public Facilities
District Improvements or required for the operation of a multi-purpose regional
events center under applicable law have been installed and are in good working
order, condition and repair.
(f) And shall be no later than September 17, 2008.
1.65 "Substantially Complete" or "Substantially Completed" means, for the
Public Facilities District Improvements, that the Public Facilities District
Improvements have been constructed in substantial accordance with the
Construction Documents and (a) all elements 'required for the functioning of the
Public Facilities District Improvements shall be operational and in good working
9
order and condition including, but not limited to, satisfying applicable
Requirements of Law; (b) the Regional Events Center shall be weather tight and
waterproof; (c) the fire and life safety systems within the Regional Events
Center shall be operational and in good working order and condition; (d)
elevators shall operate and function in good working order and condition but may
still require touch up installation and cleaning; (e) the mechanical and
electrical systems, including the HVAC system shall be individually tested and
in good working order able to support the Regional Events Center and shall also
be tested to assure that the Regional Events Center systems operate on an
integrated basis, but the HVAC system may still require final balancing work;
(f) the finish work is substantially completed, including but not limited to any
public lobbies, decks, patios, elevators, restrooms, HVAC, plumbing, fire and
life safety, sprinkler and electrical systems, doors, partitions, cabinetry,
floor coverings, including removal of all construction debris; (g) the computer
system for the Regional Events Center has been installed and is operational in
accordance with the applicable specifications; (h) all site utilities,
sidewalks, driveways, street improvements, public spaces, landscaping, street
furniture, fencing, and lighting have been substantially completed and
construction barricades and equipment have been removed; (i) all lighting,
furniture, furnishings, fixtures and equipment have been installed in the
Regional Events Center; except in each case minor punch list items which do not
materially affect use and occupancy of the Regional Events Center as a
first-class multi-purpose regional events center;
1.66 "Taxes" means all real property taxes and assessments (including
assessments for special improvements), license and permit fees, charges for
public utilities, leasehold excise taxes, other excise taxes, levies, sales, use
and occupancy taxes, and any taxes levied or assessed in addition to or in lieu
of, in whole or in part, such taxes, assessments or other charges and all other
governmental impositions and charges of every kind and nature, general and
special, ordinary and extraordinary, foreseen and unforeseen of every character.
1.67 "Tide Company" means First American Tide Insurance Company, or another
nationally recognized title insurance company selected by Lessor, and not
objected to by Lessee, which will be issuing the title insurance policy to be
issued at the Closing.
1.68 "Title Policy" has the meaning set forth in Section 15.6 below.
1.69 "Unavoidable Delay" means, with respect to a party, strikes, acts of
God, unavoidable casualties and similar events beyond the control of the party
which, after the exercise of due diligence to mitigate the effects thereof,
delay construction of the Public Facilities District Improvements. Delay or work
stoppage caused by appeals of permits issued by the City of Wenatchee or other
municipal agencies and necessary to authorize the construction of the Project
shall constitute Unavoidable Delay. The inability to obtain construction or
other financing to pay for all or any portion of the Project Costs shall not
constitute Unavoidable Delay. Lessor shall provide written notice to Lessee
within ten days of the date it becomes aware, or should have become aware, of a
condition resulting in an unavoidable delay.
1.70 "Warranty Period" means that period commencing on Final Completion of
Public Facilities District Improvements and expiring one (1) year thereafter.
Notwithstanding the foregoing, if any longer warranty or guarantee period is
specified for any particular equipment, materials, structural component of the
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Project (including, but not limited to skylights and roof) or workmanship under
this Agreement or any contract in connection with the design, development, or
construction of the Project, the longer warranty period or guarantee period
shall govern. Lessor shall convey to Lessee such warranties with the Operation
and Maintenance Manuals.
ARTICLE II
GREATER WENATCHEE REGIONAL EVENTS CENTER DEVELOPMENT
2.1 Development of Public Facilities District Improvements. Lessor has
acquired or intends to acquire fee title to the Land. Lessor shall construct on
the Land, the Public Facilities District Improvements. The Public Facilities
District Improvements and certain personal property to be located on or used in
connection with the Public Facilities District Improvements are more
particularly described in the Schematic Design Documents prepared by Lessor and
approved by Lessee, a copy of which is attached hereto as Exhibit B and by this
reference incorporated herein.
2.2 Parking Requirements. The Project includes 600 On-Site Parking Stalls.
The Lessee will provide the remainder of the required parking stalls off-site
through shared parking agreements with surrounding property owners to satisfy
local code requirements to obtain a certificate of occupancy. At Closing, Lessor
shall assign to Lessee all of Lessor's right, title and interest in and to the
On-Site Parking Facilities at no additional cost to Lessee.
ARTICLE III
DESCRIPTION OF PROPERTY
3.1 Agreement to Lease. Lessor hereby agrees to lease to Lessee and Lessee
hereby agrees to lease from Lessor, subject to the terms and conditions set
forth in this Agreement, the following upon Final Completion of the Project:
(a) The Land and Public Facilities District Improvements (Leased Premises);
(b) Fixtures and equipment, shown on Exhibit D.
3.2 Agreement to Purchase. Lessor hereby agrees to sell to Lessee and
Lessee agrees to purchase from Lessor provided Lessee exercises its option to
purchase:
(a) All interest of Lessor in any intangible personal property owned by
Lessor and used in connection with the ownership, use and operation of the
Project; and, to the extent the same are approved by Lessee pursuant to the
provisions of this Agreement, any and all contracts and lease rights,
warranties, guarantees, agreements, licenses and other rights relating to the
ownership, use or operation of all or any part of the Property, including, but
not limited to any warranty or other right under the Construction Contract, all
of Lessor's rights under the Contract Documents, and all of Lessor's rights in
the Construction Documents; and
(b) All Service Contracts.
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3.3 Identifications of Personal Property. Upon Final Completion of the
Project and in any event no later than thirty (30) days prior to Closing, Lessor
and Lessee shall identify all Personal Property, including any personal property
identified in the Detailed Specifications.
3.4 Service Contracts. Lessee specifically acknowledges and agrees that
Service Contacts do not include any architectural agreements, construction
contracts, subcontracts, or other agreements relating to the design or
construction of the Project, except for the assignment of any warranties
contained therein to Lessee upon Closing pursuant to Article XVI of this
Agreement
3.5 Ice Rink Fixtures and Equipment. Lessee or Obligor, as a portion of
Obligor's local match required by RCW 82.14.390(4), and as partial consideration
for Lessor's obligations hereunder, agrees, following completion of the 2007 -
2008 ice arena season, to convey to Lessor the following fixtures and equipment,
currently located on the Ice Rink Property, legally described in Exhibit C, to
be incorporated into the Leased Premises: Heating and cooling units, dasher
boards and glass, floor coverings, hockey goals and netting, scoreboard,
bleachers, and Zamboni. This conveyance is conditioned upon Lessor being in
substantial compliance with the Project Schedule, Exhibit F.
ARTICLE IV
DUE DILIGENCE
4.1 Project Information.
(a) Lessee acknowledges that, prior to the Effective Date, Lessee has had
the opportunity to prepare, review and copy all studies relating to the Property
and Project that Lessee has determined, in the exercise of its reasonable
business judgment, are necessary for Lessee to evaluate the suitability and
feasibility of the Property and the Project for Lessee's intended uses.
(b) Lessor acknowledges that, prior to the Effective Date, Lessor has had
the opportunity to detente the availability of the permits and financing
necessary to construct and complete the Project, and otherwise satisfy Lessor's
obligation under this Agreement
ARTICLE V
CONSTRUCTION OF REGIONAL EVENTS CENTER IMPROVEMENTS
5.1 Construction of Public Facilities District Improvements. Lessor agrees
to diligently design, construct, and complete the Public Facilities District
Improvements on the Property on or before the Substantial Completion Date, at
Lessor's sole cost and expense, in a good and workmanlike manner, free and clear
of all liens, all in accordance with the terms of this Agreement and all
Requirements of Law.
5.2 (This Section intentionally left blank.
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5.3 Schedule for Design and Construction. Lessor and Lessee acknowledge and
agree that the initial Project Schedule attached hereto as Exhibit F, shall
govern the performance of the work.
5.4 Selection of Development Team for Project. Lessor has or intends to
employ the following Persons in connection with the Project:
(i) Architect Sink Xxxxx Xxxxxxxx Architects
(ii) General Contractor: Xxxx Construction Group
(iii) Project Manager: International Coliseums Company (ICC)
(iv) Structural Engineers: Xxxxxx/Xxxxxx Consulting Engineers
(v) Land Surveyors: Xxxxxx Engineers
(vi) Mechanical Design Building Engineers: M-E Engineers. Inc.
(vii) Geotechnical Engineers: Xxxxxx Geotechnical Associates. Inc.
(viii) Environmental Consultants: Cascade Earth Sciences
(ix) Electrical Design Engineers: M-E Engineers. Inc.
(x) Traffic Consultant: Xxxxxxx Transportation. Inc.
(xi) Civil Engineer: Pacific Engineering and Design
Lessor shall select other professionals as necessary or desirable for the
design, permitting, development mid construction of the Project. Lessor shall
pay all amounts payable to the design professionals outlined above and any other
professionals hereinafter engaged by Lessor in commotion with the performance of
its duties and responsibilities under this Agreement Lessor shall enter into all
contracts for the design, permitting, development and construction of the
Project.
5.5 Plans and Specifications.
(a) Schematic Design Documents. As of the date of this Agreement, Lessee
has reviewed and approved the Project Requirements, which are incorporated into
the Schematic Design Documents listed on Exhibit B to this Agreement. In
addition, Lessee has reviewed and approved the Project Budget setting forth an
itemization of the major components of the Project that will be constructed by
subcontractors and including the Design Contingency and Stated Contingency. Upon
execution of this Agreement, Lessor shall, in conjunction with the Architect,
commence and complete Design Development, Construction Drawings. and permit
applications necessary for the construction of the Public Facilities District
Improvements.
