Exhibit 10.9
AMENDED AND RESTATED
LEASE WITH PURCHASE OPTION AGREEMENT
between
WENATCHEE EVENTS CENTER, LLC
(Lessor)
and
GREATER WENATCHEE REGIONAL EVENTS CENTER
PUBLIC FACILITIES DISTRICT
(Lessee)
and
CITY OF WENATCHEE
(Obligor)
May 30, 2007
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS
.......................................................2
1.1
"ADA"..................................................................2
1.2
"Affiliate"............................................................2
1.3
"Agreement"............................................................2
1.4
"Architect"............................................................2
1.5
"Business
Day".........................................................2
1.6
"Calendar
Year"........................................................2
1.7
"Closing"..............................................................2
1.8
"Closing
Date".........................................................2
1.9
"Construction
Contract"................................................2
1.10
"Construction
Documents"...............................................2
1.11
"Construction
Drawings"................................................3
1.12
"Construction
Lender"..................................................3
1.13
"Construction Loan"
o.................................................3
1.14
"Contingency"..........................................................3
1.15 "Contract
Documents"...................................................3
1.16 "Contract
Savings".....................................................3
1.17
"Contractor(s)"........................................................3
1.18 "Design
Development"...................................................3
1.19 "Detailed
Specifications"..............................................3
1.20
"Drawings".............................................................3
1.21 "Effective
Date".......................................................3
1.22
"Environmental
Conditions".............................................4
1.23
"Environmental
Reports"................................................4
1.24
"Environmental
Law"....................................................4
1.25 "Escrow
Agent".........................................................4
1.26 "Final
Completion
Date"................................................4
1.27 "Final
Completion of Public Facilities District Improvements
(or Final
Completion)"................................................4
1.28 "General
Construction Contract"........................................5
1.29 "General
Contractor"...................................................5
1.30 "Hazardous
Substances".................................................5
1.31
"Indemnified
Parties"..................................................6
1.32
"Land".................................................................6
1.33
"Law"..................................................................6
1.34
"Lease"................................................................6
1.35 "Lease
Payment
Date"...................................................6
1.36 "Lease
Payments".......................................................6
1.37 "Leased
Premises"......................................................6
1.38 "Lessee" or
"Public Facilities District".......,.......................6
1.39 "Lessee's
Architectural Representative"................................7
1.40
"Lessor"...............................................................7
1.41 "Mandatory
Improvements"...............................................7
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1.42
"Mediator".............................................................7
1.43
"Permit(s)"............................................................7
1.44 "Permit
Allowance".....................................................7
1.45 "Permitted
Exceptions".................................................7
1.46
"Person"...............................................................7
1.47 "Personal
Property"....................................................7
1.48
"PFD"..................................................................7
1.49
"Project"..............................................................7
1.50 "Project
Budget........................................................7
1.51 "Project
Requirements".................................................8
1.52 "Project
Schedule".....................................................8
1.53
"Property".............................................................8
1.54 "Public
Facilities District
Improvements"..............................8
1.55
"Punch-list"...........................................................8
1.56 "Real
Property"........................................................8
1.57 "Regional
Events Center"...............................................8
1.58
"Requirements of
Law"..................................................8
1.59
"Savings"..............................................................8
1.60 "Schematic
Design Documents"...........................................8
1.61 "Service
Contracts"....................................................9
1.62 "Stated
Contingency"...................................................9
1.63
"Substantial Completion
Date"..........................................9
1.64
"Substantial Completion of Public Facilities District
Improvements"....9
1.65
"Substantially Complete" or "Substantially
Completed"..................9
1.66
"Taxes"...............................................................10
1.67 "Title
Company".......................................................10
