026-23 - Resolution - Agreement with Peninsula FeedDocuSign Envelope ID: CB87447F-0505-4DA6-BAA2-7C9B761CBE90
RESOLUTION NO. 026-23
A RESOLUTION OF THE CITY OF PORT ORCHARD, WASHINGTON, APPROVING A
LEASE AGREEMENT WITH PENINSULA FEED COMPANY FOR A STRIP OF LAND,
APPROXIMATELY 29 FEET DEEP AND 129 FEET WIDE FRONTING ON HARRISON
AVENUE AT THE WEST BOUNDARY AND THE PENINSULA FEED PROPERTY TO THE
EAST BOUNDARY.
WHEREAS, the City entered into a Lease Agreement with Peninsula Feed Company on May 1,
2007, which expired on April 30, 2012, and was extended by the parties; and
WHEREAS, the City has evaluated the area for potential public use and for potential other
lessors; and
WHEREAS, the Finance Committee has been working with staff to determine the "full fair
market rental value" of the leased property, with a new valuation provided to staff on February 13,
2023; and
WHEREAS, historically, the lease has been for 25 feet deep by 200 feet wide, portion of City
right-of-way on Harrison Avenue, with its purpose to provide Peninsula Feed Company access,
additional parking, merchandise storage, and direct access into the building; and
WHEREAS, because parking is vital to downtown, the City Council finds that it is necessary
to reduce the leased portion from 25 feet by 200 feet to 29 feet by 129 feet, as the right-of-way abuts
the parking lot and building located at 901 Bay Street and on Harrison Avenue, the first approximate
70 feet will be open to the public for time -restricted parking; and
WHEREAS, the lease originally commenced September 1, 2012, with the initial base rate
of $453.34 per month with annual adjustments based upon CPI-U factors and with the new valuation
provided, staff is recommending the monthly lease rate at $639.00, which includes annual rent
escalation to keep up with anticipated market demand and pricing; now, therefore,
THE CITY COUNCIL OF THE CITY OF PORT ORCHARD, WASHINGTON, HEREBY RESOLVES AS
FOLLOWS:
THAT: The City Council of the City of Port Orchard approves the lease agreement attached
hereto as Exhibit A with Peninsula Feed Company for a strip of land approximately 29 feet
deep and 129 feet wide fronting Harrison Avenue at the west boundary, and the Peninsula
Feed property to the east boundary.
THAT: The Resolution shall take full force and effect upon passage and signatures hereon.
PASSED by the City Council of the City of Port Orchard, SIGNED by the Mayor and attested
by the City Clerk in authentication of such passage on this 14th day of March 2023.
DocuSign Envelope ID: CB87447F-0505-4DA6-BAA2-7C9B761CBE90
Resolution No. 026-23
by: Page 2 of 2
Robert Putaansuu, Mayor
A F ,Signed by:
Brandy Wallace, MMC, City Clerk
When recorded Return to:
City Clerk
City of Port Orchard
216 Prospect Street
Port Orchard, WA 98366
CITY OF PORT ORCHARD
Lease Rec Fee. $ 218 50
04/13/2023 09,04 AM
Paul Andrews, Kitsap Co Auditor
202304130014
Page: 1 of 16
Grantor (Lessor): City of Port Orchard, Washington
Grantee (Lessee): Peninsula Feed Company
Legal Description: SW 1/4, SW V4, Section 26 Township 24 N, Range 1 East. Complete
Legal Description set forth below.
Tax Parcel No.: Public Right -of -Way, no tax parcel assigned. Li (a.2 U of - C�N - U-�)j
LEASE
This Lease is made and entered into this day by and between City of Port Orchard,
a Washington municipal corporation, hereinafter called "Lessor," and Peninsula Feed
Company, a Washington corporation hereinafter called "Lessee":
WITNESSETH[:
1. Premises and Term. In consideration of the covenants and agreements
hereinafter set forth and other good and valuable consideration, Lessor hereby leases unto
Lessee, and Lessee hereby leases from Lessor, the following described property situated
in Kitsap County, Washington (the "Premises"):
See Exhibit A.
The term of this Lease shall be for five (5) years commencing on April 1.2023, and
ending on March 31, 2028.
