070-21 - Kitsap Bank - ContractCONTRACT NO.070-21
REAL ESTATE PURCHASE AND SALE AGREEMENT
This Deal Estate Purp a and Sale Agreement (thus-"Aereerment") is dated for reference
purposes as of S' 1S' a� 2021, by and between the -City of Port Orchard, a
Washington State municipal corporation (`Buyer"), and Kitsap Bank, a Washington banking
corporation ("Seller"). Buyer and Seller may be individually referred to herein as a "Party" and
collectively as the "Parties."
NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, the Parties agree as follows:
1. Basic Dates and Terms. In addition to those defined elsewhere in this Agreement, defined
time periods and terms applicable to this Agreement include the following:
(A) "D_ue Diiikence; Period" means the period ending at 5:00 p.m. Pacific Time on
September 1, 2021.
(B) "Closing. Date" shall be on or before December 15, 2021. "Close of Escrow" or
Closin " may be used interchangeably in this Agreement, either term meaning the condition that
exists upon recording of the Deed and payment of the Purchase Price (net of prorations and
adjustments allowed by this Agreement) as defined below.
(C) "Purehase Preee" is Two Million Five Hundred Thousand and no/100ths Dollars
($2,500,000). No value shall be allocated to Personalty.
(D) "Escrow. Agent" shall be Land Title Company (attention Sabre Massey), whose
office is located at 600 Kitsap St #101 Port Orchard WA 98366.
(E) "Thle Comoanvll shall be Land Title Company (attention Sabre Massey),
whose office is located at 600 Kitsap St #101 Port Orchard WA 98366.
(F) J1nten,ti6h:d 1 'OtkAttetll
(G) "Property" is defined in Section 2 of this Agreement.
(H) "Service Conf ets" means all contracts to which Seller is a party relating to the
operation, maintenance or management of the Property, including any agreements for electric, gas,
telephone, cable television and electronic communications, security alarm monitoring, sewer, trash
collection or similar services, supply contracts, and leasing brokerage agreements. Seller shall
provide copies of all Service Contracts, to the extent in writing, as part of the Property Information.
At Closing, Buyer shall assume and take the Property subject to all Service Contracts (except as
set forth in Section 7(Q of this Agreement), including, but not limited to contracts, easements and
rights of access for electronic communications, cable internet, cable television and similar
contracts whose terms extend beyond the Closing Date. Buyer's right or duty to assume, and
Seller's duty to terminate Service Contacts as of Closing are as stated in Section 7(Q below.
(1) "Business, Day means any day of the week other than a Saturday, Sunday or a
legal holiday in the state in which the Property is located.
M "Including" has the same meaning as "including but not limited to," or "including,
without limitation." Use of the term "including" is not intended to be exclusive as to matters not
specifically mentioned.
(K) "Transaction" means the purchase and sale agreement, transfer of the Property,
and all other actions of the Parties described in this Agreement.
2. Agreement to Purchase and Identification of Leases and Property.
Subject to all ofthe terms and conditions of this Agreement, Buyer agrees to purchase from
Seller, and Seller agrees to sell to Buyer, all of the following property (collectively, "Proper "):
(A) the tract or tracts of land legally described in Exhibit A to this Agreement and all
related rights and appurtenances, including such portion of the land that is subject to that Aquatic
Lands Lease No. 22-A02336 ("DNR Lease") with the Department of Natural Resources ("Land");
(B) all buildings, structures, parking areas, sidewalks, landscaping and other
improvements located on the Land (collectively, the "Imnr'ovements");
(C) [Intentionally Omitted]
(D) all right, title and interest of Seller in and to (a) all transferable permits, licenses,
approvals, utility rights, development rights and similar rights related to the Property, if any,
whether granted by governmental authorities or private persons, and (b) all assignable warranties
and guaranties covering all or any part of the Property (collectively, the "Intang tiles '), and (e) all
Service Contracts. As used herein, ";Service Contracts" means all contracts to which Seller is a
party relating to the operation, maintenance or management of the Property, including any
agreements for electric, gas, telephone, cable television, security alarm monitoring, sewer, trash
collection or similar services, supply contracts, and leasing brokerage agreements that Buyer
expressly agrees to assume at Closing.
3. Payment of the Purchase Price.
(A) Purehase Price. The Purchase Price in the amount stated in Section I (Q shall be
paid to Seller at Closing with credit for any adjustments to occur at Closing as expressly provided
for in this Agreement.. Buyer's funds comprising the Purchase Price with such credit and
adjustments, in the total amount required for Closing, shall be delivered by Buyer to the Escrow
Agent by wire transfer received not Iaer than 12:00 p.m., Pacific Standard Time, on the Closing
Date.
(B) lndegendent Consideration. Within ten (10) days after the Effective Date, Buyer
shall deliver to the Escrow Agent the amount of One Hundred Dollars (5100.00) ("Independent.
Con'sldeittion"). The Independent Consideration shall be non-refundable to Buyer as independent
consideration for the rights and options extended to Buyer hereunder, including without limitation,
the right and option to terminate this Agreement as provided herein. The Independent
Consideration shall be disbursed to Seller immediately following Buyer's deposit thereof into the
escrow. In all instances under this Agreement in which Buyer elects to terminate or is deemed to
have terminated this Agreement, Seller shall retain the Independent Consideration. The
Independent Consideration shall not be applicable towards the Purchase Price or treated as
consideration given by Buyer for any purpose other than as stated in this Section 3(B).
4. Buyer Conditions.
2
(A) Due Dilimice Condition.
(1) Due Diligence. During the period specified in Section i(A) of this
Agreement, Buyer shall have the right to make such inquiries and undertake such analysis as Buyer
elects to make in its sole and independent discretion to determine, assess and evaluate, to Buyer's
satisfaction, the suitability of the Property for Buyer's purposes and the feasibility of Buyer's
purchase, operation, and development of the Property, including the value of the Property to Buyer;
all financial and economic aspects thereof, regulatory requirements for operation and development
of the Property and Buyer's ability to comply therewith; the physical, environmental, geotechnical
and other conditions of the Property; location of the Property including its proximity to public
services, other properties, population centers and other location -related factors; taxes; risks
attendant to such ownership, operation, and development; receipt of consent from the Department
of Natural Resources to assume the existing DNR Lease or to enter into a new lease with Buyer
upon terms and conditions acceptable to Buyer; obtaining approvals, satisfactory to the Buyer, for
any federal, state or other sources of funding to acquire the Property; obtaining approval of this
Agreement and the Transaction from the City Council of the City of Port Orchard; and all other
factors deemed pertinent by Buyer in its sole and absolute, independent assessment, evaluation
and judgment. Buyer shall provide periodic updates to Seller, to the extent not deemed privileged
or confidential by Buyer, upon Seller request, regarding the status of applications for federal, state
or other sources of funding for Buyer's purchase of the Property.
(2) _ Apnroval Notice: At any time prior to the end of the Due Diligence Period,
Buyer may elect to approve or disapprove, in Buyer's sole discretion; the suitability of the Property
for Buyer's intended purposes. Buyer shall deliver written notice of its approval of such matters
("Approval Notice") to Seller and Escrow Agent at any time prior to the end of the Due Diligence
Period. Included with the Approval Notice, Buyer shall deposit with Escrow Agent, Fifty
Thousand and No/100 Dollars ($50,000.00) ("Earnest Money"). If directed by Buyer, the Escrow
Agent shall deposit the Earnest Money in an interest bearing account. If Buyer does not deliver
the Approval Notice and Earnest Money by the end of the Due Diligence Period, this Agreement
shall terminate.
(3) Effect of Buver Notice to Terminate (or Failure to Provide Approval
Notice ; If Buyer elects to terminate this Agreement under this Section 4, or if Buyer in any event
fails timely to provide an Approval Notice, then in the event of any of the foregoing, the escrow
will be terminated, all documents will be returned to the Party who deposited them, and neither
Party will have any further rights or obligations under this Agreement except as otherwise provided
in this Agreement. If this Agreement is terminated through no fault of Seller, then Seller and Buyer
will share equally any costs of terminating the escrow and any cancellation fee for the Title Report.
(B) Title Review.
(1) Title Report mid 'Suryey. Upon execution of this Agreement (if not before),
Buyer will order, through the Escrow Agent, from the Title Company, a preliminary title reportT pertaining to the Property and underlying title documents (" ft Re ri xt"). In addition, as part of
the Due Diligence Materials, Seller shall deliver to Buyer the most recent ALTA Survey relating
to the Property, if any, in Seller's possession ("Survey"). Within thirty (30) days after the date on
which Buyer has received access to the Title Report and the Survey, Buyer shall notify Seller in
writing as to any matter disclosed on the Title Report or Survey to which Buyer objects
("Disapproved Ezeentibns"). If Buyer fails to give Seller written notice within said 30-day
period, Buyer will be deemed to have approved the condition of title to the Property as disclosed
in the Title Report and on the Survey. If Buyer timely gives notice of any Disapproved Exceptions,
Seller shall have ten (10) days after receipt of such notice to give Buyer notice of whether Seller
will undertake to remove all, some or none of the Disapproved Exceptions. If Seller fails to give
Buyer notice before the expiration of such 10-day day period, Seller will be deemed to have elected
not to remove any of the Disapproved Exceptions. Unless Seller gives notice that it will remove
all of the Disapproved Exceptions, Buyer will have ten (10) days after receipt of Seller's notice
(or 10 days after the date Seller's response, if any, was due) to notify Seller of Buyer's election
either to proceed with the purchase and take the Property subject to those Disapproved Exceptions
which Seller has not agreed to remove, or to terminate this Agreement. Except as to Monetary
Liens, which shall not in any event constitute Permitted Exceptions, and which Seller shall have
the obligation to remove, unless it gives express written notice to the contrary, Seller shall not have
a duty to remove any Disapproved Exceptions. However, if Seller gives written notice stating it
will cause one or more of the Disapproved Exceptions to be removed, then fails to remove such
Disapproved Exceptions, at or by the Closing Date, or if at or before Closing Seller has failed to
remove all Monetary Liens, Buyer will have the right either to (1) elect to terminate this Agreement
by written notice to Seller or (2) proceed with the purchase, with an abatement of the Purchase
Price equal to the actual cost of removing from title those Disapproved Exceptions which Seller
had given notice of its intent to remove, and to take the Property subject to those Disapproved
Exceptions. If Buyer elects to proceed with the purchase, Seller hereby agrees and instructs Escrow
Agent to pay, satisfy and remove from title to the Property all Monetary Liens using so much of
Seller's proceeds as necessary thereto. All of the exceptions to title disclosed on either of the Title
Report or the Survey, excepting only those Disapproved Exceptions Seller has agreed in writing
to remove at or before Closing and further excepting all Monetary Liens, are referred to herein as
the "Permitted Exceptions."
(2) Monetacy Liens. Notwithstanding anything to the contrary in this
Agreement, with exception as to the lien of any tax or assessment not due or delinquent as of the
Closing date, at or before Closing, Seller shall cause all Monetary Liens affecting the Property to
be paid, satisfied, released, discharged and otherwise removed from title to the Property, and Seller
shall further indemnify and hold Buyer harmless therefrom. As used herein, 'Monetary Lien"
means any lien, encumbrance or other claim affecting title to the Property which may be removed
by payment of money, including any mortgage, deed of trust, security interest, tax lien, mechanic's
lien, materialman's lien, broker's lien, judgment lien, assessment or similar obligation.
(3) New Survey,. Supplemental Report. Buyer shall have the right, but not the
obligation during the Due Diligence Period to order an update of the Survey or a new ALTA survey
of the Property (in either case, provided such update or new survey is ordered for delivery prior to
the end of the Due Diligence Period, the "New Survey"). If Buyer orders a New Survey, Buyer
shall direct its surveyor to provide a complete copy thereof to Seller contemporaneously with
delivery of the same to Buyer. A survey or survey update not delivered prior to the end of the Due
Diligence Period shall have no bearing on Buyer's rights or Seller's obligations under this
Agreement and shall not constitute a "New Survey" for purposes of this Section 4(B)(3). If the
New Survey is received prior to the end of the Due Diligence Period, and if there should be any
new matter disclosed on the New Survey not previously shown on the Survey, or if the Title
Company issues a supplement to the Title Report showing any new title exception or other matter
4
affecting title to the Property not disclosed on the Title Report (whether resulting from the New
Survey or otherwise), then in either such case, Buyer will have the right to notify Seller of its
disapproval of such new matter or new title exception(s) by notice given to Seller within ten (10)
days after Buyer's receipt of the New Survey or the supplement to the Title Report, as applicable,
and Seller will have ten (10) days to give Buyer notice of the action, if any, that Seller proposes to
take as to such new matter or new exception. If Seller fails to provide such notice, or if Buyer is
dissatisfied with the action Seller proposes to take as specified in Seller's notice (unless Seller's
proposed action will cure any such matter or title exception entirely), Buyer shall have the right to
terminate this Agreement by written notice given to Seller, which notice, however, must be given
to Seller within ten (10) days after the date Buyer receives Seller's notice of its proposed action
(or, if Seller provides no notice, within ten (10) days after the date on which Seller's notice was
due in accordance with this Section 4(B)(3)).
5. Close of Escrow.
(A) Escrow. The purchase of the Property will be completed through an escrow opened
with the Escrow Agent designated in Section 1(D), who shall serve as the closing agent and shall
coordinate issuance of the Title Report and Title Policy. The escrow will be opened by delivering
to the Escrow Agent a fully -executed copy of this Agreement. Close of Escrow will take place on
the Closing Date specified in Section 1(B) at the office of the Escrow Agent, time being of the
essence hereof.
(B) Seller Closing Deliverles. Prior to Close of Escrow, Seller will deposit with the
Escrow Agent the following items (collectively, the ':Sreller C.losink Oelivetie ') with written
instructions to deliver and, with respect to the Deed, record the following in accordance with this.
Agreement: (a) a Statutory Warranty deed in the form attached hereto as Exhibit S, executed and
acknowledged by Seller, conveying the Land and the Improvements to Buyer, subject to the
Permitted Encumbrances ("Deed"); (b) a Bill of Sale in the form attached hereto as Exhibit C,
executed by Seller conveying any personal property, as Buyer and Seller may agree, to Buyer
("Bill. of 'So 1'p"); (c) a General Assignment in the form attached hereto as E-xhibit I , executed by
Seller, conveying to Buyer all right, title and interest of Seller in, to and under the Intangibles and
Service Contracts ("General.Assigrnment'); (d) a lease in the form attached hereto as =Exhibit F,
pursuant to which Seller shall be a tenant of the Property with a forty-two (42) month lease term,
at a Zero Dollar ($0) base rent but the obligation to pay customary operating expenses (i.e. NNN)
and utilities, and up to two (2), eighteen (18) month option terms provided the second option term
shall be exercised only where Seller's relocation is prevented by acts of God, inability to obtain
labor or materials or reasonable substitutes therefor, governmental restrictions, regulations or
controls, enemy or hostile governmental action, riot, civil commotion, fire or other casualty,
pandemic, and other causes beyond the reasonable control of the Seller, and provided the first
option term and the first twelve (12) months of the second option terms shall be subject to a Zero
Dollar ($0) base rent but the obligation to pay customary operating expenses (i.e. NNN) and
utilities, and for the final six (6) months of the second option term the rent shall be set at $13,700.00
per month with Seller paying all customary operating expenses (i.e. NNN) and utilities, executed
and acknowledged by Seller ("Lease"); (e) a lease assignment of the DNR Lease, or a new aquatic
lands lease between Buyer and the Department of Natural Resources regarding same, upon terms
and conditions acceptable to Buyer; (f) a Certificate of Non -Foreign Status (FIRPTA), dated the
date of Close of Escrow and executed by an appropriate representative of Seller under penalty of
perjury, stating that Seller is not a "person" with respect to whom withholding is required under
Section 1445 of the Internal Revenue Code; (g) Seller's estimated closing settlement statement
prepared by the Escrow Agent reflecting the Purchase Price and all prorations and adjustments
made pursuant to this Agreement ("Seller's dosing Statement"); (h) an affidavit in form
reasonably required by Title Company for issuance of the Title Policy without general exceptions
for mechanics', materialmen's or other statutory liens, parties in possession and other general title
exceptions; and (i) such documents as the Escrow Agent or the Title Company may reasonably
require to establish the authority of Seller to complete the Transaction or as otherwise required by
Escrow Agent or Title Company to complete the Transaction.
