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Ord 91-108 ORDINANCE NO. 91-108 AN ORDINANCE of the City Council of the City of Federal Way, Washington, providing for the acquisition of land located at approximately lOth Avenue S.W. and Southwest Campus Drive for use as a park or other municipal purpose by means of a lease with option to purchase; authorizing execution of such lease and related documents, and approving the financing plan for such transaction. WHEREAS, the city Council (the "Council") of the City of Federal Way, Washington (the "city"), deems it necessary and in the best interest of the City and its citizens that the City acquire approximately 16.14 acres of land adjacent to Southwest Campus Drive and the proposed extension of 10th Avenue Southwest in the City, as legally described on Exhibit A attached hereto (the "Property") for use as a city park or other municipal purpose; and WHEREAS, Chapter 35.42 RCW authorizes cities to acquire real and personal property by means of a lease with option to purchase; and WHEREAS, the city has determined that it is in the best interest of the City to acquire the Property by means of a lease with option to purchase, which lease shall be for a term not to exceed 16 years and shall include the right of prepayment, an option to purchase, and such other terms, covenants and conditions as are set forth herein; and WHEREAS, the city has negotiated a financing plan with Polygon 2000, Inc., seller of the Property (the "Seller"), George K. Baum & company, Kirchner Moore Division, as Underwriter (the COpy "Underwriter") and Seattle-First National Bank, as Trustee (the "Trustee"); and WHEREAS, the City has determined that such financing plan provides the most efficient and economical way of acquiring the Property; NOW, THEREFORE, the City Council of the City of Federal Way do ordain, as follows: section 1. Findinqs. A. There exists a need for additional parks and other public property for City residents. B. The Property best meets the criteria of the City for park and other municipal purposes. C. It is hereby found and declared that the public interest, welfare and benefit require the City to acquire the Property to meet the needs of the City for park and other municipal purposes and to accomplish the acquisition of the Property by means of the financing pl~n described herein. section 2. Approval of Trust Aqreement. The Trust Agreement between the Underwriter and the Trustee is hereby approved in substantially the form set forth on Exhibit B attached hereto and incorporated herein by this reference. section 3. Approval of Lease. The Lease between the city and the Trustee is hereby approved in substantially the form set forth on Exhibit C attached hereto and incorporated herein by this reference. -2- section 4. Execution and Delivery of Documents. The proper officers of the City, including but not limited to the Mayor, Finance Director, and City Clerk are hereby authorized and directed to do everything necessary for the execution and performance of the Lease and the Trust Agreement. section 5. Financinq Plan. To complete the financing of the acquisition of the Property by means of a lease with option to purchase, the following events and transactions shall take place and are hereby approved. The Seller's title to the Property shall be conveyed to the Trustee, for the benefit of the Underwriter or its designees, and the Trustee and the City shall execute the Lease, pursuant to the Trust Agreement. The Underwriter shall pay to the Trustee a sum equal to the contract purchase price of the Property, plus capitalized expenses. The Trustee shall pay the contract purchase price to the Seller and shall pay the capitalized expenses. The Trustee will issue to the Underwriter, or to the Underwr iter I s designees, certificates of participation representing undivided proportionate ownership interests in the Lease. The interest rate or rates of the interest component of Lease payments under such Lease shall be as set forth in the offer of the Underwriter set forth on Exhibit D attached hereto and incorporated herein by this reference. All documents shall be executed and delivered, and all payments made, simultaneously through utilization of such escrow -3- or escrows as the Finance Director of the City and the City Attorney shall determine. section 6. Assessed Value and Existinq Debt. The actual value of the taxable property within the City as ascertained by the last preceding assessment for City purposes is $3,101,693,059. The total amount of outstanding general obligation indebtedness of the City, whether voted or non-voted, as of September 1, 1991, is $13,851,000. The outstanding obligation of the City represented by the principal amount of the Lease, when executed and delivered, shall not exceed $1,450,000. The City has no other outstanding leases with option to purchase. section 7. Lease Not an Arbitraqe Bond. The City hereby certifies that on the basis of the facts, estimates and circumstances in existence on this date, it is not expected that the Property will be used in a manner that would cause the Lease or any certificates of participation therein to be "arbitrage bonds" under section 148 of the united states Internal Revenue Code of 1986, as amended, and all regulations relating thereto. The City covenants that it will comply with said section 148 and the regulations thereunder in effect from time to time, as long as the Lease remains outstanding. The City covenants that it will not take any action or permit any action to be taken that would cause the Lease authorized hereunder to constitute a private activity bond under section 141 of the united states Internal Revenue Code of 1986, as amended. -4- section 8. Lease a Limited Tax General Obliqation. The city hereby irrevocably covenants and agrees for as long as the Lease remains in effect and any Lease payments due thereunder are unpaid, that it will include in its budget and cause to be levied annually a tax upon all property within the City subject to taxation in an amount which, with other moneys of the City that may be legally used and that the City applies for such purpose, will be sufficient to pay the principal and interest components of the Lease payments so due thereunder as the same shall become due. The City hereby irrevocably pledges that the annual tax provided for herein to be levied for the payment of such Lease payments shall be within and as a part of the tax levy permitted the City without a vote of the people and that a sufficient portion of each such annual tax to be levied and collected by the city prior to the full payment of such Lease payments due will be and is hereby irrevocably set aside, pledged and appropriated for the payment of the principal and interest components of all Lease payments so due. The full faith, credit and resources of the city are hereby pledged for the annual levy and collection of such taxes and for the prompt payment of such Lease payments as the same shall become due. section 9. Effective Date. This ordinance shall be effective five days after passage and publication of an approved summary consisting of the title hereto. -5- PASSED by the city Council of the city of Federal Way at a regular meeting thereof, held this 17th day of September, 1991. CITY OF FEDERAL WAY, WASHINGTON 91/yw- [(AI Mayor, Debra Ertel ATTEST: '>2 ~CitY APPROVED AS TO FORM: (~ ~ il ih¡ ~ /' /f1, o/-"-'J ':;> Special C unsel, Nancy M. Neraas FILED WITH THE CITY CLERK: September 12,1991 PASSED BY THE CITY COUNCIL: September 17,1991 PUBLISHED: September 20,1991 EFFECTIVE DATE: September 25,1991 ORDINANCE NO. 91-108 K:\dot\ 18282-QQ,QO5\2Nord3, 1CO -6- EXHIBIT "A" Legal Description THAT PORTION OF GOVERNMENT LOT 1, SECTION 19, TOWNSHIP 21 NORTH, RANGE 4 EAST, WILLhMETTE MERIDIAN, IN KING COUNTY, WASHINGTON, SAID PORTION BEING HORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 19; ,THENCE' ALONG THE- NOR~ì!.~~__~EREO~_S.c~?TH 89:.9_°.2~~.~A~ 335, 78 F~ET; THENCE'SOUTH01°3S'15" WEST 42,00 FEET, TO THE SOUTHERLYHARGIN OF THE'LANDS'" DESCRIBED IN DEED RECORDED UNDER RECORDING NUMBER 8501170665, IN KING COUNTY, WASHINGTON, AND THE TRUE POINT OF BEGINNING; THENCE F,LONG SAID SOUTHERLY !'.ARGIN SOUTH 89'OO'lS" EAST 18,07 FE:::r TO THE BEGINNING OF A CURVE CONCAVE TO THE SOUTHWEST HAVING A RADIUS c~ 658,00 FEET; THENCE.. EASTEP,LLAND. SOUTHEF,STERLY_7QQ.,SJ_FEE,._~J:,9.lliò_~AID CUBYf., íHROUGH A CENTRAL,___,.. }>'NGLE'OF'50'59'59"; " - ' ,-,---_:" 'THENCE"SOUTH'28°00'19" EF,ST 422.43 FEET TO THE BEGINNING OF,ANON-TANGENT CURVE, êO~CAVE' TO THE 'SOUTHEAST HAVING' A R},DIUS OF 897,03 FEET-(A RÞ~IF~, LINE THROUGH SAID BEGINNING BEARS NORTH 28°00'19" WEST); , THE1:CE S'OUT¡;\,iESTERLY F,ND SOUTHERLY 732.77 FEET ALONG SAID CURVE THROUGH A CENTRAL F,!,GLE OF 45°48'15" TO A PX:J!F,L LINE OF Sì\ID CURVE .':~ICH BEARS'NORTH 74°48'34" WEST ,r,,;P THE, SO;;:'; LI);E ÒF SF.I;) GO'JERN~!ENT LOT ~;.. ' " " " " THENCE F.LO,'¡G S,;ID SOUTH LINE NORTH 88'59'20" WEST 3;6.79' FEET TO A LINE ?!"R!"LLEL WITH AND DISTANT 335.75 FEET EASíER.LY, WHEN MEASURED AT RIGHT ANGLES, FROM,THE WEST LINE OF SAID GOVERNMENT LOT; THENCE F.LONG SF,I!) Pr,RÞ,LLEL LINE NORTH 01'35.'16" EÞ,ST 1,273,00 FEET TO THE TRUE POlt:T OF BEGINNING, EXHIBIT B TRUST AGREEMENT BY AND BETWEEN SEATTLE-FIRST NATIONAL BANK, as Trustee AND GEORGE K. BAUM & COMPANY, KIRCHNER MOORE DIVISION, as Underwriter Dated: September 25, 1991 Section 1.01. Section 1.02. TABLE OF CONTENTS ARTICLE I DEFINITIONS AND CONSTRUCTION Definitions........ "'" Rules of Construction. . . . . . . . . . . . ARTICLE II Section 2.01. APPLICATION OF FUNDS; ACQUISITION OF PROPERTY Section 2.02. Section 2.03. section 2.04. Section 3.01. Section 3.02. Section 3.03. Section 3.04. Secti.on 3.05. Section 3.06. Section 3.07. section 3.08. section 3.09. Section 3.10. Section 3.11. section 4.01. Section 4.02. Acquisition of Seller's Right, Title and Interest in Property, and Payment of Certain Costs Related to Issuance of Certificates. . . . . . . . . . . . . Trustee to Enter into Lease. . . . . . Property and Lease Held in Trust. . . . . . Release of Trust Estate. . . . . . . . ARTICLE III AUTHORIZATION OF CERTIFICATES Authorization of Certificates. . . . . . . . Prepayment of Lease Payments Evidenced by certificates. Notice of Prepayment. . . . . . . . . . . . Form of certificates. . . . . . . . . . . . Execution of Certificates. . . . . . . Registrar. . . . . . . . . . . . . . provision for Payments; Remedies in Event of Default. . . . . . Mutilated, Destroyed, Lost or Stolen Certificates. . . . '. . Cancellation and Destruction of Surrendered Certificates. . . . . . . . . . Issue of Certificates. . . . . . . . . . . . Security for Certificates. . . . . . . . . . ARTICLE IV LEASE PAYMENT FUND Lease Payment Fund. . . . . . . . . Deposits and Security Therefor. . . . . . . -i- Page 2 6 6 6 7 7 7 9 9 II II 11 II 12 12 13 13 13 14 Section 4.03. Section 5.01. Section 5.02. Section 5.03. Section 5.04. Section 5.05. Section 5.06. Section 5.07. Section 5.08. section 5.09. Section 5.10. Section 5.U. Section 5.12. Investment or Deposit of Funds . . . . . . . 14 15 15 15 16 16 17 17 17 17 18 18 18 Section 6.01. Acceptance of Trust 19 Section 6.02. Trustee May Act Through Agents; Answerable Only for willful Misconduct or Negligence 19 section 6.03. Compensation 19 Section 6.04. Notice of Default; Right to Investigate 20 Section 6.05. Duties and Responsibilities 20 section 6.06. Reliance on Requisition, Etc 21 section 6.07. Construction of Ambiguous provisions 21 section 6.08. Resignation of Trustee 21 section 6.09. Removal of Trustee 21 Section 6.10. Appointment of Successor Trustee 22 section 6.11. Qualification of Successor 22 section 6.12. Instruments of Succession 22 section 6.13. Merger of Trustee 22 section 6.14. Survival of Rights 23 ARTICLE V EVENTS OF DEFAULT AND REMEDIES Events of Default Defined. . . . . . . . . . Remedies. . . . . . . . . . . . . . Legal Proceedings by Trustee. . . . . . . . Discontinuance of Proceedings by Trustee.........,......... Owners May Direct Proceedings. . . . . . . . Limitations on Actions by Owners. . . . . . Trustee May Enforce Rights without Possession of Certificates. . . . . . . Delays and Omissions Not to ImpairRights.........,...... Application of Money in Event of Default................... Moneys Held by Trustee One Year After Due Date. . . . . . Trustee's Right to Receiver. . . . . . . . . Trustee and Owners Entitled to All Remedies Under Law; Remedies Not Exclusive. . . . . . . . . . . . . . . . . . . . . . ARTICLE VI THE TRUSTEE -ii- Section 6.15. Representation and Covenants of the Trustee. . . . . . . . . . . . . ARTICLE VII ACTS OF OWNERS: Section 7.01. Section 8.01. Section 8.02. section 8.03. section 8.04. section 9.01. Section 9.02. section 10.01. section 11. 01. section 11. 02. section 11.03. Section section section section section section 11. 04. 11.05. 11.06. 11. 07. 11. 08. 11. 09. EVIDENCE OF OWNERSHIP OF CERTIFICATES Actions of Owners; Evidence of Ownership. . . . . . . . . . . . . . ARTICLE VIII AMENDMENTS AND SUPPLEMENTS Amendments and Supplements without Owners' Consent. . . . . . . . Amendments with Owners' Consent. . . . . . . Amendment of Lease. . . . . . . . . . . . . Trustee Authorized to Join in Amendments and Supplements; Reliance on Counsel. . . . . . . . . ARTICLE IX DEFEASANCE Defeasance. . . . . . . . . . . . . . Transfer of Title to Property. . . . . ARTICLE X FORM OF CERTIFICATES Form of certificates . . . . . . . . . ARTICLE XI MISCELLANEOUS PROVISIONS No Personal Recourse No Rights Conferred on Others Illegal, Etc. provisions Disregarded Notices Successors and Assigns Headings for Convenience Only Counterparts Title and Security Documents Information Under Commercial Code -iii- 23 24 24 24 25 25 26 27 27 32 32 32 33 33 33 33 34 34 Section 11.10. Section 11.11. Exhibit A Exhibit B Exhibit C Payments Due on Saturdays, Sundays and Holidays. . . . . Applicable Law. . . . . . '34 . . . . . . 35 Lease Warranty Deed Capitalized Financing Costs -iv- TRUST AGREEMENT THIS TRUST AGREEMENT (the "Trust Agreement") is entered into as of this 25th day of September, 1991, between Seattle-First National Bank, Seattle, Washington, as trustee (the "Trustee"), and George K. Baum & Company, Kirchner Moore Division Seattle Washington (the "Underwriter"). " RECITALS: WHEREAS, the City of Federal Way, Washington (the "City") is authorized by Chapter 35.42 RCW to lease real property with an option to purchase; and WHEREAS, the City has entered into a purchase and sale agreement (the "Agreement") with Polygon 2000, Inc. and Quadrant Corporation (collectively, the "Seller") to acquire approximately 16.14 acres of unimproved land adjacent to S.W. Campus Drive and the proposed extension of lOth Avenue S. W. in the City (the "Property") by means of a lease with option to purchase; and WHEREAS, the Underwriter has agreed to finance the City's acquisition of the Property by entering into this Trust Agreement providing for the execution and delivery by the Trustee of certificates of participation (the "Certificates") evidencing undivided proportionate ownership interests in a lease with option to purchase the Property between the Trustee and the City (the "Lease"); and WHEREAS, to accomplish this plan of financing, the City has assigned or will assign to the Trustee the City's right under the Agreement to purchase the Property so that the Property may be conveyed by warranty deed to the Trustee to be held in trust for the benefit of the owners of the Certificates; and WHEREAS, in exchange for the Certificates, the Underwriter will pay the Trustee an amount equal to the aggregate principal amount of the Certificates, from which funds the Trustee will pay the full purchase price due the Seller pursuant to the Agreement; the Seller has by warranty deed conveyed or will convey all its right, title, and interest in and to the Property to the Trustee, and the Trustee has accepted or hereby accepts such warranty deed in trust for the benefit of the Owner from time to time of the Certificates; and the Trustee and the City shall enter into the Lease; NOW, THEREFORE, the parties hereby agree as follows: ARTICLE I DEFINITIONS AND CONSTRUCTION Section 1. 01. Defini tions. Capitalized terms included in this Trust Agreement and not defined in this Section 1.01 shall have the meanings given them in the Lease. The following terms shall have the meanings given below unless the context clearly requires otherwise: "Additional Rent" means amounts payable by the City pursuant to Section 3.2 of the Lease, including but not limited to taxes and utilities and Non-Capitalized Financing Costs. "Agreement" means the purchase and sale agreement by and between City and Seller, dated as of July 31, 1991, for acquisition of the Property by means of a lease with option to purchase. "Agreement Amount" means the sale price specified in the Agreement for the Property. "Authorized Representative of the city" means the Mayor, Finance Director and any other person designated in writing by the Mayor and whose signature is on file with the Trustee. "Capitalized Financing Costs" means those Financing Costs that the City, in its sole discretion, determines to finance by adding such amounts to the principal component of Lease Payments. "Certificate Counsel" means the law firm of Preston Thorgrimson Shidler Gates & Ellis, or any other nationally recognized bond counsel acceptable to the City and the Trustee. "Certificates" means the certificates of participation in the Lease executed and delivered by the Trustee pursuant to Article III of this Trust Agreement. "City" means the City of Federal Way, a duly organized and existing municipal corporation of the State of Washington. "Code" means the federal Internal Revenue Code of 1986, as amended, and the applicable rulings and regulations, proposed or promulgated thereunder. "Financing Costs" means any and all costs incurred or owed by the City relating to the financing of the Property contemplated by the Agreement, including but not limited to legal -2- 00T448 91/04/19 fees, financial advisor fees, printing fees, insurance premiums, trustee fees and expenses and those fees and expenses of its counsel ~ and other costs that the city is obligated to pay in connect~on therewith. The City, in its sole discretion may determine which of the Financing Costs shall be treat~d as Capitalized Financing Costs and which shall be paid as Non- Capitalized Financing Costs. "Lease" means the Ground Lease dated as of September 25, 1991, between the Trustee and the City providing for the lease wi th option to purchase of certain real property by the City, which Lease is attached as Exhibit A hereto. "Lease Payments" means the aggregate of all payments due under Section 3.1 of the Lease, and excluding Additional Rent payable under section 3.2 of the Lease. "Lease Payment Dates" means dates on which Lease Payments are due as indicated in Exhibit B of the Lease. "Lease Payment Fund" means the Lease Payment established by the Trustee pursuant to Section 4.01 hereof. Fund "Moody's" means Moody's Investor's Service or any successor thereto. "Non-Capitalized Financing Costs" means those Financing Costs that the City, in its sole discretion, determines to pay as Additional Rent, including but not limited to fees and expenses of the Trustee. "Outstanding" means, in connection with the Certificates as of the time in question, all Certificates executed and delivered under this Trust Agreement, except: (a) Certificates theretofore canceled or required to be canceled under Section 3.09 hereof; (b) Certificates for the payment or prepayment of the Lease Payment represented thereby of which the necessary amount shall have been or shall concurrently be deposited with the Trustee, or Certificates provision for the payment of Lease Payments represented thereby of which shall have been made in accordance with Section 9.01 hereof; provided that, if such Certificates are being prepaid prior to maturity of the Lease Payment represented thereby, the required notice of prepayment shall have been given or provision satisfactory to the Trustee shall have been made therefor; and -3- DOT448 91/04/19 (c) Certificates in substitution for Certificates have been executed and delivered Article III hereof. which other pursuant to In determining whether the Owners of a requisite aggregate principal amount of Lease Payments represented by Certificates Outstanding have concurred in any request, demand, authorization, direction, notice, consent or waiver under the provisions thereof, certificates which are held by the City or its designee shall be disregarded and deemed not to be outstanding for the purpose of such determination. "Owner" means the owner of a Certificate as indicated on the Certificate Register maintained in accordance with Section 3.01 hereof. "Paying Agent" means the Trustee, in its capacity as paying agent for the Certificates issued hereunder. "Principal Office of the Trustee" means the principal corporate trust office of the Trustee, presently situated at 1001 Fourth Avenue, 11th Floor, Seattle, Washington 98154. "Property" means the real property subject to the Lease. "Qualified Investments," include the following: to the extent permitted by law, America; (i) direct obligations of the United States of (ii) obligations the payment of the principal of and interest on which is unconditionally guaranteed by the United states; (iii) general obligations instrumentalities of the United states; of any agencies or (iv) certificates of deposit, time deposits or demand deposits with any bank or savings institution qualified as a depository of public funds in the state of Washington, including the Trustee or any affiliate thereof, provided that such certifi- cates of deposit, time deposits or demand deposits, if not insured by the Federal Deposit Insurance Corporation or similar governmental insurance organization, are fully secured by obligations described in clauses (i), (ii), or (iii); (v) Shares of a money market mutual fund or other collective investment fund registered under the Federal Investment Company Act of 1940, (including those mutual funds or -4- DOT448 91/04/19 investment companies or trusts for which the Trustee or an affiliate of the Trustee serves as investment advisor, custodian, shareholder, serving agent, transfer agent, administrator or distributor), whose shares are registered under the Federal Securities Act of 1933, having assets of at least $100 000 000 whose only assets are obligations described in clauses' (.i¡' and (ii) of this definition of Authorized Investments and which, at the time of purchase, are rated by S&P and Moody's in one of the two highest categories (without regard to any refinement or gradation of rating category by numerical modifier or otherwise) for obligations of that nature. "Seller" means, collectively, Polygon 2000, Quadrant Corporation or any successors thereto. Inc. , and "Trust Agreement" means this Trust Agreement. "Trust Estate" means all right, title (if any) and interest in the Lease and Property transferred, conveyed, sold and assigned to the Trustee in trust for the benefit of the Owners of the Certificates from time to time, as set forth in Section 2.03 hereof. "Trustee" means Seattle-First National Bank or any successor thereto, in its capacity as trustee, paying agent and registrar hereunder. "Underwriter" means George K. Baum & Company, Kirchner Moore Division, or any successor thereto. "Warranty Deed" means that certain statutory warranty deed, attached as Exhibit B, of even date herewith executed by Seller for purposes of assigning all Seller's right, title and interest in the Property to the Trustee for the benefit of the Owners, of the Certificates. section 1. 02. Rules of Construction. (a) The words "hereof," "herein," "hereto," "hereby" and "hereunder" (except in the form of Certificate) refer to the entire Trust Agreement. (b) Every "request," "order," "demand," "application," "appointment," "notice," "statement," "certificate," "consent" or similar action hereunder by the ci ty shall, unless the form thereof is specifically provided, be in writing signed by the Mayor of the City or Authorized Representative of the City. -5- DOT448 91/04/19 ARTICLE II APPLICATION OF FUNDS; ACQUISIT!ON OF PROPERTY Section 2.01. Acquisition of Seller's Riqht. Title and Interest in Propertv. and Pavment of Certain Costs Related to Issuance of Certificates. For the purpose of acquiring the Property and issuing the Certificates, and in consideration for the Trustee's agreeing to perform certain duties necessary thereto all as further described in this Trust Agreement, the Underwriter has transferred to Trustee as of the date of Closing, the sum of $1,450,000, to be applied to pay for all right, title and interest of the Seller in the Property, which shall be conveyed by warranty deed to the Trustee. Said Warranty Deed shall be attached, as executed, as Exhibit B to this Trust Agreement. section 2.02. Trustee to Enter into Lease. For the purposes of financing acquisition of the Property and providing for issuance of the Certificates, the Trustee shall, simultaneously upon receipt of Seller's right, title and interest in the Property, execute as lessor a ground lease of the Property to City in the form attached as Exhibit A hereto and incorporated by this reference (the "Lease")., section 2.03. Propertv and Lease Held in Trust. All right, title (if any) and interest of Seller in the Property, as conveyed by the Warranty Deed and as leased pursuant to the Lease (the "Trust Estate") shall be held by the Trustee in trust for the benefit of the Owners of the certificates pursuant to this Trust Agreement. Trustee shall execute said Lease as Lessor in its capacity as Trustee in contemplation of creation of the Trust Estate and of acting as Trustee hereunder for the benefit of the Owners of the certificates. Trustee shall assign or release the Trust Estate only in accordance with the terms of this Trust Agreement. section 2.04. Release of Trust Estate. So long as any certificates are Outstanding, the Trustee is authorized to assign or release the Trust Estate only to a representative designated by a majority in interest of the Owners of the Certificates; or to a successor trustee following removal or resignation of the Trustee in accordance with Article VI hereof. ARTICLE III AUTHORIZATION OF CERTIFICATES section 3.01. Authorization of Certificates. this Trust Agreement, Underwriter authorizes and Pursuant to directs the -6- 001448 91/04/19 Trustee to issue the Certificates in an aggregate principal amount equal to the outstanding principal balance of all Lease Payments due or to become due under the Lease ($1,450,000) and to act as Paying Agent and Registrar of the Certificates. Each Certificate shall evidence an undivided proportionate ownership interest in all right, title and interest of the lessor in the principal and interest components of the Lease Payments. The Lease Payments are set forth in Exhibit B-2 of the Lease. The Certificates shall be issued in fully-registered form; shall be dated as of the date of delivery to the Underwriter; shal.l be in denominations representing $5,000 increments of the principal component of such Lease Payments or any integral multiple thereof, except that no certificate shall represent more than one principal maturity; shall be numbered separately in such manner and with any additional designation as the Trustee or its agent deems necessary for purposes of identification; bear interest at the rates per annum set forth in the following schedules, calculated on a year of 360 days and twelve 30-day months, payable on June 1, 1992, and semiannually thereafter on December 1 and June 1 of each year, and mature on December 1 in the years and amounts as follows: Certificates Year Principal Interest (December 1) Amount Rates 1992 $ 45,000 % 1993 70,000 1994 75,000 1995 75,000 1996 80,000 1997 85,000 1998 90,000 1999 95,000 2000 100,000 2001 105,000 2002 110,000 2003 120,000 2004 130,000 2005 135,000 2006 135,000 The Trustee or its agent shall maintain the certificate Register. The Certificate Register shall contain the name and mailing address of the Owner of each Certificate or nominee of such owner and the principal amount and number of certificates held by each Owner or nominee. -7- DOT448 91/04/19 Upon surrender thereof to the Trustee the Certificates are interchangeable for Certificates in any authorized denomination of an equal aggregate principal amount and of the same interest rate and maturity. Certificates may be transferred only if endorsed in the manner provided therein and surrendered to the Trustee. Such exchange or transfer shall be without cost to the owner or transferee. The cost of printing any Certificates and any services rendered or any expenses incurred by the Trustee in connection with the exchange or transfer shall be paid by the City as Additional Rent under the Lease. The Trustee shall not be required (a) to issue, register, transfer or exchange any Certificates for a period of 15 days next preceding any interest payment date; or (b) to register, transfer or exchange any Certificate selected, called or being called for prepayment. Both principal of and interest on the Certificates shall be payable in lawful money of the United States of America. Inter- est on the Certificates shall be paid by check or draft mailed by first-class mail (on the date such interest is due) to the registered owners or assigns at the addresses appearing on the Certificate Register as of the 15th day of the month preceding the interest payment date or upon request, received upon or before the 15th day of the month preceding any Lease Payment date, of a Certificate Owner of $1,000,000 or more in principal amount of Certificates, a payment shall be made on the interest payment date by wire transfer in immediately available funds to an account designated by such Certificate Owner to the Trustee. Principal of the Certificates shall be payable upon presentation and surrender of the certificates by the registered owners at the principal office of the Trustee in Seattle, Washington. "Section 3.02. Prepavment of Lease Pavments Evidenced bv Certificates. The City has reserved the right in the Lease to prepay all or a portion of the principal component of the Lease Payments maturing on and after December 1, 2000, in whole or in part on any date on or after December 1, 1999 at a price equal to the principal component of the Lease Payments to be so prepaid together with interest thereon to the date of prepayment. If prepayment of principal is made in part it shall be in inverse order of maturities and by lot within a maturity in increments of $5,000. In the event a portion of the principal component of Lease Payments evidenced by a certificate is prepaid, there shall be issued to the registered Owner, without charge therefor, for the then unprepaid balance of the principal component of the Lease Payments evidenced thereby, a new Certificate or certificates, of like maturity and bearing interest on the principal component of the Lease Payments evidenced by the -8- DDT448 91/04/19 Certificate, Agreement. in any denomination authorized by this Trust Section ~.