(b) Lessee's Review. Following execution of this Agreement, Lessor shall
cause Architect to prepare Design Development Drawings, which shall be
consistent with the Schematic Design Documents in all material respects and
shall submit the Design Development Drawings to Lessee for its review and
approval. Following approval of the Design Development Drawings, Lessor shall
cause Architect to prepare Construction Documents consistent with the
Lessee-approved Design Development Drawings, and submit the Construction
Documents to Lessee for its review and approval. Following approval of
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Construction Documents, Lessor shall deliver Lessee an updated Project Budget
prepared by Lessor on the basis of the approved Construction Documents. Lessee
shall give Lessor written notice within thirty (30) days following the later of
its receipt of the Design Development Drawings and Construction Drawings, as the
case may be, of Lessee's approval or disapproval, which notice shall, in the
case of disapproval, specify Lessee's reason for disapproval. Lessee shall only
disapprove Design Development Drawings and Construction Drawings which (i) do
not comply with all Requirements of Law, (ii) fail to materially comply with the
Schematic Design Documents,(iii) propose changes in the size, quality,
appearance, layout or configuration of the Public Facilities District
Improvements contemplated by the Schematic Design Documents, (iv)adversely
impact the construction schedule for the Public Facilities District
Improvements, or (v) increase the project budget.
(c) Resubmittals. If objections or comments are submitted in writing in
accordance with the preceding paragraph, Lessor shall cause the Architect to
make changes in the plans, drawings and/or specifications consistent with
objections or comments made by the Lessee and shall resubmit the same in
accordance with the foregoing schedule for further review. The process of
resubmittal and review shall continue until Lessee and Lessor have approved the
Design Development Drawings and Construction Documents.
(d) Permit and Working Drawings. Lessor shall cause the Architect and other
design professionals to prepare any Drawings or other documents in addition to
the Construction Documents that may be required to be submitted for the issuance
of building permits and other permit applications in accordance with Section 5.7
hereof, and as required for construction of the Project by the General
Contractor.
(e) Value Engineering. "The Lessor shall have the right to value engineer
and propose changes to the Design Specifications 1.23 and the Drawings 1.24 in
order to keep this project within the Project budget. The value engineering must
be consistent with the integrity and scope of the project as outlined in the
schematic drawings and detailed specifications, be within reasonable engineering
standards, and have no adverse effect on the functionality, aesthetics, and long
term operating and maintenance costs. The value engineering by the Lessor with
an accompanying detailed comparative analysis shall be presented to Xxxxxx
Xxxxxxx, the Lessee's representative in regard to this project, for review and
approval on behalf of Lessee. Lessee's approval shall not be =reasonably
withheld. The parties agree the Public Facilities District improvements will be
constructed by Lessor for a GUARANTEED MAXIMUM cost of $52,809,670, inclusive of
Construction Loan Financing Cost, with a contract savings pass-back of 80% to
the Lessee and 20% to the Lessor, all as set forth in this Lease.
(f) Changes to Construction Documents. After completion and approval, there
shall be no change in the Construction Documents without the prior written
consent of Lessee.
5.6 Dispute Resolution Process. Lessee and Lessor agree to follow the
independent resolution process set forth in this Section 5.6 to resolve disputes
regarding preparation of the Design Development Documents, Construction Drawings
14
and changes to Construction Documents in an economic and time efficient manner
so that the documents conform to the requirements of this Agreement, the Project
Schedule is not adversely impacted, and the Public Facilities District
Improvements as constructed will satisfy the Project Requirements.
(a) Disputes Resolution Mediator. In the event that a dispute arises
between Lessee and Lessor during (i) the Design Development phase of the Project
regarding the adequacy of any Drawing, specification or the responsibility for
any cost of any addition or change (e.g., whether any Design Development is
consistent with and reasonably inferable from the Project Requirements), or (ii)
during the preparation of the Construction Documents concerning whether the
Construction Drawings are consistent with the Design Development phase of the
Project, the parties shall proceed in good faith to resolve such dispute as
expeditiously as possible and shall cooperate so that the progress of the design
and construction of the Project is not delayed. If, however, the parties are
unable to resolve the dispute, either party may, by delivering written notice to
the other, refer the matter to the Mediator.
(b) Dispute Resolution Process. Within the five (5) business day period
following receipt of notice referring the matter to the Mediator, all involved
participants in such matter, that is Lessor, Lessee, Lessee's Construction
Representative, Architect and General Contractor, if necessary, shall submit all
necessary material and information with respect to the matter in dispute to the
Mediator. The Mediator shall be entitled to consult independently, or with all
or any of the parties or their respective consultants as the Mediator determines
necessary. If such dispute cannot be resolved by the parties within three (3)
business days following intervention of the Mediator, then either party may
exercise its rights and remedies under this Agreement
5.7 Permits: Costs: Compliance with Legal Requirements. Lessor shall secure
all Permits. Included within the Lease Payments is the Permit Allowance, which
is attributable to the anticipated cost of permits and licenses required for the
Project. If the actual cost incurred by Lessor for permit and license fees
payable to regulatory authorities is less than the Permit Allowance, Lessee
shall receive a credit toward the payment of the Lease Payments equal to the
difference. If the actual cost incurred by Lessor for permit and license fees
payable to regulatory authorities is more than the Permit Allowance, then Lessee
shall pay the difference as an increase in the Lease Payments. Lessor shall
cause all work on the Property to be performed in accordance with this Agreement
and all Requirements of Law and an directions and regulations' of all
governmental agencies and the representatives of such agencies having
jurisdiction over the Project and/or the Property. Lessee shall have the right
to review and approve the terms and conditions of any mitigation measures that
will affect the Property following completion of the Project.
5.8 Construction Contract. The Construction Contract shall require that
prior to the execution of subcontracts for major subcontract elements of the
Project separately stated in the Project Budget; the Contractor shall request
competitive bids from qualified subcontractors for each major subcontract
element. Each major subcontract element of the Project shall be awarded to the
lowest responsive and qualified bidder as determined by the General Contractor.
The bid amounts obtained from the lowest responsive and qualified bidder shall
be utilized in determining the amount of Contract Savings.
15
Because this is a design build/fast track project, Lessor is working with
certain major subcontractors to perform work on a design build concept. These
subcontracts have been negotiated on a time and material not to exceed basis and
will not be competitively bid.
5.9 Construction of Project.
(a) Commencement of Construction. Lessor shall cause the General Contractor
to commence construction of the Public Facilities District Improvements as soon
as practicable following receipt of necessary permits, and shall thereafter
cause construction of the Project to be diligently and continuously prosecuted
in accordance with the Construction Contract, the approved Construction
Documents and the Project Schedule subject only to Unavoidable Delays. Lessor
shall keep Lessee informed of the progress and quality of the work on a timely
basis. All work shall be performed in a good and workmanlike manner, shall be
free of defects in the work and materials and shall be constructed and in
accordance with the Construction Documents, the requirements of this Agreement
and Requirements of Law. The Lesser shall use its reasonable best efforts to
cause the Project to be Substantially Complete on or before the Substantial
Completion Date.
(b) Mandatory Improvements. Lessor shall cause the Mandatory Improvements
to be substantially completed not later than August 1, 2008, which date shall
not be extended for any Unavoidable Delays, subject to the provisionso of
Section 5.13.
(c) Delays. The existence of Unavoidable Delays shall excuse Lessor for
resulting delays and changes in the Project Schedule, except as provided in
Section 5.9(6) above. There shall not be any adjustment to the Lease Payments
for additional costs resulting from any Unavoidable Delays, If Final Completion
of the Public Facilities District Improvements has not been completed by the
date set forth in Section 5.9 (b), then Lessee may elect, but shall not be
obligated, to lease the Public Facilities District Improvements in their then
existing condition, and the Lease Payments shall be adjusted to an amount equal
to the following:
i. The cost incurred by Lessor in acquiring the Land; plus
ii. The amount expended by Lessor through the date Lessee acquires the
Public Facilities District Improvements in completing the Project to the extent
these costs are not included within the sums due the General Contractor; plus
iii. The amount paid by Lessor to the General Contractor pursuant to
the General Construction Contract, which shall in no event be greater than the
total amount of the General Construction Contact multiplied by the percentage of
completion of the work to be performed under the General Construction Contract
as of the date the Lessee acquires the Public Facilities District Improvements.
(d) Prevailing Wages. All Contractors and subcontractors employed for the
construction of the Public Facilities District Improvements shall pay prevailing
wages in the community for labor employed on the Project as defined in Chapter
39.12 of the Revised Code of Washington. Lessor shall provide an Affidavit of
16
Prevailing Wages Paid prior to closing the transaction verifying Lessor's
compliance with this section.
5.10 Changes to the Work-
(a) Changes to Construction Documents There shall be no changes in the
Construction Documents except as agreed in writing by Lessee and Lessor.
Following approval of the Construction Documents, Lessee may request changes in
the Construction Documents, If Lessee requires any improvement or deviation in
the Construction Documents from the design or level, of quality reflected in the
Schematic Design and Detail Specifications as listed on Exhibit B, any resulting
increase in the cost of design or construction will be charged to Lessee. Lessee
must provide written notice to Lessor and Architect of any changes in the work
requested by Lessee. Lessor may refuse to approve or adopt any change in the
work requested by Lessee unless Lessor and Lessee execute an amendment to this
Agreement increasing the Lease Payments by the amount of the cost increase and
Lessee shall provide Lessor assurances reasonably satisfactory to Lessor that
Lessee has funds available to pay for any resulting increase in the Project
Costs. Any change in the Construction Documents requested by Lessee that does
not alter the design or level of quality reflected in the Schematic Design and
Detail Specifications as listed on Exhibit B shall not result in any additional
charge to. Lessee or increase in the Lease Payments.
(b Use of Stated Contingency: Savings. The Project Budget includes the
Stated Contingency. Lessor shall have the right to use the Stated Contingency at
Lessor's discretion to pay for any increases in the cost of the Project, other
than costs incurred in satisfying Lessor's indemnification obligations under the
Agreement, until the Stated Contingency has been exhausted. The Lease Payments
shall not increase except as provided in Section 5.10(a) above as a result of
the use of the Stated Contingency.