(C) Buyer Closiug Deliveries. Prior to Close of Escrow, Buyer will deposit with the
Escrow Agent the following ("Buy er. Closing Deliveries") with written instructions to deliver the
same in accordance with this Agreement: (a) immediately available funds in the amount of the
Purchase Price as adjusted pursuant to this Agreement, and all other funds required from Buyer to
complete Closing as shown on Buyer's Closing Statement; (b) the Lease executed and
acknowledged by Buyer as landlord; (c) a lease assignment of the DNR Lease, or a new aquatic
lands lease between Buyer and the Department of Natural Resources regarding same, upon terms
and conditions acceptable to Buyer; (d) the General Assignment; (e) Buyer's estimated closing
settlement statement prepared by the Escrow Agent reflecting the Purchase Price, and all
prorations and adjustments made pursuant to this Agreement ("Buyer's :Closing Statement");
and, (f) such documents as the Escrow Agent or Title Company may reasonably require to establish
the authority of Buyer and otherwise to complete the Transaction or as otherwise required by
Escrow Agent or Title Company to complete the Transaction.
(D) Return :af Documents: Documents and any funds deposited in escrow under
Section S(B) or 5(Q will be returned to the Party who deposited them if the Seller or Buyer
terminates its obligation to complete the Transaction under circumstances permitted by this
Agreement.
(E) Closel of 'Eserow. Provided all conditions to Closing as set forth in this Agreement
have been satisfied or waived, the Escrow Agent will close escrow on the Closing Date by (a)
delivering the Deed for recording, with instructions to deliver the Deed to Buyer after recording;
(b) paying Seller Proceeds to Seller and third parties designated by Seller according to Seller's
Closing Statement; (c) delivering the Buyer Closing Deliveries (other than Buyer's Closing
Statement) to Seller; and (d) delivering the Seller Closing Deliveries (other than the Deed and the
Seller's Closing Statement) to Buyer. The foregoing shall be completed in such order as
determined by Escrow Agent consistent with this Agreement and as required for completion of the
Close of Escrow. The Earnest Money, plus any interest accrued thereon, shall be applied to the
Purchase Price by Escrow Agent at Closing.
(F) Contracts:. Lease`s. etc. Simultaneously with the Close of Escrow, Seller shall
deliver or cause to be delivered to Buyer, outside of escrow, originals or, if originals are not in
possession of Seller, copies, of (a) documents evidencing other permits, licenses, approvals, plans
and specifications, as -built drawings, utility rights, development rights and similar rights related
to the Property, if any, that are transferred to Buyer; (b) all assignable warranties and guaranties,
to the extent existing, covering all or any part of the Property transferred to Buyer; and (c) all
assignable Service Contracts assumed by Buyer as provided for in Section 7(C) below.
6. Conditions to Closing.
R
The obligation of each of Seller and Buyer to complete Closing is subject to the following
conditions precedent (each a "Seller's Condition te-Closine" or "Bu-i•er's Contlitifln to Closine"
as specified below):
(1) SeIler's Conditions to Closing. The obligation of Seller to sell and convey
the Property to Buyer at Closing is subject to satisfaction or, in Seller's sole discretion,
waiver, of each of the following:
a. Buyer's timely delivery of an Approval Notice as provided in Section
4(A)(2), above;
b. Timely and complete delivery of all of Buyer's Deliveries to Escrow
Agent;
c. Each of Buyer's Representations and Warranties as stated in Section
10(B) hereof shall be true without material exception as of the Closing Date;
d. Satisfaction of all other terms and conditions expressly stated in this
Agreement to be a condition to Closing.
(2) B-Dyer's. Conditions ta.Closiri . Buyer's obligation to purchase the Property
at Closing is subject to satisfaction or; in Buyer's sole discretion, waiver, each of the
following
a. Buyer's delivery of an Approval Notice;
b. [Intentionally Omitted];
C. Timely and complete delivery of all of Seller's Deliveries to Escrow
Agent;
d. Each of Seller's Representations and Warranties as stated in Section
10(A) hereof shall be true without material exception as of the Closing date;
e. Satisfaction of all other terms and conditions expressly stated herein to
be a condition to Closing.
7. Due Diligence Materials.
(A) Due Diligence Materials. Seller shall deliver to Buyer, within ten (10) days after
the Effective Date, to the extent existing and in the possession or control of Seller or any affiliate
of Seller, all of the documents regarding the Property including, without limitation, any site plans,
maps, surveys, studies, reports, soils reports, engineering reports, licenses, permits, environmental
reports, documents and materials relating to legal proceedings (to the extent not under attorney -
client privilege), governmental notices, and other items reasonably relevant to the due diligence
investigation of Buyer (collectively, the "Due Dililien.ce Materials "). Seller shall respond to the
extent reasonably possible to inquiries made by Buyer from time to time, and shall make its
employees available to Buyer to answer questions from time to time as reasonably requested by
7
Buyer, regarding the Property. Seller shall promptly provide Buyer with any additional disclosure
documents of which Seller obtains knowledge. Buyer acknowledges that the Due Diligence
Materials may consist of or contain documents, reports and other materials prepared by third
parties not within the control or direction of Seller, may also include documents and materials
which may no longer be current and also include materials prepared by or at the request of Seller
for its own internal purposes and not expressly for the purposes of disclosure or reliance by third
parties and, accordingly, the Due Diligence Materials not prepared by Seller (including any
hereafter provided as noted above) and any materials created or received by Seller are provided to
Buyer without representation or warranty, express or implied, as to the accuracy, currency, or
completeness thereof, or as to the sufficiency thereof for the purposes for which Buyer may use
such materials.
(B) Insnetans Buyer and its representatives, consultants and contractors may enter
upon the Property upon at least 48 hours' prior notice to Seller to make such inspections and tests
regarding the Property as Buyer deems necessary or desirable. Seller may reasonably condition
such inspections and tests due to Seller's operation of the Property as a bank, potentially requiring
security and privacy measures. Buyer shall obtain Seller's approval before undertaking any
intrusive, destructive or invasive testing or any soil borings, which approval Seller agrees not to
withhold unreasonably. Damage to the Property resulting from any inspection or testing conducted
by or at the direction of Buyer shall be repaired by Buyer so that the Property is substantially
restored to its condition existing prior to such damage. Buyer will indemnify, defend and hold
harmless Seller against any claim arising out of activities conducted at the Property by Buyer
and/or its representatives, consultants and contractors and related damage, liability, obligation,
claim, suit, cause of action, judgment, settlement, penalty, fine or cost or expense (including fees
and disbursements of attorneys and other professionals and court costs); provided that the
foregoing shall not apply with regard to the discovery of pre-existing conditions, or negligence or
willful misconduct on the part of Seller. Prior to any entry onto the Property, Buyer shall provide
Seller with evidence that Buyer maintains liability insurance with coverage in an amount not less
than $1,000,000 and that Seller has been named as an additional insured under such insurance. In
the event that Buyer terminates this Agreement for any reason other than Seller's default, or if
Buyer otherwise fails to complete the purchase and sale as described herein, Buyer shall, within
ten (10) days after termination or default, return to Seller copies of all materials and documents
provided by Seller to Buyer as part of Buyer's review of the Property.
(C) Apptoval, of Service Contradt Prior to expiration of the Due Diligence Period,
Buyer shall also advise Seller in writing of the Service Contracts Buyer desires to assume and
continue in effect following Closing, which 'shall be assumed by Buyer and listed in Eiliihit E.
Seller at its sole cost and expense shall cause all Service Contracts not to be assumed by Buyer at
Closing to be terminated at or prior to Closing.
(D) Doparl r 6nt of Natural Resources Dtautid, Lease. Commencing on the Effective
Date, Buyer shall have the right to enter into discussions and to negotiate with the Department of
Natural Resources a lease assignment of the DNR Lease or new aquatic lands lease. DNR's written
approval of the assignment of the DNR Lease to Buyer shall be a condition of Closing and the
assignment shall be effective on the date of Closing. The existing DNR Lease term ends on May
30, 2025. The extension of the existing DNR Lease or a new aquatic lands lease must be finalized
by Buyer and DNR by May 30, 2025, and include provisions allowing Seller to remain in the
building on the Property through the end of the three option terms. Due to Seller's Lease of the
Property from Buyer after Closing, the assignment of the DNR Lease, extension of the DNR Lease,
and/or new aquatic lands lease shall be subject to Seller's reasonable approval in so far as the terms
apply to the Property during the term of the Lease between Buyer and Seller. Seller shall remain
responsible for all lease payments to DNR under the assigned lease or new DNR Lease during the
term of the Lease between Buyer and Seller (including the option terms); however, Seller shall not
be responsible for any repairs or improvements or mitigation measures required by DNR as
conditions of the lease assignment or a new DNR lease other than cost related to the normal
maintenance of the building on the Property.
8. Title Insurance.
Buyer's obligation to purchase the Property is conditioned on the Title Company issuing
to Buyer an ALTA Standard Owner's Policy of Title Insurance ("Titlo Policy") insuring that
Buyer holds fee simple title to the Land and all related appurtenances. The Title Policy must be
in the amount of the Purchase Price, must contain as exceptions.only the Permitted Exceptions, as
defined herein, any additional exceptions for matters created by Buyer, and any subsequent non -
monetary exceptions revealed on Title Report supplements approved by Buyer. Seller will pay
the standard coverage .portion of the premium for the Title Policy issued in the amount of the
Purchase Price. In the event Buyer elects to obtain extended owner's coverage or any endorsements
in addition to ALTA Standard Owner's coverage, Buyer shall pay the portion of the Title Policy
premium applicable to extended coverage and any such endorsements.
9. Closing Costs, Prorations and Reserves.
(A) Closing Cogs. Seller shall pay the title premium attributable to the ALTA Standard
Owner's coverage portion of the Title Policy, real estate excise taxes, and to remove any
Disapproved Exceptions agreed to be removed or title endorsements to resolve same, and one-half
(1 /2) of any escrow fee charged by the Escrow Agent. Buyer shall pay any Title Policy costs related
to extended coverage and/or endorsements requested or required by Buyer that are not otherwise
required to be paid by Seller, any sales or use taxes charged for transfer of the Personalty, the
charges for recording the Deed, and one-half (1 /2) of any escrow fee charged by the Escrow Agent.
Each of Buyer and Seller will pay its own attorneys' fees. Other costs will be paid by Seller or
Buyer, as applicable, as specified by other provisions of this Agreement; or if not so specified,
then as are customarily allocated between buyers and sellers in commercial real estate transactions
in Kitsap County.
(B) Poratvns. Seller and Buyer will prorate, effective as of the Closing Date, all
expenses of operation of the Property (including utilities and property taxes and assessments),
except for insurance premiums. Amounts allocable to the Closing Date will be for the account of
Buyer. If any expenses cannot be determined finally as of Close of Escrow, such expense will be
prorated on the best available information. Adjustments to the prorations will be made from time
to time after Close of Escrow to take account of final information as to expenses estimated as of
Close of Escrow that were not included in the prorations calculated at the Close of Escrow, and
Buyer or Seller, as applicable, will pay the other on demand such amounts as may be appropriate
based on such adjustments, together with interest at 12% per annum from the date of demand if
such amount remains unpaid more than 30 days after demand.
E
10. Representations and Warranties.
(A) Seller's Representations and Warranties. To induce Buyer to enter this Agreement
and complete the Transaction, Seller represents and warrants to Buyer that the following
statements (" Sdtgr% Representations and Warranties") are true as of the Effective Date and
shall be remade as of the Closing Date:
(1) Seller is a Washington banking corporation duly formed and validly
existing under the laws of the State of Washington;
(2) Seller is duly qualified to do business in the State of Washington;
(3) Seller possesses the requisite authority to enter into this Agreement, to
perform its obligations under this Agreement and to complete the Transaction as contemplated by
this Agreement;
(4) the execution, delivery and performance by Seller of its obligations under
this Agreement in accordance with its terms and conditions will not result in (a) a breach of, or a
default under, any contract, agreement, commitment or other document or instrument to which
Seller is a party or by which Seller or the Property is bound, or (b) a violation of any law, ordinance,
regulation or rule of any governmental authority applicable to Seller or any judgment, order or
decree of any court or governmental authority that is binding on Seller;
(5) there is no action, suit, proceeding, inquiry or investigation (including any
bankruptcy or other debtor relief proceeding) pending or, to the knowledge of Seller, threatened
by or before any court or governmental authority (a) against or affecting the Property (other than
tenant eviction or collection actions disclosed in writing to Buyer) or arising out of the
development, construction, financing, operation, maintenance or management of the Property or
(b) that would prevent or hinder the performance by Seller of its obligations under this Agreement
or the completion of the Transaction as contemplated by this Agreement;
(6) except for consents, if any, required under any of the Service Contracts and
consents, approvals, authorizations and filings already completed, Seller is not required to obtain
any third -party consent, approval or authorization from, or to make any filing with, any person
(including any governmental authority) in connection with, or as a condition to, the execution and
delivery of this Agreement, the performance thereby of its obligations under this Agreement or the
completion of the Transaction as contemplated by this Agreement;
(7) Seller has paid (except to the extent prorated as Closing), all local, state,
and federal taxes attributable to the period prior to Closing which, if not paid, could constitute a
lien on the Property or for which Buyer may be held liable after Closing;
(8) to the knowledge of Seller, Seller is not aware of any concealed material
defects in the Property, except as disclosed to Buyer in writing during the Due Diligence Period;
and
(9) except as disclosed in writing to Buyer or as stated below in this section, to
the knowledge of Seller: (a) there are no underground storage tanks on the Property; (b) no
underground storage tanks have been placed on or removed from the Property during Seller's
ownership of the Property; (c) the Property is free of asbestos and asbestos -containing materials;
(d) Seller has not caused or permitted to be stored, disposed of, transferred, produced, or processed
on the Property any Hazardous Materials, except in compliance with all applicable federal, state,
10
and local laws or regulations; (e) no release of any Hazardous Materials on or off -site of the
Property which might affect the Property or for which Buyer may be liable has occurred prior to
the Closing Date hereof, and (f) there are no Materials or conditions on the Property (or off -site to
the extent affecting the Property) which would support a claim or cause of action, whether by a
governmental agency or body, private party or individual, under any current Environmental Law;
as used in this Agreement, `Hatardous Materials" means any substance, chemical, material or
waste now or in the future defined as a "hazardous substance," "hazardous material," "hazardous
waste," "toxic substance," "toxic pollutant," "contaminant," or "pollutant" within the meaning of
or regulated or addressed under any Environmental Law. Without limiting the generality of the
foregoing, Hazardous Materials includes: Significant Mold; petroleum and petroleum products and
compounds containing them or derived from them, including natural gas, gasoline, diesel fuel, oil
and other fuels and petroleum products or fractions thereof; radon; carcinogenic materials;
explosives; flammable materials; infectious materials, corrosive materials; mutagenic materials;
radioactive materials; polychlorinated biphenyls (PCBs) and compounds containing them; lead
and lead -based paint; asbestos or asbestos -containing materials in any form that is or could become
friable; underground or above -ground storage tanks, whether empty or containing any substance;
pipelines constructed for the purpose of transporting Hazardous Materials, whether empty or
containing any substance; any substance the presence of which on, under or about the Property is
regulated or prohibited by any governmental authority; any substance that is designated, classified
or regulated pursuant to any Environmental Law; and any medical products or devices, including
those materials defined as "medical waste" or "biological waste" under relevant statutes or regulations
pertaining to any Environmental Law; 'Zinvironmental. Law," means each and all present and
future federal, state., and local laws, ordinances, regulations, standards, rules, policies} and other
governmental requirements, administrative rulings, court judgments, and decrees, and all
amendments thereto, relating to pollution or protection of human health, wildlife, wetlands, natural
resources or the environment (including ambient air, surface water, ground water, land surface, or
subsurface strata) including such laws governing or regulating the use, generation, storage,
removal, remediation, recovery, treatment, handling, transport, disposal, control, release,
discharge of, or exposure to, Hazardous Materials. Environmental Law includes, without
limitation, (a) the Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. Section 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq., the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 5101, et seq., the Clean Air Act, 42 U.S.C. Section 7401, et
seq., the Safe Drinking Water Act, 42 U.S.C. Section 300f, et seq., the Occupational Safety and
Health Act, 29 U.S.C. Chapter 15, et seq., the Oil Pollution Act of 1990, 33 U.S.C. Section 2701,
et seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136, et seq., and
the River and Harbors Appropriation Act, 33 U.S.C. Section 403, et seq., and their state and local
analogs, as any such statutes may be amended, restated, modified, or supplemented from time to
time, and (b) all voluntary cleanup programs and/or brownfields programs under federal, state or
local law, as may be amended, restated, modified, or supplemented from time to time.