~3. Notice of Prepayment. Unless waived by any owner of Certlflcates to be prepaid, official notice of any such prepayment shall be given by the Trustee by mailing a copy of an official prepayment notice by first class mail at least 30 days and not more than 60 days prior to the date fixed for prepayment to the registered Owner of the Certificate or Certificates to be prepaid at the address shown on the Certificate Register or at such other address as is furnished in writing by such registered Owner to the Trustee. All official notices of prepayment shall be dated and shall state: (a) the prepayment date; (b) the prepayment price; (c) if fewer than all Outstanding Certificates are to be prepaid, the identification (and, in the case of partial prepayment, the respective principal amounts) of the certificates to be prepaid; (d) that on the prepayment date the prepayment price will become due and payable upon each such Certificate or portion thereof called for prepayment, and that interest on the principal component of Lease Payments evidenced thereby shall cease to accru~ from and after said date; and (e) the place where such Certificates are to be surrendered for payment of the prepayment price, which place of payment shall be the principal office of the Trustee. On or prior to 1:00 p.m. on any prepayment date the City in accordance with the Lease shall deposit with the Trustee an amount of money sufficient to pay the prepayment price of the Lease Payments to be prepaid on that date. Official notice of prepayment having been given as afore- said, the principal component of the Lease Payments evidenced by the certificates or portions of Certificates so to be prepaid shall, on the prepayment date, become due and payable at the prepayment price therein specified, and from and after such date (unless the City shall default in the payment of the prepayment price) such principal component of the Lease Payments evidenced by Certificates or portions of Certificates shall cease to bear interest. Upon surrender of such Certificates for prepayment of Lease Payments in accordance with said notice, such certificates -9- DOT448 91/04/19 shall be paid by the Trustee at the prepayment price. Installments of interest due on or prior to the prepayment date shall be payable as herein provided for payment of interest. All Certificates which have been prepaid shall be canceled and destroyed by the Trustee and shall not be reissued. In addition to the foregoing notice, further notice may be given by the Trustee as set forth below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for prepayment if notice thereof is given as above pre- scribed. Each further notice of prepayment given hereunder shall contain the information required above for an official notice of prepayment plus (i) the CUSIP numbers, if any, of all Certificates being prepaid; (ii) the date of issue of the Certificates as originally issued; (iii) the rate of interest borne on the principal component of the Lease Payments evidenced by each Certificate being prepaid; (iv) the maturity date of the principal component of the Lease Payments evidenced by each certificate being prepaid; and (v) any other descriptive information needed to identify accurately the Certificates being prepaid. Section 3.04. Form of Certificates. The Certificates shall be in substantially the form set forth in Section 10.01. Section 3.05. shall be signed by of the Trustee. executed manually any purpose. Execution of Certificates. The Certificates the manual signature of an authorized officer Only such Certificates as shall have been by the Trustee shall be valid or obligatory for Section 3.06. Reqistrar. The Trustee shall keep, or cause to be kept, at its principal corporate trust office, sufficient books for the registration and transfer of the rights to receive the Lease Payments evidenced by the Certificates which shall at all times be open to inspection by the City. The Trustee is authorized, on behalf of the Underwriter, to execute and deliver the Certificates transferred or exchanged in accordance with the provisions of such Certificates and this Trust Agreement and to carry out all of the Trustee's powers and duties under this Trust Agreement. The Certificate Owner shall be required to pay any tax or other governmental charge required to be paid for any exchange or registration of transfer and the Certificate Owner shall be required to pay the reasonable fees and expenses of the City and Trustee in connection with the replacement of any mutilated, lost or stolen Certificates. -10- DOT448 91/04/19 -'> The Trustee shall be responsible for its representations contained in the Certificate of Execution on the Certificates but for no other representations contained in the Certificates o~ in the recitals hereof. The Trustee may become the owner of Certificates with the same rights it would have if it were not the Trustee or registrar for the Certificates and to the extent permitted by law, may act as depositary for a~d permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Certificate Owners. As compensation for its services hereunder, the Trustee shall be paid by the City in Additional Rent payable under the Lease. The Trustee shall not be required to risk any of its own funds in the performance of any duties hereunder or under the Lease. Section 3.07. provision for Payments; Remedies in Event of Defaul t. The Lease Payments and the Certificates evidencing rights to receive such Lease Payments are payable solely from payments to be received by the Trustee from the City pursuant to the Lease. The Trustee is only obligated to pass through such payments to Certificate Owners in accordance with their relative interests; the certificates shall not be obligations of the Trustee, section 3.08. Mutilated. Destroyed. Lost or Stolen certificates. If any Certificate shall become mutilated, the Trustee shall execute and deliver a substitute certificate of like tenor, denomination, and maturity in exchange and substitution for the certificate so mutilated, but only upon surrender to the Trustee of such mutilated Certificate for cancellation, and the Trustee may require reasonable indemnity therefor. If any certificate shall be reported lost, stolen or destroyed, evidence as to the ownership thereof and the loss, theft' or destruction thereof shall be submitted to the Trustee; and if such evidence shall be satisfactory and if indemnity satisfactory to the Trustee shall be requested and given, the Trustee shall execute and deliver a substitute Certificate of like tenor, denomination, and maturity. The cost of providing any substitute Certificate under the provisions of this section shall be borne by the Owner for whose benefit such substitute certificate is provided. If any such mutilated, lost, stolen or destroyed Certificate shall have matured or be about to mature, the Trustee may pay to the Owner the principal amount of such certificate upon the maturity thereof and compliance by such Owner with the aforesaid conditions, without the issuance of a substitute Certificate therefor. All Certificates shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, -11- 001448 91/04/19 lost or stolen Certificates and shall preclude any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of participations, negotiable instruments or investment or securities without their surrender. Section 3.09. Cancellation and Destruction of Surrendered Certificates. Certificates surrendered for payment or prepayment, and the Certificates purchased from any money held by the Trustee hereunder or surrendered to the Trustee for cancellation, shall be canceled and destroyed by the Trustee no later than 365 days following payment therefor, provided that no petition in bankruptcy shall have been filed by or against the City and not dismissed. Section 3.10. Issue of Certificates. The Trustee shall issue, execute and deliver the Certificates following the execution of this Trust Agreement and filing with the Trustee the following: (a) a certified copy of a resolution(s) or ordinance(s) of the City Council authorizing (1) the execution and del i very of the Lease and the Warranty Deed; and (2) the execution and delivery of this Trust Agreement; (b) an original executed counterpart of the Lease and this Trust Agreement; (c) an original executed Warranty Deed; and (d) an approving opinion of Certificate Counsel. section 3.11. Security for Certificates. The Certificates represent undivided proportionate beneficial interests in all right, title and interest of the Trustee in the Property (subject to the terms of the Lease), and the Lease Payments to be made by the city under the Lease. The Certificates are not separately secured and are not obligations of the Underwriter, Trustee, or any other entity. ARTICLE IV LEASE PAYMENT FUND Section 4.01. Lease PaYment Fund. A. Establishment. The Trustee shall establish a special trust fund designated as the "Lease Payment Fund," shall keep such fund separate and apart from all other accounts and moneys held by it, and shall administer such fund as provided in this Section and Article VI hereof. -12- 001448 91/04/19 B. Deposits. In the Lease Payment Fund shall be deposited al2. Lease Payments received by the Trustee from the City under the Lease. C. Disbursements. The moneys deposited in the Lease Payment Fund shall be applied by the Trustee solely for the benefi t of the Owners of the Certificates. The Trustee shall promptly distribute any Lease Payments in the Lease Payment Fund for payment to the Owners of the Certificates, pro rata in accordance with maturities of the principal components of Lease Payments evidenced by their Certificates and their respective percentages of ownership interest therein, so that payment may be made to said Owners on the dates and as contemplated by section 3.01 hereof. Upon the occurrence of an Event of Default, notwithstanding the foregoing, moneys deposited in the Lease Payment Fund shall be applied as set forth in Section 5.09 hereof. The moneys credited to the Lease Payment Fund shall not be commingled, except for investment purposes pursuant to Section 4.02, with any other moneys held by the Trustee under this Trust Agreement. Any amounts in the Lease Payment Fund remaining after all Certificates are fully paid shall be paid to the City after all fees and expenses of the Trustee have been paid, and all indemnification obligations to the Trustee by the City have been satisfied. Section 4.02. Deposits and Securitv Therefor. All money received by the Trustee under this Trust Agreement shall, except as hereinafter provided, be deposited with the Trustee, until invested or deposited as provided in this Section 4.02. All deposits with the Trustee shall be held by it as required by applicable law for such trust deposits. The Trustee may deposit such money with any other depositary which is authorized to receive them and is a qualified public depository under RCW 39.58, as now or hereafter amended, subject to supervision by public authorities. All deposits in any other depositary in excess of the amount insured by the Federal Deposit Insurance Corporation or similar u.s. government insurer of deposits shall be deposited with a bank or trust company having a combined capital and surplus of not less than $50,000,000. Section 4.03. Investment or Deposit of Funds. The Trustee shall invest money held in the Lease Payment Fund. In the absence of written direction from the City, the Trustee shall invest funds in investments described in the definition of Qualified Investments herein. All such investments shall mature not later than the date when the amounts will foreseeably be needed for timely payment of the Certificates or for purposes of -13- DOT448 91/04/19 this Trust Agreement. The Trustee shall also, at the written direction of the City, sell any such investment and deposit the proceeds in the Lea:o:e Payment Fund. The investments permitted hereunder shall include only Qualified Investments. If the Trustee has been informed that, or has learned that, an Event of Default has occurred and is continuing, the Trustee shall invest any available moneys held in the Lease Payment Fund in short-term direct obligations of the United States Government. Any securities purchased with the money in the Lease Payment Fund shall be deemed part of such fund and, for the purpose of determining the amount of money in such fund, the securities therein shall be valued at their cost or market, whichever is lower. The earnings of any such investment (including interest or realized discount) shall be deposited to such fund. The Trustee may, and to the extent required for payments from the Lease Payment Fund, shall sell without prior notice to the City any such obligation at any time, and the proceeds of such sale, and of all payments at maturity and upon redemption of such investments, shall be held in such fund. The Trustee shall not be liable for losses incurred by reason of purchases or sales of investments made in accordance with this section. All interest or income received in the Lease Payment Fund shall be held therein with a corresponding credit against the ci ty' s obl igation to make Lease Payments under the Lease. The Trustee may make any or all investments permitted by the provisions of this Section 4.03 through its own investment department. ARTICLE V EVENTS OF DEFAULT AND REMEDIES section 5.01. Events of Default Defined. following shall be an Event of Default hereunder: (a) if payment of a principal installment or prepayment price of any Certificate is not made when it becomes due and payable pursuant to scheduled payment dates or upon call for prepayment; or Each of the (b) if payment of any installment of interest on any certificate is not made when it becomes due and payable; or (c) if an "Event of Default" as defined in the Lease occurs, each of which Events of Default are incorporated herein by this reference. -14- DOT448 91/04/19 Section 5.02. Remedies. If any Event of Default occurs and is continuing, the Trust~e may enforce each and every right granted to the Lessor under the Lease or any supplements or amendments thereto. In exercising such rights and the rights given the Trustee under this Article V, the Trustee shall take such action, as in the judgment of the Trustee, applying the standard described in section 6.05 hereof, would best serve the interests of the Owners. Section 5.03. Leqal Proceedinqs by Trustee. If any Event of Default has occurred and is continuing, the Trustee in its discretion may, and upon the written request of the Owners of Outstanding Certificates then representing a majority in principal amount of the Lease Payments and receipt of indemnity to its satisfaction, shall, in its own name: (a) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Owners, including the right as lessor under the Lease to collect the amounts payable under the Lease or to enforce any and all provisions of said agreements for the benefit of the Owners; (b) bring suit upon the Certificates; (c) take such actions as are allowed by law or equity to realize upon the Trust Estate; in (d) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Owners. Section 5.04. Discontinuance of Proceedinqs by Trustee. If any proceeding taken by the Trustee on account of any Event of Default is discontinued or is determined adversely to the Trustee, the city, the Trustee and the Owners shall be restored to their former positions and rights hereunder as though no such proceeding had been taken, but subject to the limitations of any such adverse determination. ' section 5.05. Owners Mav Direct Proceedinqs. The Owners of Outstanding Certificates representing a majority in principal amount of the Lease Payments hereunder shall have the right to direct the method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee provided that such direction shall not be in conflict with any rule of law or with this Trust Agreement or be unduly prejudicial to Owners not joining therein and the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction; provided, however, -15- 00T448 91/04/19 that no proceedings by the Trustee or the Owners of Certificates Outstanding shall: (a) extend the fixed maturity of any principal component of Lease Payments represented by Certificates or reduce ~he rate of inter~st thereon, or extend the time of payment of lnterest from thelr due date, or reduce the amount of principal thereof, or reduce any premium payable on the prepayment thereof without the consent of the Owner of each Certificate so affected; or (b) reduce the aforesaid percentage of certificate owners required to approve such proceeding or action without the consent of the Owners of all of the Outstanding Certificates. Section 5.06. Limitations on Actions bv Owners. No Owner shall have any right to pursue any remedy hereunder unless: (a) the Trustee shall have been given written notice of an Event of Default; (b) the Owners of at least a majority in principal amount of the Certificates then outstanding respecting which there has been an Event of Default shall have requested the Trustee, in writing, to exercise the powers hereinabove granted or to pursue such remedy in its or their name or names; (c) the Trustee shall have been offered indemnity satisfactory to it against costs, expenses and liabilities; and (d) the Trustee shall have failed to comply with such request within 60 days or such shorter time as shall be reasonable in the circumstances. section 5.07. Trustee May Enforce Riqhts wi thout Possession of Certificates. All rights under this Trust Agreement and the Certificates may be enforced by the Trustee without the possession of any certificates or the production thereof at the trial or other proceedings relative thereto, and any proceeding instituted by the Trustee shall be brought in its name for the ratable benefit of all Owners of the certificates. Section 5.08. Delays and Omissions Not to Impair Riqhts. No delay or omission in respect of exercising any right or power accruing upon any Event of Default shall impair such right or power or be a waiver of such Event of Default and every remedy given by this Article may be exercised from time to time and as often as may be deemed expedient. -16- DOT448 91/04/19 Section 5.09. Appl ication of Monev in Event of Default. Any money received by the Trustee under this Article V shall be applied: First: To the payment of all amounts due the Trustee under Section 6.02 and 6.03 hereof; Second: To the payment of principal or prepayment price (as the case may be) and interest then owing on the Lease Payments represented by the Certificates, including any interest on overdue interest, and in case such money shall be insufficient to pay the same in full, then to the payment of principal or prepayment price and interest ratably, without preference or priority of one over another or of any installment of interest over any other installment of interest; and Third: Once no Certificate is Outstanding, the payment of expenses of the city, including reasonable attorneys' fees, actually incurred in connection with this financing, and remaining unpaid. Upon termination of this trust, the surplus, if any, shall be paid to the City or the person or persons lawfully entitled to receive the same as a court of competent jurisdiction may direct. Section 5.10. Monevs Held by Trustee One Year After Due Date. Moneys or investments held by the Trustee in trust for the payment and discharge of any of the Certificates that remain unclaimed for one (1) year after the date when such Certificates shall have become due and payable, either at their stated maturity dates or by call for earlier prepayment, if such moneys were held by the Trustee at such date or for one year after the date 'of deposit of such moneys if deposited with the Trustee after the said date when such certificates become due and payable, shall at the written request of the City be repaid by the Trustee to the city (subject to any right of setoff) as the City's property, and the Trustee shall thereupon be released and discharged with respect thereto, and the owners of the certifi- cates payable from such moneys shall look only to the City for the payment of such Certificates. Section 5.11. Trustee's Riqht to Receiver. The Trustee shall, to the extent permitted by law, be entitled as of right to the appointment of a receiver; and the Trustee, the Owners and any receiver so appointed shall have such rights and powers and be subject to such limitations and restrictions as may be contained in or permitted by the law. -17- 001448 91/04/19 Section 5.12. Trustee and Owners Entitled to All Remedies Und';!r Law; Reme;dies Not Exclusive. It is the purpose of this A~tlcle to provlde to the Trustee and Owners all righrs and reme- dles as may be lawfully granted under the provisions of law but should any remedy herein granted be held unlawful, the Trustee and the Owners shall nevertheless be entitled to every remedy permitted, It is further intended that, insofar as lawfully possible, the provisions of this Article V shall apply to and be binding upon any trustee or receiver appointed. No remedy herein conferred is intended to be exclusive of any other remedy or remedies, and each remedy is in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. ARTICLE VI THE TRUSTEE Section 6.01. Acceptance of Trust. The Trustee accepts and agrees to execute the trusts hereby created or by the Warranty Deed created, but only upon the additional terms set forth in this Article VI, to all of which the parties hereto and the Owners agree. Section 6.02. Trustee May Act Throuqh Aqents; Answerable OnlY for willful Misconduct or Neqliqence. The Trustee may exer- cise any powers hereunder and perform any duties required of it pursuant to this Trust Agreement through attorneys, agents, officers or employees, and shall be entitled to advice of counsel concerning all questions hereunder. The Trustee shall not be answerable for the exercise of any discretion or power under this Trust Agreement nor for anything whatever in connection with the trust' hereunder, except only its own willful misconduct or negligence or that of its agents, officers and employees. The Trustee may consult with counsel and the advice of such counsel or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith in accordance with such advice or opinion of counsel. The Trustee shall not be responsible for any loss or damage resulting from any action or inaction in good faith in reliance upon such opinion or advice. The permissive right of the Trustee to do things enumerated in this Trust Agreement shall not be construed as a duty. All money received by the Trustee shall, until used or applied as herein provided, be held in trust as set forth in this Trust Agreement. Neither the Trustee nor any paying agent shall be under any liability for interest on any money received by it hereunder. The Trustee shall be entitled to be indemnified by the City from any loss, liability, expense or advance incurred or made, without -18- OOT448 91/04/19 negligence or bad faith on the part of the Trustee, arising out of or in connection with its acceptance or administration of the trust, or performance of its duties hereunder or under the Leèse. All indemnifications and releases from liability granted herein to the Trustee shall extend to its directors, officers, employees and agents. Section 6.03. Compensation. The Trustee shall receive from the City as compensation for its services hereunder and under the Lease an initial fee of $ and subsequent administrative fees according to the fee schedule submitted to the City at or prior to closing, for so long as the Certificates or any of them are Outstanding. In addition, in accordance with the Lease the Trustee shall be entitled to payment or reimbursement from the city for reasonable fees for its services rendered hereunder, disbursements and all advances, attorneys' fees and other expenses reasonably and necessarily made or incurred by the Trustee (including the reasonable compensation and the expenses and disbursements of its counsel and all persons not regularly in its employ), in connection with such services hereunder and, in the event that it should become necessary that the Trustee perform extraordinary services, it shall be entitled to reasonable extra compensation therefor from the City, and to reimbursement from the City for reasonable and necessary extraordinary expenses in connection therewith; provided, that if such extraordinary services are due to the willful misconduct or negligence of the Trustee, it shall not be entitled to compensa- tion or reimbursement therefor. Section 6.04. Notice of Default; Riqht to Investiqate. within 30 days after the latter of the occurrence of an event of default or receipt by the Trustee of a notice that an event of defaul t has occurred, the Trustee shall, unless such defaults have "been remedied, give written notice by first class mail to Owners of Certificates, of all defaults known to the Trustee and send a copy of such notice to the City (the term "defaults" for purposes of this section 6.04 and section 6.05 hereof being defined to include the events specified in clauses A through C of Section 5.01 hereof, not including any notice or periods of grace provided for therein); provided that, except in the case of a defaul t under Clauses A or B of Section 5.01, the Trustee may withhold such notice so long as it in good faith determines that such withholding is in the interest of the Owners. The Trustee shall not be deemed to have notice of any default unless it has actual knowledge thereof or has been notified in writing of such default by the Owners of at least a majority in principal amount of the Certificates then Outstanding. The Trustee may, however, at any time require of the City full information as to the performance of any covenant hereunder; and, if information satisfactory to it is not forthcoming, the Trustee may make or -19- DOT448 91/04/19 cause to be made an investigation into the affairs of the City related to this Trust Agreement. Section 6.05. Duties and Responsibilities. Except during the continuance of an Event of Default, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Trust Agreement, and no implied covenants or obligations shall be read into this Trust Agreement against the Trustee and in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates and opinions furnished to the Trustee and conforming to the requirements of this Trust Agreement. If any Event of Default shall have occurred and be continuing, the Trustee shall exercise such of the rights and remedies vested in it by this Trust Agreement and shall use the same degree of care in their exercise as a prudent person would exercise or use in the circumstances in the conduct of his or her own affairs; provided, that if in the opinion of the Trustee such action may tend to involve expense or liability, it shall not be obligated to take such action unless it is furnished with indemnity by one or more Owners or the City, and arrangements for payment thereof, satisfactory to it. The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of Certificates representing not less than a majority in principal amount of the Lease Payments at the time Outstanding, related to the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Trust Agreement or the Lease. section 6.06. Reliance on Requisition. Etc. The Trustee may 'act on any requisition, resolution, notice, telegram, request, consent, waiver, certificate, statement, affidavit, voucher, bond, or other paper or document which it in good faith believes to be genuine and to have been passed or signed by the proper persons or to have been prepared and furnished pursuant to any of the provisions of this Trust Agreement; and the Trustee shall be under no duty to make any investiga'tion as to any statement contained in any such instrument, but may accept the same as conclusive evidence of the accuracy of such statement. Section 6.07. Construction of Ambiquous Provisions. The Trustee may construe any ambiguous or inconsistent provisions of this Trust Agreement, and any such construction by the Trustee shall be binding upon the Owners. -20- DOT448 91/04/19 . Section 6. O~. ResiGnation of Trustee. The Trustee may res~gn and be d~scharged of the trusts created by this Trust Agreement by written resignation filed with the city no fewer than 60 days before the date when it is to take effect. Such resignation shall take effect only upon the appointment of a successor Trustee by the City. If no successor Trustee shall have been appointed within 45 days of giving notice as aforesaid, the resigning Trustee may petition a court of competent jurisdiction for the appointment of a successor Trustee and which court may thereupon appoint such successor Trustee. ' Section 6.09. Removal of Trustee. The Owners of Certificates representing a majority in principal amount of the Lease Payments then outstanding may on thirty days written notice given to the Trustee, the Underwriter and the City, replace the Trustee or any successor thereto, and may appoint a successor thereto, which successor shall be a bank or trust company meeting the requirements set forth herein. Section 6.10. Appointment of Successor Trustee. If the Trustee or any successor Trustee resigns or is removed (other than pursuant to Section 6.09 hereof) or dissolved, or if its property or business is taken under the control of any state or federal court or administrative body, a vacancy shall forthwith exist in the office of the Trustee, and the Underwriter shall appoint a successor. I f the Underwriter fails to make such appointment within 60 days after the date notice of resignation is filed, or after the effective date of the Trustee's removal or dissolution and no appointment has previously been made pursuant to Section 6.08 hereof, the Owners of Certificates representing a majority in principal amount of the Lease Payments then Outstanding may do so. Section 6.11. Qualification of Successor. A successor Trustee shall be a national bank with trust powers or a bank and trust company or a trust company, in each case having capital and surplus of at least $50,000,000, if there be one able and willing to accept the trust on reasonable and customary terms. Section 6.12. Instruments of Succession. Any successor Trustee shall execute, acknowledge and deliver to the City and the Underwriter an instrument accepting such appointment hereunder; and thereupon such successor Trustee, without any further act, deed or conveyance, shall become fully vested with all the estates (including the Trust Estate), properties, rights, powers, trusts, duties and obligations of its predecessor in the trust hereunder, with like effect as if originally named Trustee herein. The Trustee ceasing to act hereunder shall pay over to the successor Trustee all money held by it hereunder; and, upon request of the successor Trustee, the Trustee ceasing to act and -21- DDT448 91/D4/19 the City shall execute and deliver an instrument transferring to the successor Trustee all the estates (including the Trust Estate), properties, rights, powers and trusts hereunder of the Trustee ceasing to act. The City shall be provided with a copy of each instrument mentioned herein. Section 6.13. Merqer of Trustee. Any corporation into which any Trustee hereunder may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which any Trustee hereunder shall be a party, shall be the successor Trustee under this Trust Agreement, without the execution or filing of any paper or any further act on the part of the parties hereto, anything herein to the contrary notwithstanding. Notice of such merger or consolidation shall be given to the city. If such corporation fails to be eligible to serve as Trustee under Section 6.11, then the Trustee must comply with the resignation procedures set forth in Section 6.08. Section 6.14. Survival of Riqhts. The Trustee's rights to immunities, indemnifications and protection from liability hereunder and under the Lease and its rights to payment of its fees and expenses shall survive its resignation or removal, the final payment or the defeasance of the certificates and the termination of the Lease. section 6.15. Representation and Covenants of the Trustee. (i) THE TRUSTEE WILL NOT BE REQUIRED TO MAKE ANY INSPECTION OF THE PROPERTY, AND THE TRUSTEE SHALL, PURSUANT TO THE LEASE, LEASE THE PROPERTY AS IS, AND THE TRUSTEE (WHETHER ACTING AS TRUSTEE HEREUNDER OR AS LESSOR UNDER THE LEASE OR IN ITS INDIVIDUAL CAPACITY) HAS MADE, MAKES AND SHALL BE DEEMED TO HAVE MADE, NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, MERCHANTABILITY, DESIGN, QUALITY, DURABILITY, OPERATION OR FITNESS FOR USE OR PURPOSE OF THE PROPERTY OR ANY COMPONENT PART THEREOF (EXCEPT THAT THE TRUSTEE, ON THE CLOSING DATE OR, IN THE CASE OF A SUCCESSOR TRUSTEE, ON THE DATE OF TRANSFER TO IT OF TITLE TO THE PROPERTY, SHALL POSSESS WHATEVER TITLE TO THE PROPERTY THEREOF WAS TRANSFERRED TO IT), (ii) the Trustee makes no representation or warranty as to the validity, legality or enforceability of this Trust Agreement (except with respect to its enforceability against the Trustee) any agreement, certificate or document referred to herein or involved in the transactions contemplated by this Trust Agreement, or as to the correctness of any statement contained in any such agreement, certificate or document, (iii) the Trustee makes no other representation or warranty relating to the transactions contemplated by this Trust Agreement not expressly set forth in this Trust Agreement or by the Trustee in any agreement, -22- OOT448 91/04/19 certificate or document referred to herein or involved in the transactions contemplated by this Trust Agreement, except that the Trustee represents and warrants for the benefit of the Underwriter and each Owner that this Trust Agreement has been and the Lease and Certificates to be signed by the Trustee hav~ been or will be, executed and delivered by one or more ~f its officers who are, or at the time of execution and delivery were or will be, duly authorized to effect such execution and delivery on its behalf, and (iv) the Trustee in its individual capacity covenants and agrees, at its own expense, promptly to take such action as may be necessary duly to discharge or bond or eliminate any lien on the Property (A) arising as a result of claims against the Trustee not related to the transactions contemplated by this Trust Agreement or (B) related to the Trustee's willful misconduct or negligence in administering the Property. ARTICLE VII ACTS OF OWNERS: EVIDENCE OF OWNERSHIP OF CERTIFICATES section 7.01. Actions of Owners; Evidence of Ownership. Any action to be taken by Owners may be evidenced by one or more concurrent written instruments of similar tenor signed or executed by such Owners in person or by an agent appointed in writing. The fact and date of the execution by any person of any such instruments may be proved by acknowledgment before a notary public or other officer empowered to take acknowledgments or by an affidavit of a witness to such execution. Any action by the Owner of any Certificate shall bind all future Owners of the same certificate in respect of anything done or suffered by the City or the Trustee in pursuance thereof. ARTICLE VIII AMENDMENTS AND SUPPLEMENTS Section 8.01. Amendments and Supplements Without Owners' Consent. This Trust Agreement may be amended or supplemented at any time and from time to time, without notice to or the consent of the Owners, by delivery of an amendment requested by certificate Counsel filed with the Trustee, for the purpose of curing any ambiguity or curing, correcting or supplementing any defective provision of this Trust Agreement in such manner as shall not be inconsistent with this Trust Agreement and shall not impair the security hereof or adversely affect the Owners. As a condition of its effectiveness, any such request shall be accompanied by (1) a consent by the city to such, which consent shall not be unreasonably withheld; and (2) an opinion of Certificate Counsel that such change shall not impair the tax- exempt status of the interest component of the Lease Payments, -23- 00T448 91/04/19 and is not in violation of any law; provided further, that no such change may adversely or materially impair the city's obligations under the Lease. Section 8.02. Amendments with Owners' Consent. This Trust Agreement may be amended from time to time, except with respect to (1) the principal or interest payable upon Lease Payments represented by any Certificate, (2) the dates of maturity or prepayment provisions of any Certificates, and (3) this Article VIII, by a supplemental indenture approved by the Owners of at least 66-2/3% in aggregate principal amount of the Certificates then outstanding; provided, that no amendment shall be made which affects the rights of some but fewer than all the Outstanding Certificates without the consent of the Owners of Certificates representing a majority in aggregate principal amount of the Lease Payments so affected, and provided further that no amendment shall: (a) extend the fixed maturity of the principal component of Lease Payments represented by any certificates or reduce the rate of interest thereon, or extend the time of payment of interest from their due date, or reduce the amount of principal thereof, or reduce any premium payable on the prepayment thereof, without the consent of the Owner of each Certificate so effected; or (b) reduce the aforesaid percentage of certificate owners required to approve such proceeding or action without the consent of the Owners of all of the Outstanding Certificates, and provided further that no amendment shall become effective without a consent by the City thereto being placed on file with the Trustee, which consent shall not be unreasonably withheld. Section 8.03. Amendment of Lease. If the City proposes to amend the Lease, the Trustee may, in its reasonable discretion, consent thereto; provided, that if such proposal would amend the Lease in such a way as would, in the opinion of the Trustee, adversely affect the interests of the Owners, the proposed amend- ment shall not become effective without the consent thereto of the Owners of at least a majority in aggregate principal amount of the certificates then Outstanding; provided, that the Trustee shall not, without the unanimous consent of all owners of Certificates then Outstanding, consent to any amendment which would (1) decrease the amounts payable under the Lease, (2) change the date of payment or prepayment provisions under the Lease, or (3) change any provisions with respect to amendment; and further provided, that no amendment shall be consented to which affects the rights of some but fewer than all the Outstanding Certificates without the consent of the Owners of Certificates representing at least 66-2/3% in aggregate principal -24- DOT448 91/04/19 amount of the Lease Payments so affected. Notice amendment to the Lease shall be given to Moody's. of any Section 8.04. Trustee Authorized to Join in Amendments and Supplements; Reliance on Counsel. The Trustee is authorized to join with the Certificate Owners in the execution and delivery of any supplemental agreement or amendment permitted by this Article VIII and in so doing shall be fully protected by an opinion of counsel that such supplemental indenture or amendment is so permitted and has been duly authorized by the City and that all things necessary to make it a valid and binding agreement have been done. The Trustee's consent is required in the event of amendment or supplement hereto affecting its rights or duties hereunder. ARTICLE IX DEFEASANCE Section 9.01. Defeasance. When the principal or prepayment price (as the case may be) of, and interest on, the Lease and all certificates issued hereunder have been paid, as provided in this Section 9.01, or provision has been made for payment of the same, and all payment obl igations of the City under section 6.02 and 6.03 hereof have been satisfied, then, simultaneously with the Trustee's disposition of the Property (pursuant to Article X of the Lease, if the Trustee has not previously sold the Property pursuant to Section 5.03 hereof), the Trustee's right, title (if any) and interest in the Property and the Lease, and the money payable under the Lease shall thereupon cease and the Trustee shall release the Trust Estate and this Trust Agreement in respect thereto and shall execute such documents to evidence such release as may be reasonably required by the city and shall turn over 'to the City or its assigns all balances then held by it hereunder not required for the payment of the Certificates and such other sums as may be due under this Trust Agreement. If the principal or prepayment price (as the case may be) of, and interest on, any of the Lease Payments represented by the certificates issued hereunder has been paid, or provision has been made for the payment of the same in the manner stipulated therein and in this Trust Agreement, then such certificates shall cease to be entitled to any lien, benefit or security under this Trust Agreement or the Lease, and all covenants, agreements and obligations of the City with respect to payment of the Lease Payments represented by the Certificates shall thereupon cease, terminate and become void and be discharged and satisfied. without limiting the generality of the foregoing, provision for the payment of Lease Payments and Certificates shall be deemed to have been made when the Trustee shall hold in the Lease -25- DDT448 91/04/19 Purchase Fund for payment of interest on the Lease Payments represented by the Certificates when due and payment of principal component prepayment price of the Lease Payments represented by the Certificates when due (whether at maturity or upon prepayment at the option of the Owner or otherwise) (i) cash in an amount sufficient to make all payments specified above, or (ii) non- callable obligations issued by the United States of America, maturing on or before the date or dates when the payments specified above shall become due and/or on demand of the Trustee, the principal amount of which and the interest thereon, when due, is or will be, in the aggregate, sufficient without reinvestment to make all such payments, or (iii) any combination of cash and such obligations. The obligations and money deposited with the Trustee pursuant to this Section shall be segregated by it and held in trust for the payment of the principal of, prepayment price and interest on said Lease Payments represented by the Certificates. Section 9.02. Transfer of Title to Property. Upon the payment in full of all principal components of the Lease Payments of and interest thereon, or provision therefor, and upon satisfaction of the City's payment obligations under Section 6.02 and 6.03 in .conformity with Article X of the Lease, the Trustee is authorized and directed to deliver and transfer to the City all documents evidencing title to the Property and release of the Trust Estate. ARTICLE X FORM OF CERTIFICATES Section 10.01. Form of Certificates. shall be in substantially the following form: The Certificates -26- DOT448 91/04/19 No. R- $ UNITED ST~TES OF AMERICA STATE OF WASHINGTON CERTIFICATE OF PARTICIPATION, 1991 IN LIMITED TAX GENERAL OBLIGATION LEASE PAYMENTS OF THE CITY OF FEDERAL WAY, WASHINGTON, AS LESSEE UNDER A GROUND LEASE WITH OPTION TO PURCHASE CERTAIN REAL PROPERTY Registered Owner: Interest Rate: Maturity Date of Principal Sum of CUSIP: Date of Original Lease Payments: Lease Payments: Issue: This is to certify that the Registered Owner named above is the Registered Owner of the following interest in the right to receive a portion of certain Lease Payments (the "Lease Payments") to be paid under a ground lease with option to purchase (the "Lease") dated September 25, 1991, entered into by and between Seattle-First National Bank (the "Lessor" and "Trustee") and the City of Federal Way, Washington (the "City"), as lessee of certain real property (the "Property") under the Lease. The Lessor's interests in the Lease and the Property (subject to the terms of the Lease) are held pursuant to a Warranty Deed in favor of the Trustee and to the terms of a trust agreement between George K. Baum & Company, Kirchner Moore Division, and the Trustee dated September 1, 1991 (the "Trust Agreement") for the benefit of the owners of certificates of participation evidencing undivided proportionate ownership interests in the Lessor's interests under the Lease and the Lease Payments (the "Certificates"). The Registered Owner is entitled to receive, subject to the terms of the Lease, on the Maturity Date specified above, the Principal Sum of the Lease Payments specified above, representing a portion of the principal amount of the Lease Payments owing under the Lease, and to receive interest on such principal amount from the date hereof, or the most recent date to which interest has been paid or duly provided for, at the Interest Rate specified above, payable on June 1, 1992, and semiannually thereafter on each December 1 and June 1 thereafter, to and including the Maturity Date specified above. All amounts payable hereunder are payable in lawful money of the United States of America. The principal component of Lease -27- DDT448 91/D4/19 Payments payable under this certificate shall be payable upon presentation and surrender of this certificate at the principal office of the Trustee in Seattle, WaGhington. Interest payable under this certificate is payable by check or draft mailed by first-class mail on the date such interest is due by the Trustee to the Registered Owner of this certificate at the address appearing on the records maintained by the Trustee as of the 15th day of the month preceding the interest payment date. The Lease Payments are limited tax general obligations of the City. The full faith, credit and resources of the City are pledged irrevocably by the City under the Lease for the payment of principal and interest of the Lease Payments. The City has pledged under the Lease to budget and appropriate from revenues available without a vote of the City's electors, amounts suffi- cient, together with other money legally available therefor, to pay the principal and interest of said Lease Payments when due. This certificate is transferable only on the records main- tained by the Registrar for that purpose upon the surrender of this certificate by the Registered Owner and only if endorsed in the manner provided hereon, and thereupon a new fully registered certificate shall be issued to the transferee in exchange there- for. ADDITIONAL PROVISIONS OF THIS CERTIFICATE APPEAR ON THE REVERSE SIDE HEREOF; SUCH PROVISIONS HAVE THE SAME EFFECT AS IF THEY WERE PRINTED HEREIN. THIS CERTIFICATE SHALL NOT BE VALID UNLESS PROPERLY EXECUTED BY THE TRUSTEE IN THE SPACE INDICATED BELOW. CERTIFICATE OF EXECUTION This is one of the Certificates of Participation in the Lease Payments due under the Lease described herein, and is properly registered and executed pursuant to the Trust Agreement. Date of Execution: SEATTLE-FIRST Trustee NATIONAL BANK, as By Authorized Officer -28- DOT448 91/04/19 ADDITIONAL PROVISIONS This certificate and other certificates of this issue of like date and tenor, except as to interest rate and date of maturity, represent undivided, proportionate interests in the Lease Payments due from the city under the Lease and are issued in the aggregate principal amount of $1,450,000, pursuant to the terms of the Trust Agreement. This certificate has been executed by the Trustee. All right, title (if any) and interest of the Lessor under the Lease (except for express and implied warranties) are held by the Trustee pursuant to the terms of the Trust Agreement. The Warranty Deed is without recourse, and neither the Trustee nor the Registered Owner of this certificate has rights against any prior owner of the Property in the event of nonpayment hereunder or under the Lease. The Trustee has no obligation or liability to the certificate Owners for the payment of principal or interest components of the Lease Payments represented by the certificates or on the underlying Lease. In the event of default by the City in the payment of principal or interest under the Lease, the Registered Owner of this certificate has no recourse against the Trustee for such principal or interest. The Trustee's liability to the Registered Owner hereof shall consist of the duty to remit to the Registered Owner his or her pro rata share of the Lease Payments on the Lease, when, as and if collected from the City pursuant to the Lease. The Trustee's only obligations are to hold the Lease and title to the Property for the benefit of the owners of the Certificates, and to administer for the benefit of the certificate Owners the various funds and accounts established in the Trust Agreement. Copies of the Trust Agreement, Lease, and Warranty Deed are on file at the principal offices of the Trustee and at the City of Federal Way, Washington. Reference to the Trust Agreement, Lease, Warranty Deed and any and all amendments thereto is made for a description of the covenants of the City securing the Lease Payments, the nature, extent and manner of enforcement of such covenants, the rights and remedies of the Registered Owners of the certificates with respect thereto and the other terms and conditions upon which the Certificates are delivered thereunder. The City has reserved the right to prepay the principal components of the Lease Payments maturing on and after December 1, 2000 in whole or in part (in inverse order of maturity and by lot within a maturity), on any date on and after December 1, 1999 at a price of par (expressed as a percentage of -29- 001448 91/04/19 principal component of the Lease Payment), plus accrued interest to the date of prepayment. Notice of such prepayment shall be given by first class mail no more than 60 nor less than 30 days prior to the date of prepayment. To the extent and in the manner permitted by the terms of the Trust Agreement, the provisions of the Trust Agreement may be amended by the parties thereto with the written consent of the Owners of certificates representing at least a majority in principal amount of the Lease Payments then Outstanding. The ownership of this certificate must be registered upon the books of the Trustee as provided in the Trust Agreement. The Trustee may treat the registered Owner hereof as the absolute Owner hereof for all purposes, and the Trustee shall not be affected by any notice to the contrary. The following abbreviations, when used in the inscription on the face of the within certificate, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UNIF GIFT (TRANSFER) MIN ACT - Custodian (Custodian) (Minor's Name) under Uniform Gifts (Transfers) to Minors Act (state) Additional abbreviations may also be used though not in list above. -30- 001448 91/04/19 Warranty Deed FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER OF TRANSFEREE \ \ (Please print or typewrite name and address, including zip code of Transferee.) the within certificate and all rights thereunder and does hereby irrevocably constitute and appoint of , or its successor, as Agent to transfer said certificate on the books kept by the Trustee for registration thereof with full power of substitution in the premises. DATED: SIGNATURE GUARANTEED: ARTICLE XI MISCELLANEOUS PROVISIONS section 11.01. No Personal Recourse. No recourse shall be had for any claim based on this Trust Agreement or the Certificates, including but not limited to the payment of the principal or prepayment price of, or interest on, the Lease Payments represented by Certificates, against any officer, agent or employee, past, present or future, of the city or of any successor body, as such, either directly or through the city or any such successor body, under any constitutional provision, statute or rule of law or by the enforcement of any assessment or penalty or by any legal or equitable proceeding or otherwise. Section 11.02. No Riqhts Conferred on Others. Nothing herein contained shall confer any right upon any person other than the parties hereto and the Owners of the Certificates. Section 11.03. Illeqal. Etc. Provisions Disreqarded. In case any provision in this Trust Agreement or the Certificates -31- 00T448 91/04/19 shall for any reason be held invalid, illegal or unenforceable in any respect, this Trust Agreement shall be construed as if such provision had never been contained herein. Section 11.04. Notices. Any notice to or demand upon the Underwriter and the Trustee shall be deemed to have been sufficiently given or served for all purposes by being sent by registered mail, by telegram or by telephone or telefax confirmed in writing, and addressed to the parties, respectively, or at such other address as may be filed in writing by such parties to the others as follows: To the Underwriter: George K. Baum & Company, Kirchner Moore Division 6700 Columbia Center 70l Fifth Avenue Seattle, Washington 98104 Attention: Susan D. Musselman To the Trustee: Seattle-First National Bank 1001 Fourth Avenue, 11th Floor Seattle, Washington 98154 Attention: Bond Trustee Services To the City: City of Federal Way 33530 - 1st Way S. Federal Way, Washington 98003 Attention: Finance Director 'To Moody's: Moody's Investors Service 99 Church Street New York, New York 10007 Attention: Public Finance Department section 11.05. Successors and Assiqns. All the covenants, promises and agreements in this Trust Agreement contained by or on behalf of the Trustee, shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. section 11.06. Headinqs for Convenience Onlv. The descrip- tive headings in this Trust Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 11.07. Counterparts. This Trust Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original; but such counter- parts shall together constitute but one and the same instrument. -32- DOT448 91/04/19 Section 11.08. Title and Securitv Documents. The Under- writer shall cause this Trust Agreement and title documents and/or a financing statement relating thereto under the uniform Commercial Code of the state of Washington to be filed, as may be ~equired by law fully to protect the right, title (if any) and ~nterest of the Trustee in the Lease and in title to the Property held pursuant to this Trust Agreement. The Underwriter, Seller and the City shall execute or cause to be executed any and all further instruments as may be required by law or as shall reason- ably be requested by the Trustee for such protection of the interests of the Trustee and the Owners, and shall furnish satisfactory evidence to the Trustee of filing and refiling of such instruments and of every additional instrument which shall be necessary to preserve the lien of this Trust Agreement upon the rights and interests assigned to the Trustee under this Trust Agreement until the principal, or prepayment price of, and interest on the Lease Payments represented by the Certificates issued hereunder shall have been paid. The Trustee shall execute or join in the filing thereof at such time or times and in such place or places as it may be advised by an opinion of counsel will preserve the lien of this Trust Agreement upon the rights and interests assigned to the Trustee under this Trust Agreement until the aforesaid principal shall have been paid. section 11.09. Information Under Commercial Code. The following information is stated in order to facilitate filings under the Uniform Commercial Code, if necessary: The title holder (or secured party, if applicable) is Seattle-First National Bank, Trustee. Its address from which information concerning the security interest may be obtained is 1001 Fourth Avenue, 11th Floor, $eattle, Washington 98154. The debtor is the City of Federal Way, Washington. Its mailing address is 33530 - 1st Way S., Federal Way, Washington 98003. Section 11.10. PaYments Due on Saturdavs. Sundavs and Holi- days. In any case where the date of maturity of interest on or principal of the Lease Payments represented by the Certificates or the date fixed for prepayment of any or all of the Lease Payments represented by the certificates shall be a Saturday, Sunday or date which banks are authorized to remain closed, then payment of interest or principal or prepayment price need not be made on such date but may be made on the next succeeding business day with the same force and effect as if made on the date of maturity or the date fixed for prepayment, and no interest on such payment shall accrue for the period after such date. -33- 00T448 91/04/19 Section 11.11. Applicable Law. This Trust Agreement shall be governed by and construed in accordance with the laws of the State of Washington. IN WITNESS WHEREOF, the parties have executed this Trust Agreement as of the day and year first above written. GEORGE K. BAUM & COMPANY, KIRCHNER MOORE DIVISION, as Underwriter By Its SEATTLE-FIRST NATIONAL BANK, as Trustee By Trust Officer FORM OF APPROVAL BY CITY The City of Federal Way (the "City") hereby acknowledges and consents to the terms of this Trust Agreement and its rights and obligations thereunder. The City hereby represents, warrants and certifies to the Trustee and the Underwriter, or their designees, that Exhibit A contains true and correct copies of the Lease and all' amendments or supplements, if any, thereto, that no prepayments have been made on the Lease, and that the City's obligations under the Lease remain in full force and effect. The City hereby approves all provisions of this Trust Agreement. Dated this 25th day of September, 1991. CITY OF FEDERAL WAY, WASHINGTON By Mayor Attest: City Clerk [Seal] -34- 001448 91/04/19 EXHIBIT A Ground Lease with Option to Purchase EXHIBIT B Warrantv Deed None. EXHIBIT C Capitalized Financinq Costs EXHIBIT C GROUND LEASE WITH OPTION TO PURCHASE by and between SEATTLE-FIRST NATIONAL BANK, as Lessor and CITY OF FEDERAL WAY, WASHINGTON, as Lessee September 25, 1991 ARTICLE I: ARTICLE II: TABLE OF CONTENTS LEASED PREMISES. . . . . . . . . . . . . . LEASE TERM. . . . . . . . . . . . . . . . ARTICLE III: LEASE PAYMENTS. . . . . . . . . . . . . . . . 