2. Rent. Lessee agrees to pay to Lessor the sum of six hundred thirty-nine
Dollars ($639) per month plus leasehold excise tax for the monthly rental, due and
payable to the City of Port Orchard, located at 216 Prospect, Port Orchard, WA, on or
before the first day of each month during the term of the Lease beginning April 1, 2023,
Peninsula Feed Lease No.
Page 1 of 6
and without prior notice or demand therefor (except where such prior demand is
expressly provided for in this Lease), without any deductions, offsets or counterclaims
whatsoever. The parties agree that the rent amount represents the true and fair market
value of the leased Premises. In the event payment of the monthly rental is more than ten
(1o) days late, there shall be added to the rent the amount equal to 1o% of the rental
payment then due for each such delinquent payment. Late payments of rent and any
other amount due hereunder shall further accrue interest at a rate of 12% per annum
commencing on the first day that the applicable payment is past due and ending on the
day the entire payment is received by Lessor.
3. Rent Adjustments. The monthly rent shall be adjusted on April 1st of
each year during the term of this Lease to reflect the cost of inflation in the following
manner. The Lessor shall use the Seattle CPI-U factor as listed by the Department of
Labor for the month of March to adjust the monthly rent charged for the period from April
1 of that year until March 31 of the subsequent year.
4. ForrnUla Adjustment. The rent is based upon the formula used by the
Washington State Department of Natural Resources as it pertains to nonwater-dependent
uses on property leased to the City of Port Orchard. If the Lease is renewed, the Lessor
shall revisit the � Lease formula and use the current assessed land values to calculate the
adjusted rent.
5. Option to Renew. So long as Lessee is not in default hereunder, Lessee
shall have the option to renew this Lease upon the terms and conditions set forth in
Exhibit B.
6. Taxes. In addition to the rental amount, the Lessee will be responsible to
pay before delinquency any personal property taxes, real estate taxes, real estate
assessments, and leasehold excise taxes, if any, related to the Premises.
7. Reservation of Lessor's Rights. Lessor reserves the right, from time to
time, to modify the Lease by reducing the size of the Premises upon no less than go days'
prior written notice to Lessee if such portion of the Premises is required for street
improvements, pedestrian access, parking, or other similar improvements. Rent shall be
reduced in proportion to the reduced area of the Premises, but all other provisions of the
Lease shall remain in full force and effect.
8. Maintenance and Repair. Lessee, at Lessee's sole expense, shall keep in
good condition and repair all portions of the Premises. Lessee agrees to keep the Premises
neat and clean and in a sanitary condition; and upon surrendering possession, to leave
the Premises in condition equal to or better than as of the effective date of this Lease
subject to ordinary wear and tear and damage caused solely by Lessor and Lessor's
employees. The Lessee will not make any alterations, additions, or improvements without
the prior written consent of the Lessor. No portion of the Premises shall be subject to
liens for work performed or materials provided on the Premises made at the request of,
Peninsula Feed Lease No. C J - i -
Page 2 of 6
or on order of or to discharge an obligation of, Lessee. This Section shall be construed so
as to prohibit the interest of Lessor in the Premises or any part thereof from being subject
to any lien for any improvements made by Lessee or any third party on Lessee's behalf
(except Lessor) to the Premises. If any lien or notice of lien on account of an alleged debt
of Lessee or any notice of lien by a party engaged by Lessee or Lessee's contractor or
materialmen to work on the Premises shall be filed against the Premises or any part
thereof, Lessee, within ten (io) days after notice of the filing thereof, will cause the same
to be discharged of record by payment, deposit, bond, order of a court of competent
jurisdiction or otherwise. If Lessee shall fail to cause such lien or notice of lien to be
discharged and released of record within the period aforesaid, then, in addition to any
other right or remedy, Lessor may discharge the same either by paying the amounts
claimed to be due or by procuring the discharge of such lien by deposit or by bonding
procedures. Any amount so paid by Lessor and all costs and expenses, including
reasonable attorneys' fees and court costs, incurred by Lessor in connection therewith,
including interest at a rate of 12% per annum, shall constitute additional rent and shall be
promptly paid by Lessee to Lessor on demand.