As used herein, "to the knowledge of Seller" means the actual or constructive knowledge of Larry
Grohn, the SVP, Corporate Real Estate Director of Kitsap Bank, after due inquiry, provided that
nothing in this sentence is intended, expressly or by implication, to impose personal liability on
the person identified here, who is identified solely for purposes of using his or her actual
knowledge as the standard for Seller's knowledge. Seller represents and warrants that the person
11
identified here is an individual employed by or contracted with Seller who has been materially
involved in the management of the Property.
(B) Buy er''s Representations and Warranties. To induce Seller to enter this Agreement
and complete the Transaction, Buyer represents and warrants to Seller that the following
statements (" Buvees- Rearesen#ations and Warranties.") are true as of the Effective Date and
shall be remade as of the Closing Date:
(1) Buyer is a Washington municipal corporation duly organized and validly
existing under the laws of the State of Washington;
(2) Buyer has the requisite entity power to enter into this Agreement, to perform
its obligations under this Agreement and to complete the Transaction as contemplated by this
Agreement; and
(3) this Agreement has been duly executed and delivered by Buyer and
constitutes a valid, binding and enforceable obligation of Buyer, subject to receipt of approval
from the City Council of the City of Port Orchard.
(C) Survival. The representations and warranties in Sections 10(A) and 10(B) will
survive Close of Escrow.
11. Pre -Closing Obligations and Conditions.
(A) IUlaiutenanee of Ini;urance. Seller shall maintain or cause to be maintained all
insurance in effect as of the Effective Date with respect to the Property (or comparable insurance)
until the earlier of the Close of Escrow or the termination of this Agreement.
(B) Service Contracts ;anti .Liens.. Until the earlier of the Close of Escrow or the
termination by. Buyer or Seller of its obligation to complete the Transaction, without Buyer's
consent, which consent shall not be unreasonably withheld or delayed, Seller will not (a) enter into
any new Service Contract that will be binding upon Buyer or the Property after Close of Escrow,
or amend or otherwise modify any existing Service Contract that will not expire prior to Close of
Escrow, except in the ordinary course of business, (b) grant, create or allow the creation of any
easement, right-of-way, encumbrance, lien, restriction, condition, assessment or other cloud on
title which affects the Property, or (c) amend, extend or otherwise modify the terms of any existing
easement, right-of-way, encumbrance, lien, restriction, condition, assessment or other cloud on
title which affects the Property.
(C) Property Maintenance and Management; From the Effective Date until Closing,
Seller shall operate the Property and ensure that it is managed and maintained in a manner
consistent with its current operations, and in compliance with all applicable laws, regulations,
ordinances and codes, shall maintain the Property in at least as good a condition as it was in on the
Effective Date.
(D) No Transfer or Encumbrance. From the Effective Date until Closing, Seller will not
sell or dispose of any of the Property nor create or permit to be created any lien or encumbrance
against any portion of the Property, without Buyer's prior written consent.
(E) Leasing From the Effective Date until Closing, Seller agrees it will not enter into
leases or lease amendments with respect to the Property, unless otherwise approved in advance
and in writing by Buyer in its sole discretion.
12
12. Remedies.
(A) Seller Remedy. IF BUYER DEFAULTS IN ITS OBLIGATION TO PURCHASE
THE PROPERTY IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS
AGREEMENT, INCLUDING THE TERMS AND CONDITIONS AS TO THE TIME OF ITS
PERFORMANCE OF ITS OBLIGATIONS HEREUNDER, SELLER, AS ITS SOLE AND
EXCLUSIVE REMEDY, SHALL HAVE THE RIGHT TO TERMINATE ITS OBLIGATION
TO COMPLETE THE TRANSACTION AND TO RETAIN THE INDEPENDENT
CONSIDERATION AND THE $50,000.00 EARNEST MONEY DEPOSITED BY BUYER
WITH ESCROW AGENT. PROVIDED, THE FOREGOING SHALL NOT LIMIT OR
RESTRICT ANY RIGHT OR REMEDY OF SELLER FOR BUYER'S BREACH OF ANY OF
ITS OBLIGATIONS TO BE PERFORMED FOLLOWING CLOSING OR TERMINATION OF
THIS AGREEMENT, OR FOR BREACH OF ANY DUTY OF BUYER EXPRESSED HEREIN
TO INDEMNIFY, DEFEND OR HOLD HARMLESS SELLER OR SELLER -RELATED
PARTIES.
(B) Buyer's Rented . If Seller fails to perform any of its obligations under this
Agreement, then Buyer (provided that Buyer is not then in a material default under this
Agreement), as its sole and exclusive remedy, may either (a) terminate its obligation to complete
the Transaction, in which case Buyer may recover all Buyer's actual, documented out-of-pocket
expenses paid to third parties in connection with Buyer's due diligence investigation of the
Property but subject to a maximum of Fifty Thousand Dollars ($50,000), or (b) enforce specific
performance of the obligation of Seller to sell the Property pursuant to this Agreement, provided
that any action seeking specific performance must be commenced within sixty (60) days after the
date then scheduled for Closing, or if no Closing date has then been scheduled or can be
ascertained, then within sixty (60) days after the date on which Buyer contends Seller breached
this Agreement. Buyer hereby knowingly and intentionally waives all remedies for Seller's failure
in performance (including any right to obtain damages from Seller), except those specifically
provided for in this Section 12(B).
(C) Cumul'ative.. Rentddies: Except as otherwise specifically provided in this
Agreement, all remedies provided for in this Agreement or available as a matter of law (whether
at law, in equity, by statute or otherwise) are cumulative and may be exercised concurrently or
consecutively, in such order as a Party may elect. Limitations on remedies apply only to the
obligations specifically referenced to be limited.
13. Brokerage.
Neither Party has engaged any agent, broker or finder in connection with the negotiation,
execution or performance of this Agreement, or the transactions contemplated hereby. In the event
any third party makes a claim or demand for the payment of a brokerage fee, commission, or other
compensation arising from the Closing of the sale and purchase of the Property, the Party through
whom such third party is claiming such brokerage fee, commission, or other compensation shall
indemnify the other Party and hold the other Party harmless against and in respect of any claim for
such brokerage fee, commission, or other compensation. The duty to indemnify and defend
described in this section shall survive the termination of the Agreement and the Closing of the
purchase and sale of the Property.
13
14. Possession.
Seller will deliver possession of the Property to Buyer on or about 2:00 p.m. Pacific
Standard Time on the day of Close of Escrow, subject to Seller's lease of the Property back from
Buyer effective as of the Close of Escrow.
15. Casualty and Condemnation.
(A) Notice to Buyer: Seller will notify Buyer within five days after receiving notice of
or otherwise becoming aware of (a) any Casualty Loss (as defined below) and/or (b) the
commencement of any proceedings for the taking by eminent domain of all or any part of the
Property to the extent any of the foregoing occurs prior to Closing.
(B) Casualty. Loss. If, prior to Close of Escrow, the Property is damaged by fire,
windstorm, rioting or other civil disturbance, acts of war, earthquake or other
casualty (a "Casualty Loss.") and the cost to repair the related damage is more than
One Hundred Thousand Dollars ($100,000), then Buyer, at its option, may
terminate its obligation to complete the Transaction. Provided, if Buyer elects to
terminate its obligation to complete the Transaction pursuant to this Section, Buyer
must give written notice to Seller of such election within thirty (30) days after
Buyer's receipt of notice of the Casualty Loss; failure by Buyer to give such notice
shall constitute Buyer's election to complete the Transaction notwithstanding such
Casualty Loss. If Buyer elects to complete the Transaction notwithstanding a
Casualty Loss, or if the amount required to repair the Casualty Loss is less than the
amount stated above or if this Agreement for any other reason requires Buyer to
purchase the Property despite a Casualty Loss, then Seller will cooperate with
Buyer after Close of Escrow in making claim for, and collecting, all available
insurance proceeds, and applying the insurance proceeds to make the necessary
repairs to the Property, with any deductible under Seller's insurance policy charged
to Seller.
(C) I✓milient.Domain. If, prior to Close of Escrow, all or a material part of the Property
is taken by eminent domain or any proceedings for the taking by eminent domain of all or part of
the Property is commenced by any other party, then Buyer, at its option, may terminate its
obligation to complete the Transaction. Provided, if Buyer elects to terminate its obligation to
complete the Transaction pursuant to this Section, Buyer must give written notice to Seller of such
election within thirty (30) days after Buyer's receipt of notice of the commencement of any such
eminent domain or condemnation proceeding; failure by Buyer to give such notice shall constitute
Buyer's election to complete the Transaction notwithstanding the commencement of such eminent
domain or condemnation proceeding. If Buyer elects to complete the Transaction notwithstanding
a taking by eminent domain or proceeding therefor, Seller will deliver to Buyer at Close of Escrow,
through the closing escrow, all condemnation proceeds previously received by Seller and an
assignment of Seller's rights with respect to all uncollected condemnation proceeds (in either case,
net of proceeds allocable to loss of use of the Property for the period through the Closing Date and
through the term of Seller's post -Closing lease, and costs incurred by Seller in connection with
such proceedings) and such documents as Buyer may reasonably request to substitute itself for
Seller in any pending eminent domain proceedings. As used in this Section IS(C), "material part
of the Pro.perij," means a portion of the Property, the taking of which: (i) reduces the total value
14
of the Property by more than One Hundred Thousand Dollars ($100,000), or (ii) eliminates any of
the vehicular entrances or exits for vehicular ingress to or egress from the Property.
16. As Is Purchase.
Except as expressly represented or warranted herein, Seller is selling and Buyer is
acquiring the Property AS IS, WHERE IS, with all faults and defects, whether patent or latent.
Except as otherwise expressly stated in this Agreement, Seller has not made and Buyer has not
received or relied on any other representations, express or implied, regarding the Property. Buyer
acknowledges that any and all information, feasibility or marketing reports, environmental or
physical condition reports, or other information of any type that Buyer has received or may receive
from Seller or any representative, agent, employee or broker of any of Seller is furnished on the
express condition that Buyer shall or would make an independent verification of the accuracy of
any and all such information, all such information being furnished without any representation or
warranty whatsoever, express or implied, by Seller or by any employee, agent or representative
action on behalf of Seller. Buyer shall rely upon its own inspection and its own professional
advisors in its examination of the Property and all improvements thereon. Buyer recognizes that
Seller would not agree to sell the Property except on an "AS IS, WHERE IS" basis, and
acknowledges that neither Seller nor any principal, agent, manager, member, employee, broker or
representative of Seller has made any representations or warranties of any kind in connection with
the Property except those expressly stated in Section 10(A) of this Agreement.
17. Consequences of Termination.
If either of Buyer or Seller terminates its obligation to complete the Transaction under
circumstances permitted by this Agreement and not by default, neither Buyer nor Seller will have
any further obligation under this Agreement except as expressly provided for herein. Nothing in
this Section 17 is intended to limit the obligations of the Escrow Agent or the provisions of this
Agreement dealing with the disposition of funds or documents held in escrow following
termination of the obligations of Buyer or Seller.
18. Indemnification
(A) Indemnification by Buyer. Buyer agrees to indemnify, defend, and hold harmless
Seller and its successors and assigns from and against any and all claims, expenses, costs, damages,
losses and liabilities (including reasonable attorneys' fees) that may at any time be asserted against
or suffered by Seller (and/or its successors and/or assigns) as a result of, on account of or arising
from any obligation, claim, suit, liability, contract, agreement, debt or encumbrance created,
arising or accruing after the Closing Date relating to the Property or its operations, except to the
extent that such liability arises by, through or under Seller.
(B) Indemnification by. Sell'er. Seiler agrees to indemnify, defend, and hold harmless
Buyer and its successors and assigns from and against any and all claims, expenses, costs,
damages, losses and liabilities (including reasonable attorneys' fees) that may at any time be
asserted against or suffered by Buyer (and/or its successors and/or assigns) or the Property, or any
part thereof, whether before or after the Closing Date, as a result of, on account of or arising from
(i) any breach of any covenant, representation, warranty or agreement on the part of Seller to Buyer
made herein or in any instrument or document delivered pursuant to this Agreement, and/or (h)
any obligation, claim, suit, liability, contract, agreement, debt or encumbrance created, arising or
accruing on or prior to the Closing Date, regardless of when asserted, relating to the Property or
15
its operations (including, without limitation, any and all liabilities, including penalties, for federal
or state income taxes or other taxes, which are not assumed by Buyer in writing), except to the
extent that such liability arises by, through or under Buyer.
19. Miscellaneous.
(A) Survival. All covenants, undertakings and obligations under this Agreement and
all representations and warranties contained in this Agreement will survive the Close of Escrow
and will not be merged into the Deed or other documents delivered pursuant to this Agreement.
(B) Interpretation. When the context so requires in this Agreement, words of one
gender include one or more other genders, singular words include the plural, and plural words
include the singular. Use of the words `tinelude" and "including:" are intended as an introduction
to illustrative matters and not as a limitation. References in this Agreement to 'Sections" are to
the numbered subdivisions of this Agreement, unless another document is specifically referenced.
The word "Par " when used in this Agreement means either Buyer or Seller unless another
meaning is required by the context. The term "governmental authonN" is intended to be
construed broadly and includes governmental agencies, instrumentalities, bodies, boards,
departments and officers and individuals acting in any official capacity. The word "laws" is
intended to be construed broadly and includes all codes, statutes, case law, rules, regulations,
pronouncements, requirements, orders, directives, decisions, decrees, judgments and formal or
informal guidance or interpretations of any court or governmental authority.
(C) Attbrneys� Pees. If litigation is commenced by Buyer or Seller against the other
Party in connection with this Agreement or the Transaction, the substantially prevailing Party in
the litigation will be entitled to collect from the other Party the expense (including fees and
disbursements of attorneys and other professionals and court costs) incurred in connection with
the litigation.
(D) Notice. Notices may be transmitted (a) by personal delivery, (b) by delivery by
messenger, express or air courier or similar courier, (c) by delivery by United States first class
certified or registered mail, postage prepaid, (d) or by email followed by hardcopy delivery
pursuant to one or more of subsections (a) through (c). Except as otherwise provided in this
Agreement, delivery or service of any notice shall be deemed effective only upon receipt, and
receipt shall be deemed to have occurred when the notice was sent by email or delivered to the
specified address without regard to whether or not a representative of the addressee was present to
receive the Notice; provided, any Notice delivered after 5:00 P.M. local time of place of receipt,
or on a day other than a Business Day, shall be deemed received on the next succeeding Business
Day.
If to Seller: Kitsap Bank
619 Bay Street
Port Orchard, WA 98366
Attention: Steven Politakis, Chief Executive Officer
Email:
If to Buyer: City of Port Orchard
216 Prospect Street
Port Orchard, WA 98366
16
Attention: Mayor Rob Putaansuu
Email: rput=tsuu cj1, o orfiorchard.us
With a copy to, which shall not constitute "notice" hereunder:
Inslee Best Doezie & Ryder, P.S.