5.11 Inspections. Lessee, Lessee's Construction Representative and other
agents designated by Lessee shall have the opportunity, but not the duty, to
inspect the construction work from time to time as it progresses. The frequency
and level of inspections shall be determined by Lessee. Lessor shall keep at the
Property for Lessee one record copy of all Construction Documents, all drawings,
specifications, addenda, change orders and other modifications, in good order
and marked currently to record changes and selections made during construction
together with approved shop drawings, product data, samples and similar requited
submittals. Lessor shall immediately forward to Lessee's Construction
Representative Project correspondence and field communications concerning
changes in the work or delays to .the Project on any issue that might cause an
increase to the cost of the Project or a delay in the Substantial Completion
Date or the Final Completion Date. All records maintained by any of the
Contractors, including, but not limited to elevations of footings and floor
locations, shall be made available to Architect and/or Lessee upon request and,
upon completion of the Project, duplicate originals shall be delivered to
Lessee. Lessor shall record the progress of the Project Lessor shall submit
written monthly progress reports to Lessee including information on each
Contractor mid each Contractor's work, as well as the entire Project, showing
percentages of completion. If during the course of such construction, Lessee or
its agents or designees shall determine that the construction is not proceeding
in accordance with the Construction Documents, Lessee shall be entitled to, but
shall be under no obligation to, give notice in writing to Lessor specifying the
17
particular deficiency or omission, and Lessor shall be responsible to cause the
General Contractor to correct the noted deficiency or omission. The failure by
Lessee to provided any notice of any observed deficiency or omission shall not
give rise to any liability S Lessee and shall not be considered a waiver of any
right of Lessee under this Agreement, including without limitation, the
enforcement of the representations and warranties of Lessor under this Agreement
and the warranties of the General Contractor under the General Construction
Contract with respect to the completion of the Property in accordance with the
Construction Documents.
5.12 Construction Loans. The Lessor shall have the right to encumber the
Land by a deed of trust securing payment of the Construction. The Project
construction costs that are included in the Construction Loan shall not exceed
Forty-eight Million Five Hundred Thousand Dollars ($48,500,000). The
Construction Loan shall not be modified, altered, revised or amended in any
manner which would in any material respect adversely affect the rights of Lessee
under this Agreement. The Construction Loan documents shall require the
Construction Lender to notify Lessee of any default by Lessor under the
Construction Loan. Lessor shall not further mortgage, encumber or suffer to be
encumbered all or any portion of the Property without the prior written consent
of Lessee. Lessor may assign the right to receive payment of the Lease Payments
as provided under Article VII, at Closing to the Construction Lender too secure
Lessor's obligations under the Construction Loan.
5.13 Termination of Agreement. In the event Lessor has not completed the
Mandatory Improvements prior to September 17, 2008, Lessor shall be obligated to
pay, as liquidated damages, the amount of $5,000 per day for a maximum of 30
days. If the Mandatory Improvements are not completed by October 17, 2008,
Lessor shall be subject to such additional damages as may be proven, and
specifically to such consequential damages as may be suffered by Lessee due to
contractual obligations for use of the Leased Premises.
5.14 As-Built Plans and Specifications; Manuals; Warranties; Permits and
Licenses. On or before Final Completion of the Public Facilities District
Improvements Lessor shall provide Lessee with a complete and detailed set of
"as-built" plans and specifications for the Project (to be provided on CAD, or
such other format approved by Lessee), together with all technical, service,
instruction and procedure manuals, warranties, permits and licenses.
5.15 Construction Covenants and Warranties. Lessor hereby warrants and
covenants to Lessee as follows:
(a) Lessor shall cause the construction of the Project and installation of
any Personal Property to be pursued diligently-until completed in a good and
workmanlike manner and substantially in accordance with this Agreement,
Construction Documents and all Requirements of Law (including all Environmental
Laws) so that the Project will be completed and lien-free on or before the Final
Completion Date, provided this shall not be construed to prohibit the Lessor to
encumber the Property to secure the construction loan.
(b) During the course of such construction, Lessor shall make all
applications for, and thereafter obtain, any and all permits, licenses,
variances and other approvals issued by appropriate governmental authorities
having jurisdiction over the Property or Lessor and relating to the
18
construction, operation, use or occupancy of the Public Facilities District
Improvements, or any portion thereof or relating to any zoning, land use,
subdivision, environmental, building and construction laws and/or regulations
restricting, regulating or otherwise affecting the use, occupancy or enjoyment
of the Public Facilities District Improvements, as the same may be issued,
modified or amended from time to time (hereinafter collectively "Permits" and as
to each, "Permit").
(c) No amendment or change in any Permit and no amendment or change in o
zoning or any other land use control has been sought or obtained or will be
sought or obtainedo with respect to the Property without the prior written
approval of Lessee.
(d) Lessor shall maintain the following insurance policies until Final
Completion: (i) "All Risk" Builder's Risk Insurance including collapse coverage
and coverage for material in storage and while in transit on a Completed Value
non-reporting form for one hundred percent (100%) of the insurable replacement
value of the Property on a replacement cost basis on all materials, equipment
and supplies which are to become a permanent part of the Property, while
awaiting erection and until completion; (ii) Worker's Compensation Insurance
including Employer's Liability to provide statutory benefits as required by
applicable law or laws; (iii) Commercial General Liability Insurance on an
"occurrence" basis for hazard of operations, independent contractors, products
and completed operations for a period of two (2) years after completion of work
and contractual liability, such liability insurance to include Broad Form
Property Damage and afford coverage for explosion, collapse and underground
hazards and personal injury liability insurance, all with limits of not less
than Two Million Dollars ($2,000,000); and (iv) Comprehensive Automobile
Liability covering owned, non-owned and hired vehicles used in connection with
the Property with limits not less than One Million Dollars ($1,000,000).All such
insurance shall remain in force until the Closing Date (as defined below) and
shall be with companies satisfactory to Lessee. Each such policy shall provide
that the same may not be cancelled or amended by any party for any reason
whatsoever, without giving Lessee at least thirty (30) days prior written notice
of any proposed cancellation or amendment, and each such liability policy shall
include Lessee as a named insured.
(e) All work performed on, oor to be performed on, Personal Property,
materials, machinery or equipment delivered to or installed on or in, or to be
delivered or installed on or in, the Regional Events Center are, or will be,
subject to written guarantees or warranties usually and customarily obtained or
delivered and all of Lessor's rights pursuant to such guarantees or warranties
as well as under any construction agreements or service contracts are, or will
be, in full force and effect, enforceable according to their respective terms,
without defense or set-off, and assignable to Lessee; provided, however, that
Lessee shall not be deemed to have assumed liability to Lessor or to any other
person as a result of accepting any such assignment, such assignment being for
the sole benefit of Lessee.
(f) Lessor shell provide a warranty that all work performed on and all
Personal Property, material and equipment furnished to and installed in or on
the Public Facilities District Improvements will substantially conform with the
Construction Documents, as to kind, quality, function of equipment and
characteristics of material and workmanship, and will remain in conformity
therewith for a period of one (1) year commencing as of the date of Final
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Completion of the Project (the "Warranty Period"). Notwithstanding the foregoing
if any longer warranty or guarantee period is specified for any particular
equipment, materials or workmanship under this Agreement or any contract or
under any subcontract in connection with the construction and installation of
the completion of the Project or installation of any personal property or under
the laws of the State of Washington, the longer warranty or guarantee period
shall govern. Lessor shall, at Lessor's expense and without cost to, and to the
satisfaction of Lessee, immediately upon notice from Lessee sent at any time
between the date of this Agreement and that date which is twelve (12) months
following the expiration of the applicable Warranty Period, replace, correct or
repair (i) any work, personal property, material and equipment which is at
variance from the Construction Documents; (ii) any defects, faults or
imperfections in such work, personal property, material or equipment which may
appear prior to the expiration of the applicable Warranty Period; and (iii) any
damages, defects or faults in the Project and Personal Property resulting from
any of the foregoing. In the event that Lessor fails to cure any defect in
accordance with Lessee's notice thereof within fifteen (15) days after Lessor's
receipt of such notice, or if the nature of such cure is such that it cannot be
completed within such fifteen (15) day period, Lessor fails to commence such
cure within such fifteen (15) day period or, once commenced, fails to diligently
prosecute such cure to completion within sixty (60) days following Lessee's
notice, Lessee, at Lessor's sole cost and expense, may take whatever steps
Lessee deems reasonably necessary to correct such defect and any costs incurred
by Lessee in connection therewith shall be payable by Lessor upon demand. Any
action taken by Lessee under this Section 5.15 shall not be deemed to be a
waiver by Lessee of Lessor's failure to perform nor limit or abridge any other
right or remedy Lessee may have as a result of such failure, whether provided
under this Agreement, or otherwise at law or in equity. The obligations of
Lessor under this Section 5.15 shall be deemed satisfied if (i) the warranties
under the General Construction Contract provide tile same warranty terms and
remedies as stated in this Section 5.15 and (ii) Lessor, upon Final Completion
of the Public Facilities District Improvements, assigns to Lessee all warranties
under the General Construction Contract.
5.16 Disclaimer.
(a) Lessee Not Liable for Construction of Project. Notwithstanding any
other provision of this Agreement to the contrary, Lessee is under no obligation
to, nor shall it construct or supervise the construction of the Project. It is
understood and agreed that Lessee's right to inspect the Project prior to the
Closing Date is for the sole purpose of protecting its rights as a contract
vendee under this Agreement. No part of the cost of construction of the Project
shall ever become an obligation of Lessee. Lessee is not responsible to any
Contractors or to any subcontractors under any subcontracts for design,
development, repair, renovation or construction of the project or any other
third parties for any purpose whatsoever. Nothing contained in this Agreement
shall be construed as the consent or request of Lessee, express or implied, for
the performance of any labor or services or for the furnishing of any materials
or equipment for any construction, alteration, addition, repair or demolition of
or to the Property (or any part thereof). Lessor shall include in the
Construction Contract and the contracts for architectural and engineering
services the following or substantive equivalent disclaimer NOTICE IS HEREBY
GIVEN THAT GREATER WENATCHEE REGIONAL EVENTS CENTER PUBLIC FACILITIES DISTRICT
WILL NOT BE LIABLE FOR ANY LABOR, SERVICES, MATERIALS OR EQUIPMENT FURNISHED OR
TO BE FURNISHED TO LESSOR, OR ANYONE HOLDING AN INTEREST IN THE PROPERTY (OR ANY
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PART THEREOF) THROUGH OR UNDER LESSOR, AND THAT NO CONSTRUCTION OR OTHER LIENS
FOR ANY SUCH LABOR, SERVICES, MATERIALS OR EQUIPMENT SHALL ATTACH TO OR AFFECT
THE INTEREST OF LI3SSEE IN THE PROPERTY.