1.68 "Title
Policy"........................................................10
1.69
"Unavoidable
Delay"...................................................10
1.70 "Warranty
Period".....................................................10
ARTICLE II GREATER WENATCHEE REGIONAL EVENTS CENTER
DEVELOPMENT..............11
2.1
Development of Public Facilities District
Improvements................11
2.2
Parking
Requirements..................................................11
ARTICLE III DESCRIPTION OF
PROPERTY..........................................11
3.1
Agreement to
Lease....................................................11
3.2
Agreement to
Purchase.................................................11
3.3
Identification of Personal
Property...................................12
3.4
Service
Contracts.....................................................12
3.5 Ice
Rink Fixtures and
Equipment.......................................12
ARTICLE IV DUE
DILIGENCE.....................................................12
4.1
Project
Information..................................................................12
ARTICLE V CONSTRUCTION OF REGIONAL EVENTS CENTER
IMPROVEMENTS................12
5.1
Construction of Public Facilities District
Improvements...............12
5.2 [This
Section intentionally left
blank.]..............................12
<PAGE>
5.3
Schedule for Design and
Construction..................................13
5.4 Selection of Development
Team for Project.............................13
5.5 Plans
and
Specifications..............................................13
5.6
Dispute Resolution
Process............................................14
5.7
Permits; Costs; Compliance with Legal
Requirements....................15
5.8
Construction
Contract.................................................15
5.9
Construction of
Project...............................................16
5.10 Changes to
the Work...................................................17
5.11
Inspections...........................................................17
5.12
Construction
Loans....................................................18
5.13 Termination
of Agreement..............................................18
5.14 As-Built
Plans and Specifications; Manuals; Warranties; Permits
and
Licenses.........................................................18
5.15
Construction Covenants and
Warranties.................................18
5.16
Disclaimer............................................................20
5.17 Enforcement
of Warranties.............................................21
5.18 Architect's
Administration of the Contract............................22
5.19 Project
Manager.......................................................22
ARTICLE VI LEASE
TERM........................................................22
ARTICLE VII LEASE
PAYMENTS...................................................23
7.1 Lease
Payments........................................................23
7.2
Additional
Rent.......................................................24
7.3
Defeasance............................................................24
ARTICLE VIII
USE.............................................................24
8.1 Use of
Premises.......................................................24
8.2 Quiet
Enjoyment.......................................................25
ARTICLE IX ABSOLUTE NET
LEASE................................................25
9.1
Absolute Net
Lease....................................................25
9.2 Lease
-
Non-terminable................................................25
9.3 Taxes
and Utility
Charges.............................................26
9.4
Compliance with
Laws..................................................26
9.5
Lessee's Right to
Contest.............................................26
ARTICLE X ENVIRONMENTAL CONDITION OF THE
PROPERTY............................27
10.1
Environmental
Information.............................................27
10.2 Lessor's
Representations and Warranties Regarding Environmental
Conditions...........................................................27
10.3
Survival..............................................................27
10.4
Supersedure...........................................................27
ARTICLE XI REPRESENTATIONS AND
WARRANTIES....................................28
11.1 Lessor's
Representations and Warranties...............................28
11.2 Lessee's
Representations and Warranties...............................29
<PAGE>
ARTICLE XII
POSSESSION.......................................................29
ARTICLE XIII FIRE AND EXTENDED COVERAGE
INSURANCE............................30
ARTICLE XIV
LIENS............................................................30
ARTICLE XV OPTIONS TO PREPAY LEASE AND PURCHASE LEASED
PREMISES..............30
15.1 Option to
Purchase....................................................30
15.2 Exercise of
Option....................................................31
15.3 Conveyance
of Leased Premises.........................................31
15.4 Option to
Partially Prepay Lease......................................31
15.3 Option Not
Exercised..................................................31
15.6 Title to
Real Property................................................31
15.7 Title to
Personal Property and Intangible Property....................32
ARTICLE XVI
CLOSING..........................................................32
16.1 Closing
Procedures....................................................32
16.2 Delivery by
Lessor....................................................32
16.3 Delivery by
Lessee....................................................34