9. Insurance. Lessee agrees that, from and after the date of delivery of the
Premises to Lessee, Lessee will carry at its sole cost and expense the following types of
insurance, in the amounts specified and in the form hereinafter provided for:
(a) Commercial general liability and property damage insurance covering the
Premises and Lessee's use thereof against claims for personal injury or death and property
damage occurring upon, in or about the Premises, such insurance to afford protection to
the limit of not less than $1,000,000.00 with respect to injury or death of any number of
persons and property damage arising out of any one occurrence and $2,000,000.00 in
the aggregate, such insurance against property damage to the Premises to afford
protection to the limit of not less than $i,000,000.00 with respect to any one occurrence;
and auto liability insurance, such insurance to afford protection to the limit of not less
than $i,000,000.00 in respect of injury or death of any number of persons arising out of
any one occurrence.
(b) All policies of insurance provided for in this Section shall be issued in a form
acceptable to Lessor by sound and reputable insurance companies with a general
policyholder rating of not less than A- and a financial rating of Class VII as rated in the
most currently available "Best's Insurance Reports" and qualified to do business in
Washington State. Each such policy shall be issued in the name of Lessee and name
Lessor and any other parties in interest from time to time designated in writing by notice
by Lessor to Lessee as additional insured(s) and/or loss payee(s), as applicable. Said
policies shall be for the mutual and joint benefit and protection of Lessor and Lessee and
a certificate of insurance shall be delivered to Lessor upon or prior to delivery of
possession of the Premises to Lessee and thereafter within thirty (3o) days prior to the
expiration of each such policy. Policies shall be made available to Lessor for review within
ten (io) days of Lessor's written request. As often as any such policy shall expire or
terminate, renewal or additional policies shall be procured and maintained by Lessee in
Peninsula Feed Lease No. f x)
Page 3 of 6
like manner and to like extent. Lessee will give Lessor at least thirty (3o) days' notice in
writing in advance of any cancellation or lapse, or the effective date of any reduction in
the amounts, of insurance. All such liability, property damage and other casualty policies
shall be written as primary policies which do not contribute to any policies which may be
carried by Lessor. All such liability and property damage policies shall contain a provision
that Lessor, although named as an additional insured and/or loss payee, shall
nevertheless be entitled to recover under said policies for any loss occasioned to it, its
agents, contractors and employees by reason of the negligence of Lessee. Any insurance
provided for in this Section may be effected by a policy of blanket insurance covering
additional items or locations or insureds; provided, however, that (i) Lessor shall be
named as an additional insured and/or loss payee thereunder as its interest may appear;
(ii) the coverage afforded Lessor will not be reduced or diminished by reason of the use of
such blanket policy of insurance; (iii) the requirements set forth herein are otherwise
satisfied.
(c) In addition to the types of insurance set forth in subsection (a) above, Lessee
shall carry workers' compensation insurance in compliance with applicable federal and
state laws and with no less than statutory limits (providing a waiver of subrogation in
favor of Lessor) and employer's liability insurance with limits of not less than
$500,000.00 per person or $1,000,000.00 per accident or disease in the relevant
jurisdiction.
10. In emnM tin nd Liabili . Lessee agrees to save harmless and
indemnify Lessor against and from all demands, claims, causes of action, or judgments,
and all reasonable expenses incurred in investigating or resisting the same for injury to
person, loss of life, or damage to property occurring on the Premises and arising out of
Lessee's use and occupancy (unless due solely to Lessor's negligence or willful
misconduct); and Lessee agrees to carry liability insurance to protect Lessor with
insurance limits to be reasonable approved by Lessor. Solely for the purpose of
effectuating Lessee's indemnification obligations under this Lease, and not for the benefit
of any third parties (including but not limited to employees of Lessee), Lessee specifically
and expressly waives any immunity that may be granted it under the Washington State
Industrial Insurance Act, Title 51 RCW. Furthermore, the indemnification obligations
under this Lease shall not be limited in any way by any limitation on the amount or type
of damages, compensation or benefits payable to or for any third party under any
Workers' Compensation Acts, Disability Benefit Acts or other Employee Benefit Acts. The
parties acknowledge that the foregoing provisions of this Section have been specifically
and mutually negotiated between the parties.