(b) Indemnification.Lessor shall protect, defend, indemnify and hold Lessee
and its officials, officers, employees and agents harmless from and against any
and all liabilities, obligations, damages, penalties, charges, costs and
expenses including, without limitation, reasonable attorneys fees, which Lessee
may suffer or incur in connection with its ownership or use of the Property
resulting from any action or inaction of Lessor or its agents, employees,
Contractors or subcontractors occurring before the Closing Date. To the maximum
extent permitted by law, Lessor shall indemnify and defend Lessee and its
officials, officers, employees and agents from and be liable for all damages and
injury which shall be caused to owners of property on or in the vicinity of the
construction of the Project or which shall occur to any person or persons or
property whatsoever arising out of this Agreement, whether or not such injury or
damage is caused by negligence of the Lessor or caused by the inherent nature of
the construction of the Project. To the extent a court determines RCW 4.24.115
applies, Lessee shall not be entitled to such indemnification for damage caused
to Lessee or any third party by reason of the sole negligence of Lessee or
damage caused by the concurrent negligence of Lessee to the extent of such
concurrent negligence. The foregoing indemnification shall survive the Closing
Date.
IT IS SPECIFICALLY AND EXPRESSLY UNDERSTOOD THAT THE INDEMNIFICATION PROVIDED
HEREIN CONSTITUTES THE LESSOR'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. THE PROVISIONS OF MS SECTION XXXXX
SURVIVE THE EXPIRATION OR TERMINATION OF THIS AGREEMENT.
(c) Notice of Claims. Promptly upon receipt by Lessee of notice of any
action or proceeding for which Lessor have agreed to indemnify Lessee, Lessee
shall give Lessor written notice of such claim or the commencement of such
action or proceeding and Lessor shall thereafter vigorously defend on behalf of
Lessee, but at the sole cost and expense of Lessor, any such action or
proceeding for which indemnification is sought Failure to promptly give Lessor
such notice shall not constitute a bar to the indemnification obligations of
Lessor hereunder unless such delay has resulted in substantial prejudice to
Lessor in the defense of such claim or action. No settlement of any such action
or proceeding shall be made without Lessee's written approval which approval
shall not be unreasonably withheld (unless Lessee has previously been discharged
from all liability in connection with such action or proceeding).
5.17 Enforcement of Warranties. After Closing, Lessee acknowledges that it
shall be fully responsible for maintenance and repair of the Public Facilities
District Improvements, subject to the right to recover under any applicable
warranty. Lessor shall take all actions reasonably requested by Lessee to
enforce or otherwise obtain the benefit of any warranty received from the
General Contractor or any other Contractors or any subcontractor thereof, or any
supplier, material-men or manufacturer relating to the Project but shall incur
no additional expense or liability in that connection.
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5.18 Architect's Administration of the Contract.
(a) Lessor shall cause the Architect to provide administration of the
Construction Contract as described in the Contract Documents, (1) during
construction, (2) until final payment is due and (3) from time to time during
the Warranty Period. The Architect will have authority to act only to the extent
provided in the Contract Documents, unless otherwise modified in writing in
accordance with other provisions of the Construction Contract.
(b) Lessor shall cause the Architect to visit the site at intervals
appropriate to the state of the Contractor's operations (1) to become generally
familiar with and to keep the Public Facilities District informed about the
progress and quality of the portion of the Project Work completed, (2) to
endeavor to guard the Public Facilities District against defects and
deficiencies in the Project Work, and (3) to determine in general if the Project
Work is being performed in a. manner indicating that the Project Work, when
fully completed, will be in accordance with the Contract Documents. However, the
Architect will not be required to make exhaustive or continuous on-site
inspections to check the quality or quantity of the Project Work.
(c) Under the direction of Lessor, the Architect will prepare Change Orders
and Construction Change Directives and may authorize minor changes in the
Project Work as approved by the Public Facilities District
(d) The terms "Work," "Change Orders," and "Construction Change Directives"
shall mean as the same are defined in the Contract Documents.
5.19 Project Manager, International Coliseums Company ("ICC") shall serve
as "Project Manager" for the Project to provide project management services for
Lessor, including, without limitation: (i) the selection and oversight of
architects and engineers, licensed to practice in the State of Washington that
will design and develop the Project; (ii) in conjunction with the assistance of
Contractor, the preparation of the Project Budget, the preparation and
management of the construction management plan for the Project, and the
preparation of other project schedules, including schedules to identify
"critical path" items for the accomplishment of the Project; and (iii) the
selection, acquisition and installation of furniture, fixtures and furnishings
for the Project. ICC shall provide services for Lessor throughout the pre-design
phase, schematic design phase, design development phase, construction
documents/drawings phase, construction phase and post-construction phase of the
Project.
ARTICLE VI
LEASE TERM
This Lease is effective upon its execution by Lessor and Lessee; provided,
however, that the obligation of the Lessee to make Lease Payments hereunder
shall not commence unless and until the Substantial Completion Date. This Lease
shall terminate on September 1, 2031or when all Lease Payments have been paid,
whichever is earlier, unless terminated prior thereto in accordance with the
provisions of this Lease.
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ARTICLE VII
LEASE PAYMENTS
7.1 Lease Payments.
(a) Lease Payment Obligation to Arise Only Upon Substantial Completion
Date. The obligation of the Lessee to make Lease Payments hereunder shall not
commence until the Substantial Completion Date.
(b) Principal Component of Lease Payments. The principal component of the
Lease Payments is reflected in Exhibit H as the total principal amount of Lease
Payments. The parties farther agree to the amortization schedules set forth in
the attached Exhibit H. Provided, that the Lease Payments shall be adjusted to
reflect a credit to Lessee of 80% of Contract Savings.
(c) Interest Component of Lease Payments. The interest component of Lease
Payments, representing interest on the principal component of Lease Payments is
set forth in Exhibit H.
(d) Pledge to Pay Lease Payments. From and after the Substantial Completion
Date, the Lessee shall make all Lease Payments as determined in accordance with
Section 7.1 at such times and in such amounts as set forth in Exhibit H;
provided, however, that the Lessee's obligation to make any such Lease Payment
may be satisfied, in whole or in part, from funds on deposit and available for
such purpose in the Lease Payment Fund. The obligation of the Lessee to make the
Lease Payments constitutes a limited tax general obligation of the Lessee. The
Lessee hereby pledges all Sales Tax Revenue and other revenue from the operation
of the Public Facilities District Improvement for the payment of the Lease
Payments. Lessee further pledges to levy the Sales Tax at the rate of 0.033% as
provided in Chapter 82.14.390 RCW so long as this Lease is in effect.
(e) City of Wenatchee Obligations. To the extent that the Lessee does not
have non-voted general obligation debt capacity at least equal to the principal
amount of the Lease Payments at the time the Lessee's obligation to make Lease
Payments commences, the City of Wenatchee (the "City" or "Obligor") shall be
obligated to pay the proportionate amount of Lease Payments in excess of the
Lessee's non-voted debt capacity until such time as the Lessee's debt o capacity
at least equals the principal amount of the then remaining Lease Payments. The
City covenants that as long as it is obligated to make Lease Payments that each
year it will include in its budget and levy ad valorem taxes upon all the
property within the City subject to taxation in an amount that will be
sufficient, together with other money of the City legally available for such
purposes, to pay the principal of and interest on the Lease Payments as the same
become due.
In addition, prior to the time the Lessee's obligation to make Lease
Payments commences, the City agrees that it will enter into a contingent loan
agreement with the Lessee that commits the City to make loans to the Lessee if
and when the Lessee does not have sufficient money to pay the Lease Payments
when due. To the extent that this Lease has not been assigned by the Lessor to a
bank trust department or nonprofit corporation pursuant to Exhibit H, the Lessor
shall be a third party beneficiary of the contingent loan agreement.
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(f) Books and Records. Lessor shall keep or cause to be kept full and
detailed accounts and records of all costs incurred in connection with the
Project, together with supporting statements, bills, vouchers, receipts,
memoranda, correspondence and similar data relating thereto in a form acceptable
to Lessee. Lessor's records shall be maintained in a manner that allocates
costs, in a manner consistent with generally accepted accounting principles.
Lessee or its designated representative shall be afforded access to inspect,
review, copy and audit all such records and supporting data. Sixty (60) days
prior to the estimated date for Finalo Completion of the Project, Lessor shall
deliver to Lessee an accounting, in a form and substance satisfactory to Lessee
and certified by Lessor, setting forth a detailed itemization of all costs
incurred in the Project Lessee and its accountants shall have the right to
review during normal business hours, and following prior -written notice given
by Lessee to Lessor at least five (5) business days prior to the requested
review, the accounting together with the records and supporting data referenced
above to determine the accuracy of the Project costs as set forth in the
accounting delivered by Lessor.
7.2 Additionall Rent.
(a) After Substantial Completion. On or after the Substantial Completion
Date Lessee shall be liable for Additional Rent for costs not otherwise provided
for by the Lease Payments calculated pursuant to Section 7.1 above. Such costs
may include: Lessee-Initiated Change Orders in accordance with Section 5.10
hereof, and taxes and utility charges for which the Lessee is liable pursuant to
Section 9.3 hereof (herein referred to as "Additional Rent"). Due to the
contingent nature of such Additional Rent, it shall not constitute debt of the
Lessee for purposes of debt limitations established by RCW 39.36.020. The Lessee
shall have no obligation to pay Additional Rent prior to the Substantial
Completion Date.