3.1 Lease Payments ................. 3.2 Additional Rent. . . . . . . . . . . . . 3.3 Quiet Enjoyment. . . . . . . . . . . . . . 3.4 Defeasance .""""""""'. ARTICLE IV: USE. . . . . . . . . . . . . . 4.1 Use of Premises. . . . . . , . . . . . . . . . . 4.2 Compliance with Laws . . . . . . . ARTICLE V: 5.1 5.2 5.3 5.4 5.5 ARTICLE VI: TRIPLE NET LEASE. . . . , . . . . . . . Triple Net Lease. . . . . . . . . . . . . Lease Non-Terminable . . . . . . . Tax and Utility Charges. . . . . . . . . . . . . Compliance with Laws. . . . . . . . . . . City's Right to Contest. . . . . . . . . . ALTERATIONS BY CITY . . . . . . . . . . ARTICLE VII: INDEMNIFICATION AND PUBLIC LIABILITY INSURANCE ......... ........ 7.1 Indemnification by city. . . . . . . . . 7.2 City's Liability Insurance. . . . . . . . . . . ARTICLE VIII: ARTICLE IX: ARTICLE X: 10.1 10.2 10.3 10.4 10.5 FIRE AND EXTENDED COVERAGE INSURANCE. LIENS . . . . . . . . . . . . . . . . . OPTIONS TO PREPAY LEASE AND PURCHASE LEASED PREMISES. . . . . . . . option to Purchase Exercise of Option. . . . . . . . . . . . . . . option not Exercised Conveyance of Leased Premises. . . . . . . . . . option to Partially Prepay Lease . . . . . ARTICLE XI: EMINENT DOMAIN. . . . . . . . . . . . . 11.1 Eminent Domain Proceedings. . . . . . . . . . . 11.2 Insufficiency of Condemnation Award. . . . . . . 11.3 Cooperation of the Lessor. . . . . . . . . . . . -i- DOT449 Paqe 2 2 2 2 3 3 4 4 4 4 4 4 5 5 5 6 6 7 7 8 8 9 9 9 9 9 10 10 10 10 11 11 91/09/11 ARTICLE XII: ARTICLE XIII: ARTICLE XIV: ARTICLE XV: 15.1 15.2 15.3 15.4 DESTRUCTION OF LEASED PREMISES ACCESS BY LESSOR............... SURRENDER OF PREMISES. . . . . . . . . . . . . ASSIGNMENT AND SUBLEASING. . . . . Assignment by the Lessor. . . . . . . . . . . . Assignment and Leasing by the City. . . . . . . Leases Upon Default. . . . . . . . . . . Notice of Assignment. . . . . ARTICLE XVI: DEFAULT BY CITY. . . . . . . . . . 16.1 Defaults.................... 16.2 Litigation Expenses. 16.3 Waiver ..................... 16.4 Force Majeure. . . . . . . . . . . . . . . ARTICLE XVII: TAX COVENANTS . . . . . . . . . . . . . . . . ARTICLE XVIII: DEFINITIONS. . . . . . . . . . . . . . . . . 18.1 Definitions................... ARTICLE XIX: MISCELLANEOUS. . . . . . 19.1 Notices.... 19.2 No Joint Venture 19.3 Interest..... 19.4 Entire Agreement 19.5 Registration 19.6 Partial Invalidity 19.7 Recording..... 19.8 Governing Law, Time ARTICLE XX: Exhibit A Exhibit B-1 Exhibit B-2 Exhibit C Exhibit D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LESSOR'S LIABILITY Legal Description of Leased Premises Lease Term and Lease Payment Schedule Amortization Schedule Form of Notice of Election of option to Form of Notice of Partial Prepayment Purchase -ii- DOT449 12 12 12 12 12 12 13 13 13 13 14 14 15 15 16 16 17 17 17 17 17 18 18 18 18 18 91/09/11 GROUND LEASE WITH OPTION TO PURCHASE THIS GROUND LEASE WITH OPTION TO PURCHASE (the "Lease") is made as of the 25th day of September, 1991, by and between Seattle-First National Bank ("Lessor"), as Trustee under that certain Trust Agreement (hereinafter defined), which the City of Federal Way has approved and consented to, and the City of Federal Way, a Municipal corporation, duly formed and existing under the laws of the State of Washington ("City"). WITNESSETH WHEREAS, pursuant to that certain Trust Agreement dated September 1, 1991, between Lessor and George K. Baum & Company, Kirchner Moore Division (the "Trust Agreement"), Lessor holds title to certain real property located at approximately 10th Avenue S. W. and S. W. Campus Drive in the City. Lessor will execute and deliver certificates of participation in this Lease to finance the obligations of the City to acquire such property under a purchase and sale agreement by and between the City and Polygon 2000, Inc. and Quadrant Corporation. Lessor acts as Trustee in collecting all rents and sums due under this Lease and forwarding payments due under such certificates of participation to the owners thereof; and WHEREAS, City is authorized under the Constitution and the laws of the State of Washington, including Chapter 35.42 RCW to enter into a lease with an option to purchase for the purposes set forth herein; and WHEREAS, the sum of the principal components of Lease Payments shall not exceed an amount that causes the total indebtedness created by this Lease, together with all other non- voted debt of the city, to exceed one and one-half percent (1.5%) of the value of taxable property within the City as of the time the determination is made I or cause a total amount of lease indebtedness of the City then outstanding to exceed three quarters of one percent (.75%) of the value of taxable property within the City, all in accordance with RCW 39.36.030 and RCW 35.42.200; and WHEREAS, the Federal Way city Council has, by Ordinance No. , adopted on September 17, 1991, approved this Lease and the option to purchase contained therein; NOW, THEREFORE, pursuant to law and for and in consideration of the mutual promises, covenants and conditions hereinafter contained the parties agree as follows: ARTICLE I: LEASED PREMISES Lessor hereby leases and grants immediate possession and use (in accordance with RCW 84.36.010) to City, and City hereby leases from Lessor, that certain real property legally described in Exhibit A attached hereto, and by this reference incorporated herein, along with all buildings and improvements located thereon in the City of Federal Way, King County, Washington (the "Leased Premises") . ARTICLE II: LEASE TERM This Lease is effective upon its execution by both Lessor and City. This Lease shall be for a term of approximately 15 years, commencing on September 25, 1991, and terminating on December, 2006 unless earlier terminated as provided in this Agreement. The City's obligation to make semi-annual Lease Payments, including both the principal component and the interest component of Lease Payments shall commence on June 1, 1992. ARTICLE III: LEASE PAYMENTS 3.1 Lease Pavments. A. Principal Component of the Lease Pavments. The principal component of the Lease Payments is reflected in Exhibit B-1 as the total principal amount of Lease Payments. The principal component of the Lease Payments includes certain costs, fees,' and expenses incurred in connection with the financing. The parties further agree to the amortization schedules set forth in the attached Exhibits B-1 and B-2. B. Interest Component of Lease Payments. The parties hereby acknowledge that the interest component of Lease Payments, representing interest on the principal components of the Lease Payments as set forth in Exhibit B-1, has been determined through negotiation. Such interest shall bè calculated and shall accrue from the date hereof. Such process was undertaken at the direction of the City for the purpose of accomplishing the financing, by means of which Lessor obtained title to the Leased Premises. C. Pledqe to Pav Lease Pavments. ci ty covenants to make all Lease Payments, as determined in accordance with this Section 3.1, at such times and in such amounts as set forth in Exhibit B-2. The obligation of the city to make the Lease Payments constitutes a general obligation and indebtedness of the city. City hereby pledges to budget and appropriate from revenues available without a vote of the City's electors, amounts sufficient, together with other money legally available therefor, -2- DOT449 91/09/11 to make such Lease Payments when due, pursuant to the authority granted the City by RCW 35.42.200. 3.2 Additional Rent. City shall be liable for Additional Rent for costs related to the financing and other costs not otherwise included in the Lease Payments calculated pursuant to Section 3.1 above. Such costs may include but are not limited to Trustee's fees pursuant to Section 3.2(A) below, noncapitalized financing costs (if any), and costs for which the City is liable pursuant to section 5.3 of this Lease. Due to the contingent nature of such Additional Rent, it shall not constitute a debt of the city for debt limitation purposes under RCW 39.36.030 and RCW 35.42.200. A. Compensation of Trustee. Lessor, as Trustee, and George K. Baum & Company, Kirchner Moore Division, as Underwri ter, entered into that certain Trust Agreement, dated September 25, 1991 (the "Trust Agreement"), which the city has approved and consented to. In addition to fees and costs paid at the time of issuance of the certificates of participation issued as part of the financing, Lessor, in its capacity as Trustee, Paying Agent and Registrar for the certificates of participation, shall be entitled to payment and/or reimbursement from the City for reasonable fees for its services rendered under such Trust Agreement, disbursements and all advances, counsel fees and other expenses reasonably and necessarily made or incurred by the Trustee (including the reasonable compensation and the expenses and disbursements of its counsel and all persons not regularly in its èmploy) in connection with such services hereunder or under the Trust Agreement and, in the event that it should become necessary that the Trustee perform extraordinary services, it shall be entitled to reasonable extra compensation therefor from the City, and to reimbursement from the City for reasonable and necessary extraordinary expenses in connection therewith; provided, that if such extraordinary services are due to the willful misconduct or negligence of the Trustee, it shall not be entitled to compensation or reimbursement therefor. The city's obligation to pay any Additional Rent due hereunder shall survive the termination of this Lease. 3.3 Quiet Eni ovment. Upon payment by the City of the Lease Payments herein provided, and upon the observance and performance of the covenants, terms, and conditions on the City's part to be observed and performed, Lessor covenants that city shall peaceably and quietly hold and enjoy the Leased Premises for the term hereby demised without hindrance or interruption by Lessor or any person or persons lawfully or equitably claiming by, through, or under the Lessor. -3- DOT449 91/09/11 3.4 Defeasance. In the event that money and/ or "Government Obligations", as such obligations are now or may hereafter be defined in Ch. 39.53 RCW, maturing at such time or times and bearing interest to be earned thereon in amounts sufficient to payor prepay all Lease Payments and Additional Rent due under this Lease in accordance with the terms of this Lease and to satisfy all claims for indemnification under Section 7.l hereof, are irrevocably set aside and pledged to Lessor in a special account to effect such payment or prepayment, then no further payments need be made of any Lease Payments under this Lease and the Lessor shall not be entitled to any lien, benefit or security in the Leased Premises, except the right to receive the funds so set aside and pledged and Lessor shall have no further obligation to the City hereunder, except under Article X hereof and under the Trust Agreement. ARTICLE IV: USE 4.1 Use of Premises. ci ty may use the Leased Premises for the occupancy, use, maintenance and operation of park and recreation facilities and all uses incidental thereto, including but not limited to, any other use permitted by law. 4.2 Compliance with Laws. City shall comply with all municipal, county, state and federal laws, rules, regulations and ordinances applicable to the Leased Premises and the use or occupancy thereof. ARTICLE V: TRIPLE NET LEASE 5.1 Triple Net Lease. This Lease is a "triple net lease" and except as otherwise expressly provided in this Lease, city's obligations to make Lease Payments as provided in Section 3.1 of this Lease, and to pay Additional Rent as provided in section 3.2 of this Lease, and to perform and observe all other covenants and agreements of the City contained herein shall be absolute and unconditional and the failure by the City to make such Lease Payments at the time and in the amounts set forth in Exhibit B-1 and/or B-2 shall constitute an Event of Default under this Lease. All Lease Payments shall be made without notice or demand and without setoff (except as otherwise expressly provided in this Lease), counterclaim, abatement, deduction or defense whatsoever. City assumes the sole responsibility for the condition, use, operation, maintenance, repair and management of the Leased Premises, and City will, at its cost and expense, keep and maintain the Leased Premises in good repair and condition and in compliance with all applicable laws, rules, regulations, statutes, and ordinances, and will make all structural and nonstructural, and ordinary and extraordinary changes, repairs and replacements which may be required to be made upon or in -4- 001449 91/09/11 connection with any buildings and other impróvements located on the ~e~sed Premises in order to keep the same in good repair and cond~t~on, reasonable wear and tear and ordinary use excepted. Notwi thstanding anything in this Lease to the contrary, City shall have no obligations to indemnify Lessor for any claims loss, liabilities or damages arising from the negligent o~ willful acts or omissions of Lessor. 5.2 Lease Non-Terminable. Except as otherwise expressly provided in Articles X, XV and XVI hereof, this Lease shall not terminate, nor shall City have any right to terminate this Lease or to be released or discharged from any obligations or liabilities hereunder for any reasons, including, without limitation, damage or destruction of any building or improvements thereon, it being the intention of the parties hereto that all Lease Payments payable by City hereunder shall continue to be payable in all events in the manner and at the times herein provided unless the obligation to pay the same shall be terminated pursuant to the express provisions of this Lease, In that connection, City hereby waives any and all rights which it may now have or which may at any time hereafter be conferred upon it, by statute or otherwise, to terminate, cancel, quit or surrender this Lease except in accordance with the express terms hereof and agrees that if, for any reason whatsoever, this Lease shall be terminated in whole or in part by operation of law or otherwise except as specifically provided herein, City will nonetheless pay to Lessor (or to whosoever shall be entitled thereto as expressly provided herein) an amount equal to each Lease' Payment at the time such payment would have become due and payable in accordance with the terms hereof had such termination not occurred. 5.3 Tax and Utilitv Charqes. city shall pay as Additional Rent all charges for utility, communication and other services rendered to or used on or about the Leased Premises assessed and payable from and after the commencement of this Lease. City also covenants to and agrees to pay all taxes and assessments levied upon or payable in respect to the Leased Premises that are assessed and payable after the commencement of this Lease, provided that if any such taxes or assessments may be paid in installments without penalty City shall have the right to pay any such taxes or assessments in installments. If the city is in default hereunder, Lessor shall have no obligation to pay taxes or utility charges, except as may be specified in the Trust Agreement. 5.4 Compliance with Laws. city shall at all times, at City's own cost and expense, perform and comply with all laws, rules, orders, ordinances, regulations and requirements now or hereafter enacted or promulgated (including, without limitation, -5- DD1449 91/09/11 all zoning, pollution and environmental requirements, hereinafter referred to as "Environmental Requirements"), of every government and municipality having jurisdiction over the Leased Premises and of any agency thereof, relating to the Leased Premises or the facilities or equipment thereon or therein, or the 'streets, sidewalks, curbs and gutters adj oining the Leased Premises, or the use or operation of the Leased Premises, whether or not such laws, rules, orders, ordinances, regulations or requirements so involved shall necessitate structural changes, improvements, interference with use and enjoyment of the Leased Premises, replacements or repairs, and City shall so perform and comply, whether or not such laws, rules, orders, ordinances, regulations or requirements shall now exist or shall hereafter be enacted or promulgated, and whether or not such laws, rules, orders, ordinances, regulations or requirements can be said to be within the present contemplation of the parties hereto. 5.5 City's Riqht to Contest. City shall have the right to contest, by appropriate legal proceedings, any tax, charge, levy, assessment, 1 ien or other encumbrance, and/ or any law, rule, order, ordinance, regulation or other governmental requirement affecting the Leased Premises, and to postpone payment of or compliance with the same during the pendency of such contest, provided that: (i) City shall not postpone the payment of any such tax, charge, levy, assessment, lien or other encumbrance for such length of time as shall permit the Leased premises, or any lien thereon created by such item being contested, to be sold by any federal, state, county or municipal authority for the non-payment thereof; (ii) City shall not postpone compl iance with any such law, rule, order, ordinance, regulation or other governmental requirement if Lessor will thereby be subject to criminal prosecution, or if any municipal or other governmental authority shall commence a process according to applicable law to carry out any act to comply with the same or to foreclose or sell any lien affecting all or part of the Leased Premises which shall have arisen by reason of such postponement or failure of compliance; (iii) City shall proceed diligently and in good faith to resolve such contest; (iv) such contest shall be in compliance with all laws, rules, orders, ordinances, regulations or other governmental requirements; and (v) City shall not postpone compliance with any such laws, rules, orders, ordinances, regulations or other governmental requirements if the same shall invalidate any insurance required by this Lease. ARTICLE VI: ALTERATIONS BY CITY ci ty may, at its own cost and expense, make additions or improvements to or alterations of any buildings and improvements now or hereafter erected on the Leased Premises (provided such -6- 001449 91/09/11 work when completed does not impair the structural integrity of ~uch building or improvements), or construct new buildings and lmprovements on any portion of the Leased Premises that is not then improved with a building or improvement (all of the foregoing are collectively referred to as "Additional Improvements") . Notwithstanding the foregoing, City shall not make any Additional Improvements in violation or the terms of any restriction, easement, condition or covenant or other matter affecting title to the Leased Premises. Any such Additional Improvements shall be constructed in a good and workmanlike manner and in compliance with all applicable laws, rules, regulations, ordinances and covenants applicable to the Leased Premises. ARTICLE VII: INDEMNIFICATION AND PUBLIC LIABILITY INSURANCE 7.1 Indemnification bv Citv. To the fullest extent permi tted by law, City covenants to and does hereby indemnify, defend and hold harmless Lessor from and against all claims and all costs, expenses and liabilities (including reasonable attorneys' fees) incurred in connection with all claims, including any action or proceedings brought thereon, arising from or as a result of the death of or any accident, injury, loss or damage whatsoever caused to any natural person, or to the property of any person, as shall occur in or about the Leased Premises; provided, however, that Lessor shall not be entitled to such indemnification for damage caused to Lessor or any third person or entity by reason of the negligence or intentional acts or omissions of Lessor or in the event of concurrent negligence, to the extent of Lessor's comparative negligence. Lessor shall give city prompt notice of any suit or proceeding entitling the Lessor to indemnification pursuant to this section 7.1 and City shall'thereafter defend Lessor in said suit or proceeding at its sole cost and expense. Lessor shall further be entitled to be indemnified by the City from any loss, liability, expense, or advance incurred or made, without negligence or bad faith by the Lessor, in the administration of the Lease or the performance of Lessor's duties hereunder. All indemnifications and releases from liability granted under this Lease to Lessor shall extend to its dir,ectors, officers, employees and agents. The Lessor's rights to immunities and protection from liability hereunder and its right to payment of its fees and expenses as provided in the Trust Agreement shall survive the termination of this Lease. Lessor and City agree that the meaning of the term "negligence" as used in this section 7.1 to establish the obligations of the City in favor of Lessor shall reflect the standards of care applicable to Lessor hereunder, including without limitation the standards established in Article XIII hereof and under the Trust Agreement, and shall not reflect any other standard of care that may be applicable to Lessor with respect to third parties. -7- 001449 91/09/11 7.2 City's Liability Insurance. City shall maintain, or cause to be maintained, in full force and effect, comprehensive public general liability insurance covering the Leased Premises in such amounts as may be established by the City Council from time to time. City may provide all or a portion of any insurance by self insurance. Such insurance shall be applied toward extinguishment or satisfaction of City's liability under Section 7.1 of this Lease. Such insurance may be carried under a blanket policy with umbrella coverage. It is understood that this insurance covers any and all liability of the City and its commissioners, officers, employees and agents, and the procurement thereof does not constitute a waiver of the defense of governmental immunity. Such insurance (i) shall include coverage for any accident resulting in personal inj ury to or death of any person and consequential damages arising therefrom; (ii) shall include comprehensive property damage insurance; (iii) shall be issued by a financially responsible insurance company or companies; (iv) shall name Lessor as an additional insured thereunder; (v) shall provide that the same may not be cancelled without at least 30 days prior written notice being given by the insurer to Lessor; and (vi) shall include contractual liability coverage. City shall furnish to Lessor on or before the effective date of such insurance, certificates of insurance evidencing that the same shall be in full force and effect on said effective date and that the premiums therefor have been paid. ARTICLE VIII: FIRE AND EXTENDED COVERAGE INSURANCE City will carry or cause to be carried fire and extended insurance coverage covering any building and improvements on the Leased Premises in such amounts and covering such risks as the City Council may require from time to time. Such insurance shall be carried with financially responsible insurance companies authorized to do business in the state of Washington, and may be carried under a policy or policies covering other property owned or controlled by city. City shall furnish to Lessor, on or before the effective date of any such policy, certificates of insurance evidencing that the insurance required by this Article VIII are in force and effect on the specified date and that the premiums therefor have been paid and that Lessor is named as an additional insured thereunder. City agrees that such policies shall contain a provision that the same may not be cancelled without at least 30 days' prior written notice being given by the insurer to Lessor and the City shall give Lessor 30 days notice of any material changes to such policies. The amount of insurance maintained by city shall be in such amounts as may be established by the City council from time to time, or the City may be self-insured. So long as the City is not then in default -8- DDT449 9'1/09/11 under this Lease, the proceeds from any such ihsurance shall be paid to the city. If the City is then in default such insurance proceeds will be paid to Lessor to the exte~t necessary to satisfy obligations of the City to Lessor hereunder. ARTICLE IX: LIENS The City shall not create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or wi th respect to the Leased Premises, with the exception of any permitted encumbrances on the title to the Leased Premises when Lessor acquired its interest. The City shall promptly, at its own expense, take such action as may be necessary to duly discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim if the same shall arise at any time. The City shall reimburse the Lessor for any expense incurred by Lessor to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim. ARTICLE X: OPTIONS TO PREPAY LEASE AND PURCHASE LEASED PREMISES 10.1 option to Purchase. Provided City is not then in default under this Lease, the City shall have the option to purchase the Leased Premises and thereby terminate this Lease on any Lease Payment Date on or after December 1, 1999. The purchase price of the Leased Premises shall be an amount equal to the total principal component of Lease Payments set forth on Exhibit B-1, plus interest accrued thereon to the date of prepayment at the applicable rate(s) set forth on Exhibit B-1 less a credit of all Lease Payments paid by the City prior to the date of prepayment, plus an option fee of One Hundred Dollars ($100:00) . 10.2 Exercise of option. The City shall give Lessor not less than 60 days prior written notice of its election to exercise its option to purchase under Section 10.1 hereof in the form set forth in Exhibit C attached hereto. The purchase price shall be paid in cash or same-day available funds on the Closing date specified in such notice (or such other date as the City and Lessor may mutually agree). 10.3 Option not Exercised. If the City does not exercise the purchase option hereunder on or before the last Lease Payment Date, then, after giving City 90 days' written notice, Lessor may sell the Leased Premises to any third party. The proceeds from such sale, less the Lessor's costs in connection with the sale and any other sums owing to the Lessor hereunder, shall be distributed to the City. -9- 001449 91/09/11 10.4 Convevance of Leased Premises. On the Closing Date specified in the notica of el~ction to exercise purchase option, or such other date as the c~ty and Lessor may mutually agree, Lessor shall convey the Leased Premises as they may then exist to t~e City by special warranty deed, subject only to (i) those l~ens and encumbrances, if any, to which title to the Leased Premises were subject when conveyed to Lessor, (ii) those liens and encumbrances created by the City or to the creation or suffering of which the city consented, (iii) those liens and encumbrances resulting from the failure of the City to perform or observe any of the agreements on its part contained in this Lease, and (iv) the rights and title of any condemning authority described in Article XI hereof, and this Lease shall terminate if this Lease has not already terminated by its terms. Lessor shall not be required to make any representations regarding the condition of the Leased Premises and City agrees to accept the Leased Premises in an "as is" condition. Nothing herein shall be construed to require city to exercise the purchase option herein granted. 10.5 option to Partiallv Prepav Lease. Provided the city is not then in default under the Lease, the City shall have the option to partially prepay the principal component of the Lease Payments, in $5,000 increments, in inverse order of maturity (as represented by the principal portion of the Lease Payments due each year as set forth in Exhibits B-1 and B-2). Notice of such intent to prepay shall be given to the Lessor in writing not less than 60 days in advance of the intended prepayment date, which may be on any Lease Payment Date on or after December 1, 1999. The notice of partial prepayment shall be in the form set forth on Exhibit D attached hereto. On the date set for such prepayment, the City shall pay to Trustee in cash or same-day avail'able funds, an amount equal to the principal portion of Lease Payments to be prepaid, together with interest thereon to the date of prepayment. Upon such prepayment, the term of this Lease shall be deemed modified such that this Lease terminates on the Lease Payment Date for the last outstanding Lease Payment not prepaid. ARTICLE XI: EMINENT DOMAIN 11.1 Eminent Domain Proceedinqs. The following provisions shall apply with respect to eminent domain proceedings: A. Total Takinq. If all of the Leased Premises are taken by eminent domain, then the city shall comply with the Defeasance provisions as described in section 3.4 of this Lease and the parties shall have no further obligations to each other, except such obligations as survive termination of this Lease -10- 001449 91/09/11 pursuant to Agreement. the express provisions hereof or of the Trust B. Partial Takinq. I f there is a partial taking of the Leased Premises by eminent domain, this Lease shall not terminate and there shall be no abatement of Lease Payments otherwise payable by the City hereunder and the City may either retain any condemnation proceeds or apply them to repair, rebuild or restore all or any portion of the Leased Premises that shall have been taken as nearly as practicable in full compliance with all legal requirements and to the same condition, character and at least equal value and utility to that existing prior to such taking. C. Awards. In any proceeding whereby all or part of the Leased Premises are taken by eminent domain, all of the condemnation award shall be paid to the City. Lessor shall have no claim therein or thereto. The City shall apply such portion of the condemnation award as may be necessary to make Lease Payments to the extent they become due, and may apply any balance of such award to repair, rebuild or restore all or any portion of the Leased Premises that may have been taken as nearly as practicable in full compliance with all legal requirements and to the same condition, character and at least equal value and utility to that existing prior to such condemnation or for other City purposes. Upon any condemnation, there shall be no abatement of Lease Payments otherwise payable by City under this Lease. 