11. Waiver of Subrogation. Notwithstanding anything to the contrary set
forth in this Lease, in the event of loss or damage to the property of Lessor or Lessee, each
party will look first to its own insurance required to be maintained by such party pursuant
to this Lease before making any claim against the other. To the extent possible, each party
shall obtain, for all policies of property insurance required by this Lease, provisions
permitting waiver of subrogation against the other party, and each party, for itself and its
Peninsula Feed Lease No.
Page 4 of 6
insurers, hereby waives the right to make any claim against the other (or its agents,
employees or insurers) for loss or damage covered by the property insurance
requirements of this Lease.
12. Holding Aver. If Lessee remains in possession of the Premises after the
expiration of this Lease, such possession shall, if rent is accepted by Lessor, create a
month -to -month tenancy on the terms herein specified, and said tenancy may be
terminated at any time by either party by thirty (3o) days notice to the other party of such
termination.
13. Assignment and aublettinu. Lessee shall not assign this Lease nor
sublet the Premises without Lessor's prior written consent, which consent may be
withheld in Lessor's sole and absolute discretion. In addition to its ordinary meaning,
assignment and/or subletting shall include but not be limited to the following transfers
from Lessee of its entire or partial interest in the Premises to one or more of the following
entities: (1) any entity resulting from a merger or consolidation with Lessee or any
organization purchasing substantially all of Lessee's assets, (2) any entity succeeding to
substantially all the business and assets of Lessee, (3) any subsidiary, affiliate or parent
of Lessee, (4) any entity controlling, controlled by or under common control with Lessee,
or (5) any entity resulting from the reorganization of Lessee outside of a bankruptcy
organization.
14. In lv n . In the event the Lessee is adjudicated bankrupt or insolvent,
or a Receiver or Trustee is appointed for the Lessee, either voluntarily or involuntarily, or
if the Lessee makes an assignment for the benefit of creditors, this Lease shall
immediately terminate without further action on the part of Lessor or Lessee.
15. Waivers. One or more waivers of any covenants or conditions by Lessor
shall not be construed as a waiver of a subsequent breach of the same covenant or
condition or agreement.
16. Use of Premises. Lessee will use and occupy the Premises throughout the
entire term hereof for purpose of vehicular and pedestrian ingress, egress, parking,
merchandise display, and no other purpose. Lessee agrees not to violate any law,
ordinance, rule or regulations of any governmental authority having jurisdiction of the
Premises.
17. Condition of Prem' es. Lessor delivers possession of the Premises, and
Lessee accepts the Premises, in its current condition "as is" and "with all faults". Lessor
makes no representations or warranties, whether express or implied, regarding
merchantability, marketability, fitness, or suitability of the Premises for a particular
purpose, and any implied warranties are expressly disclaimed and excluded. Lessor shall
not be responsible for any defects in the Premises during the term of the Lease, and Lessee
hereby releases Lessor therefrom. Lessee hereby acknowledges that it has had full
Peninsula Feed Lease No.
Page 5 of 6
opportunity to inspect the Premises and enters into this Lease in reliance solely on its own
inspection and review of the Premises.
18. Default. In the event that Lessee shall abandon the Premises before the
end of the term, or if any rent shall be due and unpaid and such failure continues for ten
days after Lessee's receipt of notice regarding Lessee's failure to pay such rent when due,
or if default is made of any of the covenants and agreements to be performed by Lessee as
set forth herein and such failure continues for thirty days after Lessee's receipt of notice
describing Lessee's failure, then the Lessor may, at its option, enter upon the Premises
and re -let the same for such rent and upon such terms as Lessor may see fit; and if the Full
rental herein shall not be realized by Lessor over and above any expense to Lessor in such
re -letting, Lessee will pay all deficiency promptly upon demand, or the Lessor may declare
this Lease terminated and forfeited and take possession of the Premises, and Lessee
agrees to pay a reasonable attorneys' fees and the costs incurred by Lessor to enforce any
of Lessor's remedies under this Lease.
19. Attorne s Fees and Court Costs. In the event that any suit, action, or
proceeding, including arbitration as hereinafter set forth, shall be instituted to enforce
compliance with any of the terms or conditions of this Lease, there shall be paid to the
substantially prevailing party in such suit, action or proceeding, such sums as the court
or arbitrator may adjudge and determine to be a reasonable attorney's fee and reasonable
costs, with the foregoing applicable to proceedings both in the trial and appellate court
levels.