(b) Securitization of Lease. It is the expectation of Lessor and Lessee
that the payments due under this Lease will be securitized in the form of lease
revenue bonds or certificates of participation. In such event the Lease Payments
described in Section 7.1 and Additional Rent described in Section 7.2(a) shall
constitute the full extent of the Lessee's obligations hereunder.
7.3 Defeasance. In the event that money and/or "Government Obligations," as
such obligations are now or may hereafter be defined in Ch. 39.53. RCW, maturing
at such time or times and bearing interest to be earned thereon in amounts
sufficient to pay or prepay all Lease Payments and Additional Rent due under
this Lease in accordance with the terms of this Lease, are irrevocably set aside
and pledged in a special account to effect such payment or. Prepayment, then no
further payments need be made of any Lease Payments under this Lease and the
Lessor shall not be entitled to any lien, benefit or security in the Leased
Premises, except the right to receive the funds so set aside and pledged, and
Lessor shall have no further obligation to the Lessee hereunder.
ARTICLE VIII
USE
8.1 Use of Premises. From and after the Substantial Completion Date, the
Lessee may use the Leased Premises for the occupancy, use, maintenance and
operation of a regional events center and all uses incidental thereto, including
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but not limited to, any other use permitted by law or by the Certificate of
Occupancy.
8.2 Quiet Enjoyment. Upon payment by Lessee of the Lease Payments herein
provided, and upon the observance and performance of the covenants, terms and
conditions on the Lessee's part to be observed and performed, Lessor covenants
that Lessee shall peaceably and quietly hold and enjoy the Leased Premises for
the term hereby demised without hindrance or interruption by Lessor or any
person or persons lawfully or equitably claiming by, through or under the
Lessor.
ARTICLE IX
ABSOLUTE NET LEASE
9.1 Absolute Net Lease. This Lease is an "absolute net lease," and the
Lessee's obligations to make Lease Payments as provided in Section 7.1 of this
Lease, to pay Additional Rent AS provided in Section 7.2 of this Lease, and to
perform and observe all other covenants and agreements of the Lessee contained
herein shall be absolute and unconditional, and the failure by the Lessee to
make such Lease Payments and to pay Additional Rent at the times and in the
amounts as provided in Sections 7.1 and 7.2 hereof shall constitute an Event of
Default under this Lease. All Lease Payments shall be made without notice or
demand and without setoff, counterclaim, abatement, deduction or defense
whatsoever. Following Substantial Completion, notwithstanding the Lessor's
obligation to complete punch-list items, the Lessee shall assume the sole
responsibility for the condition, use, operation, maintenance, repair and
management of the Leased Premises, and Lessee will, at its cost and expense,
keep and maintain the Leased Premises in good repair and condition and in
compliance with all applicable laws, rules, regulations, statutes, and
ordinances, and will make all structural and nonstructural, and ordinary and
extraordinary changes, repairs and replacements which may be required to be made
upon or in connection with the Leased Premises in order to keep the same in good
repair and condition, reasonable wear and tear and ordinary use excepted;
provided, however, that nothing herein shall be construed to release the Lessor
from completion of the punch-list items, and if the Lessor should fail to
complete the punch-list items within a reasonable time, the Lessee may institute
such legal action against the Lessor as the Lessee may deem necessary to compel
the performance of such obligation or to recover damages therefore.
Notwithstanding anything in this Lease to the contrary, Lessee shall have no
obligations to indemnify Lessor for any claims, loss, liabilities or damages
arising from the negligence or willful misconduct of Lessor, its employees or
agents.
9.2 Lease - Non-terminable. Except as otherwise expressly provided herein,
this Lease shall not terminate, nor shall Lessee 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, damage or destruction
of the Public Facilities District Improvements, it being the intention of the
parties hereto that all Lease Payments payable by Lessee 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 terminated pursuant to
the express provisions of Section 5.13 or Section 15.1 of this Lease. In that
connection, Lessee 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
surrenders this Lease except in accordance with the express terms hereof and
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agrees that if, for, any reason whatsoever, this Lease shall be terminated in
whole or in part by operation of law or otherwise except as specifically
provided in Section 5.13 or Section 15.1 of this Lease, Lessee will nonetheless
pay to Lessor (or to whosoever shall be entitled thereto as expressly provided
herein)' an amount equal to each Lease Payment at the time such payment would
have become due and payable in accordance with the terms hereof had such
termination not occurred.
9.3 Taxes and Utility Charges: The Lessee shall pay as Additional Rent all
charges for utility, communication and other services rendered to or used on or
about the Leased Premises assessed and payable from and after the Substantial
Completion Date. Lessee also covenants to and agrees to pay all taxes and
assessments levied upon the Leased Premises that are payable after the
Substantial Completion Date and to pay a prorated share of taxes and assessments
paid by Lessor prior to the Substantial Completion Date and applicable to any
period after the Substantial Completion Date; provided, however, that if any
such taxes or assessments may be paid in installments without penalty, the
Lessee shall have the right to pay any such taxes or assessments in
installments, and provided further that the Lessee shall also be liable for any
property taxes assessed with respect to the Leased Premises after the
Substantial Completion Date.
9.4 Compliance with The Lessee shall at all times from and after the
Substantial Completion Date, at the Lessee's own cost and expense, perform and
comply with all laws, rules, orders, ordinances, regulations and requirements
now or hereafter enacted or promulgated (including, without limitation. all
zoning, pollution and environmental requirements, hereinafter referred to as
"Environmental Requirements"), of every government and municipality having
jurisdiction over the Leased Premises and of any agency thereof, relating to the
Leased Premises, or the Improvements thereon, or the facilities or equipment
thereon or therein, or the streets, sidewalks, curbs and gutters adjoining the
Leased Premises, or the use or operation of the Leased Premises, whether or not
such laws' rules, orders, ordinances, regulations or requirements so involved
shaft necessitate structural changes, .improvements, interference with use and
enjoyment of the Leased Premises, replacements or repairs, and Lessee shall so
perform and comply, whether or not such laws, rules, orders, ordinances,
regulations or requirements shall now exist or shall hereafter be enacted or
promulgated, and whether or not such laws, rules, orders, ordinances,
regulations or requirements can be said to be within the present contemplation
of the parties hereto.
9.5 Lessee's Right to Contest. The Lessee shall have the right to contest,
by appropriate legal proceedings, any tax, charge, levy, assessment, lien or
other encumbrance, and/or any law, rule, order, ordinance, regulation or other
governmental requirement affecting the Leased Premises, and to postpone payment
of or compliance the same during the pendency of such contest, provided that:
(i) the Lessee shall not postpone the payment of any such tax, charge,
levy, assessment, lien or other encumbrance for such length of time as shall
permit the Leased Premises, or any lien thereon created by such item being
contested, to be sold by any federal, state, county or municipal authority for
the non-payment thereof;
(ii) Lessee shall not postpone compliance with any such law, rule, order,
26
ordinance, regulation or other governmental requirement if Lessor will thereby
be subject to criminal prosecution, or if any municipal or other governmental
authority shall commence a process according to applicable law to carry out any
act to comply with the same or to foreclose or sell any lien affecting all or
part of the Leased Premises which shall have arisen by reason of such
postponement or failure of compliance;
(iii) Lessee shall proceed diligently and in good faith to resolve such
contest;
(iv) Such contest shall be in compliance with all laws, rules, orders,
ordinances, regulations or other governmental requirements; and
(v) Lessee shall not postpone compliance with any such laws, rules, orders,
ordinances, regulations or other governmental requirements if the same shall
invalidate any insurance required by this Lease.
ARTICLE X
ENVIRONMENTAL CONDITION OF IRE PROPERTY
10.1 Environmental Information. Lessee shall have the right following the
Effective Date to have its own environmental assessment made of the Land, which
additional environmental assessment may include further sampling and analysis.
The cost of such further sampling and analysis shall be borne by Lessee.
10.2 Lessor's Representations and Warranties Regarding Environmental
Conditions. Lessor has no knowledge of any Hazardous Substances presently
located on or under the Land other than as disclosed in the Environmental
Reports. The Lessor has not received any written notice alleging violation of
any Environmental Laws with respect to the Land, nor, to the best of the
Lessor's knowledge, have there been any written claims, demands, or suits made
against any Person regarding potential liability for environmental response
costs or natural resource damages in connection with the Property other than
shown in the Environmental Reports.
10.3 Survival. The representations, covenants, warranties and
indemnifications by Lessor contained in this Article X shall survive the closing
of the sale of the Real Property for a period of twenty-five (25) years and
shall not expire until the expiration of said 25-year period.
10.4 Supersedure. This Article X supersedes any limitation oor expiration
on representations, warranties or indemnification provisions, and any
indemnifications, with respect to environmental matters set forth elsewhere in
this Agreement.
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ARTICLE XI
REPRESENTATIONS AND WARRANTIES
11.1 Lessor's Representations and Warranties. In order to induce Lessee to
enter into this Agreement and the transactions contemplated hereby, Lessor makes
the following representations and warranties as of the date of this Agreement
and again as of the Closing Date:
(a) Lessor is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Washington and qualified to
do business in the State of Washington. Lessor has full power to enter into this
Agreement, to execute and deliver the Deed and all other documents required in
this transaction, and to perform all of the terms, conditions and provisions
hereof and as set forth in such documents. The acceptance and performance of the
terms and provisions of this Agreement have been duly authorized and approved by
all necessary parties and this Agreement is binding upon Lessor in accordance
with its terms.
(b) At the Closing Date, Lessor shall have good, marketable and
indefeasible title to all of the Property subject only to the Permitted
Encumbrances, and Lessor is aware of no other matters which adversely affect
title thereto.
(c) The Property will be subject to no encumbrances, defects, liens,
adverse claims or other matters known to Lessor or of which Lessor is or may be
aware except the Permitted Exceptions, and there will be no commitments or
agreements, including leases, of any kind or character relating to the Property.