10900 N.E. 41h Street, Suite 1500
Bellevue, WA 98004
Attention: Charlotte A. Archer & Daniel Shin
Email: carcher(ajinsleebest.cam
Email: dshih(dJ sl.eebest.corn
(E) Successors and. Permitted Assfkns. This Agreement will be binding upon and will
inure to the benefit of Buyer and Seller and their respective successors and permitted assigns. Any
indemnity in favor of a Party also will benefit each person who holds a direct or indirect ownership
interest in such Party and the respective officers, directors, trustees, agents, employees and
affiliates of such Party and such owners, and all such persons are third -party beneficiaries of this
Agreement to the extent of their rights to indemnity under the related provision and may enforce
that provision against Buyer or Seller, as applicable.
(F) Headvias. The Section headings contained in this Agreement are for convenience
of reference only and are not intended to delineate or limit the meaning of any provision of this
Agreement or be considered in construing or interpreting the provisions of this Agreement.
(G) Couniferparts. The Parties may deliver executed signature pages to this Agreement
by PDF transmission to the other Party, which PDF copy shall be deemed to be an original executed
signature page. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which .counterparts together shall constitute one agreement
with the same effect as if the parties had signed the same signature page. The Parties hereby
acknowledge and agree that counterpart signature pages distributed electronically by facsimile or
e-mail, may be used in connection with the execution of this Agreement and shall be legal and
binding and shall have the same full force and effect as if a paper original of this Agreement had
been delivered had been signed using a handwritten signature. The Parties (i) intend to be bound
by the signatures (whether original, faxed or electronic) on any document sent or delivered by
facsimile or, electronic mail, or other electronic means, (ii) are aware that the other Party will rely
on such signatures, and (iii) hereby waive any defenses to the enforcement of the terms of this
Agreement based on the foregoing forms of signature. If this Agreement has been executed by
electronic signature, all parties executing this document are expressly consenting under the
Electronic Signatures in Global and National Commerce Act ("E-SIGN"), and Uniform Electronic
Transactions Act ("UETA"), that a signature by fax, email or other electronic means shall
constitute an Electronic Signature to an Electronic Record under both E-SIGN and UETA with
respect to this specific transaction.
(H) [ ntire Agreement. It is agreed that all understandings and agreements heretofore
had between the Parties respecting this transaction, including without limitation, any offers,
counteroffers or letters of intent, are merged in this Agreement, which fully and completely
expresses the agreement of the Parties. This Agreement and the obligations of the Parties under
17
this Agreement may be amended, waived and discharged only by an instrument in writing executed
by the Party against which enforcement of the amendment, waiver or discharge is sought.
(I) Severability. The determination that any provision of this Agreement is invalid or
unenforceable will not affect the validity or enforceability of the remaining provisions or of that
provision under other circumstances. Any invalid or unenforceable provision will be enforced to
the maximum extent permitted by law.
(J) Force ,Maieure Performance by Seller or Buyer of their obligations under this
Agreement shall be extended by the period of delay caused by force majeure. The term "Force
Majeure" shall mean war, natural catastrophe, strikes, walkouts or other labor industrial
disturbance, pandemic, order of any government, court or regulatory body having jurisdiction,
shortages, blockade, embargo, riot, civil disorder, or any similar cause beyond the reasonable
control of the party who is obligated to render performance (but excluding financial inability to
perform however caused).
(K) Construction. Seller and Buyer acknowledge that each Party and its counsel have
reviewed and revised this Agreement and that the rule of construction that ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation of this Agreement
(including the exhibits) or any amendments hereto, and the same shall be construed neither for nor
against Seller or Buyer, but shall be given a reasonable interpretation in accordance with the plain
meaning of its terms and the intent of the Parties.
(L) Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the State of Washington.
(M) Effective Date. In the, event Buyer and Seller do not sign this Agreement
simultaneously, this Agreement shall be considered an offer made by the Party first executing and
delivering this Agreement to the other Party. In such event, said offer shall expire at 5:00 p.m.
Pacific Standard Time on the fifth (5th) day following execution and delivery by the offering Party,
unless prior to such deadline the Party to which the offer was made shall have delivered one copy
of this Agreement, executed without change, to the Party malting the offer. If the Party receiving
the offer changes the terms of the offer, the original offer shall be deemed rejected and a new offer
shall be deemed made by the Party making such changes. The date on which this Agreement shall
be effective ("Effective Date") is the date upon which this Agreement is accepted without change,
which date is presumed to be the later of Seller's and Buyer's execution dates following their
signatures set forth on this Agreement.
(N) Exhibits. All exhibits attached to this Agreement are incorporated into this
Agreement by this reference and made a part of this Agreement as if fully set forth herein. The
following constitute the exhibits to this Agreement:
Exhibit A
Legal Description of Property
Exhibit B
Deed
Exhibit C
Bill of Sale
Exhibit D
General Assig
Exhibit E
Exhibit F
Lease
is
(Signature pages follow)
IM
IN WITNESS WHEREOF, the Parties have executed this Agreement intending to be
bound by its terms and conditions as of the Effective Date.
SELLER:
Kitsap Bank
A Washington banking corporation
By:
Print name:
Its: C. L 0
BUYER:
City of Port Orchard
A Washington municipal corporation
By:
Mayor Rob Putaansuu
Approved as to form:
Charlotte A. Archer
City Attorney
gaXXX{+ik4§lt§P3 tYftlii�r.! Brandy I i.nearson �
City Clerk SEA
r
L . -
tP�j � r
af" 1 `ask �1 ♦=S"'��.
S1il�l!#!f kf11jXS4i`xt.
20
Date: F(aC.,l�id L
Date: 5
EXHIBIT A
Legal Description of Property
Kitsap County Tax Parcel No. 4650-011-001-0001:
PTN BLK 11 & BLK 11 SIDNEY TDLDS (NOW PORT ORCHARD) CNVYD BY AUD, NO
1104385 DAF, LOTS 1 THRU 4 BLK I I EXC ANY PTN THOF LY WHIN SIDNEY TDLDS
& ALSO LOTS 1 THRU 4 BLK 11 SIDNEY TDLDS & ALSO TH PTN OF PORT STR VAC
UNDER PTO CITY ORD NO 941 AS SHOWN ON SIDNEY TDLDS DAF, BAT NWLY COR
LOT 1 BLK I 1 SD PLAT TH SELY ALG WLY LN SD LOT .& ALG ELY R/W MGN SD STR
70FT TO SWLY COR SD LOT TH WLY ALG EXT OF SLY LN SD LOT 11.99FT TAP ON
LN LY PLW & 1 OFT WLY (AS MEAS AT R/A TO) ELY MGN OF SD STR TH NWLY ALG
SD PLL LN 61.35FT TAP ON SWLY EXT OF NWLY LN BLK 11 TH NELY 1 OFT ALG SD
EXT TO POB
Kitsap County Tax Parcel No. 262401-1-001-2004 (Subject to DNR Lease):
HARBOR AREA FRTG BLK 11 SIDNEY (NOW PORT ORCHARD) TDLDS CNVYD BY
AUD NO 1104385 BEING IN FRT OF BLK 11 ORIG PLAT OF SIDNEY TGW VAC PTN OF
PORT STR AD3 THRTO ALL INCL IN FDT, BAT MOST WLY COR OF BLK 11 SIDNEY
TDLDS SD POB BEING A PT ON INNER HARBOR LN TH N46*40'16E 215.12 FT ALG SD
LN & NWLY BDRY SD BLK TO AN ANG PT THRIN TH S80* 18'33E 3.05FT ALG SD LN
& NLY BDRY TH LEAV SD LN & NLY BDRY N31*50'43W 206.57FT TH S46*40'16W
227.65FT TH S31*50'43E 204.09FT TAP ON SD INNER HARBOR LN & TH N46*40'16E
10.20FT TO POB (HARBOR AREA LEASE NO 2336 AS SHOWN ON EXHIBIT ON FILE
WITH APPLICATION AT OLYMPIA)
21
LAND TITLE COMPANY - SILVERDALE 202112080286
After recording return to:
Brandy Rinearson
City Clerk
City of Port Orchard
216 Prospect Street
Port Orchard, WA 98366
Grantor:
Grantee:
Deed Rec Fee: $205.50
12/08/2021 03:15:41 PM Page 1 of 3
Paul Andrews, Kitsap County Auditor
THIS DOCUMENT WAS
E-FILED WITH THE
KITSAP COUNTY AUDITOR
STATUTORY WARRANTY DEED
Abbreviated Legal Description:
Assessor's Property Tax Parcel/Account No.:
Reference Numbers of Documents
Assigned or Released:
KITSAP BANK, A WASHINGTON
BANKING CORPORATION
CITY OF PORT ORCHARD, A
WASHINGTON MUNICIPAL
CORPORATION
SEC 26, TWP 24, RNG lE (NE/4)
4650-011-001-0001
262401-1-001-2004 (Subject to DNR Lease)
200603220008 (DNR Lease)
THE GRANTOR, Kitsap Bank, a Washington banking corporation, for and in
consideration of ten dollars in hand paid, conveys and warrarfj�,,'to GRANTEE, City of Port
Orchard, a Washington municipal company, the following described real estate, situated in
Kitsap County, State of Washington:
619 BAY ST. PORT ORCHARD. WA 9836
Lots 1, 2, 3 and 4, Block 11, S. M. Steven's Town, Plat of Sidney,
according to Plat recorded in Volume 1 of Plats, Page 1, records of
Kitsap County, EXCEPT any portion thereof lybig" ithin Sidney
Tidelands, and also
Lots 1, 2, 3 and 4, Block 11, Sidney Tidelands, ac prding to plat
record in the Office of Commissioner of Public Lands, Olympia,
Washington;
2021--X10658
2021-12-08
HSWANSON
$58305.00
After recording return to:
Brandy Rinearson
City Clerk
City of Port Orchard
216 Prospect Street
Port Orchard, WA 98366
STATUTORY WARRANTY DEED
Grantor: KITSAP BANK, A WASHINGTON
BANKING CORPORATION
Grantee: CITY OF PORT ORCHARD, A
WASHINGTON MUNICIPAL
CORPORATION
Abbreviated Legal Description: SEC 26, TWP 24, RNG 1 E (NE/4)
Assessor's Property Tax Parcel/Account No.: 4650-011-001-0001
262401-1-001-2004 (Subject to DNR Lease)
Reference Numbers of Documents 200603220008 (DNR Lease)
Assigned or Released:
THE GRANTOR, Kitsap Bank, a Washington banking corporation, for and in
consideration of ten dollars in hand paid, conveys and warrants to GRANTEE, City of Port
Orchard, a Washington municipal company, the following described real estate, situated in
Kitsap County, State of Washington:
619 BAY ST PORT ORCHARD WA 98366
Lots 1, 2, 3 and 4, Block 11, S. M. Steven's Town Plat of Sidney,
according to Plat recorded in Volume 1 of Plats, Page 1, records of
Kitsap County, EXCEPT any portion thereof lying within Sidney
Tidelands, and also
Lots 1, 2, 3 and 4, Block 11, Sidney Tidelands, according to plat
record in the Office of Commissioner of Public Lands, Olympia,
Washington;
and also
That portion of Port Street as vacated under Ordinance #941,
records of the City of Port Orchard, Washington, as shown on the
Plat of Sidney Tidelands, according to Plat recorded in the Office
of the Commissioner of Public Lands, Olympia, Washington
described as follows:
Beginning at the Northwesterly corner of Lot 1...Block 11, of said Plat; thence
Southeasterly along the Westerly line of said Lot 1, and along the Easterly right-
of-way margin of Port Street a distance of 70.00 feet to the Southwesterly corner
of said Lot 1; thence Westerly along an extension of the Southerly line of said Lot
1 a distance of 11.99 feet to a point on a line lying parallel with and 10.00 feet
Westerly of (as measured at right angles to) the Easterly margin of Port Street;
thence Northwesterly along said parallel line 61.35 feet to a point on the
Southwesterly extension of the Northwesterly line of said Block 11; thence
Northeasterly 10.20 feet along said extension to the point of beginning; situate in
Kitsap County, Washington.
Subject to Special Exceptions 3 through 7, 9 and 10 in Land Title Company
Commitment for Title Insurance E2021-417239
KITSAP A WASHINGTON BANKING CORPORATION
By:
Print name: ►�'1N - GL B�-(S`
Its:
STATE OF WASHINGTON )
) ss.
COUNTY OF KITSAP
Date:
I certify that 1 know or have satisfactory evidence_that is the person who
appeared be re me, and said person acknowledged tha he he signed this instrument, on oath
stated tha h1he was authorized to execute the instrument and acknowledged it as the
authorized signor of Kitsap Bank, a Washington Banking Corporation to be the free and
voluntary act of such party for the uses and purposes mentioned in the instrument.
SABRES MASS
NOTARY PUBLIC
STATE OF WASHINGTON
Name: Sabre S. Mas
COMPASSION WMURe03=
Notary Public in and for the State of Wash ton
COMMISSM a 04M AM. zs, 2=
Residing at
My appointment expires:qzelwr
1 hereby certrfY that
this is a TRUE and
exact copy
gy:
BILL OF SALE AND ASSIGNMENT
THIS BILL OF SALE AND ASSIGNMENT AGREEMENT ("Bill of Sale") is entered
into and effective as of � .t��2021, by and between Kitsap Bank, a Washington
banking corporation ("Grantor"), and City of Port Orchard, a Washington State municipal
corporation ("Grantee").
FOR AND IN CONSIDERATION of Ten Dollars ($10.00) in hand paid, and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Grantor, in accordance with that certain Purchase and Sale Agreement, dated°°;V does
hereby grant, sell, transfer, assign, convey and deliver to Grantee, and its successors and assigns,
all of Grantor's right, title and interest in and to the personal property listed in Exhibit B. All of
the foregoing is herein collectively called the "Personal Property."
Grantee acknowledges and agrees that the Personal Property shall be transferred on
[Date] in its AS -IS, WHERE -IS, WITH ALL `FAULTS condition, without
representation or warranty of any kind, express or implied, from Grantor.
Grantor represents and warrants to Grantee that the Personal Property is free and clear of
all encumbrances, that Grantor has the full right and title to sell the Personal Property, that it has
duly caused its authorized representative to execute this instrument; and Grantor covenants and
agrees that it will warrant and defend the Personal Property against all claims and demands of all
persons or entities, whomever and wherever located.
To have and to hold the same to the said Purchaser, its successors and assigns forever.
IN WITNESS WHEREOF, the parties hereto have caused this, Bill of Sale to be duly
executed as of the day and year first above written.
GRANTOR:
Kitsap Bank
A Washington banking corporation
A
By:
Print name:,..
Its: f oovr- 6)
GRANTEE:
City of Port Orchard
A Washington municipal corporation
By:
Mayor Rob Putaansuu
Approved as to form:
L,k- k0lq�CLk
Charlotte A. Archer
City Attorney
Brandy Rinearson
City Clerk
Date:
Date:
By: Date:
Print name:
Its:
GRANTEE:
City of Port Orchard
A Washington municipal corporation
By: tj Date:
Mayor Rob Putaansuu
Approved as to form:
Charlotte A. Archer
City Attorney
Brandy Rinearson
City Clerk
BY � � aJ� �% Date: -- -
Print name:
Its:
GRANTEE:
City of Port Orchard
A Washington .municipal corporation
Date:
Mayor Rob Putaansuu
Approved as to form:
Charlotte A. Archer
City Attort..
1 riindy Rinearson
City Clerk
and also
That portion of Port Street as vacated under Ordinance #941,
records of the City of Port Orchard, Washington, as shown on the
Plat of Sidney Tidelands, according to Plat recorded in the Office
of the Commissioner of Public Lands, Olympia, Washington
described as follows:
Beginning at the Northwesterly corner of Lot 1. Block 11, of said Plat; thence
Southeasterly along the Westerly line of said Lot 1, and along the Easterly right-
of-way margin of Port Street a distance of 70.00 feet to the Southwesterly corner
of said Lot 1; thence Westerly along an extension of the Southerly line of said Lot
I a distance of 11.99 feet to a point on a line lying parallel with and 10.00 feet
Westerly of (as measured at right angles to) the Easterly margin of Port Street;
thence Northwesterly along said parallel line 61.35 feet to a point on the
Southwesterly extension of the Northwesterly line of said Block 11; thence
Northeasterly 10.20 feet along said extension to the point of beginning; situate in
Kitsap County, Washington.