20. Arbitration. In the event that there is a dispute arising out of any of the
terms or conditions or the amount of rent payable as provided in this Lease, said dispute
shall be referred to arbitration. The Lessor shall appoint an arbitrator at its sole cost, and
the Lessee shall appoint an arbitrator at its sole cost. The two arbitrators shall then select
a third independent arbitrator. The costs of the third arbitrator shall be divided equally
between the Lessor and the Lessee. The three arbitrators shall then resolve the dispute
between the Lessor and the Lessee by a majority thereof, and the decision shall be reduced
to writing. Said arbitration award may then be reduced to judgment by entry in the Kitsap
County Superior Court.
21. Compliance with Law. Lessor shall be responsible for complying with
the Americans With Disabilities Act of 1990 (42 U.S.C.12101-12213) and the Washington
State Law Against Discrimination, Chapter 49.6o RCW, as well as regulations adopted
thereunder, with respect to the Property and the Premises.
22. Hazardous Substances. The term "Hazardous Substances" as used in
this Agreement shall mean pollutants, contaminants, toxic wastes, or any other
substances, the removal of which is required or the use of which is restricted, regulated,
proliibited or penalized by any "Environmental Law." The term "Environmental Law" or
"Environmental Laws" shall mean any federal, state or local law or ordinance relating to
pollution or protection of the environment or public health. Lessee agrees not to use,
Peninsula Feed Lease No. �'
Page 6 of 6
dispose, store or generate any asbestos or Hazardous Substances in violation of any
applicable law, rule or regulation upon the Premises. In the event such laws, rules or
regulations require remediation of any asbestos or Hazardous Substances discovered on
the Premises, Lessee agrees to promptly remove or remedy the violation at its sole cost.
Lessee agrees to indemnify and hold Lessor harmless against any losses, damages, costs,
liabilities and claims suffered by Lessor in connection with a breach by Lessee of its
obligations set forth in this Section.
23. ANTT-TERRORISM AND MONEY LAUNDERING
REPRESENTA11 N AND INIDEMNIFT-CATION. Lessee certifies that: (i) neither it
nor its managers, members or controlling owners are acting, directly or indirectly, for or
on behalf of any person, group, entity, or nation named by any Executive Order, the
United States Department of Justice, or the United States Treasury Department as a
terrorist, "Specially Designated National or Blocked Person," or other banned or blocked
person, entity, nation, or transaction pursuant to any law, order, rule or regulation that is
enforced or administered by the Office of Foreign Assets Control ("SDN"); (ii) neither it
nor its managers, members, or controlling owners are engaged in this transaction, directly
or indirectly on behalf of, or instigating or facilitating this transaction, directly or
indirectly on behalf of, any such person, group, entity or nation; and (iii) neither it nor its
managers, members, or controlling owners are in violation of Presidential Executive
Order 13224, the USA Patriot Act, the Bank Secrecy Act, the Money Laundering Control
Act or any regulations promulgated pursuant thereto. Lessee hereby agrees to defend,
indemnify, and hold harmless Lessor from and against any and all claims, damages,
losses, risks, liabilities and expenses (including reasonable attorneys' fees and costs)
arising from or related to any breach of the foregoing certification. Should Lessee, during
the term of this Lease, be designated an SDN, Lessor may, at its sole option, terminate
this Lease.
24. Brok r. Each party represents that it has worked with no broker with
respect to the Lease. Lessee and Lessor (each an "indemnitor") agree to indemnify and
hold harmless the other parties hereto, and their respective affiliates, successors and
assigns, from and against claims, actions, judgments, liabilities, payments, losses,
damages and expenses, including reasonable attorney's fees and court costs, suffered or
incurred by reason of the indemnitor's breach of its respective representation in this
Section.
25, WAIVES. Failure of either party to insist upon the strict performance of
any provision of this Lease or to exercise any option or enforce any rules and regulations
shall not be construed as a waiver in the future of any such provision, rule or option.