In particular, Lessor has delivered to Lessee complete copies of all contracts
of any nature with respect to the Property and is unaware of any defaults either
by Lessor or by contracting parties with respect thereto, and to the best of
Lessor's knowledge no basis exists for any default thereunder. It is understood
and agreed that Lessor shall be responsible for any existing service,
maintenance and operating contracts which Lessor has entered into, and that such
contacts shall not be assumed by Lessee except in the event and to the extent
that such contracts have been approved by Lessee and specifically assumed by
Lessee at the Closing by Lessee's execution of the assignment of Service
Contracts.
(d) Other than disclosed by Lessor to Lessee as of the Effective Date,
there is no claim, litigation, proceeding, or governmental investigation
pending, or so far as is known to Lessor, threatened against or relating to
Lessor's properties or business, the Property, or the transactions contemplated
by this Agreement, or any dispute arising out of any contact or commitment
entered into regarding the Property, nor is there any basis known to Lessor for
any such action.
(e) Neither the execution of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of the terms hereof, will
conflict with or result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, any agreement or instrument to
which Lessor is, or is asserted to be, a party affecting the Property or to
which the Property is subject or any applicable laws or regulations of any
governmental body having jurisdiction.
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(f) Lessor has not committed nor obligated itself in any manner whatsoever
to sell the Property or any portion thereof to any party other than Lessee.
Lessor has not hypothecated or assigned the rents or income from the Property in
any manner.
(g) Lessor has not received any notices from any insurance companies,
governmental agencies or from any other parties with respect to any violations
or other matters concerning the Property.
(h) Lessor agrees to keep the Property free from liens which might result
and to indemnify, defend, protect and hold Lessee harmless from any such liens
and all attorneys' fees and other costs incurred by reason thereof. The
provisions of this subsection (h) shall not limit the right of Lessor to contest
in good faith claims of liens asserted in connection with the Project so long as
Lessor is able to satisfy the requirements of Article VIII as of the date of
Closing.
(i) All certificates, schedules and other documents containing factual
information to be delivered by Lessor, or by Lessor's officers and other agents
pursuant to or in connection with this Agreement, are and shall be true and
correct and do not and shall not contain any untrue statement of a material fact
or omit to state any material fact the disclosure of which is necessary to make
the statements contained therein and herein, in light of the circumstances under
which they are made, not misleading.
(j) As of the date of this Agreement, there is no, and at the Closing Date
there will be no, labor dispute with any construction, maintenance or other
personnel or employees of Lessor that could adversely affect the use operation
or value of the Property. Lessor hereby agrees to defend, protect, indemnify and
hold Lessee harmless from any and all loss, damage, liability or expense,
including attorneys' fees and costs, Lessee may suffer as a result of any breach
of or any inaccuracy in the foregoing representations and warranties.
11.2 Lessee's Representations and Warranties. Lessee represents (which
representations shall be deemed to have been made again on the Closing Date) and
agrees to indemnify Lessor from and against any loss or damage, including
reasonable attorneys' fees and expenses, as a result of any inaccuracy in such
representations, that (a) Lessee is a municipal corporation validly existing
under the laws of the State of Washington and is qualified to do business in
Washington; (b) Lessee has taken all steps necessary to authorize the
transaction contemplated by this Agreement; (c) the officer executing this
Agreement and all other documents in connection with this transaction is fully
authorized and empowered to do so, and (d) upon execution by Lessee, this
Agreement represents the lawful and binding obligation of Lessee.
ARTICLE XII
POSSESSIONS
Possession of the Property shall be delivered to Lessee on the Closing Date
free and clear of all leases, licenses or other agreements granting any Person
the right to use or occupy all or any portion of the Property. Lessor shall
afford authorized representatives of Lessee reasonable access to the Property
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for the purposes of satisfying Lessee with respect to the representations,
warranties, and covenants of Lessor contained herein and with respect to
satisfaction of any conditions precedent to the Closing contained herein.
ARTICLE XIII
FIRE AND EXTENDED COVERAGE INSURANCE
From and after the Substantial Completion Date or the date the Lessee takes
possession of the Leased Premises, whichever is earlier, the Lessee shall
maintain, or cause to be maintained, in full force and effect, fire and extended
coverage insurance covering the Improvements in such amounts and covering such
risks as the Lessee may require from time to time. Such insurance shall be
carried with financially responsible insurance companies authorized to do
business in the State of Washington, and may be carried under a policy or
policies covering other property owned or controlled by Lessee, or the Lessee
may be self- insured. The Lessee shall furnish to Lessor, on or before the
effective date of any such policy or self insurance, and annually thereafter
certificates of insurance evidencing that the insurance required by this Article
XBI are in force and effect on the specified date and that the premiums
therefore have been paid. Lessee agrees that such policies shall contain a
provision that the same may not be cancelled without at least thirty (30) days'
prior written notice being given by the insurer to Lessor. The amount of
insurance maintained by Lessee in compliance with this Article XIII shall be in
such amounts as may be established by the Lessee from time to time. The proceeds
from any such insurance shall be paid to the Lessee.
ARTICLE XIV
LIENS
The Lessee shall not create, incur, assume or suffer to exist any mortgage,
pledge, lien, charge, encumbrance or claim on or with respect to the Leased
Premises. The Lessee shall promptly, at its own expense, take such action as may
be necessary to duly discharge or remove any such mortgage, pledge, lien,
charge, and encumbrance or claim if the same shall arise at any time. The Lessee
shall reimburse the Lessor for any expense incurred by Lessor (including
reasonable attorneys' fees) to discharge or remove any such Lessee-incurred
mortgage, pledge, lien, charge, encumbrance or claim.
ARTICLE XV
OPTIONS TO PREPAY LEASE AND PURCHASE LEASED PREMISES
15.1 Option to Purchase. Provided that the Lessee is not in default under
this Lease (including payment of any Additional Rent then due and owing), the
Lessee shall have the option to purchase the Leased Premises and thereby
terminate this Lease at any time on or after Substantial Completion by giving
notice of its election to exercise its option and paying the Lease Payments. The
Lease Payments of the Leased Premises shall be an amount equal to the total
outstanding principal amount of Lease Payments set forth on Exhibit H, plus
interest accrued thereon to the date of prepayment at the applicable rate(s) set
forth on Exhibit H, plus an option exercise fee of one dollar ($1.00).
30
15.2 Exercise of Option. The Lessee shall give Lessor not less than 90 days
prior written notice of its election to exercise its option to purchase under
Section 15.1 hereof. The Lease Payments shall be paid in cash or same-day
available funds by 10:00 a.m. Seattle time on the payment date specified in such
notice (or such other date as the Lessee and Lessor may mutually, agree).
15.3 Conveyance of Leased Premises. On the payment date specified in the
notice of election to exercise purchase option, or such other date as the Lessee
and Lessor may mutually agree, Lessor shall convey the Leased Premises to the
Lessee by Statutory Warranty Deed, and this Lease shall terminate. Nothing
herein shall be construed to require the Lessee to exercise the purchase option
herein granted.
15.4 Option to Partially Prepay Lease. The Lessee shall have the option to
partially prepay the principal component of the Lease Payments, in $5,000
increments, in inverse order of maturities (as represented by the principal
portion of the Lease Payments due each year as set forth in Exhibit H). Notice
of such intent to prepay shall be given to the Lessor in writing not less than
90 days in advance of the intended prepayment date. Such prepayment may be at
any time on or after the Substantial Completion Date. By 10:00 a.m. Seattle time
on the date set for such prepayment, the Lessee shall pay to Lessor in cash or
same-day available funds, an amount equal to the principal portion of Lease
Payment to be prepaid, together with interest thereon to the date of prepayment
Upon such prepayment, the term of this Lease shall be deemed modified such that
this Lease terminates on the Lease Payment Date for the last outstanding Lease
Payment not prepaid.
15.5 Option Not Exercised. If the Lessee does not exercise the purchase
option hereunder upon termination of this Lease, then, after giving the Lessee
ninety (90) days' written notice, Lessor may sell the Leased Premises to any
third party. The proceeds from such sale, less the Lessor's costs in connection
with the sale, shall be distributed to the Lessee.
15.6 Title to Real Property. At the Closing, Lessor shall convey to Lessee
marketable and insurable fee simple title to the Real Property, by execution and
delivery of a Statutory Warranty Deed to the Real Property in a form reasonably
acceptable to Lessee (the "Deed"). Evidence of delivery of marketable and
insurable fee simple title shall be the issuance by the Title Company of an ALTA
extended coverage Owner's Policy of Title Insurance (Form B, Rev. 10/17170) with
liability in the amount of the Purchase Price or any lesser sum as may be
approved by Lessee, in Lessee's sole discretion (the "Title Policy") insuring
fee simple title to the Real Property in Lessee, subject only to (i) easements,
reservations, restrictions and other matters referred to as special exceptions
in the Owner's Policy of Title Insurance approved by Lessee in writing; (ii)
other exceptions created or suffered by Lessor following the Effective Date that
have been approved by Lessee in writing; (iii) utility and other easements
granted by Lessor following the Effective Date required for the use of the
Property as a regional events center facility; and (iv) any liens, encumbrances
or defects created or incurred by Lessee after the Effective Date (all of which
are referred to in this Agreement as 'Permitted Exceptions"). The Title Policy
shall include the following endorsements: (a) survey endorsement (WLTA form
116.1); (b) access to public right of way (WLTA form 103.7); (c) contiguity
(CLTA form 116.4); (d) environmental liens (ALTA form 8.1); and (e) legal lot
endorsement as to Property constituting validly subdivided legal lots. The
indemnification of the title Company by Lessor, or the Contractor to induce the
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Title Company to insure over any otherwise unpermitted exceptions to title shall
not be allowed except with the prior written consent of Lessee in its sole
discretion after full disclosure to Lessee of the nature and substance of the
unpermitted exception and the nature of the indemnity. The Title Policy shall
provide full coverage against construction liens arising out of the construction
of the Public Facilities District Improvements on the Property.
15.7 Title to Personal Property and Intangible Property. At the Closing,
Lessor shall transfer title to the Personal Property free and clear of all liens
and encumbrances whatsoever except for the Permitted Exceptions and such liens
and encumbrances as Lessee may approve in writing by execution and delivery of a
warranty xxxx of sale in a form reasonably acceptable to Lessee. Lessor shall
execute and delivery to Lessee any documents that Lessee may reasonably request
in order to transfer to Lessee any intangible personal property included in the
Property.