16.4
Proration's...........................................................34
16.5 Costs and
Expenses....................................................34
16.6
Recordation...........................................................35
16.7 Effect of
Damage or Destruction of Property...........................35
ARTICLE XVII DESTRUCTION OF LEASED
PREMISES..................................35
ARTICLE XVIII DEFAULT;
REMEDIES..............................................35
18.1 Corrective
Work.......................................................35
18.2 Specific
Performance..................................................36
18.3
Waiver................................................................36
ARTICLE XIX
MISCELLANEOUS....................................................36
19.1
Incorporation of Recitals;
Definitions................................36
19.2
Notices...............................................................36
19.3 Amendment,
Waiver, Assignment.........................................37
19.4 Lessee's
Disclaimer...................................................38
19.5
Survival..............................................................38
19.6
Captions..............................................................38
19.7 Brokerage
Fees........................................................38
19.8 Joint
Venture.........................................................38
19.9
Severability..........................................................39
19.10 Further
Assurances....................................................39
19.11 Merger of Prior
Agreements............................................39
19.12 Fair
Construction.....................................................39
19.13
Authority.............................................................39
19.14 Time is of the
Essence................................................39
19.15
Arbitration...........................................................39
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19.16 Non-Waiver of
Governmental Rights.....................................39
19.17 Agreement for
Exclusive Benefit of Lessor and Lessee..................40
19.18 Interest on
Past-Due Obligations......................................40
19.19 Governing
Law.........................................................40
19.20 Memorandum of
Agreement...............................................40
EXHIBITS
Exhibit A
Legal Description of Land -- Regional Events Center
Improvements
Exhibit B
Construction Documents for Regional Events Center Improvements
Exhibit C
Legal Description - Ice Rink Property
Exhibit D
Schedule of Fixtures and Equipment
Exhibit E
Project Budget (Revised)
Exhibit F
First Revised Project Schedule
Exhibit G
List of Environmental Reports
Exhibit H
Lease Payments (Revised)
<PAGE>
LEASE AGREEMENT
THIS
AMENDED AND RESTATED LEASE WTTH PURCHASE OPTION AGREEMENT (the
"Agreement") is made
and entered into as of this 30th day of May, 2007, by and
between WENATCHEE
EVENTS CENTER, LLC, a
Washington limited
liability company
("Lessor"), and
GREATER WENATCHEE
REGIONAL EVENTS CENTER PUBLIC FACILITIES
DISTRICT, a Washington municipal corporation
("Lessee" or "Public Facilities District"), and the CITY OF WENATCHEE,
a
Washington
Municipal Corporation ("Obligor") with reference to the following
facts:
RECITALS
A.
On June 15, 2006 Lessee was formed by an inter-local agreement to
create
a regional (nine-jurisdiction) public facilities district
("PFD").
B.
Lessee is interested
in constructing and leasing a regional events
center to be located in Wenatchee.
C.
Lessor is the contract
purchaser pursuant to a real estate purchase and
sale agreement for the
purchase of the real
property described on
Exhibit "A"
which sale shall be closed by purchaser on or before August 1,
2007. Failure to
close as set
forth herein shall be deemed a material default subject to
enforcement pursuant to Article XVIII of this Agreement.
D.
Lessor proposes to design, develop, finance, construct, complete and
thereafter lease to Lessee a regional events center with associated
parking area
to be constructed on privately owned property of Lessor in Wenatchee,
Washington.
E.
Lessee is interested
in leasing a regional
events center
facility to
achieve multiple
public facilities district objectives including, but not
limited to, improving the financial stability and general economic
vitality of
the district,
increasing tax revenues, creating jobs, providing artistic and
cultural opportunities
and important public spaces for the residents of
the
district
F.
Lessee's desire to lease the regional
events center is on
the express
condition, among others, that construction of the project commence
in accordance
with RCW 82.14.390,
not later than February 1, 2007, which condition has been
satisfied.
G.
Lessee desires to lease from Lessor and Lessor desires to lease to
Lessee the Property (as hereinafter defined) on the terms and
conditions
set
forth herein.
H.
Lessee is authorized by RCW Chapter 35.57 to lease, acquire and
transfer
real and personal property, and intends to finance its lease
or purchase of the
regional events center facility and associated parking area with
the proceeds of
tax exempt financing, to be repaid in part with sales taxes
received pursuant to
RCW Chapter 82.14.
<PAGE>
I.
BBP Two, TLC was
originally identified
as Lessor in the
September 28,
2006 original Lease
Agreement.
This Amended and
Restated Lease with
Purchase
Option Agreement
is entered into as a replacement for the original Lease
Agreement which has been terminated by mutual agreement of BBP Two, LLC and
the
Public Facilities District.