KITSAP BANK, A WASHINGTON BANKING CORPORATION
By: ��. Date:
Print name:
Its:
STATE OF WASHINGTON
ss.
COUNTY OF KITSAP )
I certify that I know or have satisfactory evidence that ` s the person w o
appeared before me, and said person acknowledged that i , she signed this instrument, on oath
stated thaShe he was authorized to execute the instrument and acknowledged it as the
authorized signor of Kitsap Bank, a Washington Banking Corporation to be the free and
voluntary act of such party for the uses and purposes mentioned in the instrument.
SABRE lIASSEY
®i'ARY PU
1.mIG
S'�ATE ®� �A�WING�®(1 ame: Sabre ��
COMMISSION P{R�$ AUG. 28, 2022 Notary Public in and for the State of Was gton
Co Residing at � }_
My appointment expires: 2,
Exhibit A to Bill of Sale and Assignment
Legal Description of Premises
Lots 1, 2, 3 and 4, Block 11, S. M. Steven's Town Plat of Sidney,
according to Plat recorded in Volume 1 of Plats, Page 1, records of
Kitsap County, EXCEPT any portion thereof lying within Sidney
Tidelands, and also
Lots 1, 2, 3 and 4, Block 11, Sidney Tidelands, according to plat
record in the Office of Commissioner of Public Lands, Olympia,
Washington;
and also
That portion of Port Street as vacated under Ordinance #941, records
of the City of Port Orchard, Washington, as shown on the Plat of
Sidney Tidelands, according to Plat recorded in the Office of the
Commissioner of Public Lands, Olympia, Washington described as
follows:
Beginning at the Northwesterly corner of Lot 1. Bloek 11, of said
Plat; thence Southeasterly along the Westerly line of said Lot 1, and
along the Easterly right-of-way margin of Port Street a distance of
70.00 feet to the Southwesterly corner of said Lot 1; thence Westerly
along an extension of the Southerly line of said Lot l a distance of
11.99 feet to a point on a line lying parallel with' and 10.00 feet
Westerly of (as measured at right angles to) the Easterly margin of
Port Street; thence Northwesterly along said parallel line 61.35 feet
to a point on the Southwesterly extension of the Northwesterly line
of said Block 11; thence Northeasterly 10.20 feet along said
extension to the point of beginning; situate in 'Kitsap County,
Washington.
Exhibit B to Bill of Sale and Assignment
Included Personal Property
[NONE UNLESS SPECIFICALLY AGREED TO IN WRITING BETWEEN SELLER AND
PURCHASER PRIOR TO CLOSING]
619 BAY ST, PORT ORCHARD, WA 98366
LEASE AGREEMENT
Contract No. 081-21
THIS LEASE AGREEMENT (this "Lease") is dated as of August 18, 2021 by and
between the City of Port Orchard, a Washington municipal corporation, with its principal place
of business at 216 Prospect Street, Port Orchard, WA 98366 ("Landlord"), and Kitsap Bank, a
Washington banking corporation ("Tenant").
ARTICLE I
DEFINITIONS
1.1 The following terms shall have the meanings set forth below for all purposes in this
Lease:
(a) Property: The real estate and improvements commonly known as the Kitsap Bank
headquarters, located at 619 BAY ST, PORT ORCHARD, WA 98366, in Kitsap County,
Washington, legally described per Exhibit A.
(b) Premises: The Premises commonly known as 619 BAY ST, PORT ORCHARD,
WA 98366, in Kitsap County, Washington, comprising the building and improvements on the real
property described in Exhibit A.
(c) Lease Tenn: Forty-two (42) months, plus two (2), eighteen (18) month option
terms, provided the second option terin shall be exercised only where Tenant's relocation is
prevented by acts of God, inability to obtain labor or materials or reasonable substitutes therefor,
governmental restrictions, regulations or controls, enemy or hostile governmental action, riot, civil
commotion, fire or other casualty, pandemic, and other causes beyond the reasonable control of
the Tenant.
(d) Lease Conunencement Date: December 16, 2021
(e) Rent Commencement Date: Beginning December 16, 2021, tenant to pay all
customary operating expenses (i.e. NNN) and utilities, plus all costs associated with existing DNR
Lease for duration of tenancy (see DNR Lease at Kitsap County Recording No. 200603220008),
plus rent set out in Section 1.1(g) herein.
(f) Lease Expiration Date: June 16, 2025, subject to option terms.
(g) Minimum Rent: In addition to payment for all building and property expenses
(NNN), Tenant shall pay the following rent:
December 16, 2021 — June 16, 2025 $ 0.00 per month
June 17, 2025 — December 17, 2027 $ 0.00 per month
December 18, 2027 — June 17, 2028 $ 13,700.00 per month
(h) Insurance Costs
Tenant to pay
(i) Real Estate Taxes Landlord to pay, including,
but not limited to, any leasehold excise tax under RCW Chapter 82.29A.
0) Trash Removal & Recycling Tenant to pay
(k) Utilities Tenant to pay
(1) Perrnitted Use of Premises: Operation of banking corporation, and for no other
purpose without the prior written consent of Landlord.
(m) Tenant's Advertised Name: Kitsap Bank
(n) Address for Notices to Tenant: Kitsap Bank
619 Bay Street
Port Orchard, WA 98366
Attention: Steven Politakis, Chief Executive
Officer
Telephone:
Email:
(o) Address for Notices to Landlord: City of Port Orchard
216 Prospect Street
Port Orchard, WA 98366
Attention: Mayor Rob Putaansuu
Email: rputaansuu@cityofportorchard.us
With Copy To:
Inslee Best Doezie & Ryder, P.S.
10900 N.E. 4th Street, Suite 1500
Bellevue, WA 98004
Attention: Charlotte A. Archer & Daniel
Shin
Email: carcher@insleebest.com
Email: dshin@insleebest.com
(p) DNR Lease: Tenant will execute an assignment to Landlord of Aquatic Lands
Lease No. 22-A02336 ("DNR Lease") with the Department of Natural Resources, and Tenant shall
remain responsible for all lease payments to DNR under the assigned lease or new DNR Lease
during the term of this Lease (including all exercised option terms), provided, Tenant shall not be
responsible for any repairs or improvements or mitigation measures required by DNR as conditions
of the lease assignment or a new DNR lease other than cost related to the normal maintenance of
2
the building on the Property.
1.2 Exhibits and Addenda. This Lease includes and incorporates Exhibit A, and the
following additional documents, if any: Purchase and Sale Agreement, dated0�1
ARTICLE II
PREMISES
2.1 Defined. Landlord leases the Premises as defined in Section 1.1(b) to Tenant, and
Tenant rents the Premises from Landlord, for the term herein provided.
2.2 [Intentionally Deleted]
2.3 No Liability for Landlord. Notwithstanding anything contained in this Lease to the
contrary, Tenant agrees that:
(a) Landlord will have no liability, and Tenant will not be entitled to any compensation
or a reduction or abatement of Rent, as a result of Landlord's exercise of its rights under this Lease;
(b) Tenant shall not be entitled to and shall not commence any action or proceeding
seeking injunctive or declaratory relief in connection with any of the rights reserved to Landlord
under this Lease.
(c) If Landlord shall prevail in any action nor preceding undertaken by Tenant, Tenant
shall pay to Landlord as Additional Rent, a sum equal to all legal fees, costs and disbursements
incurred by Landlord in any way related to, or arising out of such action or proceeding.
(d) Any Landlord exercise of the rights contained herein shall not terminate or
otherwise affect or modify this Lease.
2.4 Liens. Tenant shall keep the Premises and the Property in which the Premises is
situated free from any liens arising out of any work performed, materials furnished or obligations
incurred by Tenant. Tenant shall indemnify and hold Landlord harmless from any liability for
losses or damages resulting directly or indirectly from any such liens or lien claims (including any
costs incurred arising out of or relating to Landlord's lender) and from any work performed on or
about the Premises by Tenant, its agents, employees, contractors or subcontractors. Tenant shall
immediately notify Landlord in writing of the placement of any such liens, and provide Landlord
of a copy of the same. Landlord may require, at Landlord's sole option, that Tenant shall provide
to Landlord, at Tenant's sole cost and expense, payment and performance bonds in an amount
equal to one and one half (1.5) times the estimated cost of such work, materials, labor and supplies
and/or any improvements, additions, or alterations in the Premises which the Tenant desires to
make to insure Landlord against any liability for mechanics' and materialmen's liens and to insure
completion of the work within twenty (20) days of Tenant's written notice to Landlord, or a
removal of the lien by that time.
2.5 Encumbrances. The Tenant shall not cause or suffer to be placed, filed or recorded
against the title to the Premises, the Building of which the Premises is a part, the Property in which
the Premises is located, or any part thereof, any mortgage, deed of trust, security agreement,
financing statement or other encumbrance; and further, in no event shall the lien of Tenant's
mortgage, deed of trust, or other security agreement or financing statement cover the Premises, the
Building of which the Premises is a part or the Property or any part thereof nor any leasehold
improvements, alterations, additions, or improvements thereto except trade fixtures, appliances
and equipment which are owned by Tenant and which are not, and which do not become, a part of
the Premises. The form of any such mortgage, deed of trust or other security agreement or
financing statement which includes a legal description of the Premises, or the Building of which
the Premises is a part or the Property or the address thereto, shall be subject to Landlord's prior
written approval at Landlord's sole and exclusive discretion, which approval if granted, may be
subject to such conditions as the Landlord may deem appropriate in its sole and exclusive
discretion.
ARTICLE III
TERM
3.1 Term. The Lease Term shall commence on the Lease Commencement Date (as
determined pursuant to Section 1.1(d)); provided, however, that if the Lease Commencement Date
is not the first day of a month, then the Lease Term shall be the period set forth in Section 1.1(c)
above plus the partial month in which the Lease Commencement Date occurs. The Lease Term
shall include any and all renewals and extensions of the term of this Lease.
3.2 Delivery. Tenant is currently occupying the Premises, and shall maintain
possession of the Premises upon the Lease Commencement Date.
3.3 Tenant's First Option to Extend. I£
(a) Tenant faithfully and punctually complies with and performs the terms,
covenants and conditions to be observed and performed by it in accordance with the terms of the
Lease; and
(b) Tenant gives, and Landlord receives, written notice not less than ninety (90)
days prior to the expiration of the Term of Tenant's intention to exercise its first option to extend
the Lease Term (and if Tenant fails to give its written notice within said time, then such Option
shall immediately lapse, including any additional option periods, and terminate without any further
notice or action by Landlord); and
(c) This Lease is not previously canceled or terminated as in this Lease
provided, by operation of law or otherwise; and
(d) Tenant has not been in default beyond any applicable cure period in any of
its obligations under this Lease during the Term or extended Term, and Tenant is not in default of
its obligations under this Lease at the time of Tenant's exercise of this Option;
11
Then Tenant shall have the right to extend the Lease Term upon the expiration of the initial Lease
Term for eighteen (18) months ("First Option Term") upon the same terms and conditions as set
out in the Lease.
3.4 Tenant's Second Option to Extend. If -
(a) Tenant faithfully and punctually complies with and performs the terms,
covenants and conditions to be observed and performed by it in accordance with the terms of the
Lease; and
(b) Tenant gives, and Landlord receives, written notice not less than ninety (90)
days prior to the expiration of the First Option Term of Tenant's intention to exercise its second
option to extend the Lease Term (and if Tenant fails to give its written notice within said time,
then such Option shall immediately lapse, including any additional option periods, and terminate
without any further notice or action by Landlord); and
(c) This Lease is not previously canceled or terminated as in this Lease
provided, by operation of law or otherwise; and
(d) Tenant has not been in default beyond any applicable cure period in any of
its obligations under this Lease during the Term or extended Term, and Tenant is not in default of
its obligations under this Lease at the time of Tenant's exercise of this Option; and
(e) Tenant's relocation is prevented by acts of God, inability to obtain labor or
materials or reasonable substitutes therefor, governmental restrictions, regulations or controls,
enemy or hostile governmental action, riot, civil commotion, fire or other casualty, pandemic, and
other causes beyond the reasonable control of the tenant;
Then Tenant shall have the right to extend the Lease Term upon the expiration of the First Option
Term for eighteen (18) months ("Second Option Term") upon the same terms and conditions as
set out in the Lease, except that for the final six (6) months of the second option term the rent shall
be set at $13,700.00 per month with Tenant continuing to pay all customary operating expenses
(i.e. NNN) and utilities.
All terms and conditions of this Lease shall apply during the entire Term (initial Term and
any Option Terms) as extended by Tenant's Option, exercised as provided herein, including but
not limited to Tenant's obligation to pay rent and all other charges and expenses provided for in
the Lease, and provided, that (1) Tenant shall have no right to extend the Lease beyond the Second
Option Term. Tenant may terminate this Lease at any time on ninety (90) days prior written notice
to Landlord.
ARTICLE IV
MINIMUM RENT
5
4.1 Minimum Rent.
(a) Commencing on the Lease Commencement Date, and continuing thereafter
during the Lease Term, Tenant shall pay to Landlord the Minimum Rent, as set out in Section
1.1(g). Minimum Rent shall be divided into equal monthly installments, and such monthly
installments shall be due and payable in advance on the first day of each month. If the Minimum
Rent is due on a day other than the first day of a month, then Minimum Rent from the due date
until the first day of the following month shall be prorated on a per diem basis at the rate of one -
thirtieth (1/30th) of the monthly installment of Minimum Rent payable during the lease term, and
Tenant shall pay such prorated installment of Minimum Rent in advance.
4.2 No Offset. All sums payable by Tenant under this Lease, whether or not stated to
be Minimum Rent or Additional Rent, shall be paid to Landlord in legal tender of the United States,
without set off, deduction or demand, at the Address for Notices to Landlord or at such other
address as Landlord shall designate in writing. If Landlord shall at any time accept rent after it
shall have become due and payable, such acceptance shall not excuse a delay upon subsequent
occasions or constitute a waiver of any of Landlord's rights hereunder. Further, Landlord's
acceptance of less than the full amount of rent (including without limitation, Minimum Rent,
Additional Rent, late fees or interest) or any partial payment, shall not constitute a waiver of
Landlord's rights available under this Lease at law or equity, including without limitation the right
to declare an Event of Default after three days and recover possession of the Premises. No
endorsement or statement on any check, or any letter accompanying any check or payment as rent
will be deemed an accord and satisfaction. Landlord will accept the check or payment without
prejudice to Landlord's right to recover the balance of such rent or to pursue any other remedy
available to Landlord.
ARTICLE V
UTILITIES
5.1 Utilities. Tenant, at its own expense, shall arrange with the appropriate utility
companies for the provision of water, electricity, gas, cable, alarm, internet, and telephone service
to the Premises from and after the Lease Commencement Date. Tenant shall pay to the appropriate
utility companies all charges for such utilities consumed in the Premises as and when such charges
become due and payable.
5.2 Payment of HVAC Utility Costs. In addition to the utility costs Tenant shall pay,
Tenant shall pay all utility costs attributable to any HVAC or other cooling system located in the
Premises.
ARTICLE VI
COMMON EXPENSES
6.1 Common Expenses. Tenant shall be responsible for all costs associated with the
Premises as follows:
In
(a) Operating costs, including (1) the costs of operating, maintaining, repairing,
replacing, lighting, cleaning and landscaping the Property and facilities located thereon (including,
but not limited to, the roof of any building and any signage); (2) gas, electricity, water, sanitary
sewer, storm sewer and other utility charges (including surcharges) of every type and nature for
services provided to the Property; (3) the costs of service and maintenance contracts; (4) costs and
expenses incurred in connection with maintaining federal, state or local government ambient air
and environmental standards and the cost of all materials, supplies and services purchased or hired
therefor.