ARTICLE XVI
CLOSING
16.1 Closing Procedures.
(a) The Closing shall be held at the offices of Escrow Agent. The Closing
Date shall be within (30) days following Final Completion of the Public
Facilities District Improvements. Such date may not be extended without the
written approval of Lessor and Lessee except as otherwise expressly provided in
this Agreement All documents shall be deemed delivered on the date the Deed is
recorded.
(b) In the event the Closing does not occur on or before the Closing Date,
Escrow Agent shall, unless it is notified by both parties to the contrary within
five (5) days after the Closing Date, return to the depositor thereof items
which may have been deposited hereunder. Any such return shall not, however,
relieve either party hereto of any liability it may have for its wrongful
failure to close.
16.2 Delivery by Lessor. On or prior to the Closing Date, Lessor shall
deposit with Escrow Agent, and shall deliver copies to Lessee to the extent not
previously delivered prior to the Closing, the following:
(a) Lessor shall execute and deliver to Lessee a good and sufficient
Statutory Warranty Deed (the "Deed") to the Real Property in recordable form
conveying good and marketable fee simple title free and clear of all liens and
encumbrances, except for the Permitted Encumbrances, and all easements and
rights appurtenant thereto;
(b) A certificate from the Department of Licensing of the State of
Washington indicating that, as of a date not more than five (5) business days
prior to the Closing Date there are no filings against Lessor in the office of
the Uniform Commercial Code division of the Department of Licensing which would
be a lien on any of the Property (other than such filings, if any, as are being
released at the time of closing;
32
(c) Lessor shall furnish to Lessee, at Lessee's sole cost and expense, the
Title Policy;
(d) Lessor shall deliver to Lessee the originals of all Permits, licenses,
and approvals necessary for the occupation, use and operation of the Property,
including, without limitation, the building permits and a certificate of
occupancy issued by the appropriate governmental authority for the Public
Facilities District Improvements. In the event the original is required to be
posted on the Property, delivery of a duplicate shall be permitted;
(e) Lessor shall deliver to Lessee the originals of all warranties and
guarantees of contractors, subcontractors, suppliers and material-men received
by Lessor in connection with the construction or installation of the Project and
the acquisition of any equipment and Personal Property. Lessor shall deliver to
Lessee a written assignment of such warranties and guarantees, in a form
reasonably acceptable to Lessor and its counsel (hereinafter the "Assignment of
Warranties");
(f) Lessor shall deliver to Lessee, at Lessor's expense, a complete set of
final engineering plans and specifications of the Public Facilities District
Improvements;
(g) [This provision intentionally left blank]
(h) Lessor shall provide a complete inventory of, and shall transfer to
Lessee its interest in, any and all personal property required pursuant to
Construction Documents, if any, to be located on the Real Property, by warranty
xxxx of sale in a form reasonably acceptable to Lessee and its counsel. The cost
of such personal property being transferred is included in the Purchase Price;
(i) Lessor shall transfer to Lessee its interest in those Service Contracts
approved by Lessee by execution and delivery of an assignment of Service
Contracts;
(j) Lessor shall execute and deliver to Lessee an affidavit which satisfies
the requirements of Section 1445 of the Unites States Internal Revenue Code
regarding foreign investors;
(k) Any re-conveyance documents required to eliminate of record the
Construction Loan and any other existing deeds of trust and other security
documents which are a lien on the Real Property and any affidavit required to
eliminate the Title Company exception for construction liens and the rights of
parties in possession;
(1) Confirmation of warranties made by Lessor in this Agreement;
(m) Copies of books and records of Lessor which Lessee would require to
operate and maintain the Property (including applicable maintenance records),
together with keys to all entrance doors to, equipment and utility rooms located
in the Property, which keys shall be properly tagged for identification;
33
(n) Such resolutions, authorizations, certificates or other limited
liability documents or agreements relating to Lessor or as shall be reasonably
required by Lessee or the Title Company in connection with this transaction;
(o) Lessor shall duly execute (and acknowledge if appropriate) such other
documents as reasonably necessary to effectuate this transaction;
(p) Lessor shall deliver to Lessee all other documents required to be
delivered at or prior to the Closing pursuant to the terms of this Agreement,
and
(q) An Affidavit of Prevailing Wages Paid verifying compliance with Section
5.9(d)
16.3 Delivery by Lessee. On or before the Closing Date, Lessee shall
deposit with Escrow Agent the Purchase Price (less any adjustments authorized
under this Agreement) and shall deposit the following:
(a) Assignment of Service Contracts duly accepted by Lessee;
(b) Confirmation of warranties made by Lessee;
(c) Such resolutions, authorizations, certificates or other ordinances or
agreements relating to Lessee or as shall be reasonably required by Lessor or
the Title Company in connection with this transaction;
(d) Lessee shall duly execute (and acknowledge if appropriate) such other
documents reasonably necessary to effectuate this transaction; and
(e) Lessee shall deliver to Lessor all other documents required to be
delivered by Lessee at or prior to the Closing pursuant to this Agreement.
16.4 Pro-rations. All revenue and all expenses of the Property (other, than
real and personal property taxes), including, but not limited to rents, water,
sewer and utility charges, amounts payable under Service Contracts which are to
be assumed by Lessee, annul permits and/or inspection fees (calculated on the
basis of the respective periods covered thereby) and other expenses normal to
the ownership, use, operation and maintenance of the Property shall be prorated
as of the Closing Date. Because Lessee is exempt from property tax, no
prorations of real and personal property taxes will be required, but Lessor
shall pay all real and personal property taxes for the Property for the period
up to and including the Closing Date.
16.5 Costs and Expenses. Lessee shall pay the premium for the Title Policy
and all real estate excise taxes. Lessee shall pay the cost to record the Deed
and any sales or use tax payable in connection with any personal property
included as part of the Property. The escrow fees shall be paid equally by
Lessor and Lessee.
34
16.6 Recordation. Provided that Escrow Agent has not received prior written
notice from either party than an agreement of either party made hereunder has
not been performed, or to the effect that any condition set forth herein has not
been fulfilled, and further provided that Title Company has issued or is
unconditionally prepared and committed to issue to Lessee the Title Policy, then
Escrow Agent is authorized and instructed at 8:00 A.M.(or as soon thereafter as
possible) on the Closing Date pursuant to joint escrow instructions to be
executed by Lessee and Lessor to:
(a) Record the Deed in the official records of Chelan County, Washington;
(b) Assemble and deliver at least one fully executed counterpart of the
assignment of Service Contracts to both Lessee and Lessor;
(c) Deliver all documents described in Section 16.2 to Lessee; and
(d) Record any re-conveyancing documents delivered by Lessor pursuant to
Section 16.2 hereof.
16.7 Effect of Damage or Destruction of Property. If a material part of the
Public Facilities District Improvements has been damaged and not fully restored,
or replaced ( or, in the case of an unsubstantial loss or damage, provision for
full restoration of replacement made) by the Closing Date, the Closing Date
shall (i) be extended for the period of time necessary for Lessor to repair and
restore the damaged portions of the Public Facilities District Improvements, or
(ii) Lessee may elect to complete the Closing and shall receive from Lessor all
insurance proceeds payable with respect to the damage. The determination of what
is a material part of the Public Facilities District Improvements shall be made
by Lessee in its sole discretion.
ARTICLE XVII
DESTRUCTION OF LEASED PREMISES
In the event the Leased Premises are damaged or destroyed by fire or other
casualty following the Substantial Completion Date, this Lease shall not
terminate nor shall there be any abatement of the Lease Payments or Additional
Rent otherwise payable by Lessee hereunder; provided, however, that the Lessee
may elect to defease or prepay the Lease Payments in accordance with Section
15.4 hereof.
ARTICLE XVIII
DEFAULT; REMEDIES
18.1 Corrective Work. In the event of a material default in or of this
Agreement or any of the representations, warranties, terms, covenants,
conditions or provisions hereof by Lessor, which are not cured to Lessee's
satisfaction on the Closing Date, Lessee may, at its election and without
waiving its rights under the Agreement, elect to close the purchase of the
Property and Lessee shall receive a credit against the Lease Payments in an
amount equal to one hundred fifty percent (150%) of the estimated cost of the
Corrective Work. All other Closing Procedures as set forth in this Agreement
35
shall remain in full force and effect. Upon completion of such Corrective Work,
Lessee shall promptly furnish Lessor with a reasonably detailed summary of the
actual cost of the Corrective Work. In the event that the actual cost of the
Corrective Work is more than the amount set forth in the amount credited to
Lessee at Closing, Lessor shall promptly pay to Lessee the difference between
the actual cost and the amount set forth in the estimate. In the event that the
actual cost of the Corrective Work is less than the amount credited to Lessee at
Closing, Lessee shall promptly pay to Lessor the difference between the amounts
credited toward the payment of the Lease Payments and the actual cost. In the
event Lessee or Lessor, as the case may be, does not pay to the other party the
total amount due and owing to -such party pursuant to the foregoing within ten
(10) days following written demand therefore from such other party, the unpaid
amount shall bear interest at the rate of twelve percent (12%) per annum from
the date of the written demand therefore until the date of actual receipt
thereof by the party to whom such amount is owed.
18.2 Specific Performance. In the event of a material breach or default in
or of this Agreement or any of the representations, warranties, terms,
covenants, conditions or provisions hereof by Lessor, Lessee shall have, in
addition to a claim for damages for such breach or default, and in addition and
without prejudice to any other right or remedy available under this Agreement or
at law or in equity, the right to demand and have specific performance of this
Agreement.
18.3 Waiver. No delay in exercising any right or remedy shall constitute a
waiver thereof, and no waiver by Lessor or Lessee of the breach of any covenant
of this Agreement shall be construed as a waiver of any preceding or succeeding
breach of the same or any other covenant or condition of this Agreement.