11.2 Insufficiencv of Condemnation Award. If the condemnation award is insufficient to pay in full the cost of any Lease Payments or any repair, restoration, modification or improvement of any component of the Leased Premises, the City may, subject to appropriation of sufficient funds, complete the work and pay any cost in excess of the amount of the condemnation award. The City shall not be entitled to any reimbursement therefor from the Lessor nor shall the City be entitled to any diminution of any Lease Payments otherwise payable hereunder. . 11.3 Cooperation of the Lessor. The Lessor shall cooperate fully with the City and at the expense of the City in filing any proof of loss with respect to any insurance policy covering the events described in Articles XI and XII hereof and in the prosecution or defense of any prospective or pending condemnation proceeding with respect to the Leased Premises or any part thereof and, to the extent it may lawfully do so, authorizes the City to litigate in any proceeding resulting therefrom in the name of and on behalf of the Lessor. So long as the City is not then in' default, in no event will Lessor voluntarily settle, or consent to the settlement of, any -11- OOT449 91/09/11 proceeding arising out of any insurance claim or any prospective or pending condemnation proceeding with respect to the Leased Premises or any part thereof without the prior written consent to the City. ARTICLE XII: DESTRUCTION OF LEASED PREMISES In the event the Leased Premises are damaged or destroyed by fire or other casualty, this Lease shall not terminate nor shall there be any abatement of the Lease Payments otherwise payable by City hereunder and City may repair, rebuild or restore all or any portion of the Leased Premises that have been damaged or destroyed in full compliance with all legal requirements and to the same condition, character and at least equal value and utility to that existing prior to such damage or destruction. ARTICLE XIII: ACCESS BY LESSOR At any time during the term hereof Lessor or Lessor's agents shall have the right to enter the Leased Premises on reasonable notice to examine the same. Nothing contained herein shall be construed to impose upon Lessor any duty of repair of the Leased Premises. In the absence of Lessor's actual knowledge of a default by the City hereunder, Lessor shall have no obligation to monitor the City's performance of its obligations hereunder. ARTICLE XIV: SURRENDER OF PREMISES The City shall promptly yield and deliver to Lessor possession of the Leased Premises at the termination of this Lease at the expiration date or at any prior termination date, unless the Leased Premises are purchased by the City in accordance with the terms hereof. ARTICLE XV: ASSIGNMENT AND SUBLEASING 15.1 Assiqnment by the Lessor. The Lessor's right, title and interest in and obligations and duties under this Lease, including the right to receive and enforce payment of the Lease Payments to be made by the City under this Lease may be assigned and reassigned subj ect to prior written consent of the City. Notwithstanding the foregoing, at any time that Lessor is replaced as Trustee under the Trust Agreement, Lessor may, without the City's consent, assign its rights, title and interest in and obligations and duties under this Lease, and convey the Leased Premises by Special Warranty Deed to the Successor Trustee, as named under the Trust Agreement. not 15.2 Assiqnment and Leasinq by the ci tv. This Lease may be assigned by the City without the written consent of -12- DOT449 91/09/11 Lessor. The City, however, shall have the right to sublease all o~ part of the Leased Premises. Notwithstanding the foregoing, Clty shall not sublease any additional space in the Leased Premises to any person or entity other than the city or a municipal corporation of the state of Washington or other governmental entity, unless the City shall first obtain an opinion from nationally recognized bond counsel that the sublease of the Leased Premises or portion thereof to the proposed tenant will not have an adverse effect on the tax-exempt status of the interest portion of Lease Payments. The City shall remain obligated to make all Lease Payments, notwithstanding any such subleases. 15.3 Leases Upon Default. If the City defaults under Section 16.1 hereof and Lessor re-enters the Leased Premises without terminating this Lease, then Lessor shall use its reasonable efforts to sublease the Premises. Notwi thstanding anything in this Lease to the contrary, all rental income received by Lessor from such tenants shall be credited first against Additional Rent, including but not limited to Lessor's expenses in retaking and leasing the Leased Premises, and against claims for indemnification under Section 7.1 hereof, and second against Lease Payments otherwise payable by the City under this Lease. Upon payment in full of all Lease Payments to Lessor (whether by payment from City or credits from payments from tenants other than the City, or otherwise) this Lease shall terminate. 15.4 Notice of Assiqnment. Notice of any assignment of this Lease shall be given by the Trustee to Moody's Investor Services, 99 Church Street, New York, New York 10007, Attention: Public Finance Department. ARTICLE XVI: DEFAULT BY CITY 16.1 Defaults. Time is of the essence hereof, and in the event that (i) City shall default in the payment of Lease Payments; or (ii) city shall default in the performance or observance of any of, the other terms, covenants, conditions or agreements of this Lease or the Trust Agreement which default is not cured within 30 days after written notice and demand from Lessor; provided, however, if such default shall be of such a nature that the same cannot practicably be cured within said 30 day period, then City shall not be deemed to be in default if city shall within said 30 day period commence with due diligence and dispatch the curing and performance of such defaulted term, covenant, condition or agreement and thereafter diligently prosecutes such cure to completion; or (iii) there shall be filed by or against City in any court or other tribunal pursuant to any statute or other rule of law, either of the United states or of -13- 00T449 91/09/11 ~ny.st?te. or of an~ ~the~ authority now o~ hereafter exercising ]urlsdlctlon, a petltlon ln bankruptcy or lnsolvency proceedings or for reorganization or for the appointment of a receiver or trustee of all or substantially all of City's property, or for any other form of debtor relief, unless such petition be filed against City and if in good faith city shall promptly thereafter commence and diligently prosecute any and all proceedings appropriate to secure the dismissal of such petition and shall secure such dismissal within 60 days after the date of filing or the commencement of such proceeding; or (iv) if City makes an assignment for the benefit of creditors, then and in any such case, at Lessor's option and in addition to all other rights or remedies Lessor may, following the expiration of the cure period, if any, provided herein for such default, immediately declare City's rights under this Lease terminated, and re-enter the Leased Premises, using such force as may be necessary, and repossess itself thereof, as of its former estate, and remove all persons and property from the Leased Premises. Notwithstanding any such re-entry, the liability of City for the Lease Payments at such times and in such amounts provided for herein by Exhibits B-1 and B-2 shall not be extinguished for the balance of the term of this Lease and city shall make good to Lessor any deficiency arising from receipt by Lessor of a lesser rental than hereinbefore agreed upon. All rental income received by Lessor for the Leased Premises pursuant to section 15.3 hereof in such event shall be credited as provided in section 15.3 against the Lease Payment obligations of the City. Upon receipt by Lessor of all Lease Payments (whether by payments by the City or credits of payments from tenants other than the City), this Lease shall terminate. 16.2 Litiqation Expenses. In the event Lessor is required to bring any action for the enforcement of any of the covenants, terms and conditions of this Lease, and shall be successful in such action, City shall, in addition to all other payments required herein, pay all the costs of any actions brought by Lessor including reasonable attorneys' fees. 16.3 Waiver. Neither the acceptance of Lease Payments nor any other actions or omissions of Lessor at any time or times after the happening of any event authorizing the cancellation or forfeiture of this Lease, shall operate as a waiver of any past or future violation, breach or failure to keep or perform any covenant, agreement, term or condition hereof, or deprive Lessor of its right to cancel or forfeit this Lease, upon the written notice provided for herein, at any time that cause for cancellation or forfeiture may exist, or be construed so as to at any future time estop Lessor from promptly exercising any other option, right or remedy that it may have under any term or provision of this Lease. -14- DOT449 91/09/11 16.4 Force Maieure. If by reason of force maieure t;¡e City is unable in whole or in part to carry out its obligations under this Lease, other than its obligation to pay Lease Payments and Additional Rent with respect thereto, and to indemnify Lessor pursuant to Section 7.1 of this Lease, the City shall not be deemed in default during the continuance of such inability, provided notice thereof is given to the Lessor. The term "force maieure" as used herein means, without limitation, the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the government of the united States of America or the State of Washington or their respective departments, agencies, or officials, or any civil or military authority; insurrections; riots; landslides; volcanoes; earthquakes; fires; storms; droughts; floods; explosions; breakage or accident to machinery, transmission pipes or canals; or any other cause or event not reasonably within the control of the City and not resulting from its negligence. The City agrees, however, to remedy with all reasonable dispatch the cause or causes preventing the City from carrying out its agreements hereunder; provided that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the City and the City shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the City unfavorable to the City. ARTICLE XVII: TAX COVENANTS The City intends, and the Lessor agrees to accommodate such intention, that the interest portion of the Lease Payments hereunder shall be exempt from federal income tax payable by the Lessor or its assignee(s). City and Lessor hereby each covenant that they will not, to their knowledge, make any use of the Leased Premises that will cause this Lease to be treated as an "arbitrage bond" within the meaning of section 148 (a) of the federal Internal Revenue Code of 1986 as amended, and applicable regulations thereunder, at the time of such use. The City will comply with the applicable requirements of section l48(a) of the Code and the applicable regulations thereunder throughout the term of the Lease. City and Lessor each covenant that they will not, to their knowledge, act or fail to act in a manner which will cause the Lease Payments to be considered obligations not described in section 103 (a) of the Code. The City and Lessor each further covenant that they will, to their knowledge, take no actions that would cause the Lease Payments to be treated as a "private activity bond" as defined in Section 141 of the Code then in effect. -15- 00T449 91/09/11 ARTICLE XVIII: DEFINITIONS 18.1 Defini tions. As used in this Lease, terms shall have the following meanings: the following "Additional Improvements" means any improvements or al terations that the City elects to make in accordance with Article VI hereof. "Additional Rent" means those amounts payable by the City to parties pursuant to Section 3.2 hereof including but not limited to taxes and utilities and Non-Capitalized Financing Costs. "Capitalized Financinq Costs" means those Financing Costs that the City, in its sole discretion, determines to finance by adding such amounts to the principal component of Lease Payments to be made hereunder. "citv" means the City of Federal corporation of the State of Washington. Way, a municipal "citv Council" means the city Council of the city of Federal Way as the same may be constituted from time to time. "Code" means the federal Internal Revenue Code of 1986, as amended, together with applicable regulations thereunder. "Financinq Costs" means any and all costs incurred or owed by the City in consideration for and relating to the take-out financing of the Leased Premises, including but not limited to legal fees, financial advisor fees, printing fees, trustee fees, and other costs that the City is obligated to pay in connection therewith. The City, in its sole discretion shall determine which of the Financing Costs shall be treated as Capitalized Financing Costs and which shall be paid as Non-Capitalized Financing Costs. "Lease" means this Ground Lease by and between Lessor and city. "Lease Payments" means the aggregate of all payments due under section 3.1 hereof, excluding Additional Rent payable under section 3.2 hereof. "Leased Premises" means the real property legally described in Exhibit A hereto and all buildings and other improvements located thereon. "Lessor" means Seattle-First National Bank, or its assignee hereunder, as Trustee under the Trust Agreement. -16- DDT449 91/D9/11 "Non-Capitalized Financinq Costs" means those Financing cos~s.that the City, in its sole discretion, determines to pay as Addl tlonal Rent, when and as due to parties other than Lessor including but not limited to fees of the Trustee. ' ARTICLE XIX: MISCELLANEOUS 19.1 Notices. Any notices required in accordance with any of the provisions herein shall be sent by registered or certified mail addressed to Lessor or City, respectively as follows: City: City of Federal Way 33530 - 1st Way S. Federal Way, Washington 98003 Attention: Finance Director Lessor: Seattle First-National Bank 1001 Fourth Avenue, 11th Floor Seattle, Washington 98154 Attention: Bond Trustee Services or at such other place as Lessor or City may in writing direct. All notices shall be deemed effective upon receipt, refusal of delivery or attempted delivery. 19.2 No Joint Venture. It is not intended by this Lease to, and nothing contained in this Lease shall, create any partnership, j oint venture or other arrangement between Lessor and City, No term or provision of this Lease is intended to be, or shall be, for the benefit of any person, firm, organization or corpo~ation not a party hereto, nor shall any such person, firm, organization or corporation have any right or cause of action hereunder. 19.3 Interest. If City shall fail to pay, when the same is due and payable, any Lease Payment set forth in Article III, or any Additional Rent or additional sums of money to be paid by City under this Lease, such unpaid amounts shall bear interest from the due date thereof until paid at the rate of 12% per annum. 19.4 Entire Aqreement. This Lease, any exhibits or attachments hereto and forming a part hereof, and the Trust Agreement set forth the entire agreement of Lessor and City concerning the Leased Premises, and there are no other agreements or understandings, oral or written, between Lessor and City. Any subsequent modification of this Lease shall be binding upon Lessor and City only if reduced to writing and signed by the party intended to be bound. -17- DOT449 91/09/11 19.5 Reqistration. Lessor agrees to maintain books setting forth complete records of any and all transfers and assignments of any interests in this Lease. 19.6 Partial Invaliditv. If any term, covenant or condition of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Lease shall be valid and be enforced to the fullest extent permitted by law. 19.7 Recordinq. Lessor shall not record this Lease without the written consent of City; however, upon the request of either party hereto the other party shall join in the execution of a memorandum or so-called "short form" of this Lease for the purposes of recordation. said memorandum or short form of this Lease shall describe the parties, the Leased Premises and the term of this Lease and shall incorporate this Lease by reference. 19.8 Governinq Law. Time. This Lease and the rights of the parties hereto shall be governed and construed in accordance with the laws of the state of Washington. Time is of the essence of this Lease. ARTICLE XX: LESSOR'S LIABILITY The City expressly acknowledges and agrees that except in the case of Lessor's negligence or willful misconduct: all remedies or actions against Lessor are strictly and solely limited to recovery against Lessor in its capacity as Trustee under the Trust Agreement; that any and all recovery under this Lease shall be limited to those trust assets held by or on behalf of Lessor pursuant to the Trust Agreement; and that under no circumstances shall any monies, properties, or assets owned by Lessor in its individual capacity .be subject to demand, collection, judgment, execution, or any other enforcement hereunder. -18- 001449 91/09/11 IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year first above set forth. CITY: THE CITY OF FEDERAL WAY, WASHINGTON By Mayor ATTEST: APPROVED AS TO FORM: By City Clerk By City Attorney (Seal) LESSOR: SEATTLE-FIRST NATIONAL BANK By Its STATE OF WASHINGTON ) ) ss. ) COUNTY OF KING I certify that I know or have satisfactory evidence that , and signed this instrument, on oath stated that they were authorized to execute the instrument and acknowledged it as the Mayor, City Clerk and City Attorney of the CITY OF FEDERAL WAY, the Municipal corporation to be the free and voluntary act of such. party for the uses and purposes mentioned in the instrument. Notary Public My commission expires: -19- OOT449 91/09/11 STATE CF WASHINGTON ) ) ss. ) COUNTY OF KING I certify that I know or have satisfactory evidence that signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as a Trust Officer of SEATTLE FIRST-NATIONAL BANK to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Notary Public My commission expires: -20- 001449 91/09/11 EXHIBIT A Legal Description of Leased Premises A-I DOT449 91/09/11 Date EXHIBIT B-1 Lease Term and Lease Payment Schedule Lease Payments 1. Total Principal Component of Lease: Payments as of original execution of Lease: $ $ 2. Interest shall be calculated and shall accrue from September 25, 1991. 3. Maturity Schedule for Lease Payments: Principal Component Interest Rate ApPlicable B-1 OOT449 91/09/11 Lease Payment Date EXHIBIT B-2 Amortization Schedule of Total Lease Payments (Excluding Additional Rent) Lease Payments Principal Component of Lease Payment Interest Component of Lease Payment Total Lease Payment B-2 00T449 91/09/11 EXHIBIT C Form of Notice of Election of Option to Purchase (Date) TO: Lessor You are hereby notified that the City of Federal Way, Washington, has elected to exercise on its option to purchase the Leased Premises (including the real property and any buildings and improvements located thereon) currently leased by the City pursuant to the Lease by and between the city and Lessor dated September 25, 1991. This purchase option is being exercised pursuant to Article X of said Lease. The City is now, and on the date set forth above for payment will be, in full compliance with all terms and conditions of the Lease. In accordance with Article X, the City shall purchase the Leased Premises for a price of the total principal component of the Lease Payments set forth in Exhibit B-1 to the Lease plus accrued interest thereon to the date of payment at the rates set forth in Exhibit B-1 of the Lease, less all Lease Payments previously paid to Lessor, for a total Purchase Price of $ CITY OF FEDERAL WAY, WASHINGTON By Authorized Representative C-l 001449 91/09/11 EXHIBIT D Form of Notice of Election to Partially Prepay Lease Payments (Date) TO: Lessor You are hereby notified that the City of Federal Way, Washington, has elected to exercise its option to prepay a portion of the Lease Payments due under that certain Lease by and between the City and Lessor dated September 25, 1991. In accordance with section 10.4 of the Lease, the date of prepayment shall be , and the principal portion of Lease Payments to be prepaid on such date is $ , representing the maturities (or portions thereof) set forth below. On such date, the city shall pay to Lessor in cash or same-day available funds, an amount equal to the principal component of Lease Payments to be prepaid, together with interest thereon accruing to such date, together with any other amounts payable under the Lease on such date. From and after such date, the term of the Lease shall be shortened in accordance with section 10.4 to terminate on CITY OF FEDERAL WAY, WASHINGTON By Authorized Representative Schedule of Principal Component of Lease Payments to be Prepaid Date Principal Component Due Amount of Principal Component to be Prepaid* *Principal may be prepaid only in increments of $5,000. D-l 001449 91/09/11 City of Federal Way ~shington Certificates of Participation in Limited Tax General Obligation Lease, 1991 Debt Service Schedule Dated Date: Delivery Date: 09/25/91 09/25/91 Total Date Principal Rate Interest Debt Service -------- ----------------- ------- ----------------- ----------------- -- 06/01/92 60,955.04 60,955.04 12/01/92 45,000,00 4.750 44,601.25 89,601.25 06/01/93 43,532.50 43,532.50 12/01/93 70,000,00 5.000 43,532.50 113,532.50 06/01/94 41,782.50 41,782.50 12/01/94 75,000.00 5.250 41,782.50 116,782.50 06/01/95 39,813.75 39,813.75 12/01/95 75,000.00 5.500 39,813.75 114,813.75 06/01/96 37,751.25 37,751.25 12/01/96 80,000,00 5.650 37,751.25 117,751.25 06/01/97 35,491.25 35,491.25 12/01/97 85,000.00 5.800 35,491.25 120,491.25 06/01/98 33,026.25 33,026.25 12/01/98 90,000.00 6,000 33,026.25 123,026,25 06/01/99 30,326.25 30,326.25 12/01/99 95,000.00 6,150 30,326.25 125,326.25 06/01/00 27,405.00 27,405.00 12/01/00 100,000.00 6.250 27,405.00 127,405,00 06/01/01 24,280.00 24,280.00 12/01/01 105,000.00 6.350 24,280,00 129,280.00 06/01/02 20,946.25 20,946.25 12/01/02 110,000,00 6,450 20,946,25 130,946.25 06/01/03 17,398.75 17,398.75 12/01/03 120,000.00 6.550 17,398,75 137,398.75 06/01/04 13,468.75 13,468.75 12/01/04 130,000.00 6.650 13,468.75 143,468,75 06/01/05 9,146.25 9,146.25 12/01/05 135,000.00 6.750 9,146.25 144,146.25 06/01/06 4,590.00 4,590.00 12/01/06 135,000.00 6.800 4,590,00 139,590.00 ----------------- ----------------- ----------------- Total 1,450,000.00 863,473.79 2,313,473.79 Accrued ----------------- ----------------- ----------------- Net Cost 1,450,000.00 863,473.79 2,313,473.79 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- From Dated Date From Delivery Date -------------------- -------------------- Average Coupon TIC Bond Years Average Life NIC Discount 6.40520 6.40520 6.49631 13,480.83333 9.29713 6,50200 -13,050.00 13,480,83333 9.29713 6.50200 EXHIBIT .} " City of Federal Way City Clerk's Office To: Electronic File—Ordinance No.91-108 From: Krystal Roe CC: Date: 2/19/2013 Re: Scanned Documents Comments: The following pages are part of the recorded document file pertaining to this ordinance.The original hard copy of the ordinance has been transferred to the state archivist.The original recorded documents are on file in the Clerk's Office with all other recorded documents. The AG referenced is No.91-081 ' d 4 9z OP/ CHICAGO TITLE INSURANCE COMPANY .a CD �a FILED FOR RECORD AT REQUEST OF — qi THIS SPACE PROVIDED FOR RECORDERS USE o to CHICAGO TITLE INSURANCE COMPANY • W 1800 COLUMBIA CENTER M 701 FIFTH AVENUE o SEATTLE, WASHINGTON 98104 -u WHEN RECORDED RETURN TO z c� SANDRA DRICOLL, CITY ATTORNEY °c THE CITY OF FEDERAL WAY z 33530 1ST WAY SOUTH FEDERAL WAY, WASHINGTON 98003 m 1 d -ar 215518 CD CD STATUTORY WARRANTY DEED 3E THE GRANTOR TH8 QUADRANT CORPORATION, A WASHINGTON CORPORATION ;� 0 CD for and in consideration of TEN DOLLARS AND OTHER GOOD AND VALUABLE CONSIDERATION in band paid,conveys and warrants to SEE ATTACHED DESCRIPTION C) Lr) the following described real estate situated in the County of KING State of Washington: CV cpLEGAL DESCRIPTION IS SET FORTH IN EXHIBIT A WHICH IS ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE. CT SUBJECT TO NATTERS SET FORTH IN EXHIBIT B WHICH IS ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE. Dated: September 24, 1991 1 G v3 • 44 )- r-4-I(in"111 f.° ?A$ *UADRANT CORPORATION $Ye 0 up , °� X WASHINGTON CORPORATION ITS: We.sicItewT l EL 2s c4 STATE OF WASHINGTON as c) '•` COUNTY OF KING J2 ils, 31 IdI ccrtif; that I know or have satisfactory evidence that i1 H J. r-z is the person who appeared before me, and said person acknowledged that /f, signed this instrument, on oath stated that lee was authorized to execute the instrument and acknowledged it as eges.rvovr of THE QUADRANT CORPORATION to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated: SEPTEMBER Ste. 1991. _ Notary Public 14.,,,." " `CAL,6taii My appointment expires: /0//6/9Y RESIDING AT: Ifirie- / 7 F1 anav 119.125,1991.'fi0 a5856.28' 1452600.00 Ei209960 09/25/1991 25856.28 1452600.00 0 STATUTORY WARRANTY DEED(continued) Conveys and warrants to(continued): SEATTLE-FIRST NATIONAL BANK, AS TRUSTEE FOR THE BENEFICIAL INTERESTS OF OWNERS OF CERTIFICATES OF PARTICIPATION IN LEASE PAYMENTS BY THE CITY OF FEDERAL WAY, WASHINGTON, SUBJECT TO THE INTERESTS OF THE CITY OF FEDERAL WAY, WASHINGTON (INCLUDING LESSOR'S GRANT OF IMMEDIATE POSSESSION AND USE (IN ACCORDANCE WITH RCW 84.36.010) ) , UNDER THE SEPTEMBER 25, 1991 GROUND LEASE WITH OPTION TO PURCHASE BETWEEN SEATTLE-FIRST NATIONAL BANK AS TRUSTEE, LESSOR, AND CITY OF FEDERAL WAY, A WASHINGTON MUNICIPAL CORPORATION, AS LESSEE. Cr") CD Lr, Lt-) N rn O Q: d LFB1o0BC 2HICAGO TITLE INSURANCE COMPA. Escrow No.: 215 518 EXHIBIT A LEGAL DESCRIPTION The land referred to is situated in the State of Washington,County of KING ,and is describcd as follows: THAT PORTION OF GOVERNMENT LOT 1, SECTION 19, TOWNSHIP 21 NORTH, RANGE 4 EAST, WILLAMETTE MERIDIAN, IN KING COUNTY, WASHINGTON, SAID PORTION BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 19; THENCE ALONG THE NORTH LINE THEREOF SOUTH 89°00'18" EAST 335.78 FEET; THENCE SOUTH 01°35'16" WEST 42.00 FEET TO THE SOUTHERLY MARGIN OF THE LANDS DESCRIBED IN DEED RECORDED UNDER RECORDING NUMBER 8501170665, IN KING COUNTY, WASHINGTON, AND THE TRUE POINT OF BEGINNING; THENCE ALONG SAID SOUTHERLY MARGIN SOUTH 89°00'18" EAST 18.07 FEET TO THE BEGINNING OF A CURVE CONCAVE TO THE SOUTHWEST HAVING A RADIUS OF 658.00 FEET; THENCE EASTERLY AND SOUTHEASTERLY 700.54 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 60°59'59"; THENCE SOUTH 28°00'19" EAST 422.43 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE TO THE SOUTHEAST HAVING A RADIUS OF 897.03 FEET (A RADIAL LINE THROUGH SAID BEGINNING BEARS NORTH 28'00'19" WEST); THENCE SOUTHWESTERLY AND SOUTHERLY 732.77 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 46°48'15" TO A RADIAL LINE OF SAID CURVE WHICH BEARS NORTH 74°48'34" WEST AND THE SOUTH LINE OF SAID GOVERNMENT LOT 1; THENCE ALONG SAID SOUTH LINE NORTH 88°59'20" WEST 376.79 FEET TO A LINE PARALLEL WITH AND DISTANT 335.76 FEET EASTERLY, WHEN MEASURED AT RIGHT ANGLES, FROM THE CID WEST LINE OF SAID GOVERNMENT LOT; Ln THENCE ALONG SAID PARALLEL LINE NORTH O1°35'16" EAST 1,273.00 FEET TO THE TRUE POINT OF BEGINNING. L1") CV C7) C= CHICAGO TITLE INSURANCE COMPANY ' r CHICAGO TITLE INSURANCE COMPANY Escrow No.: 215518 EXHIBIT B SUBJECT TO: A 1. UNDERGROUND UTILITY EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: PUGET SOUND POWER & LIGHT COMPANY, A WASHINGTON CORPORATION PURPOSE: ELECTRIC TRANSMISSION AND/OR DISTRIBUTION SYSTEM TOGETHER WITH ALL NECESSARY OR CONVENIENT APPURTENANCES THEREFOR AREA AFFECTED: PORTIONS OF SAID PREMISES AND OTHER PROPERTY ADJOINING THE EXTERIOR MARGINS OF SOUTHWEST CAMPUS DRIVE RECORDED: APRIL 2, 1986 RECORDING NUMBER: 8604020489 CONTAINS COVENANT PROHIBITING STRUCTURES OVER SAID EASEMENT OR OTHER ACTIVITIES WHICH MIGHT ENDANGER THE UNDERGROUND SYSTEM. 