(b) Insurance Costs for such insurance as described elsewhere in this Lease.
(c) [Intentionally Deleted]
6.2 Pam. Tenant shall make estimated monthly payments to Landlord on account
of the above expenses that are expected to be incurred during each calendar year for those expenses
not directly paid by the Tenant.
ARTICLE VII
USE OF PREMISES
7.1 Permitted Use. Tenant shall use and occupy the Premises solely for the Permitted
Use of the Premises and for no other use or purpose without the prior written consent of Landlord,
which consent may be withheld or granted in Landlord's sole and absolute discretion. Tenant shall
not use or occupy the Premises for any unlawful purpose or in any manner that will violate
Tenant's certificate of occupancy or that will constitute waste.
Tenant shall, at its sole cost and expense, promptly comply with all federal, state, county,
borough or municipal laws, ordinances, rules, regulations, directives, orders and/or requirements
(including zoning ordinances and land use requirements) now in force or which may hereafter be
in force with respect to (a) the Premises, (b) the Tenant's use and occupancy of the Premises, (c)
the Tenant's business conducted thereon, (d) with the requirements of any board of fire
underwriters or other similar bodies now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Premises, all of which shall be complied with in a timely manner
at Tenant's sole cost and expense. It is expressly understood that if any present or future law,
ordinance, regulation or order requires an occupancy or use permit or license for the Premises or
the operation of any business conducted therein, Tenant shall obtain and keep current such permit
or license at Tenant's own expense and shall promptly deliver a copy thereof to Landlord. Use of
the Premises is subject to all federal, state and local laws, regulations, covenants, conditions and
restrictions of record. The judgment of any court of competent jurisdiction or the admission of
Tenant in any action against Tenant, whether Landlord be a party thereto or not, that Tenant has
violated any law, statute, ordinance or governmental rule, regulation, order, directive or
requirement, shall be conclusive of that fact as between the Landlord and Tenant. The Tenant
shall be financially solely responsible and shall indemnify and hold Landlord harmless from and
against, all costs, expenses (including attorneys' fees), fines, damages, penalties and surcharges
7
incurred or arising by reason of Tenant's failure to promptly and completely perform the Tenant's
obligations under this Section.
7.2 Waste; Nuisance. Tenant shall not do or permit anything to be done in or about the
Premises or bring or keep anything therein which will in any way increase or affect the existing
rate of any fire or other insurance policy upon the Premises or the Property, or cause a cancellation
of any such insurance policy covering said Premises, nor shall the Tenant use or allow the Premises
to be used for any improper, immoral, unlawful, objectionable or offensive purpose, nor shall
Tenant cause, maintain or suffer or permit any nuisance in, on or about the Premises.
7.3 Tenant Investigation. Tenant represents and warrants that Tenant has investigated
all applicable building and zoning codes, regulations and ordinances to determine whether
Tenant's intended use of the Premises is permitted. Tenant accepts the Premises "as is," and
"where is," subject to all applicable statutes, ordinances, rules and regulations governing Tenant's
use of the Premises. Any and all expenses required to comply with all applicable statutes,
ordinances, rules, regulations and requirements in effect during the Lease Term or part thereof
regulating Tenant's use of the Premises will be borne exclusively by Tenant. Tenant agrees to
comply with all such statues, ordinances, rules and regulations throughout the Lease Term. Tenant
agrees that it has determined to its' satisfaction that the Premises can be used for the purposes for
which they are leased and waives any right to terminate this lease in the event the Premises cannot
be used for such purposes or for any reason may not be used for such purposes during the term of
the Lease.
7.4 No Landlord Representati oils. Tenant has inspected the plumbing, lighting, air
conditioning, heating, windows, interior walls, flooring and all other elements of the Premises
prior to execution of this Lease. Based upon that inspection, Tenant accepts the Premises "as is"
and "where is." Tenant acknowledges that neither Landlord nor Landlord's agent has made any
representation or warranty as to the present or future suitability of the Premises for the conduct of
Tenant's business.
7.5 Personal Property Taxes. Tenant shall pay before delinquency any business, rent
or other taxes that are now or hereafter levied, assessed or imposed upon Tenant's use or
occupancy of the Premises, the conduct of Tenant's business at the Premises, or Tenant's
equipment, fixtures, furnishings, inventory or personal property. If any such taxes are enacted,
changed or altered so that any of such taxes are levied against Landlord, or the mode of collection
of such taxes is changed so that Landlord is responsible for collection or payment of such taxes,
then Tenant shall pay as Additional Rent due hereunder the amount of any and all such taxes.
ARTICLE VIII
ASSIGNMENT AND SUBLETTING
8.1 No Assignment or Sublet. Tenant shall not assign, transfer, mortgage or otherwise
encumber this Lease or all or any of Tenant's rights hereunder or interest herein or sublet any or
all of the Premises, without obtaining the prior written consent of Landlord, which consent may
not be unreasonably withheld, conditioned, or delayed. Tenant shall not sublet, rent or permit any
8
concessionaire, licensee or anyone else to occupy or use part of the Premises, without obtaining
the prior written consent of Landlord, which consent may be withheld, conditioned or delayed, in
Landlord's sole and exclusive discretion, and provided Tenant is not in default under this Lease.
In no event whatsoever may Tenant assign the Lease or sublet the Premises or any portion thereof
to any other tenant or subtenant of the Property. No assignment or transfer of this Lease or the
right of occupancy hereunder may be effectuated by operation of law or otherwise without the
prior written consent of Landlord.
8.2 Deemed Assignment. Tenant is a corporation; any dissolution, merger,
consolidation or other reorganization of Tenant, or the sale or transfer of a controlling interest of
the capital stock of Tenant, shall be deemed a voluntary assignment of this Lease.
8.3 Lease Binding. All restrictions and obligations imposed pursuant to this Lease on
Tenant shall be deemed to extend to any subtenant, assignee, licensee, concessionaire or occupant
of Tenant, and Tenant shall cause such persons to comply with such restrictions and obligations.
ARTICLE IX
MAINTENANCE AND REPAIRS
9.1 Tenant's Maintenance. Tenant, at Tenant's sole cost and expense, shall promptly
make all repairs, perform all maintenance, and make all replacements in and to the Premises that
are necessary or desirable to keep the Premises in a safe and tenantable condition, and otherwise
in accordance with the requirements of this Lease. Tenant shall maintain all fixtures, furnishings
and equipment located in, or exclusively serving, the Premises in a clean, safe and sanitary
condition, shall take good care thereof and make all required repairs and replacements thereto.
Tenant shall suffer no waste or injury to any part of the Premises, and shall, at the expiration or
earlier termination of the Lease Term, surrender the Premises in an order and condition equal to
or better than their order and condition on the Lease Commencement Date, ordinary wear and tear
excepted. Without limitation of the generality of the foregoing, Tenant, at Tenant's sole cost and
expense, shall promptly make all repairs and replacements to (a) any pipes, lines, ducts, wires or
conduits contained within the Premises, (b) Tenant's signs, (c) any heating, air conditioning,
electrical, ventilating or plumbing equipment installed in or serving the Premises, (d) all glass,
window panes, windows, and doors, (including any trim, framing, and painting thereof), and (e)
any other mechanical systems serving the Premises. Tenant shall be responsible, at Tenant's sole
expense, for providing all janitorial and cleaning and pest and termite control services for the
Premises. All such services shall be provided in accordance with standards customarily
maintained for similar first-class properties, and Tenant shall maintain, at Tenant's sole cost and
expense, service contracts therefor. Tenant shall maintain the heating, ventilation and air
conditioning equipment and systems in or serving the Premises.
9.2 ADA Compliance. Tenant shall at all times keep the Premises in compliance with
the Americans With Disabilities Act and its supporting regulations, and all similar federal, state or
local laws, regulations and ordinances ("ADA"). If Landlord's consent would be required for
alterations to bring the Premises into compliance, Landlord agrees not to unreasonably withhold
its consent. Tenant shall defend indemnify and hold harmless Landlord from all loss, claims, suits,
E
actions, and liability relating to the ADA that is the result of the use of the Premises by Tenant, its
employees, agents, guests or invitees.
9.3 Landlord's Rights to Repair. If Tenant fails to keep and preserve the Premises as
set forth in this Lease, Landlord may, at its option, put or cause the same to be put in the condition
and state of repair agreed upon, and in such case, upon receipt of written statements from Landlord,
Tenant shall promptly pay the entire cost thereof as additional Minimum Rent. After reasonable
advance notice to Tenant of not less than twenty-four (24) hours, except in the case of emergency
in which no advance notice shall be required, Landlord shall have the right without liability, to
enter the Premises for the purpose of making such repairs upon the failure of Tenant to do so. This
shall not affect the right of Landlord to declare an Event of Default of the Tenant.
9.4 [Intentionally Deleted]
ARTICLE X
INSPECTION BY LANDLORD
10.1 Inspection and Entiy. Tenant shall permit Landlord, its agents and representatives,
to enter the Premises, upon a minimum of two (2) business days notice, without charge therefor
and without diminution of the rent payable by Tenant, to examine, inspect and protect the Premises
and the Property, to make such alterations and/or repairs as in the sole judgment of Landlord may
be deemed necessary, or at any time during the Lease Term. In connection with any such entry,
Landlord shall endeavor to minimize the disruption to Tenant's use of the Premises. No entry by
Landlord shall be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction of Tenant from all or any portion of the Premises. This right shall not be
construed as an agreement on the part of the Landlord to make any repairs.
ARTICLE XI
INSURANCE
11.1 Insurance.
(a) Throughout the Lease Term, Tenant shall obtain and maintain a policy of:
(1) Broad form commercial general liability insurance (written on an
occurrence basis and including an endorsement for personal injury), products liability insurance,
fire legal liability, comprehensive automobile liability insurance (covering automobiles owned,
leased or operated by Tenant). Such commercial general liability insurance policy shall protect its
insured against any liability which arises from any occurrence on or about the Premises or which
arises from any matter against which Tenant is required to indemnify Landlord. Such policies
shall be in minimum amounts approved by Landlord from time to time, and shall name Landlord,
its managing agent and the holder of each Mortgage, as additional named insureds thereunder. As
of the date hereof, such insurance shall be in the minimum amount of One Million and 00/100
Dollars ($1,000,000.00) combined single limit per occurrence, Two Million and 00/100 Dollars
10
($2,000,000.00) in aggregate.
(2) Excess liability insurance on a following form basis excess of the
underlying commercial general liability, business automobile liability and employer's liability
insurance, with limits of not less than $2,000,000.00 each occurrence. Such policy shall name
Landlord, its managing agent, as additional named insureds thereunder.
(3) All risk property insurance insuring one hundred percent (100%) of
the full replacement cost of all Alterations, inventory, fixtures, equipment, personal property,
HVAC equipment, signage, floor coverings and furnishings installed in and located on the
Premises. Such policy shall name Landlord as additional named insured and loss payee. So long
as this Lease shall remain in effect, any and all proceeds of such insurance shall be used only to
repair or replace the insured items.
(b) Each such policy shall: (i) be issued by a company which is licensed to do
business in the jurisdiction in which the Property is located and which shall otherwise be
acceptable to Landlord in its reasonable discretion; (ii) contain an endorsement that such policy
shall remain in full force and effect notwithstanding that the insured may have waived its right of
action against any party prior to the occurrence of a loss, and shall provide that the insurer
thereunder waives all right of recovery by way of subrogation against Landlord, its partners,
agents, employees, and representatives, in connection with any loss or damage covered by such
policy; (iii) shall be acceptable in form and content to Landlord; (iv) shall be primary and non-
contributory; and (v) contain an endorsement prohibiting cancellation, failure to renew, reduction
of amount of insurance or change in coverage without the insurer's first giving Landlord at least
thirty (30) days' prior written notice (by certified or registered mail, return receipt requested) of
such proposed action. Tenant shall deliver a certificate of such insurance (and, upon request,
copies of all required insurance policies, including endorsements and declarations) to Landlord on
or before the Lease Commencement Date and at least annually thereafter.
ARTICLE XII
LIABILITY OF LANDLORD
12.1 Limitation of Liability. Except for gross negligence or intentional misconduct,
Landlord, its employees and agents shall not be liable to Tenant, Tenant's employees, agents,
invitees, assignees, subtenants, contractors, licensees, concessionaires (collectively, "Invitees"),
or to any other person or entity for any damage (including indirect and consequential damage),
injury, loss, or claim (including claims for the interruption of or loss to the business being
conducted in the Premises) based on or arising out of any cause whatsoever (except as otherwise
provided in this Section), including but not limited to the following: repair to any portion of the
Premises or the Property; interruption in the use of the Premises or any equipment therein; any
accident or damage resulting from the use or operation (by Landlord, Tenant or any other person
or entity) of the heating, cooling, electrical, sewerage, plumbing, or other utility equipment or
apparatus; termination of this Lease by reason of the destruction of the Premises or the Property;
any fire, robbery, theft, vandalism, mysterious disappearance and/or any other casualty; the
operation or failure of any alarm or security system whether provided by Landlord or Tenant;
11
actions of any other tenants of the Property or of any other person or entity; and leakage in any
part of the Premises or the Property from water, rain, ice or snow that may leak into, or flow from,
any part of the Premises or the Property, or from drains, pipes or plumbing fixtures in the Premises
or the Property. Any failure or inability to furnish any service required hereunder shall not be
considered an eviction, actual or constructive, of Tenant from the Premises and shall not entitle
Tenant to terminate this Lease or to an abatement of any rent payable hereunder. If any condition
exists which may be the basis of a claim of constructive eviction, then Tenant shall give Landlord
written notice thereof and a reasonable opportunity to correct such condition prior to any claim by
Tenant that it has been constructively evicted. Any property placed by Tenant or any Invitee in or
about the Premises or the Property shall be at the sole risk of Tenant, and Tenant hereby waives
any and every right or cause of action against Landlord and its employees and agents for any and
all loss of, or damage to, any of Tenant's property (whether or not such loss or damage is caused
by the fault or negligence of Landlord or anyone for whom Landlord may be responsible).
Notwithstanding the foregoing provisions of this Section, Landlord shall not be released from
liability to Tenant for any physical injury to any natural person or damage to personal property
caused by the gross negligence or willful misconduct of Landlord or its employees to the extent
such injury or damage is not covered by insurance (a) carried by Tenant or such person, or (b)
required by this Lease to be carried by Tenant; provided, however, that Landlord shall never have
any liability with respect to claims for the interruption of or loss to the business being conducted
in the Premises.
12.2 Tenant's Indemnity. Tenant shall reimburse Landlord for, and shall indemnify,
defend upon request and hold Landlord, its employees and agents harmless from and against all
costs, damages, claims, liabilities and expenses (including attorneys' fees), losses and court costs
suffered by or claimed against Landlord, directly or indirectly, based on or arising out of, in whole
or in part, (i) use and occupancy of the Premises or the business conducted therein, including but
not limited to the use or operation of any security, alarm or surveillance system in the Premises,
(ii) any act, omission, failure or negligence ("act") by Tenant, its agents, employees, contractors,
licensees or invitees, including without limitation, any act which occurs in or relates to the
Premises, common areas, or any other parts or areas in or adjacent to the Property, (iii) from any
third party arising out of or resulting from Landlord's withholding of its consent under this Lease,
or (iv) any breach or default in the performance or observance of Tenant's covenants or obligations
under this Lease. In case any action or proceeding is brought against Landlord or any Landlord
Parties by reason of any such indemnified claims, Tenant, upon notice from Landlord, shall defend
the same at Tenant's sole cost and expense by counsel approved in writing by Landlord, which
approval shall not be unreasonably withheld. Any indemnification of Landlord by Tenant in this
Section or otherwise in this Lease shall survive the expiration or earlier termination of this Lease.