ARTICLE XIX
MISCELLANEOUS
19.1 Incorporation of Recitals; Definitions. Each recital set forth above
is incorporated into this Agreement as though fully set forth herein. All
capitalized terms not otherwise defined herein shall have the meanings set forth
in Article I of this Agreement.
19.2 Notices. All notices, demands, requests, consents and approvals which
may, or are required to, be given by any party to any other party hereunder
shall be in writing and shall be deemed given when (a) personally delivered, (b)
given by machine-confirmed facsimile, or (c) after placement in the U.S. mail as
certified or registered, return receipt requested, first-class postage prepaid,
the receipt indicates delivery or refusal or failure to accept delivery:
Lessor: Wenatchee Events Center, LLC
0000 Xxxx XxXxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
36
Lessee: Greater Wenatchee Regional Events Center
Public Facilities District 000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Obligor: City of Wenatchee
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other addresses as either party may from time to time designate in
writing and deliver in a like manner. All notices shall be deemed to be complete
upon actual receipt or refusal to accept delivery. Facsimile transmission of any
signed original document and retransmission of any signed facsimile transmission
shall be the same as delivery of an original document. At the request of either
party, the parties will confirm facsimile transmitted signatures by signing an
original document All notices required to be provided to Lessee or Lessor shall
be provided to the City of Wenatchee.
19.3 Amendment. Waiver Assignment No modification, termination or amendment
of this Agreement may be made except by written agreement or as otherwise may be
provided in this Agreement. No failure by Lessor or Lessee to insist upon the
strict performance of any covenant, duty, agreement, or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute a waiver of any such breach or of such or any other covenant,
agreement, term or condition. Any party hereto, by notice and only by notice as
provided in Section 18.2 hereof, may, but shall be under no obligation to, waive
any of its rights or any conditions to its obligations hereunder, or any duty,
obligation or covenant of any other party hereto. No waiver shall affect or
alter this Agreement, and each and every covenant, agreement, term and condition
of this Agreement shall continue in full force and effect with respect to any
other then existing or subsequent breach thereof. All the terms, provisions and
conditions of this Agreement shall continue in full force and effect with
respect to any other then existing or subsequent breach thereof. All the terms,
provisions and conditions of this Agreement shall inure to the benefit of and be
enforceable by Lessor's or Lessee's respective successors and. assigns, except
that Lessor's interest under this Agreement may not be assigned, encumbered or
otherwise transferred, whether voluntarily, involuntarily, by operation of law
or otherwise, without the prior written consent of Lessee, which consent shall
not be unreasonably withheld.
Notwithstanding the prior paragraph, Lessor may assign this Lease to a
bathes trust department or nonprofit financing entity for purposes of issuing
certificates of participation secured by the Lease Payments and Lessee expressly
agrees that Lessor may assign Lease Payments and Additional Rent payments to the
Construction Lender or any other lender financial institution in connection with
the construction loan to Lessor. Lessor shall give the City no less than 10 days
37
notice of its intent to assign this Lease. The City shall cooperate in the
issuance of the Sales Tax. Sales Tax means the sales and use tax imposed by the
District pursuant to Resolution No. 2006-02, adopted by the Board on 7/5106,
pursuant to RCW 82.14.390. Sales Tax Revenue means the money received by the PFD
from the Washington State Department of Revenue on account of the Sales Tax.
19.4 Lessee's Disclaimer. Notwithstanding any other provision of this
Agreement to the contrary, Lessee is under no obligation to construct or
supervise construction of the Project or the installation of any Personal
Property. It is understood and agreed that Lessee's rights under this Agreement
are for the sole purpose of protecting its interest as contract vendee. The
approval of any Construction Drawings, Detailed Specifications or Contract
Documents, construction agreements, or service contracts shall not be construed
by Lessor as a guaranty of sufficiency of the work and shall not excuse
performance of any Lessor's obligation during the Warranty Periods. Lessee's
right of inspection as provided in this Agreement shall not constitute any
representation or warranty, expressed or implied, or any obligation of Lessee to
insure that work or materials are in compliance with the Plans and
Specifications or any building requirements imposed by a governmental agency.
Lessee is not responsible to the Contractor or any other third parties for any
purpose whatsoever.
19.5 Survival. All provisions of this Agreement which involve obligations,
duties or rights which have not been determined or ascertained as of the Closing
Date or the recording of the Deed and all representations, warranties and
indemnifications made in or to be made pursuant to this Agreement shall be
deemed to survive the Closing Date and/or the recording of the Deed and shall be
enforceable in accordance with their terms.
19.6 Captions. The captions of this Agreement are for convenience and
reference only and in no way define, limit or describe the scope or intent of
this Agreement
19.7 Brokerage Fees. Each party represents to the other that no broker has
been involved in this transaction. In the event of a claim for broker's fee,
finder's fee, commission or other similar compensation in connection herewith,
Lessor, if such claim is based upon any agreement alleged to have been made by
Lessor, hereby agrees to indemnify Lessee against and hold Lessee harmless from
any and all damages, liabilities, costs, expenses and losses (including, without
limitation, reasonable attorneys' fees and costs) which Lessee may sustain or
incur by reason of such claim and Lessee, if such claim is based upon any
agreement alleged to have been made by Lessee, hereby agrees to indemnify Lessor
against and hold Lessor harmless from any and all damages, liabilities, costs
and expenses (including, without limitation, reasonable attorneys' fees and
costs) which Lessor may sustain or incur by reason of such claim. The provisions
of this Section 19.7 shall survive the termination of this Agreement or the
recording of the Deed to the Property.
19.8 Joint Venture. It is not intended by this Agreement to, and nothing
contained in this Agreement shall, create any partnership, joint venture or
other arrangement between Lessee o and Lessor. No term or provision of this
Agreement is intended to be, or shall be, for the benefit of any person, firm,
organization or corporation not a party hereto, and no such other person, firm,
organization or corporation shall have any right or cause of action hereunder.
38
19.9 Severability. If any provision contained in this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provisions had never been contained herein.
19.10 Further Assurances, Each party hereto agrees that it will execute or
furnish such documents and further assurances to the other or to proper
authorities as may be necessary for the full implementation and consummation of
this Agreement and the transactions contemplated hereby.
19.11 Merger of Prior Agreements. This Agreement and the exhibits hereto
constitute the entire agreements between the parties with respect to the
purchase and sale of the Property and supersedes all prior and contemporaneous
agreements and understandings between the parties hereto relating to the subject
matter hereof.
19.12 Fair Construction. The provisions of this Agreement shall be
construed as a whole according to their common meaning not strictly for or
against any party and consistent with the provisions contained herein in order
to achieve the objectives and purposes of this Agreement. Each party hereto and
its counsel has reviewed and revised this Agreement and agrees that the normal
rules of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement.
19.13 Authority. The persons signing below represent and warrant that they
have the requisite authority to bind the party on whose behalf they are signing.
19.14 Time is of the Essence. For the purposes of this Agreement and all
transactions contemplated hereunder, time is of the essence.
19.15 Arbitration. In the event a dispute arises between the parties
regarding this agreement, either party (First Party) may submit the issue to
arbitration by selecting an arbitrator and notifying the other party (Second
Party) of the selection. The Second Party shall either approve such arbitrator
and proceed to arbitration or select an alternate arbitrator. Second Party shall
notify the First Party of such acceptance or selection within seven days of the
first notification. Upon receiving notification of the selection of an alternate
arbitrator, the First Party shall then approve the arbitrator and proceed to
arbitration or reject the alternate arbitrator. First Party shall notify Second
Party of such approval or rejection within seven days of receipt of the notice
from Second party. In the case of Rejection, the first two selected arbitrators
shall select a third arbitrator. The third arbitrator shall arbitrate the
dispute. The arbitrators shall be familiar with the construction industry in
Washington State. The arbitrator shall not be related to either party by blood
or marriage to a principal or owner of either party and shall have no economic
interest direct or indirect with either party. The arbitration shall take place
within thirty days after selection of the arbitrator. The decision of the
arbitrator shall be made within 14 days after the arbitrator has been named and
shall be binding upon the parties. The parties shall share equally in the cost
of the arbitrator.
19.16 Non-Waiver of Governmental Rights. Nothing contained in this
Agreement shall require Lessee to take any discretionary action relating to
39
development of improvements to be constructed on the Property as part of the
Project, including, but not limited to; environmental review, zoning and land
use approvals, approval of applications to vacate public streets, permitting, or
any other governmental approvals.
19.17 Agreement for Exclusive Benefit of Lessor and Lessee. The provisions
of this Agreement are for the exclusive benefit of Lessor and Lessee and their
respective permitted successors and assigns and not for the benefit of any other
Person. This Agreement shall not be deemed to have conferred any rights upon any
other Person.
19.18 Interest on Past-Due Obligations. Any amount due to either party
hereunder which is not paid when due shall bear interest from the date due until
paid at a rate equal to twelve percent (12%) per annum.
19.19 Governing Law. This Agreement and the rights of the parties hereto
shall be governed by and construed in accordance with the laws of the State of
Washington. In the event any action is brought to enforce any of the provisions
of this Agreement, the parties agree to be subject to exclusive in personam
jurisdiction in the Chelan County Superior Court for the State of Washington and
agree that in any such action venue shall lie exclusively at Wenatchee,
Washington.
19.20 Memorandum of Agreement. Lessor shall execute, acknowledge and
deliver to Lessee, simultaneous with the execution hereof, a memorandum of this
Agreement, which shall, at Lessee's option, be recorded in the real property
records of Chelan County, Washington, at any time after the Effective Date.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
"LESSEE"
GREATER WENATCHEE REGIONAL
EVENTS CENTER PUBLIC FACILITIES
DISTRICT, a Washington municipal
Corporation
By: /s/ Xxx Xxxxxx
-------------------------------------
Xxx Xxxxxx, Board President
"LESSOR"
WENATCHEE EVENTS CENTER, LLC
a Washington limited Liability Company
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Global Entertainment Corporation, as
executed by its President, Xxxx Xxxxxxxx,
The managing Member of Wenatchee
Events Center, LLC
"OBLIGOR"
CITY OF WENATCHEE, a Washington
municipal corporation
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Xxxxxx Xxxxxxx, Mayor
40