26. ACCORD AND ATI FAC N. No payment by Lessee or receipt by
Lessor of a lesser amount than the rent herein stipulated shall be deemed to be other than
on account of the earliest stipulated rent, nor shall any endorsement or statement on any
check or any letter accompanying any such check or payment as rent be deemed an accord
and satisfaction, and Lessor may accept such check or payment without prdudice to
Peninsula Feed Lease No. -LZ
Page 7 of 6
Lessor's right to recover the balance of such rent or pursue any other remedy provided for
in this Lease or available at law or in equity.
(signature page follows)
Peninsula Feed Lease No. L)L-3
Page 8 of 6
IN WITNESS WHEREOF, the parties hereto have signed and sealed this Lease the
day and year first above written.
LESSOR:
OF PORT ORCHARD
Robert Putaansuu, Mayor
216 Prospect Street
Port Orchard, WA 98366
36o-876-4407
ATTEST:
Brandy Wall ce, MMC, City Clerk
Charlotte A. Cher, City Attorney
STATE OF WASHINGTON)
) ss.
COUNTY OF KITSAP )
LESSEE:
PENINSULA FEED Company
By:
Prin Nam
Address: !
Phone No. V -7r r
I certify that I know or have satisfactory evidence that Robert Putaansuu and
Brandy Wallace are the persons who appeared before me, and said persons acknowledged
that they signed this instrument, on oath, stated that they were authorized to execute the
instrument and acknowledged it as the Mayor and City Clerk of the City of Port Orchard,
respectively to be the free and voluntary act of such party for the uses and purposes
mentioned in the instrument.
DATED: 3
4aN 4 :O
otary Public aiia for the State of
Washington residing at
My commission expires �-
Peninsula Feed Lease No. Q
Page 9 of 6
DocuSign Envelope ID: 35DC29CA-D3FD-4770-AAC5-50CO3FF1B3CE
IN WITNESS WHEREOF, the parties hereto have signed and sealed this Lease the
day and year first above written.
LESSOR:
C OOF PORT ORCHARD
By:
Robert Putaansuu, Mayor
216 Prospect Street
Port Orchard, WA 98366
36o-876-4407
ATTEST:
6Z
Brandy Wall ce, MMC, City Clerk
OocuSigned by:
i
A. Archer, City Attorney
STATE OF WASHINGTON)
) ss.
COUNTY OF KITSAP )
LESSEE:
PENINSULA FEED Company
By:
Print -Nam : -e
Address: cam- r l/
Z' - (r% r!` 4 .- Gr rr J FKc
Phone No. u - -k -T• V -7
I certify that I know or have satisfactory evidence that Robert Putaansuu and
Brandy Wallace are the persons who appeared before me, and said persons acknowledged
that they signed this instrument, on oath, stated that they were authorized to execute the
instrument and acknowledged it as the Mayor and City Clerk of the City of Port Orchard,
respectively to be the free and voluntary act of such party for the uses and purposes
mentioned in the instrument.
DATED: 3C�
�p1�Nri� � � i � ri1Nb4
,tia �Dy A11y fi•,,.
-K�¢P. �IsRic� ;9 ''•
0T4
tary Public Ad for the State of�
Washington residing at
My commission expires 2
Peninsula Feed Lease No. QN —
Page 9 of 6
STATE OF WASHINGTON)
) ss.
COUNTY OF KITSAP )
I. certify that I know or have satisfactory evidence that
(, is the person who appeared before me and said
person cknowledged th he signed this instrument, on oath, stated th6;she was
a thorized to execute the instrument and acknowledged it as the
of all- i 1 /? Q16 kite (t-) to be the free and
vo untary act of such party for the uses and purposed mentioned in the instrument.
DATED: ,5 r P I — loa 3
Notary Public in4nd for the State
��„ kt, i i+++r►►►1j
Washington residing at C
.0�' to D Y R Nl,,�
♦� •
My commission expires
♦
�,• � n,rr'siai,a.,Htt,
:'e.° ax-orao f gam:
���
���►MINIM"
Peninsula Feed Lease No. Q;
Page io of 6
Exhibit A
Legal Description of Premises and Depiction of Leased Area
Section 26, Township 24, Range 1 East, that section of Harrison Avenue
right of way described as follows: Beginning at the northeast corner of the
intersection of Harrison Avenue and Bay Street; thence 129 feet northward
along the east margin of Harrison Avenue; thence west 29 feet; thence
south 200 feet along a line parallel to the east margin of the Harrison
Avenue right of way; thence west 25 feet to the point of beginning.