8 2. EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: FEDERAL WAY WATER AND SEWER DISTRICT, A MUNICIPAL CORPORATION Cr7 PURPOSE: SEWER FACILITIES AND ALL APPURTENANCES • Cr, Ll'? RELATED THERETO AREA AFFECTED: PORTION Of SAID PREMISES N RECORDED: NOVEMBER 17, 1987 C� RECORDING NUMBER: 8711170788 O " C` 3. EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: KING COUNTY PURPOSE: SLOPES, DRAINAGE AND UTILITIES AREA AFFECTED: PORTION OF SAID PREMISES WITHIN A STRIP . OF LAND 10 FEET IN WIDTH LYING PARALLEL TO AND ADJOINING SOUTHWEST CAMPUS DRIVE RECORDED: AUGUST 11, 1989 RECORDING NUMBER: 8908110283 D 4. EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: WASHINGTON NATURAL GAS COMPANY, A WASHINGTON CORPORATION PURPOSE: GAS PIPELINE(S) AND APPURTENANCES AREA AFFECTED: PORTION OF SAID PREMISES AND OTHER PROPERTY LYING WITHIN A STRIP OF LAND 16 VEST WIDE LOCATED SOUTHERLY OF,, PARALLEL TO AND ADJOINING THE SOUTH BOUNDARY LINE OF SOUTHWEST CAMPUS DRIVE RECORDED: AUGUST 7, 1990 RECORDING NUMBER: 9008070651 CHICAGO TITLE INSURANCE COMPAN' Escrow No.: 215518 EXHIBIT B SUBJECT TO: E 5. AGREEMENT AND THE TERMS AND CONDITIONS THEREOF: BETWEEN: CITY OF FEDERAL WAY AND: THE QUADRANT CORPORATION RECORDED: MARCH 5, 1990 RECORDING NUMBER: 9003051119 REGARDING: RESTRICTIONS AND REQUIREMENTS RELATED TO THE DEVELOPMENT OF SAID PREMISES F 6. RIGHT TO MAKE NECESSARY SLOPES FOR CUTS OR FILLS UPON PROPERTY HEREIN DESCRIBED AS GRANTED IN DEED: • • GRANTEE: KING COUNTY • RECORDED: JANUARY 17, 1985 RECORDING NUMBER: 8501170665 ' G AFFECTS: THAT PORTION OF SAID PREMISES AND OTHER PROPERTY ABUTTING SOUTHWEST CAMPUS DRIVE Cr) ! 9. FACILITY CHARGES, IF ANY, INCLUDING BUT NOT LIMITED TO HOOK—UP OR CONNECTION CHARGES AND LATECOMER CHARGES FOR WATER OR SEWER FACILITIES OF WATER DISTRICT NO. 124, AS DISCLOSED BY INSTRUMENT RECORDED UNDER RECORDING NUMBER me N 8106010916. Q? O CT r sor.nn iTll.P INSURANCE COMPANY • f-I/ • 4 r c Recorded at the Request of and After Recording Return to THIS DOCUMENT IS BEING RE-RECORDED TO Preston Thorgrimson Shidler INCLUDE EXHIBIT A. ;� Gates & Ellis to 701 5th Avenue, Suite 5400 e• Seattle, WA 98104 gui Attention: David O. Thompson MEMORANDUM OF GROUND LEASE WITH OPTION TO PURCHASE THIS MEMORANDUM OF GROUND LEASE, gives notice of that certain Ground . Lease with Option to Purchase ("Lease") made as of September 25, 1991, by and between y Seattle-First National Bank, Seattle, Washington, as Trustee under that certain Trust Agreement dated September 25, 1991 ("Lessor"), and the City of Federal Way, Washington, a municipal corporation duly formed and existing under the laws of the State of Washington ("Lessee"). The Lease provides for the lease of the real property described on Exhibit A hereto and grants immediate possession and use of such real property (in accordance with RCW 84.36.010). The Lease is for the term of approximately fifteen (15) years, commencing on September 25, 1991, and terminating on December 1, 2006. The Lease contains an option to prepay such Lease and to purchase the Leased Premises upon the terms, covenants and conditions specified in the Lease, reference to which is made for the particular terms thereof. IN WITNESS whereof, the parties have executed this document as of the date first above written. CITY: CLI Em TAX NOT THE C OF FEDERAL WAY, REQUIRED WAS II GTON r Co Recur•s Di • ion ,/ 4..i 41,11, 0 • Deputy By ..• / /_. Mayor ri • 'R to `1 ID AS TO FORM: .92 Id Lr. : _ By ■41 I If i Cl:� City A •rney (Seal) 00.6 Of €00 91110338 wm03 MIX WI 0O 2$=E0 ZIT-LOOM wimm ,7 LESSOR: SEATTLE-FIRST NATIONAL BANK, as Trustee By L-2) Ofj/ i Its -revLhT or-ROA. STATE OF WASHINGTON ) ss. COUNTY OF KING ) Q, teuy tJ 44.‹e I certify that I know or have satisfactory evidence that Debra Ertel, Maureen Swaney and a: dra ri-e-1 signed this instrument, on oath stated that they were authorized to execute the instrument and acknowledged it as the Mayor, City Clerk and City Attorney of the CITY OF FEDERAL WAY, the Municipal corporation to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Air Notary Public My commission expires: //1/92- P1 STATE OF WASHINGTON ) r ) ss. 0 c) COUNTY OF KING ) I certify that I know or have satisfactory evidence that t-1 ik sat d../1-3 signed this instrument, on oath stated that • 0') he dl'ja was authorized to execute the instrument and acknowledged it as a Trust Officer of SEATTLE FIRST-NATIONAL BANK to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Griaenifkit.R. 4P4016 Notary Public My c mm sion expires: .57/1/93/tl93 -2- D0T460 91/09/20 CHICAGO TITLE INSURANCE COMP/ • ' Order No.: 215 518 EXHIBIT A LEGAL DESCRIPTION THAT PORTION OF GOVERNMENT LOT 1, SECTION 19, TOWNSHIP 21 NORTH, RANGE 4 EAST, WILLAMETTE MERIDIAN, IN KING COUNTY, WASHINGTON, SAID PORTION BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 19; THENCE ALONG THE NORTH LINE THEREOF SOUTH 89°00'18" EAST 335.78 FEET; THENCE SOUTH 01°35'16" WEST 42.00 FEET TO THE SOUTHERLY MARGIN OF THE LANDS DESCRIBED IN DEED RECORDED UNDER RECORDING NUMBER 8501170665, IN KING COUNTY, WASHINGTON, AND THE TRUE POINT OF BEGINNING; THENCE ALONG SAID SOUTHERLY MARGIN SOUTH 89°00'18" EAST 18.07 FEET TO THE BEGINNING OF A CURVE CONCAVE TO THE SOUTHWEST HAVING A RADIUS OF 658.00 FEET; THENCE EASTERLY AND SOUTHEASTERLY 700.54 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 60°59'59"; THENCE SOUTH 28°00'19" EAST 422.43 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE TO THE SOUTHEAST HAVING A RADIUS OF 897.03 FEET (A RADIAL LINE THROUGH SAID BEGINNING BEARS NORTH 28°00'19" WEST); THENCE SOUTHWESTERLY AND SOUTHERLY 732.77 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 46°48'15" TO A RADIAL LINE OF SAID CURVE WHICH BEARS NORTH 74°48'34" WEST AND THE SOUTH LINE OF SAID GOVERNMENT LOT 1; THENCE ALONG SAID SOUTH LINE NORTH 88°59'20" WEST 376.79 FEET TO A LINE PARALLEL WITH AND DISTANT 335.76 FEET EASTERLY, WHEN MEASURED AT RIGHT ANGLES, FROM THE WEST LINE OF SAID GOVERNMENT LOT; THENCE ALONG SAID PARALLEL LINE NORTH 01°35'16" EAST 1,273.00 FEET TO THE TRUE POINT OF BEGINNING. '.4 0 CI CHICAGO TITLE INSURANCE COMPANY 9/p/ Recorded at the Request of and After Recording Return to Preston Thorgrimson Shidler Gates & Ellis 701 5th Avenue, Suite 5400 Seattle, WA 98104 Attention: David O. Thompson MEMORANDUM OF GROUND LEASE WITH OPTION TO PURCHASE THIS MEMORANDUM OF GROUND LEASE, gives notice of that certain Ground Lease with Option to Purchase ("Lease") made as of September 25, 1991, by and between Seattle-First National Bank, Seattle, Washington, as Trustee under that certain Trust Agreement dated September 25, 1991 ("Lessor"), and the City of Federal Way, Washington, a municipal corporation duly formed and existing under the laws of the State of Washington ("Lessee"). The Lease provides for the lease of the real property described on Exhibit A hereto and grants immediate possession and use of such real property(in accordance with RCW 84.36.010). The Lease is for the term of approximately fifteen (15) years, commencing on September 25, 1991, and terminating on December 1, 2006. The Lease contains an option to prepay such Lease and to purchase the Leased Premises upon the terms, covenants and conditions specified in the Lease, reference to which is made for the particular terms thereof. IN WITNESS whereof, the parties have executed this document as of the date first above written. CITY: THE CITY OF FEDERAL WAY, WASHINGTON By .IJ . aer Mayor ATTES ,• PR i 'A II TO FORM: By: By�- �I il� �,.�, " 0-Lisa& ity Cl City ttorney (Seal) ORIGINAL i , „„ . .1 LESSOR: SEATTLE-FIRST NATIONAL BANK, as Trustee B \-.11 � ,..i Its 1 RAAtcr or-Fie/0g- STATE OF WASHINGTON ) ss. COUNTY OF KING ) 69.4 o Y,tf '4C I certify that I know or have, satisfactory evidence that Debra Ertel, Maureen Swaney and --rvenctret—Bachl-k signed this instrument, on oath stated that they were authorized to execute the instrument and acknowledged it as the Mayor, City Clerk and City Attorney of the CITY OF FEDERAL WAY, the Municipal corporation to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. 57 ,a4.10.2, 2,--4-1_,„__ Notary Public My commission expires: STATE OF WASHINGTON ) ss. COUNTY OF KING ) I certify that I know or have satisfactory evidence that 4*` 5 ,,,,/# signed this instrument, on oath stated that • h Ce) was duthorized to execute the instrument and acknowledged it a Trust Officer of SEATTLE FIRST-NATIONAL BANK to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. c4mei / if/ .! - Notary Publ My Acod��3 ion expires: -2- D0T460 91/09/20 t 4 s Recorded at the Request of ti • and After Recording Return to Preston Thorgrimsoa Shidler Gates&Ellis 701 5th Avenue, Suite 5400 Seattle,WA 98104 Attention: David O. Thompson MEMORANDUM OF GROUND LEASE WITH OPTION TO PURCHASE THIS MEMORANDUM OF GROUND LEASE, gives notice of that certain Ground E Lease with Option to Purchase ('Lease') made as of September 25, 1991, by and between Seattle-First National Bank,Seattle,Washington,as Trustee under that certain Trust Agreement dated September 25, 1991 ("Lessor`), and the City of Federal Way,Washington, a municipal corporation duly formed and existing under the laws of the State of Washington("Lessee"). (V a The Lease provides for the lease of the real property descated on Exhibit A hereto and grants immediate possession and use of such real.property(m accordance with RCW 84.36.010). N The Lease is for the teem of approximately fifteen(15)years, commencing on September 25, 0 1991, and terminating on December 1, 2006. The Lease contains an option to prepay such Lease and to purchase the Leased Premises upon the terms,covenants and conditions specified Cr) in the L ease, reference to which is made for the particular terms thereof. IN WITNESS whereof,the parties have executed this document as of the date first above written. CITY: THE CITY OF FEDERAL WAY, EXOS6 TAX NOT REQUIRED WASHINGTON ; `. Deputy By 99./..1L.4..., C/ m� Mayor S� au us. , : .R• AS TO FORM: A- AIL"i C „� City A.., pey (Seal) -MD BY: `° . Como TITLE V LESSOR: SEATTLE-FIRST NATIONAL BANK, as Trustee By L�II`�,/ Its ile0.41. OFFCG - STATE OF WASHINGTON ) ) ss. COUNTY OF KING tdcr� axe I certify that I know or have/7satisfactory evidence that Debra Ertel, Maureen Swaney and signed this instrument, on oath stated that they were authorized to execute the instrument and acknowledged it as the Mayor, City Clerk and (V City Attorney of the CITY OF FEDERAL WAY, the Municipal corporation to be the free and voluntary act of such party for Lr) the uses and purposes mentioned in the instrument. Lc) Ee Notary Publ c My commission expires: /v//g • STATE OF WASHINGTON ). ss. COUNTY OF KING I certify that I know or have satisfactory evidence that t) Std L/ signed this instrument, on oath stated that he d�was authorized to execute the instrument and acknowledged it as a Trust Officer of SEATTLE FIRST-NATIONAL BANK to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. M- 2406 NotaC"ub My c mm4s Sion expires: 47/1/93 - -2- 007460 91/09/20 • -- FEB BY: CHICAGO TITIB © CHICAGO TITLE INSURANCE COMPANY t� FILED FOR RECORD AT REQUPST O! TMS$PACE PROVIDED FOR RECD RDMS USE P • u CHICAGO TITLE INSURANCE COMPANY ' 1800 COLUMBIA CENTER 701 FIFTH AVENUE SEATTLE, WASHINGTON 98104 s WHEN R8CORDED RETURNTO ,c SANDRA DRICOLL, CITY ATTORNEY THE CITY OF FEDERAL WAY 33530 1ST WAY SOUTH Fb FEDERAL WAY, WASHINGTON 98003 9 215518 a STATUTORY WARRANTY DEED m THE GRANTOR THE QUADRANT CORPORATION, A WASHINGTON CORPORATION 8 for and in consideration of TEN DOLLARS AND OTHER GOOD AND VALUABLE CONSIDERATION in band paid,conveys and warrants to SEE ATTACHED DESCRIPTION Cr) VI the following dcstaed real estate situated in the County.of NING State of Washington: f■ CD LEGAL DESCRIPTION IS SET FORTH IN EXHIBIT A WHICH IS ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE. C3, SUBJEC? TO MATTERS SET.FORTH IN EXHIBIT 8 WHICH IS ATTACKED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE. Dated: September 24, 1991 9 i° a� INS QUADRANT CORPORA TIOt( BY: _ UO 5 , A WASHINGTON CORPORATION 1T5' tie.I.A. lc( STATE OF WASHINGTON as COUNTY OF KING 3 id I certify that I know or have satisfactory evidence that /4 144/4 J. Fsr-zG 5 �4 D is the person who appeared before me, and said person acknowledged that /f� signed this instrument, on oath stated that ice was authorised to execute the instrument and acknowledged it se f/tE5Xs+Cr/7 of THE QUADRANT CORPORATION to be the free and voluntary act of such • party for the uses snd purposes mentioned in the instrument. Dated: SEPTEMBER 01-5.—, 1991. I . Notary Public "" 'C •. • My appointment expires: /)//0/ 9Y : : ' _•- •FILB)-BY:- - RESIDING AT: kr-e � +a^O°t^ O9L�i99i .25856.29, 1452600.00 CHICAGO TTTIL � . . . E1209960 09/25/1991 25856.28 1452600.00 STATUTORY WARRANTY DEED(continued) Conveys and warrants to(continued): SEATTLE—FIRST NATIONAL BANK, AS TRUSTEE FOR THE BENEFICIAL INTERESTS OF OWNERS OF CERTIFICATES OF PARTICIPATION IN LEASE PAYMENTS BY THE CITY OF FEDERAL WAY, WASHINGTON, SUBJECT TO THE INTERESTS OF THE CITY OF FEDERAL WAY, WASHINGTON (INCLUDING LESSOR'S GRANT OF IMMEDIATE POSSESSION AND USE (IN ACCORDANCE WITH RCW 84.36.010)), UNDER THE SEPTEMBER 25, 1991 GROUND LEASE WITH OPTION,TO PURCHASE BETWEEN SEATTLE—FIRST NATIONAL BANK AS TRUSTEE, LESSOR, AND CITY OF FEDERAL WAY, A WASHINGTON MUNICIPAL CORPORATION, AS LESSEE. • (.n N O • ' ftiHitAL Ab • FEY BY: - miaow GSIi�G� TIiIS CHICAGO TITLE INSURANCr^OMPANY Escrow No.:215518 EXHIBIT A '< LEGAL DESCRIPTION The land referred to is situated in the State of Washington.County of R/NO and is described as follows: THAT PORTION OF GOVERNMENT LOT 1, SECTION 19, TOWNSHIP 21 NORTH, RANGE 4 LAST. WILLAMETTE MERIDIAN, IN RING COUNTY, WASHINGTON, SAID PORTION BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 191 THENCE ALONG THE NORTH LINE THEREOF SOUTH 89'00'18" EAST 335.78 FEET! THENCE SOUTH 01.35'16' WEST 42.00 FLIT TO THE SOUTHERLY MARGIN OF THE LANDS DESCRIBED IN DEED RECORDED UNDER RECORDING NUMBER 8501170665, IN RING COUNTY, WASHINGTON, AND THE TRUE POINT OF BEGINNING/ THENCE ALONG SAID SOUTHERLY MARGIN SOUTH 89'00'18' EAST 18.07 FEET TO THE BEGINNING OF A CURVE CONCAVE TO THE SOUTHWEST HAVING A RADIUS OF 658.00 FEET: THENCE EASTERLY AND SOUTHEASTERLY 700.54 FELT ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 60'59'59'/ THENCE SOUTH 28.00.19' EAST 422.43 FEET TO THE BEGINNING OF A NON—TANGENT CURVE CONCAVE TO THE SOUTHEAST HAVING A RADIUS OF 897.03 FEET (A RADIAL LINE THROUGH SAID BEGINNING BEARS NORTH 28.00'19' WEST); THENCE SOUTHWESTERLY AND SOUTHERLY 732.77 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 46.48'15' TO A RADIAL LINE OF SAID CURVE WHICH BEARS NORTH 74'48'34' WEST AND THE SOUTH LINE OF SAID GOVERNMENT LOT Is WITH AND DISTANT 335.76 FEET 88°59'20' WEST MEASURED6AT9RI US? GHT ANGLES,LINE FROM PARALLEL Crl WEST LINE OF SAID GOVERNMENT LOT; THENCE ALONG SAID PARALLEL LINE NORTH 01'35'16' LAST 1,271.00 FEST TO THE TRUE POINT OF BEGINNING. Lt') N • • • > BY: CHICAGO TITLE INSURANCE COMPANY CHICAGO TITLE INSURANCE--+MPANY Escrow No.:215 518 EXHIBIT B SUBJECT TO: A 1. UNDERGROUND UTILITY EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: PUCET SOUND POWER i LIGHT COMPANY, A . WASHINGTON CORPORATION PURPOSE: ELECTRIC TRANS)M18SION AND/OR DISTRIBUTION SYSTEM TOGETHER WITH ALL _ NECESSARY OR CONVENIENT APPURTENANCES THEREFOR AREA AFFECTED: PORTIONS OF SAID PREMISES Akb OTHER • PROPERTY ADJOINING THE EXTERIOR MARGINS Of SOUTHWEST CAMPUS DRIVE •- RECORDED: APRIL 2, 1986 RECORDING NUMBER: 8604020489 • CONTAINS COVENANT PROHIBITING STRUCTURES OVER SAID EASEMENT Olt OTHER ACTIVITIES WHICH MIGHT ENDANGER THE UNDERGROUND SYSTEM. 2. EASEMENT MID THE TERMS AND CONDITIONS THEREOF: . GRANTEE: FEDERAL WAY WATER AND SEWER DISTRICT, A MUNICIPAL CORPORATION. SEWER PURPOSE: • RELATED ACILTTIES AND ALL APPURTENANCES L� AREA AFFECTED: PORTION Of SAID PREMISES N RECORDED: NOVEMBER 17, 1987 , • RECORDING NUMBER: 8732270788 1:3' C 3. EASEMENT AND THE TERMS AND CONDITIONS THEREOF: • GRANTEE: RING COUNT! PURPOSE: SLOPES, DRAINAGE AND UTILITIES • AREA AFFECTED: PORTION OF SAID PREMISES WITHIN A STRIP . OP LAND 10 FEET IN WIDTH LYING PARALLEL TO-AND ADJOINING SOUTHWEST CAMPUS DRIVE RECORDED: AUGUST 11, 1989 RECORDING NUMBER: 8908110283 D 4. EASEMENT.AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: WASHINGTON NATURAL GAS COMPANY, A WASHINGTON CORPORATION PURPOSE! * GAS PIPELINE(S) AND APPURTENANCES AREA AFFECTED: PORTION OF SAID PREMISES AND OTHER PROPER?! LYING WITHIN A STRIP Of LAND 1S TEXT WIDE LOCATED SOUTHERLY OF, PARALLEL TO AND ADJOINING THE SOUTH BOUNDARY LINE Of SOUTHWEST CAMPUS DRIVE RECORDED: AUGUST 7, 1990 RECORDING NUMBER: 9008070651 a, I 1 . IUD-BY:- - . CHICAGO Ira CHICAGO TITLE INSURANC '4PANY Escrow No:215518 EXHIBIT B SUBJECT TOs • t' S. AGREEMENT AND THE TERMS AND CONDITIONS THEREOF' BETWEEN: CITY OF FEDERAL WAY AND: THE QUADRANT CORPORATION RECORDED: MARCH 8, 1990 RECORDING NUMBER: 9003051119 REGARDING' RESTRICTIONS AND REQUIREMENTS RELATED TO THE DEVELOPMENT OF SAID- PREMISES F 6. RIGHT TO MAKE NECESSARY SLOPES FOR CUTS OR FILLS UPON PROPERTY HEREIN DESCRIBED AS GRANTED IN DEED' • • GRANTEE: XING COUNTY RECORDED' JANUARY 17, 1985 • RECORDING NUMBER: 8501170665• 8 AFFECTS' THAT PORTION 07 SAID PREMISES AND OTHER PROPERTY ABUTTING SOUTHWEST CAMPUS DRIVE • C') l 9. FACILITY CHARGES, IT ANY, INCLUDING BUT NOT LIMITED TO 800K-BP OR CORPOCTION NO.CHARGES DISCLOSED BY NSTRUMENT WATER RECORDED UNDDERRREuCORDI Or NUMBER DISTRICT (NJ 8106010916. • • • • lli ) BY: CHICAGO TE1E r�..r•.rsn1111 P)NCUR.NCB COMPANY �9G ?j-- d'/ '' • ORIGINAL REAL ESTATE PURCHASE AND SALE AGREEMENT WITH EARNEST MONEY PROVISION The City of Federal Way (hereinafter "Purchaser") agrees to purchase and Quadrant Corporation, a corporation qualified to do business in the State of Washington and Polygon 2000, Inc. , a corporation qualified to do business in the State of Washington (hereinafter "Seller") agrees to sell, on the following terms, approximately 16.14 acres of property, commonly known as Parcel A of Campus Crest (Parcel 5) , in Federal Way, Washington, legally described in Exhibit A, attached hereto and incorporated herein by this reference. 1. Purchase Price. The total purchase price is One Million Four Hundred Fifty-Two Thousand Six Hundred Dollars ($1,452, 600.00) , Ninety Thousand Dollars ($90,000.00) per acre. CheC if Q, 2. Method of Payment. Cash or warrant° at closing. pri,--- ( ke_ 3 . Earnest Money. The Purchaser shall place in escrow a check for One Thousand Dollars ($1,000.00) at Chicago Title Insurance Company, Seattle, Washington, as earnest money in partial payment of the purchase price. This earnest money shall be applied to the total purchase price. 4. Condition of Title. Unless otherwise specified in this Agreement, title to the property is to be free of all encumbrances or defects, except that rights reserved in federal patents or state deeds, building or use restrictions general to the area, other than platting and subdivision requirements, and utility easements shall not be deemed encumbrances or defects Encumbrances to be discharged by the Seller shall be paid by the Seller on or before closing. L(olu✓G1eax.^ .r'i r u*Ay .f.lie, 69 Acl,, t ar,, 15`FJ 0f faft.( 1.*.✓% 4 I t/1 +if/e v ,Set 70,11. in tka p✓ett.,nee,"y fi-tu re,a.r7'43ub)ea10 re.11eri eterclt.,ye G aseMcuu•1'+raei 5. Utilities. Seller warrants that the property is Al connected to f 5'.t cJ -' 6. `t erc6` ey f` e- A. public water main pue.r.. ^'- 4v Orr 4)/ee.,•w01, B. well C. public sewer main 2/5"itigiti::: D. s eptic tE. none of the above Atia9011 jF,{t1 6(.)Closing of the Sale. This sale sha e c os within / iem aixxty (-64} calendar days from the date of he City Council's ./ approval as set forth in Section 17 below. amt atisfaction of all other conditions and contingencies herein. or at another timo agrccd to in writing by the Partite.. This sale shall be closed by _ _ _ ' - _ - - , - -_ _ _ _ - - - _ - - - -- - _ Purchaser and Seller shall, immediately upon demand, deposit with closing agent all instruments and monies required t l in 1 accordance with this Agreement. Chcca�o�•t�a * L `; v t • • - ) c " n o � =SCl�‘N Sew �t 11 I e a kV l'iarl&A fit 1l-fi (3?) d o ,i I t /7e e..teo1 -F t v»y0!e iv / fr e f�i/Idnci`45 Of Vic putc4oJe L�' 1 N.141 ceitur ke er. ,1o+-ice, I I e. S (11- i e5 � ff1rt a Y1ti,�L-k-Lc._6( (1.�I{ `K,c Y`4--'- ` 0 a vt o e y1 Qr(O 5 (�tg 02 a `f i Gc ev li.c.)8_4[.QQ- /✓Y °'l LIP w► '1- vv c'1) ) (1 tte1 *--2Y4CAMAY 7. losing Costs and Proration. Seller and Purchaser shall each pay o e-half of the escrow fees. Seller shall pay real estate excise tax and any real estate commissions. Taxes for the current year and all rents, interest, utilities and other liens and charges shall be prorated as of closing. Seller shall pay for the cost of the title insurance. Seller shall pay those charges accruing to the date of closing on or before the date of closing. 8. Possession. Purchaser shall be entitled to possession on closing. "Closing" means the date upon which all documents are recorded and the sale proceeds are available to the Seller. 9. Default and Attorney's Fees. If the Seller defaults in its contractual performance herein, the Purchaser may seek specific performance pursuant to the terms of this Agreement, damages, or recision. If the Purchaser seeks damages or recision, the earnest money, upon demand, shall be returned in full to the Purchaser. If the Purchaser defaults in its contractual performance herein, the earnest money, upon demand, shall be forfeited to the Seller and shall be the sole and exclusive remedy for default available to the Seller. In the event of litigation to enforce any of the terms or provisions herein, each party shall pay all its own costs and attorney's fees. 10. Title Insurance. The Seller, at Seller's expense, shall, immediately, upon execution by all parties to this Agreement, apply for a standard form of Purchaser's policy of title insurance. The preliminary commitment thereto, and the title policy to be issued, shall contain no exceptions other than general exclusions and exceptions in said standard form and any that may be excepted herein. If title cannot be made so insurable prior to the closing date, the earnest money shall be returned in full to the Purchaser, any and all costs shall be paid by the Seller, and this Agreement shall thereupon be terminated. The Purchaser may elect to waive any such defects or encumbrances. 11. Conveyance-Warranty Deed. Title shall be conveyed by statutory warranty deed. 12. Performance. Time is of the essence to this Agreement. 13. Records. Studies and Documents. The Seller shall provide to the Purchaser within fourteen (14) calendar days of approval of this Agreement by the Federal Way City Council a copy of any and a all soils or hazardous materials reports or studies or preliminary jicA reports or studies elated to this property or the approximately five acres adjacen to this property owned by the - Seller. In- - = - - • - - , the detc of cles' - all maps, "as built3", plan3, studie3, and X V- other reprt a re - - o the property* awl ite deme�� A4 VYA 419- *213- 4 e 14. Seller's Representations and Warranties. It is the covo Seller's obligation at its sole cost and expense to comply or ensure compliance with, and for matters arising out of all federal, state, foreign and local laws or administrative orders with respect to environmental conditions existing on the closing date including, without limitation, the Resource Conservation and Recovery Act, the s.�r`� Comprehensive Environmental Response, Compensation and Liability r Act, the Spill Compensation and Control Act, and the Environmental -fri;ge, Cleanup Responsibility Act, with respect to the purchased property 6'21'& •0 broaoh- thereof stall rvive tho olocing, ' ' • - In the event Purchaser discovers or determines or is notified about the existence of any environmental condition (including, . without limitation, a spill, discharge or contamination) that ''r existed as of and/or prior to the closing date or any act or ;' t omission occurring prior to the closing date, the result of which may require remedial action pursuant to any law or may be the basis '. for the assertion of any third party claims, including claims of governmental entities, Purchaser shall promptly notify Seller thereof and Seller shall, at its sole cost and expense, proceed / with due diligence and in good faith to take the • •r• •r' ,te action ;,,,serq and response thereto In the ;:.t that Seller - _ -_ _ proceed tc,ti psi with due diligence nd go. ' h, the Pu haser may, at its o r� option, proceed to t ke the( .A;;. iate acti•, and shall have the rights to indemnity s set f. , ? el i --te. l�e /lu 15. Seller's Indemnities. The eller agrees to indemnify and 49' harmless the Purchaser, against and in respect of, any and all damages, claims, losses, liabilities, judgments, demands, fees, obligations, assessments, and expenses and costs, including without limitation, reasonable legal, accounting, consulting, engineering and other expenses which may be imposed upon or incurred by Purchaser, or asserted against Purchaser, by any other party or parties (including, without limitation, a governmental entity) , arising out of or in connection with any environmental condition existing as of and/or prior to the closing date, including the exposure of any person to any such environmental condition, regardless of whether such environmental condition or exposure resulted from activities of Seller or Seller's predecessors in interest. This indemnity shall survive the closing and be in addition to Seller's obligation for breach of a representation or warranty as may be set forth herein. 16. Notice. Unless otherwise specified, any notice required or permitted in or related to this Agreement, including any addenda _;w thereto, must be in writing, signed by the Purchaser or Seller and °" received by the Purchaser or Seller, as applicable. Facsimile ` transmission of any signed original document shall not be the same 414 as transmission of an original. of a./ 0,0 •N u!e ef t , c r' el( -, tJ 19 1.--■• �,C A/ . vde. aj! l7-e rte- J'II s.t:( r'e7Fo/,, er a,.el -to IZe �, _ � re tt.� Ou/aoxr ' eat' ✓ei•w-IowJ- - 7 /t•(/Jes Tvs au 0 i-if Cc.$1:1 1"t reI&W 4 (ac� de,�TJmcn - - -_ -.il t 't:a�or o/ a"((rc/a!v/c aft,.. ae QKt, ,-/tie 4 0-n v, en v t r v...1,4,%,( Cc N /'7 i-e- I / • • �. 47 6" 51%1 e,,.. 17•-R or,c/f urn 1' , N le- teke (4,"- bQfe/ • Jau/a.aJe/ l`., cu//1 ,j'uc1,1 GaJ'',. w, t' t-tL re(4,t urJe #1.4 a r sit,wilt 6 e v o 49 4-1-.) n 4,:fist pot 4-i Sti vfA `t u,.-e a y tai.ii -- (( 17. Conditional Offer. This offer is subject to the final approval by the Federal Way City Council. Should this offer not be approved by the City Council,V the earnest money shall be immediately returned the City. No rights or responsibilities shall accrue to either Party and this Agreement shall be null and void if not approved by the City Council. 18. Property Segregation. Purchaser understands Purchaser is purchasing a portion of Campus Crest, Parcel 5, that being Parcel A, and that Seller retains ownership of Parcel B. Purchaser acknowledges that the owner desires to segregate the Campus Crest Parcel into Parcel A and Parcel B pursuant to the provisions of RCW 58.17.040(2) . Under an independent analysis, the City has determined that there is no objection to the segregation and by separate letter has so informed the King County Assessor's Office. IA 19. Concomitant Agreements. The Parties hereto understand A and agree that this property and related property, commonly known as Campus Highlands, are subject to Concomitant Agreements relating to the zoning of Campus Crest Property (Parcel 5) and related tor: tj the zoning of Campus Highland Towne Home Property (Parcel 7) . The ,, ;, Parties understand that, by entering into this Purchase and Sale Agreement and by the City's purchase of such property if such the terms and conditions of the Concomitant p urchase occurs, e x �e t 1�a.-1• -Fl, i'►'►aki w,.w►n d�e Agreements remain in full force and effect A I t,, o a�e�e-�f,:a v,.,,a,,cr eit re -e'& `�-o �4vk 5'.�-y o►tna1 11 r vda( 20. Agreement to Purchase and Time Limit for Acceptance. �a5i5 +o Purchaser offers to purchase the property on the terms and ri-Pt€z✓t th,_ _illconditions set forth herein. Seller shall have until 11:59 p.m. ofr 4-et,oh August 5„6 1991, by delivery of a signed copy hereof to J. Brent t,e' ,o e°` `"cf , *i .)( McFall, City Manager, City of Federal Way, Washington, to accept µe.J jilJ this offer. e,c,,,e,14..a 6 e 04a. re 5`z.. 'H- / i-k.i 3 Dated this ( day of (} , 19/2. '¢5 re_Q we e+11-, PURCHASER CI Y OF FEDERAL WAY se,-t-faY -' By: , �� , �y �� �,�-a l- J. Brent M Fall it Manager Y 530 1st Way South ederal Way, Washington 98003 ■ta im. 21. Seller's Acceptance. Seller agrees to sell the property on the terms and conditions herein. Seller acknowledges receipt of A a copy of this Agreement, signed by all parties, having read the terms and conditions above and agreeing thereto. av ?N 4„... rnm / , a O -437- a ri f , / ✓/ 4 naU lo, rei"dn s w c , + a r �], f/.),I N.,i, lard 'Ai' d f ror,C/� _ `/'rt aCC 0,41,4, C u.c � eye "Pc viola 7 C-( 1 ft•af1 Jc.cll ii, a ( , !U/ A C t!— ∎" " (4 el e pet.,c fp Ow Ni uv„ te cf vCC “P PO ier ,- 1 •/ e iAo $-e 0i- the \$ _ -4- c7 r c r J'1 ru �c.c•{+.r c 464 \� ff u J C cTa (f`e C t f act /e�lec-T -ID CG'r-J'rr,.J� ron i e.( ',JQr %„� w/r4, e�c 1 i r e O C `, "P•' �PJ t"1•e j,„Pr��c ! ^S ore a rPrcc� 7 ro to..5 A p eSIae4 '� tie seller for ec"h-ez farce( S' R.. or I 4 Ce' 1jCki ?