THE LANDLORD AND TENANT SPECIFICALLY AGREE THAT THE PROVISIONS OF
THIS SECTION 15 ALSO APPLY TO ANY CLAIM OF INJURY OR DAMAGE TO THE
PERSONS OR PROPERTY OF THE TENANT'S EMPLOYEES, AND TENANT
ACKNOWLEDGES AND AGREES THAT AS TO SUCH CLAIMS, TENANT, WITH
RESPECT TO LANDLORD, DOES HEREBY WAIVE ANY RIGHT OF IMMUNITY WHICH
TENANT MAY HAVE UNDER INDUSTRIAL INSURANCE (TITLE 51 RCW AS AMENDED
AND UNDER ANY SUBSTITUTE OR REPLACEMENT STATUTE). THIS WAIVER AND
12
AGREEMENT WAS SPECIFICALLY NEGOTIATED BY LANDLORD AND TENANT AND
IS SOLELY FOR THE BENEFIT OF LANDLORD AND TENANT AND THEIR
SUCCESSORS AND ASSIGNS AND IS NOT INTENDED AS A WAIVER OF TENANT'S
RIGHTS OF IMMUNITY UNDER SAID INDUSTRIAL INSURANCE FOR ANY OTHER
PURPOSE.
LANDLORD:
City of Port Orchard, a Washington municipal corporation
By:
Mayor Rob Putaansuu
TENANT:
Kitsap Bank, a Washington banking corporation
IN
Print name:
Its:
Date:'
Date:
12.3 Tenant's Remedy. Tenant shall not have the right to set off or deduct any amount
allegedly owed to Tenant pursuant to any claim against Landlord from any rent or other sums
payable to Landlord. Tenant's sole remedy for recovering upon such claim shall be to institute an
independent action against Landlord. If Tenant or any Invitee is awarded a money judgment
against Landlord, then recourse for satisfaction of such judgment shall be limited to execution
against the estate and interest of Landlord in the Property. No other asset of Landlord, any partner,
member, manager, director or officer of Landlord (collectively, "officer") or any other person or
entity shall be available to satisfy or subject to such judgment, nor shall any officer or any other
person or entity have personal liability for satisfaction of any claim or judgment against Landlord
or any officer.
12.4 Property at Tenant's Sole Risk. All of Tenant's property, improvements and
Alternations, on said leased Premises shall be at the sole risk of Tenant. Landlord and/or
Landlord's agent shall not be liable for any injury or damage, either to person or property (whether
or not said property was obtained by Tenant), or others, caused by any defects in said Premises or
Property, now or hereafter occurring therein, or any part of appurtenance thereof, including but
not limited to any injury or damage arising out of or relating to repair, fire, the bursting or leaking
of water, gas, sewer or steam pipes, or from any act or neglect of co -tenants, Landlord, Landlord's
agent or employees, or any third parties, or due to the happening of any accident from whatsoever
cause in and about said Premises.
13
12.5 Landlord's Default. Landlord shall not be in default unless Landlord fails to
perform obligations required of Landlord within a reasonable time, but in any event within (30)
days after prior written notice by certified mail from Tenant to Landlord and to the holder of any
first mortgage or deed of trust covering the Premises whose name and address shall have
theretofore been furnished to Tenant in writing. Said notice shall specify wherein Landlord has
failed to perform such obligation; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for performance, then Landlord shall not be in
default if Landlord commences performance within such thirty (30) days period and thereafter
diligently prosecutes the same to completion. Tenant further agrees not to invoke any of its
remedies under this Lease, if any, until said thirty (30) days have elapsed. In no event shall Tenant
have the right to terminate this Lease as a result of Landlord's default and Tenant's remedies shall
be limited to damages; and in no case may the Tenant withhold rent or claim a set-off from rent.
12.6 Landlord's Self Help. In addition to Landlord's rights of self-help set forth
elsewhere in this Lease, if Tenant at any time fails to perform any of its obligations under this
Lease in a manner reasonably satisfactory to Landlord, Landlord shall have the right, but not the
obligation, upon giving Tenant at least ten (10) days' prior written notice of its election to do so
(in the event of an emergency, no prior notice shall be required), to perform such obligations on
behalf of and for the account of Tenant and to take all such action necessary to perform such
obligations without liability to Tenant for any loss or damage which may result to Tenant's stock
or business by reason of such repairs. In such event, Landlord's costs and expenses incurred therein
shall be paid for by Tenant as Additional Rent, forthwith upon demand therefor, with interest
thereon from the date Landlord performs such work at the Default Rate. The performance by
Landlord of any such obligation shall not constitute a release or waiver of Tenant therefrom.
ARTICLE XIII
DAMAGE OR DESTRUCTION
13.1 Damage or Destruction. If the Premises or the Property are totally or partially
damaged or destroyed thereby rendering the Premises totally or partially inaccessible or unusable,
Tenant may elect to: (1) restore and repair the Premises and the Property to substantially the same
condition they were in prior to such damage and complete the term of the Lease; or (2) restore the
Property to substantially the same condition they were in prior to such damage, terminate this
Lease by giving written notice of termination, and immediately turning over the Premises and
Property to the Landlord, provided the parties may negotiate a modification to this term if such
damage or destruction was not caused by the act or omission of the parties or any Invitee. In no
event shall the Tenant have any obligation to make repairs or restoration beyond the extent of
insurance proceeds received by Tenant for such repairs or restoration. Further, in no event shall
Landlord be liable to tenant by reason of any injury to or interference with Tenant's business or
property arising from or relating to damage or destruction of the Property or Premises, or by reason
of any repairs to any part of the Property or Premises necessitated by the damage or destruction.
If this Lease is terminated pursuant to the preceding section, then rent payable pursuant to Article
VI shall be apportioned and paid to the date of termination. If this Lease is not terminated as a
14
result of such damage or destruction, then until such repair and restoration of the Premises are
substantially complete, Tenant shall be required to pay rent pursuant to Article VI only for those
portions of the Premises that Tenant is able to use while such repair and restoration are being made;
provided, however, that if such damage or destruction was caused by the act or omission of Tenant
or any Invitee, then Tenant shall not be entitled to any such reduction of Minimum Rent and
Additional Rent.
13.2 [Intentionally Deleted]
ARTICLE XIV
CONDEMNATION
14.1 Condemnation. If the whole or a substantial part (as hereinafter defined) of the
Premises, or the use or occupancy of the Premises, shall be taken or condemned by any
governmental or quasi -governmental authority for any public or quasi -public use or purpose
(including a sale thereof under threat of such a taking), then this Lease shall terminate on the date
title thereto vests in such governmental or quasigovernmental authority, and all rent payable
hereunder shall be apportioned as of such date. If less than a substantial part of the Premises, or if
the use or occupancy of less than a substantial part of the Premises, is taken or condemned by any
governmental or quasi -governmental authority for any public or quasi -public use or purpose
(including a sale thereof under threat of such a taking), then this Lease shall continue in full force
and effect as to the portion of the Premises not so taken or condemned, except that as of the date
title vests in the governmental or quasi -governmental authority Tenant shall not be required to pay
rent with respect to the portion of the Premises taken or condemned. For purposes of this Section,
a substantial part of the Premises shall be considered to have been taken if more than one-third
(1/3) of the Premises is rendered unusable as a result of such condemnation. The provisions in
this Section shall not apply to any condemnation by Landlord or any quasi -public agency in any
way affiliated with Landlord.
14.2 Award. All awards, damages and other compensation paid by the condemning
authority on account of such taking or condemnation (or sale under threat of such a taking) shall
belong to Landlord, and Tenant hereby assigns to Landlord all rights to such awards, damages and
compensation. Tenant agrees not to make any claim against Landlord or the condemning authority
for any portion of such award or compensation attributable to damages to the Premises, the value
of the unexpired Lease Term, the loss of profits or goodwill, leasehold improvements or severance
damages. Nothing contained herein, however, shall prevent Tenant from pursuing a separate claim
against the condemning authority for relocation expenses and the value of furnishings, equipment
and trade fixtures installed in the Premises at Tenant's expense and which Tenant is entitled
pursuant to this Lease to remove at the expiration or earlier termination of the Lease Term,
provided that such claim shall in no way diminish the award or compensation payable to or
recoverable by Landlord in connection with such taking or condemnation.
14.3 Termination of Lease. Notwithstanding anything to the contrary contained herein,
if twenty-five percent (25%) or more of the Property or the Premises is located is taken,
condemned, or sold under threat of such a taking, then, whether or not any portion of the Premises
15
is condemned, Landlord shall have the right, in Landlord's sole discretion, to terminate this Lease
as of the date title vests in the governmental or quasi -governmental authority.
ARTICLE XV
DEFAULT
15.1 Event of Default. An Event of Default is: (a)Tenant's failure to make when due
any payment of Minimum Rent or Additional Rent or other sum, which failure continues for a
period of five (5) business days after written notice from Landlord of such failure to pay on the
date due; (b) Tenant's failure to perform or observe any other covenant or condition, or agreement,
which failure continues for a period of thirty (30) days after written notice thereof to Tenant,
provided, however, that if the default cannot, by its nature, be cured within such thirty (30) day
period, but Tenant commences and diligently pursues a cure of such default promptly within the
initial thirty (30) day cure period, then Landlord shall not exercise any Landlord remedies unless
such default remains uncured for more than ninety (90) days after the initial delivery of Landlord's
original default notice; (c) Tenant or any agent of Tenant falsifies any report or misrepresents other
information required to be furnished to Landlord pursuant to this Lease; or (h) The occurrence of
any other event described as a default elsewhere in the Lease or any amendment thereto, regardless
of whether such event is defined as an "Event of Default."
15.2 Remedies in Default. If there shall be an Event of Default, including without
limitation an Event of Default prior to the Lease Commencement Date, then the provisions of this
Section shall apply, and Landlord shall have the right one or more of the following described
remedies, in addition to all rights and remedies now or hereafter available at law or in equity:
(a) Right to Terminate Lease. Landlord may terminate this Lease at any time
after such default. No act by Landlord other than giving notice to Tenant shall terminate
this Lease.
In addition, without terminating the Lease, the Landlord may terminate the right of
the Tenant (or any assignee or successor Tenant) to exercise any Option to Extend or
Option to Renew hereunder, at anytime after such default.
15.3 No Waiver. If Landlord shall institute proceedings against Tenant and a
compromise or settlement thereof shall be made, then the same shall not constitute a waiver of the
same or of any other covenant, condition or agreement set forth herein, nor of any of Landlord's
rights hereunder.
15.4 Payment to Third Parties. If Tenant fails to make any payment to any third party
or to do any act herein required to be made or done by Tenant, then Landlord may, but shall not
be required to, make such payment or do such act. The taking of such action by Landlord shall
not be considered a cure of such default by Tenant or prevent Landlord from pursuing any remedy
it is otherwise entitled to in connection with such default. If Landlord elects to make such payment
or do such act, then all expenses incurred by Landlord, plus interest thereon at a rate (the "Default
16
Rate") equal to the two (2) percent per month, from the date incurred by Landlord to the date of
payment thereof by Tenant, shall constitute Additional Rent due hereunder; provided, however,
that nothing contained herein shall be construed as permitting Landlord to charge or receive
interest in excess of the maximum rate then allowed by law.
15.5 Late Fee. If Tenant fails to make any payment of rent or any other sum within five
business days of the date such payment is due and payable (without regard to any grace period
specified in Section 19.1), then Tenant shall pay to Landlord a late charge of five percent (5%) of
the amount of such payment or $100.00 whichever is greater. In addition, such payment and such
late fee shall bear interest at the Default Rate after the date such payment or late fee, respectively,
became due to the date of payment thereof by Tenant; provided, however, that nothing contained
herein shall be construed as permitting Landlord to charge or receive interest in excess of the
maximum rate then allowed by law. Such late charge and interest shall constitute Additional Rent
due hereunder.
15.6 [Intentiionally Deleted]
15.7 No Right of Redern ption. Tenant hereby expressly waives, for itself and all persons
claiming by, through or under it, any right of redemption or for the restoration of the operation of
this Lease under any present or future law, including without limitation any such right which
Tenant would otherwise have in case Tenant shall be dispossessed for any cause, or in case
Landlord shall obtain possession of the Premises as herein provided.
ARTICLE XVI
BANKRUPTCY
16.1 Event of Bankruptcy. An Event of Bankruptcy is: (a) Tenant becoming insolvent,
as that term is defined in Title 11 of the United States Code (the "Bankruptcy Code"), or under the
insolvency laws of any state (the "Insolvency Laws"); (b) appointment of a receiver or custodian
for any property of Tenant or the institution of a foreclosure or attachment action upon any property
of Tenant; (c) filing of a voluntary petition by Tenant under the provisions of the Bankruptcy Code
or Insolvency Laws; (d) filing of an involuntary petition against Tenant as the subject debtor under
the Bankruptcy Code or Insolvency Laws, which either (1) is not dismissed within thirty (30) days
after filing, or (2) results in the issuance of an order for relief against the debtor; or (e) Tenant's
making or consenting to an assignment for the benefit of creditors or a composition of creditors.
16.2 Landlord's Remedies. Upon occurrence of an Event of Bankruptcy, Landlord shall
have all rights and remedies available pursuant to this Lease; provided, however, that while a case
(the "Case") in which Tenant is the subject debtor under the Bankruptcy Code is pending,
Landlord's right to terminate this Lease shall be subject, to the extent required by the Bankruptcy
Code, to any rights of Tenant or its trustee in bankruptcy (collectively, "Trustee") to assume or
assign this Lease pursuant to the Bankruptcy Code. Trustee shall not have the right to assume or
assign this Lease unless Trustee promptly (a) cures all defaults under this Lease, (b) compensates
Landlord for damages incurred as a result of such defaults, (c) provides adequate assurance of
future performance on the part of Tenant as debtor in possession or Tenant's assignee, and (d)
17
complies with all other requirements of the Bankruptcy Code. If Trustee fails to assume or assign
this Lease in accordance with the requirements of the Bankruptcy Code within sixty (60) days after
the initiation of the Case, then Trustee shall be deemed to have rejected this Lease. Adequate
assurance of future performance shall require that the following minimum criteria be met: (1)
Trustee must pay its estimated pro-rata share of the cost of all services performed or provided by
Landlord (including without limitation attorney's fees, whether directly or through agents or
contractors and whether or not previously included as part of Minimum Rent) in advance of the
performance or provision of such services; (2) Trustee must agree that Tenant's business shall be
conducted in a first-class manner, and that no liquidating sale, auction or other non -first-class
business operation shall be conducted in the Premises; (3) Trustee must agree that the use of the
Premises as stated in this Lease shall remain unchanged and that no prohibited use shall be
permitted; (4) Trustee must agree that the assumption or assignment of this Lease shall not violate
or affect the rights of other tenants of the Property; (5) Trustee must pay at the time the next
monthly installment of Minimum Rent is due, in addition to such installment, an amount equal to
the monthly installments of rent due for the next six (6) months thereafter, such amount to be held
as a security deposit; (6) Trustee must agree to pay, at any time Landlord draws on such security
deposit, the amount necessary to restore such security deposit to its original amount; and (7) all
assurances of future performance specified in the Bankruptcy Code must be provided.
16.3 R.eiection of Lease. Notwithstanding anything contained in this Lease to the
contrary, if this Lease is rejected in any bankruptcy action or proceeding filed by or against Tenant,
and the effective date of the rejection is on or after the date upon which that month's Rent is due
and owing, then the Rent owing under this Lease for the month during which the effective date of
such rejection occurs shall be due and payable in full and shall not be prorated.