Parcelk 4650-009-001-0005
620 Bay St
Port Orchard, WA 98366
A Portion Of:
PARCEL I: LOTS 1 AND 2, BLOCK 9, S.M. STEVEN'S TOWN PLAT OF SIDNEY,
ACCORDING TO PLAT RECORDED IN VOLUME 1 OF PLATS, PAGE 1 OF KITSAP
COUNTY, WASHINGTON. PARCEL II: LOTS 3 AND 4, BLOCK 9, S.M., STEVEN'S
TOWN PLAT OF SIDNEY, ACCORDING TO PLAT RECORDED IN VOLUME 1 OF
PLATS, PAGE 1, RECORDS OF KITSAP COUNTY, WASHINGTON; EXCEPT THOSE
PORTIONS OF SAID LOT 3 CONVEYED TO THE TOWN OF PORT ORCHARD FOR
STATE ROAD NO. 14 BY DEEDS RECORDED IN VOLUME 149 OF DEEDS, PAGES
505 AND 558, UNDER AUDITOR'S FILE NOS. 147447 AND 147666, WHICH
EXCEPTED PORTIONS ARE DESCRIBED AS FOLLOWS: BEGINNING AT A POINT
ON THE WEST LINE OF SAID LOT 3 A DISTANCE OF45.0 FEET SOUTH OF THE
NORTHWEST CORNER OF SAID LOT; THENCE SOUTH ALONG SAID WEST LINE
29.87 FEET, MORE OR LESS, TO THE SOUTHWEST CORNER OF SAID LOT;
THENCE EAST ALONG SAID SOUTH LINE 7.0 FEET; THENCE NORTH PARALLEL
WITH SAID WEST LINE TO A POINT EAST OF THE POINT OF BEGINNING; THENCE
EAST PARALLEL WITH SAID SOUTH LINE 0.5 FEET; THENCE NORTH PARALLEL
WITH SAID WEST LINE 7.5 FEET; THENCE EAST PARALLEL WITH SAID SOUTH
LINE 3.0 FEET; THENCE NORTHERLY ALONG THE ARC OF A CURVE, THE RADIUS
OF WHICH BEARS EAST PARALLEL WITH SAID SOUTH LINE 105.8 FEET TO A
POINT ON THE NORTHWESTERLY LINE OF SAID LOT, 13.17 FEET
SOUTHWESTERLY FROM THE MOST NORTHERLY CORNER THEREOF; THENCE
SOUTHWESTERLY ALONG SAID NORTHWESTERLY LINE 29.0 FEET TO THE
NORTHWEST CORNER OF SAID LOT; THENCE SOUTH ALONG THE WEST LINE OF
SAID LOT 45.0 FEET TO THE POINT OF BEGINNING OF SAID EXCEPTED
PORTIONS.
Peninsula Feed Lease No. W-t� L2
Page a of 6
Peninsula Feed Lease No. -�.05' — _
Page 12 of 6
Exhibit B
Option to Extend
EXHIBIT J
OPTION TO EXTEND
1. OPTION. Lessee is granted one option to extend the term of this Lease for an
additional five year period ("Option Period"), upon the terms and conditions set forth
herein; provided, that said right to extend for such Option Period (" 'on") may be
exercised only in the event Lessee is not in default either at the time said Option right is
exercised nor at the time such Option Period is to commence, nor has ever been in default
during the time of the Lease. The words "Lease Term" or "Term," as used in this Lease, shall
mean the term of this Lease as extended by Lessee pursuant to this Section.
2. EXERCISE OIL OPTION. To exercise the Option described in this Section above,
Lessee shall notify Lessor in writing (" EL ") no later than ninety (go)
calendar days prior to the expiration of the initial Lease term.