*OCC ' a, cr it ✓ or”-I ,e f�,'r e.,.....3-47 ere � f t SELLER, Alp GON 2000, INC. By: Gary A. Yo"g, - for Vice President 4040 Lake Wash' •ton B1vd.N.E. Ste.201 Kirkland, Washington 98033 QUADRANT CORPORATION By: (-tO Hug . /FitzlI ald, President P. O. Box 130 Bellevue, Washington 98009 20. Purchaser's Receipt. Purchaser acknowledges receipt of a Seller's signed copy of this Agreement on oep , 19&. �y PURCHASER, CITY OF FEDERAL WAY �1 �� By: J. - enr McFall, City Manager p ,r la t & i k 5�� e wee `� 0 f0.,a`) a As +o Pct.e r t a , 'H,.e_. (� 4e �r o e_ e Q.at. e ro` c� o►� Po� reC,� b r p�t (ree B +CQ e„ 0_ w• t.ca- or 4-v r u-� A e.lt- £ s `fu (tree L .4 bo ws- n b� c u CLt`C>e�Q `FVL i5 4 c� me `�-� p � r 06e 6 Go__ Lev ecoe �eQoe � +e v' 6 c� 91L1027 � V Le wt � rcl S o vt @ cpwc c -5- Exhibit A to Real Estate Purchase and Sale Agreement for Portion of Campus Crest Property LEGAL DESCRIPTION . PARCEL "A" THAT PORTION OP GOVERNMENT LOT 1, SECTION 19, TOWNSHIP 21 NORTH, RANGE 4 EAST, W.M. , IN KING COUNTY, WASHINGTON, SAID PORTION BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 19; • THENCE ALONG THE NORTH LINE THEREOF 589'00'18"E 335.78 FEET; THENCE 301'35'15"W 42.00 FEET TO THE SOUTHERLY MARGIN OF THE LANDS DESCRIBED IN DEED RECORDED UNDER RECORDING NUMBER 8501170665, RECORDS OF SAID COUNTY AND THE TRUS POINT OP SEGINNINGr • THENCE ALONG SAID SOUTHERLY MARGIN 889'00'18"E 18.07 FEET TO THE BEGINNING OF A CURVE CONCAVE TO THE SOUTHWEST HAVING A RADIUS OF 658.00 PEET; THENCE EASTERLY AND SOUTHEASTERLY 700.54 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 60'59159"; THENCE s28.00'19"E 422.43 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE TO THE SOUTHEAST HAVING/A RADIUS OP 897.03 FEET (A RADIAL LINE THROUGH SAID BEGINNING BEARS N25'O0'19"W) : THENCE SOUTHWESTERLY AND SOUTHERLY 732.77 PUT ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 46648/1611 TO A RADIAL LINE OF SAID CURVE WHICH BEARS N74•48•34"W AND THE SOUTH LINE OF SAID GOVERNMENT LOT 1; THENCE ALONG SAID SOUTH LINE N6B'69'20"W 376.79 FEET TO A LINE PARALLEL WITH AND DISTANT 335.76 FEET EASTERLY, WHEN MEASURED AT RIGHT ANGLES, PROM THE WEST LINE OP SAID GOVERNMENT LOT; THENCE ALONG SAID PARALLEL LINE N01'35'16"E 1273.00 FEET TO THE TRUE POINT of 3EGIENXNG. CONTAINS 702,969 SQUARE FEET (16.14) , MORE OR LESS. SITUATE IN KING COUNTY, WASHINGTON. . 411;. ',:t0N . ; , 061 '' 44(01 04 1 \<<zar51" I0 . • RESTON 5 701 Fifth Avenue THORGRI MSON D Seattle,WA 98104-7078 SHIDLER Telephone:(206)623-7580 GATES & ELLIS Facsimile:(206)623-7022 FEDERAL WAY ATTORNEYS AT LAW CITY ATTORNEY NANCY M. NERAAS ebruary 4, 1992 lf ------11) C-1-' "C--.----". . . . Carolyn Lake ti �� �,r:. � �, ,; . Assistant City Attorney °i, � City of Federal Way - \\G )���n�A 33530 - 1st Way South Ct Y Federa'! Ways WA 98003 Re: Ground Lease Dear Carolyn: Enclosed is the original recorded memorandum of ground lease for the Campus Center property for your records. Please let me know if I can ever be of any assistance. Very truly yours, PRESTON THORGRIMSON SHIDLER GATES & ELLIS By / I , Nancy M Neraas NMN: ih Enclosures K:\NMN\19406-89.010\21L.3U0 r - -- PRESTON 5400 COLUMBIA CENTER THORGRIMSON SEATTLE FIFTH oi-N70U78 SHIDLER TELEPHONE:(206)623-7580 GATES & ELLIS FACSIMILE:(206)623-7022 ATTORNEYS AT LAW NANCY M. NERAAS BELLEVUE SPOKANE TACOMA ANCHORAGE PORTLAND WASHINGTON.DC I Anchorage • Bellevue • Portland . Spokane •Tacoma • Washington,D.C. A Partnership Including A Professional Corporation _ AMERICAN LAND TITLE ASSOCIATION _ LEASEHOLD OWNER'S POLICY I- (4-6-90) g CHICAGO TITLE INSURANCE COMPANY SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, CHICAGO TITLE INSURANCE COMPANY,a Missouri corporation,herein called the Company,insures,as of Date of Policy shown in Schedule A,against loss or damage,not exceeding the Amount of Insurance stated in Schedule A, sustained or incurred by the insured by reason of: 1. Title to the estate or interest described in Schedule A being vested other than as stated therein; 2. Any defect in or lien or encumbrance on the title; 3. Unmarketability of the title; g 4. Lack of a right of access to and from the land. The Company will also pay the costs, attorneys' fees and expenses incurred in defense of the title, as insured,but only to the extent provided in the Conditions and Stipulations. In Witness Whereof,CHICAGO TITLE INSURANCE COMPANY has caused this policy to be signed and sealed as of Date of Policy shown in Schedule A,the policy to become valid when countersigned by an authorized signatory. 'E AI CHICAGO TITLE INSURANCE COMPANY Issued by: By: CHICAGO TITLE INSURANCE COMPANY 1800 Columbia Center . 701 Fifth Avenue � 't- Seattle,Washington 98104 Presid 4 s (206) 628-5666 t` ISt By Secretary ire ALTA Leasehold Owner's Policy(4-6-90) 41/ 40u Jo Jay1e4M'AOHOd s!4;;o swig;044 Japun uo!loe weudojdde Aue awl Aew u!1saJalu!Jo alelse ue sulelej pamsw o44 se 6uol os Apo paJnsu!us;o Jones Auedwo0 all•pamsu!941 o1 a6ewep Jo SSOI eonpai Jo luanald of Jo`paJnsu! 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If the Company shall exercise its rights under this provided for under this Oolicy, together with any costs, attorneys' fees and paragraph,it shall do so diligently. expenses incurred by the insured claimant which were authorized by the (c)Whenever the Company shall have brought an action or interposed a Company up to the time of payment and which the Company is obligated to defense as required or permitted by the provisions of this policy,the Company Pay may pursue any litigation to final determination by a court of competent juris- Upon the exercise by the Company of either of the options provided for in diction and expressly reserves the right,in its sole discretion,to appeal from paragraphs(b)(i)or(ii),the Company's obligations to the insured under this any adverse judgment or order. policy for the claimed loss or damage,other than the payments required to be (d)In all cases where this policy permits or requires the Company to prose- made,shall terminate,including any liability or obligation to defend, prose- cute or provide for the defense of any action or proceeding,the insured shall cute or continue any litigation. secure to the Company the right to so prosecute or provide defense in the 7, DETERMINATION,EXTENT OF LIABILITY AND COINSURANCE action or proceeding, and all appeals therein,and permit the Company to This policy is a contract of indemnity against actual monetary loss or dam- use, at its option, the name of the insured for this purpose. Whenever age sustained or incurred by the insured claimant who has suffered loss or requested by the Company,the insured,at the Company's expense,shall give damage by reason of matters insured against by this policy and only to the the Company all reasonable aid (i) in any action or proceeding, securing extent herein described. evidence,obtaining witnesses, prosecuting or defending the action or pro- (a)The liability of the Company under this policy shall not exceed the least ceeding,or effecting settlement,and(ii)in any other lawful act which in the of: opinion of the Company may be necessary or desirable to establish the title to (i)the Amount of Insurance stated in Schedule A;or, the estate or interest as insured.If the Company is prejudiced by the failure of (ii)the difference between the value of the insured estate or interest as the insured to furnish the required cooperation,the Company's obligations to insured and the value of the insured estate or interest subject to the defect, the insured under the policy shall terminate,including any liability or obliga- lien or encumbrance insured against by this policy. tion to defend,prosecute,or continue any litigation,with regard to the matter (b)In the event the Amount of Insurance stated in Schedule A at the Date of or matters requiring such cooperation. Policy is less than 80 percent of the value of the insured estate or interest or if 5. PROOF OF LOSS OR DAMAGE subsequent to the Date of Policy an improvement is erected on the land which increases the value of the insured estate or interest by at least 20 percent over In addition to and after the notices required under Section 3 of these Condi- the Amount of Insurance stated in Schedule A,then this policy is subject to the tions and Stipulations have been provided the Company, a proof of loss or following: damage signed and sworn to by the insured claimant shall be furnished to the (i)where no subsequent improvement has been made,as to any partial Company within 90 days after the insured claimant shall ascertain the facts loss,the Company shall only pay the loss pro rata in the proportion that the giving rise to the loss or damage.The proof of loss or damage shall describe amount of insurance at Date of Policy bears to the total value of the insured the defect in, or lien or encumbrance on the title, or other matter insured estate or interest at Date of Policy;or against by this policy which constitutes the basis of loss or damage and shall (ii)where a subsequent improvement has been made,as to any partial state,to the extent possible,the basis of calculating the amount of the loss or loss,the Company shall only pay the loss pro rata in the proportion that 120 damage.If the Company is prejudiced by the failure of the insured claimant to percent of the Amount of Insurance stated in Schedule A bears to the sum of provide the required proof of loss or damage,the Company's obligations to the Amount of Insurance stated in Schedule A and the amount expended for the insured under the policy shall terminate,including any liability or obliga- the improvement. tion to defend,prosecute,or continue any litigation,with regard to the matter The provisions of this paragraph shall not apply to costs,attorneys'fees or matters requiring such proof of loss or damage. and expenses for which the Company is liable under this policy,and shall only In addition,the insured claimant may reasonably be required to submit to apply to that portion of any loss which exceeds,in the aggregate,10 percent of examination under oath by any authorized representative of the Company the Amount of Insurance stated in Schedule A. and shall produce for examination,inspection and copying,at such reason- (c)The Company will pay only those costs,attorneys'fees and expenses able times and places as may be designated by any authorized representative incurred in accordance with Section 4 of these Conditions and Stipulations. of the Company, all records, books, ledgers,checks, correspondence and 8. APPORTIONMENT memoranda, whether bearing a date before or after Date of Policy, which reasonably pertain to the loss or damage.Further,if requested by any autho- If the land described in Schedule A consists of two or more parcels which rized representative of the Company, the insured claimant shall grant its are not used as a single site,and a loss is established affecting one or more of permission,in writing,for any authorized representative of the Company to the parcels but not all,the loss shall be computed and settled on a pro rata examine,inspect and copy all records, books, ledgers,checks,correspon- basis as if the amount of insurance under this policy was divided pro rata as to dente and memoranda in the custody or control of a third party,which reason- the value on Date of Policy of each separate parcel to the whole,exclusive of ably pertain to the loss or damage.All information designated as confidential any improvements made subsequent to Date of Policy, unless a liability or by the insured claimant provided to the Company pursuant to this Section value has otherwise been agreed upon as to each parcel by the Company and shall not be disclosed to others unless, in the reasonable judgment of the the insured at the time of the issuance of this policy and shown by an express Company, it is necessary in the administration of the claim. Failure of the statement or by an endorsement attached to this policy. insured claimant to submit for examination under oath,produce other reason- 9. LIMITATION OF LIABILITY ably requested information or grant permission to secure reasonably neces- (a)If the Company establishes the title,or removes the alleged defect,lien sary information from third parties as required in this paragraph shall termi- or encumbrance,or cures the lack of a right of access to or from the land,or nate any liability of the Company under this policy as to that claim. cures the claim of unmarketability of title, all as insured, in a reasonably 8. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS;TERMINATION diligent manner by any method,including litigation and the completion of any OF LIABILITY appeals therefrom,it shall have fully performed its obligations with respect to In that matter and shall not be liable for any loss or damage caused thereby. ncase of a claim under this policy,the Company shall have the following (b)In the event of any litigation,including litigation by the Company or with additional options: the Company's consent,the Company shall have no liability for loss or dam- (a)To Pay or Tender Payment of the Amount of Insurance. age until there has been a final determination by a court of competent jurisdic- To pay or tender payment of the amount of insurance under this policy tion,and disposition of all appeals therefrom,adverse to the title as insured. together with any costs,attorneys'fees and expenses incurred by the insured (c)The Company shall not be liable for loss or damage to any insured for claimant,which were authorized by the Company,up to the time of payment or liability voluntarily assumed by the insured in settling any claim or suit without tender of payment and which the Company is obligated to pay. the prior written consent of the Company. Upon the exercise by the Company of this option,all liability and obligations 10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF to the insured under this policy,other than to make the payment required,shall LIABILITY terminate, including any liability or obligation to defend, prosecute,or con- tinue any litigation,and the policy shall be surrendered to the Company for fees and expenses,shall reduce the amount of the insurance pro tanto. cancellation. (b)To Pay or Otherwise Settle With Parties Other than the Insured or 11. LIABILITY NONCUMULATIVE With the Insured Claimant. It is expressly understood that the amount of insurance under this policy (i)to pay or otherwise settle with other parties for or in the name of an shall be reduced by any amount the Company may pay under any policy insured claimant any claim insured against under this policy,together with any insuring a mortgage to which exception is taken in Schedule B or to which the costs,attorneys'fees and expenses incurred by the insured claimant which insured has agreed, assumed, or taken subject, or which is hereafter ex- were authorized by the Company up to the time of payment and which the ecuted by an insured and which is a charge or lien on the estate or interest Company is obligated to pay;or described or referred to in Schedule A, and the amount so paid shall be deemed a payment under this policy to the insured owner. 80a9 oN'mod 10909 81014111`0bsa140 leads uo$BuIUBeM 199M LLL 4uewiadea swle10 Auedwo3 eausinsu181311 06e01410 :o4 Jo ao!44o 6u!nss!8141 W Auedwo0 ey;of pesseippe eq pays pue Apadoid pue sleueyo usew pays'o;138118 19J enoge„`Apedoid ISUOSJad„ AO!Iod 5!144;o Jegwnu eyl epnlpu!Heys Auedwo0 ayi peys!ujn;eq of peJ!nbei •uo!1e001eJ Bu!;UJM u!iueweieis Aus pue Auedwo0 ayi uen16 eq of pennbei seogou py pus lenow:J s4! o; Joud ApedoJd ISuosJed ey; ;o amen ey; a eBeJ66e 1N3S 31:13HM`S30IION '6L 8141 u!peeoxe iou Heys enoge 0i peiJe;9J moo 841•uoueoo'aj pue Ienowaa ey;;o uoseei Aq pe6ewep Apadoid IeuosJ9d ey;6upiedeJ;o isoo etgeuoseeJ wane pus eoio;Ho;u!u!eweJ DNS SUO!SIAOJd 10410 Its pus ey; pus 'uo!isoolaj eyi 41!M uogoeuuoo u! paamou!seIlw en!;-Alueml!e!i!u! uois!noJd ley;apnl3u!04 lou Pewee!)eq IIsgs AO!Iod 941 VI elgso!Idds Jepun 041 Jo;Apedojd IeuosJed my;lo uo!;spodsusJ3;o moo ay;'uol4o!ne;o 9115;ey; elgeeoao;ueun Jo p!Ienu! play s!Ao!Iod ayl;o UOIS1AoJd Aue luane ay;u1 le pull ayi uo pelsnlls`elsooleJ pus enowai 04 4g6u eyl say pamsul ay;yo!ym A11119V83A3S '9L Apedoid Isuosied Aus 6ul4eoOIeJ pus 6u!nowej;o woo algeuoseei a41(e) •Ao!Iod 5!14;Aq pamsu!;seta;u! 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The estate or interest in the land which is covered by this policy is: SEE ATTACHED ESTATE OR INTEREST 3. Title to the estate or interest in the land is vested in: CITY OF FEDERAL WAY, WASHINGTON, A MUNICIPAL CORPORATION • 4. The land referred to in this policy is described as follows: SEE ATTACHED DESCRIPTION RECEIVED OCT 2 2 1991 FINANCE CITY OF FEDERAL WAY CHICAGO TITLE INSURANCE COMPANY CHICAGO TITLE INSURANC E COMP Y Policy No.: 215518 EXTENDED OWNER POLICY SCHEDULE A (Continued) INTEREST THE LEASEHOLD ESTATE, AS LEASEHOLD ESTATE IS DEFINED IN PARAGRAPH 1 (G) OF THE CONDITIONS AND STIPULATIONS OF THIS POLICY, CREATED BY THE INSTRUMENT HEREIN REFERRED TO AS THE LEASE. MEMORANDUM OF LEASE INCLUDING THE TERMS AND CONDITIONS OF THE LEASE DISCLOSED THEREIN: LESSOR: SEATTLE-FIRST NATIONAL BANK LESSEE: CITY OF FEDERAL WAY FOR A TERM OF: APPROXIMATELY 15 YEARS COMMENCING ON SEPTEMBER 25, 1991 AND TERMINATING ON DECEMBER 01, 2006 RECORDED: OCTOBER 07, 1991 RECORDING NUMBER: 9110071155 CHICAGO TITLE INSURANCE COMPANY • CHICAGO TITLE INSURANCE COMP Y Policy No.: 215 518 EXTENDED OWNER POLICY SCHEDULE A (Continued) LEGAL DESCRIPTION THAT PORTION OF GOVERNMENT LOT 1, SECTION 19, TOWNSHIP 21 NORTH, RANGE 4 EAST, WILLAMETTE MERIDIAN, IN KING COUNTY, WASHINGTON, SAID PORTION BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 19; THENCE ALONG THE NORTH LINE THEREOF SOUTH 89°00'18" EAST 335.78 FEET; THENCE SOUTH 01°35'16" WEST 42.00 FEET TO THE SOUTHERLY MARGIN OF THE LANDS DESCRIBED IN DEED RECORDED UNDER RECORDING NUMBER 8501170665, IN KING COUNTY, WASHINGTON, AND THE TRUE POINT OF BEGINNING; THENCE ALONG SAID SOUTHERLY MARGIN SOUTH 89°00'18" EAST 18.07 FEET TO THE BEGINNING OF A CURVE CONCAVE TO THE SOUTHWEST HAVING A RADIUS OF 658.00 FEET; THENCE EASTERLY AND SOUTHEASTERLY 700.54 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 60°59'59"; THENCE SOUTH 28°00'19" EAST 422.43 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE TO THE SOUTHEAST HAVING A RADIUS OF 897.03 FEET (A RADIAL LINE THROUGH SAID BEGINNING BEARS NORTH 28°00'19" WEST); THENCE SOUTHWESTERLY AND SOUTHERLY 732.77 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 46°48'15" TO A RADIAL LINE OF SAID CURVE WHICH BEARS NORTH 74°48'34" WEST AND THE SOUTH LINE OF SAID GOVERNMENT LOT 1; THENCE ALONG SAID SOUTH LINE NORTH 88°59'20" WEST 376.79 FEET TO A LINE PARALLEL WITH AND DISTANT 335.76 FEET EASTERLY, WHEN MEASURED AT RIGHT ANGLES, FROM THE WEST LINE OF SAID GOVERNMENT LOT; THENCE ALONG SAID PARALLEL LINE NORTH 01°35'16" EAST 1,273.00 FEET TO THE TRUE POINT OF BEGINNING. CHICAGO TITLE INSURANCE COMPANY CHICAGO TITLE INSURANCE COMP Y Policy No.: 215518 EXTENDED OWNER POLICY SCHEDULE B EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage(and the Company will not pay costs,attorneys'fees or expenses) which arise by reason of: GENERAL EXCEPTIONS: 1. TAXES OR SPECIAL ASSESSMENTS WHICH ARE NOT SHOWN AS EXISTING LIENS BY THE PUBLIC RECORDS. 2. ANY SERVICE, INSTALLATION, CONNECTION, MAINTENANCE, OR CONSTRUCTION CHARGES FOR SEWER, WATER, ELECTRICITY, OR GARBAGE COLLECTION AND DISPOSAL. 3. RESERVATIONS AND EXCEPTIONS IN UNITED STATES PATENTS OR IN ACTS AUTHORIZING THE ISSUANCE THEREOF; INDIAN TRIBAL CODES OR REGULATIONS, INDIAN TREATY OR ABORIGINAL RIGHTS, INCLUDING EASEMENTS OR EQUITABLE SERVITUDES. 4. WATER RIGHTS, CLAIMS, OR TITLE TO WATER. CHICAGO ITTLE INSURANCE COMPANY OWNS Cfa/b1391/E1c CHICAGO TITLE INSURANCE COMP Y Policy No.: 215 518 EXTENDED OWNER POLICY SCHEDULE B (Continued) SPECIAL EXCEPTIONS 1. UNDERGROUND UTILITY EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: PUGET SOUND POWER & LIGHT COMPANY, A WASHINGTON CORPORATION PURPOSE: ELECTRIC TRANSMISSION AND/OR DISTRIBUTION SYSTEM TOGETHER WITH ALL NECESSARY OR CONVENIENT APPURTENANCES THEREFOR AREA AFFECTED: PORTIONS OF SAID PREMISES AND OTHER PROPERTY ADJOINING THE EXTERIOR MARGINS OF SOUTHWEST CAMPUS DRIVE RECORDED: APRIL 2, 1986 RECORDING NUMBER: 8604020489 CONTAINS COVENANT PROHIBITING STRUCTURES OVER SAID EASEMENT OR OTHER ACTIVITIES WHICH MIGHT ENDANGER THE UNDERGROUND SYSTEM. 2. EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: FEDERAL WAY WATER AND SEWER DISTRICT, A MUNICIPAL CORPORATION PURPOSE: SEWER FACILITIES AND ALL APPURTENANCES RELATED THERETO AREA AFFECTED: PORTION OF SAID PREMISES RECORDED: NOVEMBER 17, 1987 RECORDING NUMBER: 8711170788 3. EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: KING COUNTY PURPOSE: SLOPES, DRAINAGE AND UTILITIES AREA AFFECTED: PORTION OF SAID PREMISES WITHIN A STRIP OF LAND 10 FEET IN WIDTH LYING PARALLEL TO AND ADJOINING SOUTHWEST CAMPUS DRIVE RECORDED: AUGUST 11, 1989 RECORDING NUMBER: 8908110283 4. EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: WASHINGTON NATURAL GAS COMPANY, A WASHINGTON CORPORATION PURPOSE: GAS PIPELINE(S) AND APPURTENANCES AREA AFFECTED: PORTION OF SAID PREMISES AND OTHER PROPERTY LYING WITHIN A STRIP OF LAND 15 FEET WIDE LOCATED SOUTHERLY OF, PARALLEL TO AND ADJOINING THE SOUTH CHICAGO TITLE INSURANCE COMPANY OWNEXISS/24391/mt THICAGO TITLE INSURANCE COMP Y Policy No.: 215 518 EXTENDED OWNER POLICY SCHEDULE B (Continued) SPECIAL EXCEPTIONS BOUNDARY LINE OF SOUTHWEST CAMPUS DRIVE RECORDED: AUGUST 7, 1990 RECORDING NUMBER: 9008070651 5. AGREEMENT AND THE TERMS AND CONDITIONS THEREOF: BETWEEN: CITY OF FEDERAL WAY AND: THE QUADRANT CORPORATION RECORDED: MARCH 5, 1990 RECORDING NUMBER: 9003051119 REGARDING: RESTRICTIONS AND REQUIREMENTS RELATED TO THE DEVELOPMENT OF SAID PREMISES 6. RIGHT TO MAKE NECESSARY SLOPES FOR CUTS OR FILLS UPON PROPERTY HEREIN DESCRIBED AS GRANTED IN DEED: GRANTEE: KING COUNTY RECORDED: JANUARY 17, 1985 RECORDING NUMBER: 8501170665 AFFECTS: THAT PORTION OF SAID PREMISES AND OTHER PROPERTY ABUTTING SOUTHWEST CAMPUS DRIVE 7. FACILITY CHARGES, IF ANY, INCLUDING BUT NOT LIMITED TO HOOK-UP OR CONNECTION CHARGES AND LATECOMER CHARGES FOR WATER OR SEWER FACILITIES OF WATER DISTRICT NO. 124, AS DISCLOSED BY INSTRUMENT RECORDED UNDER RECORDING NUMBER 8106010916. 8. TERMS AND CONDITIONS OF THE LEASE SHOWN IN SCHEDULE A. 9. OPTION TO PURCHASE AS CONTAINED IN THE LEASE SHOWN IN SCHEDULE A. END OF SCHEDULE B AUTHORIZED SIGNATORY CHICAGO TITLE INSURANCE COMPANY Your rence: QUAD1,- .r CORP./CITY OF FEDERAL WAY ENDORSEMENT Attached to and forming a part of Policy No. 215518 Issued by CHICAGO TITLE INSURANCE COMPANY The Company insures the Insured against loss or damage sustained by reason of any final judgment of a court of competent jurisdiction that all of the land described in Schedule A violates the provisions of RCW 58.17 ct seq,. or local laws or ordinances pursuant thereto relating to either a separation in ownership of all of said land prior to date of policy from any parcel of which said land was formerly a part or a change in the dimensions of all of the land prior to date of policy. This endorsement is made a part of the policy and is subject to all the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and prior endorsements,if any,nor does it extend the effective date of the policy and prior endorsements or increase the face amount thereof. DATED: October 7, 1991 CHICAGO TITLE INSURANCE COMPANY Authorized Signatory Note: This endorsement shall not be valid or binding until countersigned by an authorized signatory SUBDIVISION ENDORSEMENT(7/88) ALTA Owner's Policy ENSIBO/11-1190/CW 0 CHICAGO '111L- , INSURANCE COMPANY 1800 COLUMBIA CENTER, 701 FIFTH AVENUE, SEATTLE, WASHINGTON 98104 IMPORTANT: This is not a Survey. It is furnished as a convenience to locate the land indicated hereon with reference to streets and other land. No liability is assumed by reason of reliance hereon. ii r1.7\ �L 1 I — 2.1--- - wIw i.5,.. a: a t_ 5 69DD•r6•c 771)6' T_'• 7.P.0 E. p• 601!'11' +Rw R • 700.00' •NW CORNLR L 741.2L' Secna+ r9-J:-< s69,EV•t *w:, • r .07 .f, A• 6oSi'19• n • R_ MO OW 's'.,CG �.T•L • 700.34' j�J p � •A • U ,t ,..“9, P'�tl CA N ` fs 6 4) %0 i• LU CI 0 A 147716• k L1 R . 6DD.00' t • 206.64' C.• 46'46'1.''- . • ',►••.:.'i R • 647.07' A• 1477'19' L • 77777. R• 26177.00■ ' rr. �. / i L 4..t . a r• rys N t _ SOUifi LINE 56 7.92* N ees9��•ot �.r N eesir•aD'W cOY:RNMENT LOT 1 2 ~ "''�"rA7 — 0 • MAP . , . . 1 r „::Ao -:-,A,.,-...:::::,.-"::::::.. ....:7,77,7::, _..A. ,.::::.. ..A. '" .A.' •,,t, •04.,• ,.a,t,.. •,,A. A,.. 'A., •:.el., ••01.. ...,A„.: .:.itt;.• :.":. tic, liX AMERICAN LAND TITLE ASSOCIATION LEASEHOLD LOAN POLICY ((4-6-90) 3. CHICAGO TITLE INSURANCE COMPANY * o-r S. SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, CHICAGO TITLE INSURANCE COMPANY,a Missouri corporation,herein called the Company,insures,as of Date of Policy shown in Schedule A,against loss or damage, not exceeding the Amount of Insurance stated in Schedule A, sustained or 4 ,, incurred by the insured by reason of: NI 1. Title to the estate or interest described in Schedule A being vested other than as stated therein; ' 2. An y defect in or lien or encumbrance on the title; Ao ? 3. Unmarketability of the title; tiI 4. Lack of a right of access to and from the land; 5. The invalidity or unenforceability of the lien of the insured mortgage upon the title; 6. The priority of any lien or encumbrance over the lien of the insured mortgage; 7. Lack of priority of the lien of the insured mortgage over any statutory lien for services,labor or material: (a) arising from an improvement or work related to the land which is contracted for or commenced prior to Date of Policy; or (b) arising from an improvement or work related to the land which is contracted for or commenced subsequent to Date of Policy and which is financed in whole or in part by proceeds of the indebted- ;y ness secured by the insured mortgage which at Date of Policy the insured has advanced or is obligated to advance; 8. The invalidity or unenforceability of any assignment of the insured mortgage,provided the assignment is shown in Schedule A,or the failure of the assignment shown in Schedule A to vest title to the insured mortgage in the named insured assignee free and clear of all liens. r The Company will also pay the costs,attorneys'fees and expenses incurred in defense of the title or the lien of the t insured mortgage, as insured, but only to the extent provided in the Conditions and Stipulations. ,,4 . In Witness Whereof,CHICAGO TITLE INSURANCE COMPANY has caused this policy to be signed and sealed as E ,,' of Date of Policy shown in Schedule A,the policy to become valid when countersigned by an authorized signatory. / { CHICAGO TITLE INSURANCE COMPANY / By: Issued by: CHICAGO TITLE INSURANCE COMPANY 1800 Columbia Center e-c-yam ,,:os /��, 5 701 Fifth Avenue Seattle,Washington 98104 Presides (206) 628-5666 5 By - Secretary to !'N, :, ;ryil .Y 'r .A'1 .ryl :� jV♦ 'V" - I ' ALTA Leasehold Loan Policy(4-6-90) pue`paJnsu!se`e6e6pow pamsu!041;o tap an Jo lulu!JO aleisa e 1 of awl 'elm a e e Jeu] o Alan!a a 6uu!nbej u !! 4 1. 11.1 Ig i �I 1 I P 43 ompuoO!enloaquoo all of asJanpe s!yo!yM 15aJe1u!Jo elm Jo w!e!o Aue;o Jepunaieq pamsui ue a;o enp!n Aq eseyomd o1 uo!1e6!!go 041 wall peseelai eq of e6e6iiow paJnsu! of awoo!Heys a6peIMou aseo u!(!!)'MOlaq(e)b uo!loas u!ypol les se uo!le6!1!! ay)Joy alnpeyos u! paq!JOSap IS9JalUl JO aleise ay1;o JaseyoJnd e eip ue Aue;o aseo U!(!)6U!4UM u!Ai;dwoJd Auedwoo ay)410U Ileys pamsu!all pinoM yo!14M 'a6eJanoo way paideoxe Jo pepnloxe jou 'pue!ayi of awl a44 1NVWIV13 03HflSN1 A8 N3AI0 39 01 1411V13 d0 33110N '£ 6u!l0a;;e JaRew luaJedde Jo pe6a!!e ue :,,911!1 041;o Al!IlgeIe>Jewun„(6) AIUe *meow s!pue!0141 yO!LM u!lows!!)an Jo;lino°lOUls!p sees Polito -Jen6 Jo lOeJluoo aouemsu!Si!;o uo!loe;s!les u!lsaJalu!JO aleisa ayi;o uo!i!s 044;O)1.10!0 941 Jo solo°aJ ayi U!pa!!;sue!1 toµ°aloJd leluawuoJIAUe epnlou! ow!pus SpJO°eJ o!lgnd a6eaoo wOJd suo!snl0x3 ay ;o(n!)(e)I uooas!nb°e ayi u! luew!el°pamsu!all s!Al!eluewnlsu!Jo °ue6e ayi;!`Al!euew „ „ nJ;su! eivawwano6 Jo A0ua6e eluawuJano6 Aue Aq 0113adse.'41!M•e6palMou)!lnoyl!M pue amen Jo;siaseyomd of AiJedoad peal ! ! q pled lunowe ayi(n!) of 6u!eleJ slaRew;o eO!lou an!onJlsuoo 6u!pedw!;o asodmd ow Jo;Aogod Jo:spew sluewAed lie;o lunowe ayi Aq pampa.' ;o oleo le salnlels ems Japun pays!!gelse spio39J :„spJOOaJ O!Ignd„(;) lnq`swewenojdw!;o uo!leJO!Jelep Hue/aid of pepuedxe swnowe algeuoseeJ pue Ageia41 pamoas pue pue! ayi u! 1S91011.11 Jo eleis° all ;o uo!ps!nboe luawnJlsu! ;o aw!4 ayi of mud e6e6pow paJnsu!ayi lo ue!!04113010A of Jo smel yl!M Al!Jnoas .101410 JO 'pap 1snJ1 Ism) ;o paap 'e6e6Uow :,,e6e6Uow„(a) aoue!!dwoo aJnsse of a6e6pow pamsu!dyl of luensmd paouenpe slunowe •Ao!10d 6!141 Aq pamsw s!pue!ayi 'eJnso!oaJol ;o sasuadxa 'uoejayi iseiaw! `Ao!!od ;o alga ;o so e6e6110w WOJ)pue of Ssaooe;o ly6u a yO!yM of Hue xe 01411!W!!Jo A;!pow Heys u!aJay 6u! pamsu!ayi Aq pamoas ssaupalgapu!ayi;o led!ou!Jd ayi;o lunowe 9y1(!!) -410u lnq`sAeMJe eM Jo sAeM`saue!`sAalle`sanuane'spew`010aJ16 6u!unge :y aInpay°S u!paws aouemsul;o wnowy ayi(!) u!wawOSee JO wise`lsaJalu!`Oµ!1'446!.1 Aue Jou`y alnpayoS u!of paJJa;a. :10;sea!ayi paaoxa liana JaylIeu u!Heys aoueAanuo°ayi Jeue JO peq!JOSOp ewe ayi ;o sew! ayi puoAaq Aliadoid Aue epnlou! you coop JO uo11lslnboe ayi Jaue°oueJnsu!;o lunowe eyl'eoueJnsul;o lunowV(a) „punt„wial 041•AUedojd real alnl!isuo3 mel Aq y3lyM olaiall pax!ue slum •paJnsu!ail of uen!6 e6e64Jow Aeuow aseyoJnd e Aq pamoas enoJdw!pue'y alnpay°S u!01 paJJa;aJ Jo paglJ°sap pue!ayi:,,pue!„(p) ssaupalgapu! ue(!!)Jo`puel an u!lsaJalu!JO 040460 ue(!)Jayi!O 40 paJnsu! •pue!a416Ull0aue SJOREW 40 OO!loU 0AR ay; woJ4 JaseyoJnd Aue 40 Jone; U! 