ARTICLE XVII
HOLDING OVER
17.1 Holding Over. If Tenant or any assignee, subtenant or licensee of Tenant shall not
immediately surrender the Premises (or any portion thereof) on the date of the expiration or earlier
termination of the Lease Term, then (i) Tenant shall automatically become a tenant at sufferance
upon all the terms and conditions contained herein, except as to Lease Term and Minimum Rent,
(ii) Tenant shall pay Landlord for each day Tenant retains possession of the Premises or any part
thereof after the expiration or earlier termination of the Lease Term, an amount which is the greater
of (a) the daily rate of fair market rent for the Premises, or (b) double the daily rate of Second
Option Term sums payable by Tenant under this Lease, including any increases in Minimum Rent
provided for herein calculated as if the holdover period during which Tenant's possession
continues were originally included within the Lease Term, and (iv) Tenant shall pay all direct and
consequential damages sustained by Landlord as a result of such holdover. Landlord's acceptance
of such rent from Tenant shall not in any manner impair or adversely affect Landlord's other rights
and remedies hereunder, including, but not limited to, (i) Landlord's right to evict Tenant from the
Premises, and (ii) Landlord's right to recover damages pursuant to this Lease and such other
damages as are available to Landlord at law or in equity. Such tenancy at sufferance may be
terminated by either party by not less than thirty (30) days prior written notice to the other.
18
17.2 Voluntaa Surrender. The voluntary or other surrender of this Lease by Tenant, or
a mutual cancellation thereof, shall not work a merger, but shall, at the option of Landlord,
terminate the Lease.
ARTICLE XVIII
HAZARDOUS SUBSTANCES
18.1 Presence and Use of Hazardous Substances. Tenant shall not, without Landlord's
prior written consent, keep, on or around the Premises, Common Areas or Property, for use,
handling, transport, disposal, treatment, generation, storage or sale, any substances designated as,
or containing components designated as hazardous, dangerous, toxic, harmful, medical or
infectious (collectively referred to as "Hazardous Substance"), and/or is subject to regulation by
any federal, state or local law, regulation, statute, ordinance or management plan. Hazardous
Substance shall also include (a) "hazardous wastes", as defined by the Resource Conservation and
Recovery Act of 1976, as amended from time to time, (b) "hazardous substances", as defined by
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, (c) "toxic substances", as defined by the Washington State Model
Toxic Substances Control Act, as amended from time to time, (d) "hazardous materials", as defined
by the Hazardous Materials Transportation Act, as amended from time to time, (e) oil or other
petroleum products, and (f) any substance whose presence could be detrimental to the Property or
hazardous to health or the environment. With respect to any such Hazardous Substance, Tenant
shall:
(a) Comply promptly, timely, and completely with all governmental requirements for
reporting, keeping and submitting manifests, and obtaining and keeping current identification
numbers;
(b) Submit to Landlord true and correct copies of all reports, manifests and
identification numbers at the same time as they are required to be and/or are submitted to the
appropriate governmental authorities;
(c) Within five (5) days of Landlord's request, submit written reports to Landlord
regarding Tenant's use, handling, storage, treatment, transportation, generation, disposal or sale of
Hazardous Substances and provide evidence satisfactory to Landlord of Tenant's compliance with
the applicable government regulations;
(d) Allow Landlord or Landlord's agent, representative or consultant to come on the
Premises at all times to check Tenant's compliance with all applicable governmental regulations
regarding Hazardous Substances and to assess the environmental condition of the Premises,
including, but not limited to, the imposition of an environmental audit;
(e) Comply with minimum levels, standards or other performance standards or
requirements which may be set forth or established for certain Hazardous Substances (if minimum
standards or levels are applicable to Hazardous Substances present on the Premises, such levels or
19
standards shall be established by an on -site inspection by the appropriate governmental authorities
and shall be set forth in an addendum to this Lease); and
(f) Comply with all applicable governmental statutes, ordinances, rules, regulations,
management plans and requirements regarding the proper and lawful use, handling, sale,
transportation, generation, treatment, and disposal of Hazardous Substances.
Any and all costs incurred by Landlord and associated with Landlord's inspection of
Tenant's Premises and Landlord's monitoring of Tenant's compliance with this Section, including
Landlord's attorneys' and consultants' fees and costs, shall be Additional Rent and shall be due
and payable to Landlord immediately upon demand by Landlord if such inspection and monitoring
shows that Tenant was not in compliance with this Section 25. Additionally, Tenant shall advise
Landlord in writing immediately of any environmental concern related to Tenant's use and
occupancy of the Premises brought to Tenant's attention by any private party or governmental
agency or official. Landlord shall have the right to remedy any environmental problem and to
conduct any environmental tests reasonably necessary to discover a hazardous waste or other
environmental problem and Tenant shall be liable for all costs and expenses related to such tests
or remedial action if a hazardous waste or environmental problem caused by Tenant is found to
exist.
18.2 Cleanup Costs Default and Indemnification.
(a) Tenant shall be fully and completely liable to Landlord for any and all cleanup
costs, and any and all other charges, fees, penalties (civil and criminal) imposed by any
governmental authority with respect to Tenant's use, handling, disposal, transportation, generation
and/or sale of Hazardous Substances, in or about the Premises, Common Areas, or Property.
(b) Tenant shall indemnify, defend and save Landlord harmless from any and all of the
costs, fees, penalties and charges assessed against, incurred by or imposed upon Landlord (as well
as Landlord's attorneys' and consultants' fees and costs) as a result of Tenant's use, handling,
disposal, transportation, generation and/or sale of Hazardous Substances.
(c) Upon Tenant's default under this Section, in addition to the rights and remedies set
forth elsewhere in this Lease, Landlord shall be entitled to the following rights and remedies:
(i) At Landlord's option, to terminate this Lease immediately; and
(ii) To recover any and all damages associated with the default, including, but
not limited to cleanup costs and charges, civil and criminal penalties and fees, loss of
business and sales by Landlord and other tenants of the Property, any and all damages and
claims asserted by third parties and Landlord's attorneys' and consultants' fees and costs.
18.3 Survival. The provisions of this Article shall survive the expiration or earlier
termination of this Lease.
20
ARTICLE XIX
GENERAL PROVISIONS
19.1 Merger. Tenant acknowledges that neither Landlord nor any broker, agent or
employee of Landlord has made any representations or promises with respect to the Premises or
the Property except as herein expressly set forth, and no rights, privileges, easements or licenses
are being acquired by Tenant except as herein expressly set forth.
19.2 Relationship. Nothing contained in this Lease shall be construed as creating any
relationship between Landlord and Tenant other than that of landlord and tenant.
19.3 Waivers.
(a) TENANT WAIVES TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT IN CONNECTION WITH ANY
MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT HEREUNDER, TENANT'S USE OR
OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE. THIS
WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE, AND
TENANT ACKNOWLEDGES (i) THAT NEITHER LANDLORD, NOR ANY PERSON
ACTING ON BEHALF OF LANDLORD, HAS MADE ANY REPRESENTATIONS OF FACT
TO INDUCE THIS WAIVER OR IN ANY WAY MODIFY ITS EFFECT, AND (ii) THAT
EACH HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS
WAIVER PROVISION.
19.4 Notice. All notices or other communications required hereunder shall be in writing
and shall be deemed duly given when (i) delivered in person (with receipt therefor), (ii) when sent
by first class mail, (iii) sent by certified or registered mail return receipt requested, postage prepaid,
regardless of whether or not there is an acceptance or acknowledgement of acceptance, (iv) sent
by overnight courier, or (v) sent by telecopier (facsimile), to the addresses set forth in Sections
1.1(n) and (o), provided that after the Lease Commencement Date, all notices to Tenant may, at
Landlord's option, be sent to the Premises. All notices from Landlord may be given by Landlord
or any authorized agent of Landlord. Either party may change its address for the giving of notices
by notice given in accordance with this Section. If Landlord or the holder of any Mortgage notifies
Tenant that a copy of each notice to Landlord shall be sent to such holder at a specified address,
then no notice to Landlord shall be considered duly given unless such copy is simultaneously given
in accordance with this Section to such holder.
19.5 5everability. Each provision of this Lease shall be valid and enforced to the fullest
extent permitted by law. If any provision of this Lease or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, then such provision shall be deemed
to be replaced by the valid and enforceable provision most substantively similar to such invalid or
unenforceable provision, and the remainder of this Lease, or the application of such provision to
persons or circumstances other than those as to which it is invalid or unenforceable, shall not be
affected thereby. This Lease shall not be construed against any party solely by virtue of the fact
21
that such party or its counsel was primarily responsible for its preparation.
19.6 Binding Effect. The provisions of this Lease shall be binding upon, and shall inure
to the benefit of, the parties hereto and each of their respective representatives, successors and
assigns, subject to the provisions hereof restricting assignment or subletting by Tenant.
19.7 Entire Agreement. This Lease contains and embodies the entire agreement of the
parties hereto and supersedes all prior agreements, negotiations, letters of intent, proposals,
representations, warranties, understandings and discussions between the parties hereto. Any
representation, inducement, warranty, understanding or agreement that is not contained in this
Lease shall not be of any force or effect. This Lease may not be modified or changed in whole or
in part in any manner other than by an instrument in writing duly signed by both parties hereto.
Tenant hereby authorizes Landlord to obtain, from time to time during the Lease Term, credit
reports on Tenant.
19.8 Governin),, Law, Construction; Waiver ofJua Trial. This Lease shall be governed
by, and construed in accordance with, the laws of the jurisdiction in which the Property is located,
without regard to its conflicts of laws provisions. The printed provisions of this Lease were drawn
together by Tenant and Landlord, so that this Lease shall not be construed for or against Landlord
or Tenant, but this Lease shall be interpreted in accordance with the general tenor of the language
in an effort to reach the intended result. The Tenant hereby waives trial by jury in any action,
proceeding, or permissive counterclaim involving any matters whatsoever arising out of or in any
way connected with the Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy
of the Premises, or claim or injury or damage.
19.9 Headings. Headings are used herein for convenience and shall not be considered
when construing this Lease.
19.10 Time is of the Essence. Time is of the essence with respect to each of Tenant's
obligations under this Lease.
19.11 Counterparts. This Lease may be executed in multiple counterparts, each of which
shall be deemed an original and all of which together shall constitute one and the same document.
19.12 Recordation. This Lease shall not be recorded except that upon the request of
Landlord, Tenant shall execute, in recordable form, a short -form memorandum of this Lease. Such
memorandum may be recorded at Landlord's expense in the land records of the jurisdiction in
which the Property is located.
19.13 Survival. Any liability of Tenant to Landlord, and any indemnification obligation
of Tenant, existing hereunder as of the expiration or earlier termination of the Lease Term, any
warranties of Tenant or environmental or legal compliance required hereunder by Tenant, shall
survive such expiration or earlier termination of this Lease.
19.14 Force Majeure. If Landlord or Tenant is in any way delayed, interrupted or
22
prevented from performing any of its obligations under this Lease, and such delay, interruption or
prevention is due to fire, act of God, governmental act or failure to act, strike, labor dispute, acts
of war, terrorism, and bioterrorism, inability to procure materials, or any cause beyond Landlord
or Tenant's reasonable control (whether similar or dissimilar), then the time for performance of
the affected obligation(s) by Landlord or Tenant shall be excused for the period of the delay and
extended for a period equivalent to the period of such delay, interruption or prevention.
19.15 Keys. At the expiration or earlier termination of the Lease Term, Tenant shall
deliver to Landlord all keys to the Property or the Premises, whether such keys were furnished by
Landlord or otherwise procured by Tenant, and shall inform Landlord of the combination of each
lock, safe and vault, and security system, if any, in the Premises. The acceptance of keys to the
Premises by the Landlord, its agents, employees, contractors or any other person on Landlord's
behalf shall not be deemed or constitute a termination of this Lease unless such termination is
evidenced in writing signed by the Landlord.
19.16 Attorney's Fees. Should it be necessary for any party to this Lease to initiate legal
proceedings to enforce this Lease, including without limitation, to recover any rent due hereunder,
or for breach of any provision of this Lease or to recover possession of the leased Premises, each
party shall bear its own attorney's fees and disbursements (including costs and the fees and
expenses of expert and fact witnesses) r in preparing for suit, during suit, on appeal, on petition for
review, and in enforcing any judgment or award.
19.17 Tenant Warranties. Tenant and the persons and/or entities executing this Lease on
behalf of Tenant represent and warrant that: (a) Tenant is a duly organized, authorized and validly
existing partnership, corporation or limited liability company, as the case may be, and is qualified
to do business in the state in which the Premises is located; (b) such persons and/or entities
executing this Lease are duly authorized to execute and deliver this Lease on Tenant's behalf in
accordance with the duly adopted resolution of Tenant's board of directors and the Tenant's by-
laws (if Tenant is a corporation), and (c) this Lease is binding upon Tenant in accordance with its
terms.
19.18 Covenants, Conditions and Restrictions. Tenant's rights under this Lease are
subject to any covenants, conditions and/or restrictions now or hereafter recorded against the
Property and/or the real property on which the Premises is located.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the date
first above written.
LANDLORD:
City of Port Orchard, a Washington municipal corporation
IM
Mayor Rob Putaansuu
23
Date: � -
TENANT:
Kitsap Bank, a Washington banking corporation
By: Date
Print name:
Its:
LANDLORD
STATE OF WASHINGTON )
) ss. LLC ACKNOWLEDGEMENT
COUNTY OF KITSAP
On this day personally appeared before me Rob Putaansuu, to me known to be the
individual described who executed the within and foregoing instrument as duly appointed Mayor
of the City of Port Orchard f and acknowledges that he signed the same as his free and voluntary
act and deed and on oath stating that his powers authorizing the execution of this instrument have
not been revoked.
Given under my hand and official seal this
STATE OF WASHINGTON
COUNTY OF KITSAP
V day of 2021.
�l
1`a ry Public in and for th State of Washington
Printed Name: Prvel
Residing at:
My commission expires:
TENANT
ss. ACKNOWLEDGEMENT
On this day personally appeared before me , to me known to be the
individual described who executed the within and foregoing instrument as
for and acknowledges that he/she
signed the same as his/her free and voluntary act and deed and on oath stating that his/her powers
authorizing the execution of this instrument have not been revoked.
Given under my hand and official seal this
I�'
day of , 2021.
Notary Public in and for the State of Washington
Printed Name:
Residing at: _
My commission expires:
25
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Kitsap County Tax Parcel No. 4650-011-001-0001:
PTN BLK 11 & BLK 11 SIDNEY TDLDS (NOW PORT ORCHARD) CNVYD BY AUD NO
1104385 DAF, LOTS 1 THRU 4 BLK 11 EXC ANY PTN THOF LY WHIN SIDNEY TDLDS
& ALSO LOTS 1 THRU 4 BLK 11 SIDNEY TDLDS & ALSO TH PTN OF PORT STR VAC
UNDER PTO CITY ORD NO 941 AS SHOWN ON SIDNEY TDLDS DAF, BAT NWLY COR
LOT 1 BLK 11 SD PLAT TH SELY ALG WLY LN SD LOT & ALG ELY R/W MGN SD STR
70FT TO SWLY COR SD LOT TH WLY ALG EXT OF SLY LN SD LOT 11.99FT TAP ON
LN LY PLW & 1 OFT WLY (AS MEAS AT R/A TO) ELY MGN OF SD STR TH NWLY ALG
SD PLL LN 61.35FT TAP ON SWLY EXT OF NWLY LN BLK 11 TH NELY LOFT ALG SD
EXT TO POB
Kitsap County Tax Parcel No. 262401-1-001-2004 (Subject to DNR Lease):
HARBOR AREA FRTG BLK 11 SIDNEY (NOW PORT ORCHARD) TDLDS CNVYD BY
AUD NO 1104385 BEING IN FRT OF BLK 11 ORIG PLAT OF SIDNEY TGW VAC PTN OF
PORT STR ADJ THRTO ALL INCL IN FDT, BAT MOST WLY COR OF BLK 11 SIDNEY
TDLDS SD POB BEING A PT ON INNER HARBOR LN TH N46*40'16E 215.12 FT ALG SD
LN & NWLY BDRY SD BLK TO AN ANG PT THRIN TH S80* 18'33E 3.05FT ALG SD LN
& NLY BDRY TH LEAV SD LN & NLY BDRY N31*50'43W 206.57FT TH S46*40'16W
227.65FT TH S31*50'43E 204.09FT TAP ON SD INNER HARBOR LN & TH N46*40'16E
10.20FT TO POB (HARBOR AREA LEASE NO 2336 AS SHOWN ON EXHIBIT ON FILE
WITH APPLICATION AT OLYMPIA)
26