3. CONTVDMG EFFECT. In the event Lessee properly exercises its Option right as
provided herein and the term of this Lease is extended as provided herein, all of the terms
and conditions of this Lease shall apply during the Option Period, (except the Option right
then exercised), including but not limited to Lessee's obligation to pay rent and other
charges and expenses provided for in the Lease and provided, that (1) no rental concession,
reduced or free rent, tenant improvement allowance or other concessions shall be due or
payable to Lessee during or with respect to such Option Period; (2) rent during the Option
Period shall be determined in accordance with the terms and conditions set forth below, but
in no event shall the rent for the first year of the Option Period be less than the rent payable
in the last year of the previous Lease term.
4. RENT DURING OPTION PERIOD.
(a) In the event Lessee validly exercises its Option as herein provided, the rent
shall be adjusted to the then current market rate for the Premises, determined as of the
commencement date of the Option Period, as follows: Within thirty (3o) days after Lessor
receives Lessee's Election, Lessor shall provide Lessee with Lessor's determination of the
fair market rent for the Option Period ("Lessor's Determination"). Lessee shall
provide notice to Lessor within ten (io) days after receipt of such notice from Lessor as to
whether Lessee accepts Lessor's Determination. In the event Lessee does not agree to
Lessor's Determination, Lessor and Lessee shall attempt to agree upon rent for the
Premises for the Option Period, such rent to be the fair market rental value of the
Premises for the Option Period. If the parties are unable to agree upon the rent for the
Option Period by the date forty five (45) days prior to the commencement of the option,
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then within ten (1o) days thereafter each party, at its own cost and by giving notice to the
other party, shall appoint a real estate broker with at least ten (1o) years full-time
commercial real estate experience in Kitsap County to appraise and set rent for the Option
Period. If a party does not appoint a broker within ten (io) days after the other party has
given notice of the name of its broker, the single broker appointed shall be the sole broker
and shall set rent for the Option Period. If each party shall have so appointed a broker,
the two broker(s) shall meet promptly and attempt to set the rent for the Option Period.
If the two broker(s) are unable to agree within thirty (3o) days after the second broker
has been appointed, they shall attempt to select a third broker meeting the qualifications
herein stated within ten (1o) days after the last day the two broker(s) are given to set rent.
If the two broker(s) are unable to agree on the third broker within such ten (1o) day
period, either of the parties to this Lease, by giving five (5) days' notice to the other party,
may apply to the then presiding judge of the Superior Court of the Kitsap County for the
selection of a third broker meeting the qualifications stated in this Section. Each of the
parties shall bear one-half (1/2) of the cost of appointing the third broker and of paying
the third broker's fee. The third broker, however selected, shall be a person who has not
previously acted in any capacity for either party.
(b) Within thirty (3o) days after the selection of the third broker, a majority of
the broker(s) shall set rent for the Option Period. If a majority of the broker(s) are unable
to set rent within the stipulated period of time, the three appraisals shall be added
together and their total divided by three (3). The resulting quotient shall be the rent for
the Premises during the Option Period. If, however, the low appraisal and/or the high
appraisal is/are more than ten percent (io%) lower and/or higher than the middle
appraisal, the low appraisal and/or the high appraisal shall be disregarded. If only one
(1) appraisal is disregarded, the remaining two (2) appraisals shall be added together and
their total divided by two (2), and the resulting quotient shall be rent for the Premises
during the Option Period.
(c) For purposes of the appraisal, the term "fair market rental value" shall mean
the price that a ready and willing tenant would pay, as of the commencement date of the
Option Period, as rent to a ready and willing Lessor of premises comparable to the
Premises in Kitsap County, if such premises were exposed for Lease on the open market
for a reasonable period of time; including any rent increases over the Option Period to the
extent normal under then current market conditions. In no event shall there be deducted
from such fair market rental value, the value of any concessions, including without
limitation tenant improvements, commissions, free rent and/or "downtime". In no event
shall the fair market rental value for any applicable Option Period be less than the rent in
effect during the month immediately preceding the commencement of such Option
Period.
(d) Any delay or failure of Lessor in computing or billing for the rent adjustment
hereinabove provided, shall not constitute a waiver of or in any way impair the Lessee's
obligation to pay such rent adjustment hereunder. In the event of any such delay or failure
Peninsula Feed Lease No. '.
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of Lessor to notify Lessee of the rent adjustment, Lessee shall continue paying the rent due
prior to the applicable adjustment until notified by Lessor of the rent adjustment.
Peninsula Feed Lease No. _
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