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If prompt notice In case of a claim under this policy,the Company shall have the following shall not be given to the Company,then as to the insured all liability of the additional options: Company shall terminate with regard to the matter or matters for which prompt (a)To Pay or Tender Payment of the Amount of Insurance or to notice is required;provided,however,that failure to notify the Company shall Purchase the Indebtedness. in no case prejudice the rights of any insured under this policy unless the (i)to pay or tender payment of the amount of insurance under this policy Company shall be prejudiced by the failure and then only to the extent of the together with any costs,attorneys'fees and expenses incurred by the insured prejudice. claimant,which were authorized by the Company,up to the time of payment or tender of payment and which the Company is obligated to pay;or 4. DEFENSE AND PROSECUTION OF ACTIONS; DUTY OF INSURED (ii)to purchase the indebtedness secured by the insured mortgage for the CLAIMANT TO COOPERATE amount owing thereon together with any costs,attorneys'fees and expenses (a)Upon written request by the insured and subject to the options con- incurred by the insured claimant which were authorized by the Company up to tained in Section 6 of these Conditions and Stipulations,the Company,at its the time of purchase and which the Company is obligated to pay. own cost and without unreasonable delay,shall provide for the defense of an If the company offers to purchase the indebtedness as herein provided,the insured in litigation in which any third party asserts a claim adverse to the title owner of the indebtedness shall transfer, assign, and convey the indebted- or interest as insured,but only as to those stated causes of action alleging a ness and the insured mortgage,together with any collateral security,to the defect,lien or encumbrance or other matter insured against by this policy.The Company upon payment therefor. Company shall have the right to select counsel of its choice(subject to the Upon the exercise by the Company of either of the options provided for in right of the insured to object for reasonable cause)to represent the insured as paragraphs a(i)or(ii), all liability and obligations to the insured under this to those stated causes of action and shall not be liable for and will not pay the policy, other than to make the payment required in those paragraphs, shall fees of any other counsel. The Company will not pay any fees, costs or terminate, including any liability or obligation to defend, prosecute, or con- expenses incurred by the insured in the defense of those causes of action tinue any litigation,and the policy shall be surrendered to the Company for which allege matters not insured against by this policy. cancellation. (b)The Company shall have the right, at its own cost, to institute and (b)To Pay or Otherwise Settle With Parties Other than the Insured or prosecute any action or proceeding or to do any other act which in its opinion With the Insured Claimant. may be necessary or desirable to establish the title to the estate or interest or (i)to pay or otherwise settle with other parties for or in the name of an the lien of the insured mortgage,as insured,or to prevent or reduce loss or insured claimant any claim insured against under this policy,together with any damage to the insured.The Company may take any appropriate action under costs,attorneys'fees and expenses incurred by the insured claimant which the terms of this policy,whether or not it shall be liable hereunder,and shall not were authorized by the Company up to the time of payment and which the thereby concede liability or waive any provision of this policy.If the Company Company is obligated to pay;or shall exercise its rights under this paragraph,it shall do so diligently. (ii)to pay or otherwise settle with the insured claimant the loss or damage (c)Whenever the Company shall have brought an action or interposed a provided for under this policy,together with any costs, attorneys' fees and defense as required or permitted by the provisions of this policy,the Company expenses incurred by the insured claimant which were authorized by the may pursue any litigation to final determination by a court of competent juris- Company up to the time of payment and which the Company is obligated to diction and expressly reserves the right,in its sole discretion,to appeal from pay any adverse judgment or order. Upon the exercise by the Company of either of the options provided for in (d)In all cases where this policy permits or requires the Company to prose- paragraphs(b)(i)or(ii),the Company's obligations to the insured under this cute or provide for the defense of any action or proceeding,the insured shall policy for the claimed loss or damage,other than the payments required to be secure to the Company the right to so prosecute or provide defense in the made,shall terminate, including any liability or obligation to defend, prose- action or proceeding, and all appeals therein,and permit the Company to cute or continue any litigation. use, at its option, the name of the insured for this purpose. Whenever 7. DETERMINATION AND EXTENT OF LIABILITY requested by the Company,the insured,at the Company's expense,shall give This policy is a contract of indemnity against actual monetary loss or dam- the Company all reasonable aid (i) in any action or proceeding, securing age sustained or incurred by the insured claimant who has suffered loss or evidence,obtaining witnesses, prosecuting or defending the action or pro- damage by reason of matters insured against by this policy and only to the ceeding,or effecting settlement,and(ii)in any other lawful act which in the extent herein described. opinion of the Company may be necessary or desirable to establish the title to (a)The liability of the Company under this policy shall not exceed the least the estate or interest or the lien of the insured mortgage, as insured. If the of: Company is prejudiced by the failure of the insured to furnish the required (i)the Amount of Insurance stated in Schedule A, or, if applicable, the cooperation,the Company's obligations to the insured under the policy shall amount of insurance as defined in Section 2(c)of these Conditions and Stipu- terminate, including any liability or obligation to defend, prosecute, or con- lations; tinue any litigation,with regard to the matter or matters requiring such cooper- (ii)the amount of the unpaid principal indebtedness secured by the ation. insured mortgage as limited or provided under Section 8 of these Conditions 5. PROOF OF LOSS OR DAMAGE and Stipulations or as reduced under Section 9 of these Conditions and required under Section 3 of these Condi- Stipulations, at the time the loss or damage insured against by this policy In addition to and after the notices re q occurs,together with interest thereon;or tions and Stipulations have been provided the Company, a proof of loss or (iii)the difference between the value of the insured estate or interest as damage signed and sworn to by the insured claimant shall be furnished to the insured and the value of the insured estate or interest subject to the defect, Company within 90 days after the insured claimant shall ascertain the facts lien or encumbrance insured against by this policy. giving rise to the loss or damage.The proof of loss or damage shall describe (b)In the event the insured has acquired the estate or interest in the manner the defect in, or lien or encumbrance on the title, or other matter insured described in Section 2(a)of these Conditions and Stipulations or has con- against by this policy which constitutes the basis of loss or damage and shall veyed the title,then the liability of the Company shall continue as set forth in state,to the extent possible,the basis of calculating the amount of the loss or Section 7(a)of these Conditions and Stipulations. damage.If the Company is prejudiced by the failure of the insured claimant to (c)The Company will pay only those costs,attorneys'fees and expenses provide the required proof of loss or damage,the Company's obligations to incurred in accordance with Section 4 of these Conditions and Stipulations. the insured under the policy shall terminate,including any liability or obliga- tion to defend,prosecute,or continue any litigation,with regard to the matter 8. LIMITATION OF LIABILITY or matters requiring such proof of loss or damage. (a)If the Company establishes the title,or removes the alleged defect,lien In addition,the insured claimant may reasonably be required to submit to or encumbrance,or cures the lack of a right of access to or from the land,or examination under oath by any authorized representative of the Company cures the claim of unmarketability of title,or otherwise establishes the lien of and shall produce for examination,inspection and copying,at such reason- the insured mortgage,all as insured,in a reasonably diligent manner by any able times and places as may be designated by any authorized representative method, including litigation and the completion of any appeals therefrom,it of the Company, all records, books, ledgers, checks, correspondence and shall have fully performed its obligations with respect to that matter and shall memoranda, whether bearing a date before or after Date of Policy, which not be liable for any loss or damage caused thereby. reasonably pertain to the loss or damage.Further,if requested by any author- (b)In the event of any litigation,including litigation by the Company or with ized representative of the Company,the insured claimant shall grant its per- the Company's consent,the Company shall have no liability for loss or dam- mission,in writing,for any authorized representative of the Company to exam- age until there has been a final determination by a court of competent jurisdic- ine, inspect and copy all records, books, ledgers, checks, correspondence tion,and disposition of all appeals therefrom,adverse to the title or to the lien and memoranda in the custody or control of a third party,which reasonably of the insured mortgage,as insured. pertain to the loss or damage.All information designated as confidential by (c)The Company shall not be liable for loss or damage to any insured for the insured claimant provided to the Company pursuant to this Section shall liability voluntarily assumed by the insured in settling any claim or suit without not be disclosed to others unless, in the reasonable judgment of the Com- the prior written consent of the Company. pany,it is necessary in the administration of the claim.Failure of the insured (d)The Company shall not be liable for:(i)any indebtedness created subse- claimant to submit for examination under oath, produce other reasonably quent to Date of Policy except for advances made to protect the lien of the requested information or grant permission to secure reasonably necessary insured mortgage and secured thereby and reasonable amounts expended to information from third parties as required in this paragraph,unless prohibited prevent deterioration of improvements; or (ii) construction loan advances by law or governmental regulation,shall terminate any liability of the Company made subsequent to Date of Policy,except construction loan advances made under this policy as to that claim. subsequent to Date of Policy for the purpose of financing in whole or in part the Z0909 S!ODUIII`0653!43 soae ON WJOA leaJ;S uo46u!ysF aM 1.44 luewpE ;w!eI3 -sapau sawooaq I!'pansy, .q paunou!a6ewep Jo sso!6u!)ndwoo u!'4I Auedwoo aaueinsu!am,,J603143 :o1 J°woo 6uinss!ail le Auedwoo ag1 of pesseippe eq Ileys puE 031lf1SNl 1S3u31NI HO 31V1S3 dO NOI1Vf 1VA 'El AO!Iod sow}0 Jagwnu ail epn'ou!Ileys Auedwoa ay1 pays!wn}eq o1 pei!nbei •suo!1e!nd!ls pue suop!puo3 esawl;o(!)(e)4 uo!l 6u!luM u!luewalels Aue pue Auedwo3 ail uany6 eq of peilnbei sa3!4ou Hy -oas Bu!puelsyl!Mlou`Ao!od sow Japun paansuo ue eq you II!m Jo6!Igo all pue 1N3S 31i3HM'S33IJON '81 puoq JO`eoueansu!;o Ao!Iod J0410`aaluejen6`A1!uwepuo ue Jo pm a se e6e6 -pow pamsuo ay saJynboe oyM(suoge!nd!1s pue suo!4!puo0 esew to(!!)(e)4 1oe4 a pue aOJO}"n;u!uyeweJ Heys suo!s!noJd JaylO ye pue uo!loes u!paquosap Jo6llgo ue ldaoxa)Jo6!Igo ue Aq a6ebpow pamsuo ag1 u0!s!nad leyy epnpu!w you pawaap eq Heys Ao!'od ay`mei a'geogdde Japun 4o uo!g!smboe Aq pep!one eq 1ou Heys uo!1e6agns}01y6u s,Auedwoa 841 a!geeoaosueun Jo menu! play s!AO!'od sow;o uolslnoJd Aue lueAe ay u! •AO!Iod sow;o uoseei Aq sly6u uoy AlIl19Ve3A3S 'L1 -e6agns Jo;ep!nad goyim sguewnJlsu!°soil uo peu!ewoo suo!l!puoo JO swial Aue Bu!puelsyl!M4ou`spuoq Jo eoueinsu!;o se!o!lod Jeq o'sa!1ueien6'se!l!u AuedwoO ail so AJO1eu6ys pezuoylne wepu!01 pamsu!ay1}o sly6u am 'uo!lel!w!I lnoyl!M`epnpu!Heys pue)slxe Jo Jaol;;o 6u!1ep!'en Jo`AJe)aJpas 1ue4s!ssy ue'AJeleJpas ail`luap!saJd eo!A Heys sJO6!Igo pamsu!-uou 1sule6e uoye6agns 4o gy6u s,Auedwoo ail•�o6il0 PeJnsul-UON lsue6V 814511:1 s,Auedwo3 ail(o) e )uap!sald ai Jag1e Aq peu6!s oaay pegoeue Jo U08.184 pesiopue BgJM e Aq ldaoxa spew eq ueo Aollod s!41 of luewesiopue J°40 luawpuawe oN(o) •uoge6°Jgns;o 14461J s,Au -edwo0 ail 4o luew!eIo pamsu!x141 Aq 1u°wJ!Edw!ail;o uose°J Aq AuedwoO •A3Hod sow 01 paloulsei eq Heys 541 o1 isol`Aue 4!lunowe ail paaoxa Heys yo!lM Ao!od sow Aq lsu!e6e pamsu! 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The estate or interest referred to herein is at Date of Policy vested in: CITY OF FEDERAL WAY, WASHINGTON, A MUNICIPAL CORPORATION 3. The estate or interest in the land described in Schedule A and which is encumbered by the insured mortgage is: SEE ATTACHED ESTATE OR INTEREST 4. The insured mortgage,and assignments thereof,if any,are described as follows: THE INDEBTEDNESS EVIDENCED AND SECURED BY A LEASE, A MEMORANDUM OF WHICH WAS RECORDED, INCLUDING THE TERMS AND PROVISIONS THEREOF: AMOUNT: $1,452,600.00 DATED: SEPTEMBER 25, 1991 RECORDED: OCTOBER 07, 1991 RECORDING NUMBER: 9110071155 LESSOR: SEATTLE-FIRST NATIONAL BANK LESSEE: CITY OF FEDERAL WAY SAID DOCUMENT IS A RE-RECORD OF DOCUMENT RECORDED SEPTEMBER 25, 1991 UNDER RECORDING NUMBER 9109251562. 5. The land referred to in this policy is described as follows: SEE ATTACHED DESCRIPTION CHICAGO TITLE INSURANCE COMPANY CHICAGO TITLE INSURANCE COMPANY Policy No.: 215518 EXTENDED MORTGAGEE POLICY SCHEDULE A (Continued) INTEREST THE LEASEHOLD ESTATE, AS LEASEHOLD ESTATE IS DEFINED IN PARAGRAPH 1 (G) OF THE CONDITIONS AND STIPULATIONS OF THIS POLICY, CREATED BY THE INSTRUMENT HEREIN REFERRED TO AS THE LEASE. MEMORANDUM OF LEASE INCLUDING THE TERMS AND CONDITIONS OF THE LEASE DISCLOSED THEREIN: LESSOR: SEATTLE-FIRST NATIONAL BANK LESSEE: CITY OF FEDERAL WAY FOR A TERM OF: APPROXIMATELY 15 YEARS COMMENCING ON SEPTEMBER 25, 1991 AND TERMINATING ON DECEMBER 01, 2006 RECORDED: OCTOBER 07, 1991 RECORDING NUMBER: 9110071155 CHICAGO TITLE INSURANCE COMPANY • I CHICAGO TITLE INSURANCE COMPANY Policy No.: 215 518 EXTENDED MORTGAGEE POLICY SCHEDULE A (Continued) LEGAL DESCRIPTION THAT PORTION OF GOVERNMENT LOT 1, SECTION 19, TOWNSHIP 21 NORTH, RANGE 4 EAST, WILLAMETTE MERIDIAN, IN RING COUNTY, WASHINGTON, SAID PORTION BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 19; THENCE ALONG THE NORTH LINE THEREOF SOUTH 89°00'18" EAST 335.78 FEET; THENCE SOUTH 01°35'16" WEST 42.00 FEET TO THE SOUTHERLY MARGIN OF THE LANDS DESCRIBED IN DEED RECORDED UNDER RECORDING NUMBER 8501170665, IN RING COUNTY, WASHINGTON, AND THE TRUE POINT OF BEGINNING; THENCE ALONG SAID SOUTHERLY MARGIN SOUTH 89°00'18" EAST 18.07 FEET TO THE BEGINNING OF A CURVE CONCAVE TO THE SOUTHWEST HAVING A RADIUS OF 658.00 FEET; THENCE EASTERLY AND SOUTHEASTERLY 700.54 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 60°59'59"; THENCE SOUTH 28°00'19" EAST 422.43 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE TO THE SOUTHEAST HAVING A RADIUS OF 897.03 FEET (A RADIAL LINE THROUGH SAID BEGINNING BEARS NORTH 28°00'19" WEST); THENCE SOUTHWESTERLY AND SOUTHERLY 732.77 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 46°48'15" TO A RADIAL LINE OF SAID CURVE WHICH BEARS NORTH 74°48'34" WEST AND THE SOUTH LINE OF SAID GOVERNMENT LOT 1; THENCE ALONG SAID SOUTH LINE NORTH 88°59'20" WEST 376.79 FEET TO A LINE PARALLEL WITH AND DISTANT 335.76 FEET EASTERLY, WHEN MEASURED AT RIGHT ANGLES, FROM THE WEST LINE OF SAID GOVERNMENT LOT; THENCE ALONG SAID PARALLEL LINE NORTH 01°35'16" EAST 1,273.00 FEET TO THE TRUE POINT OF BEGINNING. CHICAGO TITLE INSURANCE COMPANY CHICAGO TITLE INSURANCE COMPANY Policy No.: 215 518 EXTENDED MORTGAGEE POLICY SCHEDULE B (Continued) PART I This policy does not insure against loss or damage(and the Company will not pay costs,attorneys'fees or expenses) which arise by reason of: 1. UNDERGROUND UTILITY EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: PUGET SOUND POWER & LIGHT COMPANY, A WASHINGTON CORPORATION PURPOSE: ELECTRIC TRANSMISSION AND/OR DISTRIBUTION SYSTEM TOGETHER WITH ALL NECESSARY OR CONVENIENT APPURTENANCES THEREFOR AREA AFFECTED: PORTIONS OF SAID PREMISES AND OTHER PROPERTY ADJOINING THE EXTERIOR MARGINS OF SOUTHWEST CAMPUS DRIVE RECORDED: APRIL 2, 1986 RECORDING NUMBER: 8604020489 CONTAINS COVENANT PROHIBITING STRUCTURES OVER SAID EASEMENT OR OTHER ACTIVITIES WHICH MIGHT ENDANGER THE UNDERGROUND SYSTEM. 2. EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: FEDERAL WAY WATER AND SEWER DISTRICT, A MUNICIPAL CORPORATION PURPOSE: SEWER FACILITIES AND ALL APPURTENANCES RELATED THERETO AREA AFFECTED: PORTION OF SAID PREMISES RECORDED: NOVEMBER 17, 1987 RECORDING NUMBER: 8711170788 3. EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: XING COUNTY PURPOSE: SLOPES, DRAINAGE AND UTILITIES AREA AFFECTED: PORTION OF SAID PREMISES WITHIN A STRIP OF LAND 10 FEET IN WIDTH LYING PARALLEL TO AND ADJOINING SOUTHWEST CAMPUS DRIVE RECORDED: AUGUST 11, 1989 RECORDING NUMBER: 8908110283 SEE NEXT PAGE CHICAGO TITLE INSURANCE COMPANY CHICAGO TITLE INSURANCE COMPANY Policy No.: 215 518 EXTENDED MORTGAGEE POLICY SCHEDULE B (Continued) PARTI 4. EASEMENT AND THE TERMS AND CONDITIONS THEREOF: GRANTEE: WASHINGTON NATURAL GAS COMPANY, A WASHINGTON CORPORATION PURPOSE: GAS PIPELINE(S) AND APPURTENANCES AREA AFFECTED: PORTION OF SAID PREMISES AND OTHER PROPERTY LYING WITHIN A STRIP OF LAND 15 FEET WIDE LOCATED SOUTHERLY OF, PARALLEL TO AND ADJOINING THE SOUTH BOUNDARY LINE OF SOUTHWEST CAMPUS DRIVE RECORDED: AUGUST 7, 1990 RECORDING NUMBER: 9008070651 5. AGREEMENT AND THE TERMS AND CONDITIONS THEREOF: BETWEEN: CITY OF FEDERAL WAY AND: THE QUADRANT CORPORATION RECORDED: MARCH 5, 1990 RECORDING NUMBER: 9003051119 REGARDING: RESTRICTIONS AND REQUIREMENTS RELATED TO THE DEVELOPMENT OF SAID PREMISES 6. RIGHT TO MAKE NECESSARY SLOPES FOR CUTS OR FILLS UPON PROPERTY HEREIN DESCRIBED AS GRANTED IN DEED: GRANTEE: KING COUNTY RECORDED: JANUARY 17, 1985 RECORDING NUMBER: 8501170665 AFFECTS: THAT PORTION OF SAID PREMISES AND OTHER PROPERTY ABUTTING SOUTHWEST CAMPUS DRIVE 7. FACILITY CHARGES, IF ANY, INCLUDING BUT NOT LIMITED TO HOOK-UP OR CONNECTION CHARGES AND LATECOMER CHARGES FOR WATER OR SEWER FACILITIES OF WATER DISTRICT NO. 124, AS DISCLOSED BY INSTRUMENT RECORDED UNDER RECORDING NUMBER 8106010916. 8. TERMS AND CONDITIONS OF THE LEASE SHOWN IN SCHEDULE A. 9. OPTION TO PURCHASE AS CONTAINED IN THE LEASE SHOWN IN SCHEDULE A. CHICAGO TITLE INSURANCE COMPANY CHICAGO TITLE INSURANCE COMPANY Policy No.: 215518 EXTENDED MORTGAGEE POLICY SCHEDULE B (Continued) PART II In addition to the matters set forth in Part I of this Schedule,the title to the estate or interest in the land described or referred to in Schedule A is subject to the following matters,if any be shown,but the Company insures that such matters are subordinate to the lien or charge of the insured mortgage upon said estate or interest: NONE f4'.1),A 4•A■ AUTHORIZED SIGNATORY CHICAGO TITLE INSURANCE COMPANY ENDORSEMENT Attached to and forming a part c. Policy No. 215518 Issued by CHICAGO TITLE INSURANCE COMPANY ENDORSEMENT 100 The Company hereby insures against loss which said Insured shall sustain by reason of the following matters: (1) Any incorrectness in the assurance which the Company hereby gives: (a) That there are no covenants, conditions or restrictions under which the lien of the mortgage referred to in Schedule A can be cut off, subordinated, or otherwise impaired; (b) That there are no present violations on said land of any enforceable covenants, conditions or restrictions; (c) That, except as shown in Schedule B, there are no encroachements of buildings, structures or improvements located on said land onto adjoining lands, nor any encroachements onto said land of buildings, structures, or improvements located on adjoining lands. (2)(a) Any future violations on said land of any covenants, conditions, or restrictions occuring prior to acquisition of title to said estate or interest by the Insured, provided such violations result in impairment or loss of the lien of the mortgage referred to in Schedule A, or result in impairment or loss of the title to said estate or interest if the Insured shall acquire title in satisfaction of the indebtedness secured by such mortgage; (b) Unmarketability of the title to said estate or interest by reason of any violations on said land, occuring prior to acquisition of title to said estate or interest by the Insured, of any convenants, conditions, or restrictions. (3) Damage to existing improvements, including lawns, shrubbery or trees: (a) Which are located or encroach upon that portion of the land subject to any easement shown in Schedule B, which damage results from the exercise of the right to use or maintain such easement for the purposes for which the same was granted or reserved; (b) Resulting from the exercise of any right to use the surface of said land for the extraction or development of the minerals excepted from the description of said land or shown as a reservation in Schedule B. (4) Any final court order or judgment requiring removal from any land adjoining said land of any encroachement shown in Schedule B. Wherever in this endorsement any or all of the words "covenants, conditions or restrictions" appear they shall not be deemed to refer to or include the terms, covenants and conditions contained in any lease referred to in Schedule A. The total liability of the Company under said policy and endorsement therein shall not exceed, in the aggregate, the face amount of said policy and costs which the Company is obligated under the conditions and stipulations thereof to pay. This endorsement is made a part of said policy and is subject to the exclusions from coverage, schedules, conditions and stipulations therein, except as modified by the provisions hereof. Dated: October 7, 1991 C I IN tRA E COMPANY Authorized Signatory Note: This endorsement shall not be valid or binding until countersigned by an authorized signatory Your T rence: QUADI.. .r CORP./CITY OF FEDERAL WAY ENDORSEMENT Attached to and forming a part of Policy No. 215 518 Issued by CHICAGO TITLE INSURANCE COMPANY PARAGRAPH 1(E) OF THE CONDITIONS AND STIPULATIONS IS HEREBY AMENDED AS FOLLOWS: 1(E) "MORTGAGE": MORTGAGE, DEED OF TRUST, TRUST DEED OR OTHER SECURITY INSTRUMENTS, INCLUDING THE INDEBTEDNESS EVIDENCED AND SECURED BY A LEASE. This endorsement is made a part of the policy and is subject to all the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated,it neither modifies any of the terms and provisions of the policy and prior endorsements,if any,nor does it extend the effective date of the policy and prior endorsements or increase the face amount thereof. Dated: October 7, 1991 CHICAGO TITLE INSURANCE COMPANY Authorized Signatory Note: This endorsement shall not be valid or binding until countersigned by an authorized signatory BIANY2/01-3.04 EK C) CHICAGO INSURANCE COMPANY 1800 COLUMBIA CENTER, 701 FIFTH AVENUE, SEATTLE, WASHINGTON 98104 IMPORTANT: This is not a Survey. It is furnished as a convenience to locate the land indicated hereon with reference to streets and other land. No liability is assumed by reason of reliance hereon. r1.7\e C- I 47Ir t CC S 69'0016•E )2116• 7.P.0 8. • p• 6011.62' 1 .. R • 100.00' •NI✓CORNER '- . L • 74S.2 • SECt10N t2-27-4 s abrj6•E fy� • N A. 603!'9!• \*1 R• 630.00' L 700.34'0 ° �'�'. g11• • 4 o 8 ,OWN S•e,c J�+ o= aU x ul Wy p• t4.4716' U.p R . 600.00' l + 206.64' p. 4696'!:• aJIL "s.,.• p■ 14'4730' M. R • 69 R pt;,00' '+ 1 + 217.49' ' �h a r a 16 7f• 367.92* M 6659''20 _ N 6656.20-w SOUTH LIN( 1 ie t• ` 6O%ERNM(NT Lot I "'(s/ ` MAP ?r- 8/ CITY OF FEDERAL WAY Memorandum DATE: October 21, 1991 TO: Maureen Swaney, City Clerk FROM: Sandra Driscoll, City Attorney SUBJECT: Quadrant Property Enclosed is one of the three triplicate original Memorandum of Ground Lease with Option to Purchase and a copy of the recorded Statutory Warranty Deed for the above-referenced property. I will keep a copy of these documents in my file but felt that this original and the deed should appropriately be kept with the Clerk's Office. enclosure LA\EF\SRD\91-0222.QUA CITY OF FEDERAL WAY Memorandum DATE: October 15, 1991 TO: Brent McFall, City Manager Steve Anderson, Assistant City Manager Ken Nyberg, Assistant City Manager Joe Stevens, Parks Director John Moir, Finance Director 04 Maureen Swaney, City Clerk M: Sandra Driscoll, City Attorney . SUBJECT: Polygon Property Purchase The final documents related to the purchase of the of gon prop rtl have been received from the title company. Settlement Statements, Escrow Instructions, Ground Lease with Option to Purchase, Real Estate Excise Tax Affidavit, and Statutory Warranty Deed. These copies will be kept in the legal file, bu will be available anytime you need to look at any the the m nth. I will make sure Maureen receives a copy of original of the lease. LA\EF\SRD\91-0221.POL CITY OF FEDERAL WAY MEMORANDUM TO: J. Brent McFall, City Manager FROM: John Moir, Finance Director ) DATE: August 16, 1991 SUBJECT: Lease Purchase Capital Financing The following table identifies the city's non-voted debt capacity: • Limited Tax general obligation (LTGO) bonds $23,256,792 Less: Amount issued to date 14,210,000 Plus: Amount available in debt service fund 359,092 (as of July 31, 1991) Subtotal LTGO capacity $ 9,405,884 • Capital financing leases $23,256,792 Less: Amount issued to date 0 Subtotal Financing Lease Capacity $23,256,792 Total Non-voted Debt Capacity $32,662,676 The City has utilized 59.6% of its limited tax general obligation bond capacity. The City has 100% of its non-voted financing lease capacity remaining. The City has approximately 70% of its non voted debt capacity remaining. The LTGO bond may be used to finance a wider range of public purpose projects compared to financing leases. Financing leases are most commonly used for building construction, equipment, and land acquisition. Because there is more flexibility with LTGO bonds, the City should hold its remaining LTGO bond capacity in reserve and utilize financing leases whenever deemed appropriate. Therefore, the financing lease is the mechanism proposed for the acquisition of the Campus Center (Polygon) property. A financing lease works as follows: • the City obtains the services of a trustee, • the City obtains an underwriter(s) for the amount of the financing lease, • the amount of issue is divided into increments known as certificates of participation(the COP is similar to a bond), 1 • the proceeds from the sale are deposited with the trustee, • the trustee pays the seller of the property from the financing lease proceeds, ' • the City pays annual installments to the trustee, • the trustee forwards semi-annual interest and annual principal payments to the certificate holders. The trustee receives compensation for the following duties: • Acceptance services (examination of documents and account setup); • Evaluation of liability in the event hazardous substances are found; • Periodic accountings/statements; • Maintenance of trustee's records; • Compliance monitoring; • Preparation of annual reports to certificate holders; • Custody of a reasonable number of insurance policies, letters of credit, and other security documents; • Usual and ordinary correspondence with interested parties concerning the regular administration of the trust; • Audit confirmations. These services are similar to those of a fiscal/paying agent for LTGO bonds;however,because the trustee retains ownership of the property until the lease is paid off, due diligence (oversight) requirements are much more significant. An example is the evaluation of liability in the event of hazardous substances are found on the property. The following table compares current estimates for fiscal agent fees and trustee fees for an issue of $1,450,000: Service Fiscal Agent Trustee 1. Acceptance/Setup 500 2,000 2. Due Diligence Review 0 2,000 3. Annual Administration 1,000 1,750 At the present time we are still negotiating trustee fees. Summary of terms of sale: 1. The lease would be for 15 years with approximately equal annual payments. 2. The lease does NOT contain a "non-appropriation" clause; therefore, the lease payments are a limited tax general obligation of the City. 3. The amount of issue would total $1,450,000(an amount divisible by $5000--the normal size of the certificate or bond). 2 w 4. The cost of issuance and purchase price in excess of the proposed issue amount would be paid from budgeted funds in the 1st 1/4% Real Estate Excise Tax Fund. • Savings in financing costs resulting from this suggestion would total approximately$22,000 over 15 years. 5. Call (early redemption)features earlier than 8 to 10 years would increase both the interest rate on the total financing by at least 25 basis points (1/4%)AND require a premium of about 2% of the amount redeemed at the time of call. This would be too punitive and preempts an earlier call. Our original intention was to "fast track" the transaction; however, because of the Labor Day holiday, we will not be able to bring closure to the financing until September 17th--at which time the Council would approve the lease terms. Therefore, the Council will not need to approve an ordinance until September 17. If you have any questions, please let me know. JM/rm cc: Management Team 3