NOW,
THEREFORE,
in consideration of
the mutual covenants,
conditions and
provisions contained herein, and for other good and valuable
consideration, the
receipt and
sufficiency of which is hereby mutually acknowledged, the parties
agree as follows:
ARTICLE I
DEFINITIONS
As
used in this Agreement, the following capitalized terms shall have
the
following meanings:
1.1
"ADA" means the
Americans With
Disabilities
Act of 1990,
42 U.S.C.
Section 1201, et seq., as amended from time to time.
1.2
"Affiliate" means any Person or entity related to, owned by, in
common
ownership with or affiliated with a person or entity that is a
parent company or
constituting a
shareholder or member of a person or in which such Person has
or
holds an equity or other interest.
1.3
"Agreement" means this
Amended and Restated Lease With Purchase Option
Agreement, as the same
may be amended,
supplemented or
modified from time
to
time.
1.4
"Architect" means Sink
Combs Dethlefs
Architects,
collectively, or
such other architect licensed to practice in the State of
Washington as may from
time to time be hired by Lessor in connection with the design of the
Regional
Events Center Improvements.
1.5
"Business Day" means any day other than a
Saturday, Sunday or legal
holiday that Lessee's offices are open.
1.6
"Calendar Year" means a calendar year
commencing
with January 1 and
ending with December 31.
1.7
"Closing" means the delivery of documents and funds to the Escrow
Agent
with appropriate instructions that are necessary for the completion
of the lease
and/or purchase of the
Property in accordance
with the terms and conditions of
this Agreement.
1.8
"Closing Date" means the date on which the Closing occurs.
1.9
"Construction
Contract" means the
General Construction
Contract for
construction services
entered into by Lessor, and the General Contractor, for
construction of the Public Facilities District Improvements.
1.10
"Construction
Documents" means the
Final Public Facilities District
approved Construction Drawings and related Project Manual,
inclusive of Division
1 General
2
<PAGE>
Requirements and Technical Divisions 2 through 14 for the Public
Facilities
District Improvements
approved by Lessor and Lessee for the construction of the
Public Facilities
District
Improvements,
including
technical
drawings,
schedules, diagrams,
plans and specifications setting forth in detail the
requirements for construction, itemization of furniture, fixtures,
equipment and
furnishings to be installed and providing information customarily required for
the use of the
building trades and the general construction contract for
construction of the Public Facilities District Improvements. The Construction
Documents shall be
revised to reflect the Project as described in the Project
Budget (revised), Exhibit "E" to this Agreement
1.11
"Construction
Drawings" means Drawings setting forth in detail the
requirements for
the construction of the Public Facilities District
Improvements.
1.12
"Construction Lender" means the financial lending institution
selected
by the Lessor.
1.13
"Construction Loan" means a loan obtained from the Construction
Lender
for the purpose of paying Project construction costs. o
1.14
"Contingency" means Stated Contingency and Design Contingency.
1.15
"Contract Documents" means the documents identified in the General
Construction Contract as "contract documents."
1.16
"Contract Savings"
means the amount, if
any, by which a bid accepted
for each major subcontract element identified in the Project Budget
is less than
the amount for the major subcontract element in the Project
Budget, plus the
amount of unused
Stated Contingency
as of the Final
Completion of the
Public
Facilities District Improvements.
1.17
"Contractor(s)"
means
the General Contractor and any other
construction
contractors with whom
Lessor contracts for construction of all or
any portion of the Project
1.18
"Design Development" means that phase of design of the Project
providing for development of plans and specifications for the
Project based upon
the Schematic
Design Documents; as such term is generally
understood in the
construction industry.
1.19
"Detailed
Specifications" means
the Final Public Facilities District
approved written detailed requirements for materials,
equipment,
construction
systems, standards and workmanship for the construction of the
Project as issued
by the Architect as Final Construction Documents for the
Project.
1.20
"Drawings"
means all graphic and
pictorial documents
depicting the
design, location
and dimensions of the elements of the Public Facilities
District Improvements
and also include
itemization
of furniture, fixtures,
equipment and
furnishings
to be installed and include plans, elevations,
sections, details,
schedules and diagrams
for the Public
Facilities
District
Improvements.
1.21 "Effective Date" means the date this Lease
was entered
into as set
forth above.
3
<PAGE>
1.22
"Environmental
Conditions" means conditions involving the presence of
Hazardous Substances in soil, surface waters, groundwater and
sediments.
1.23
"Environmental
Reports" means all environmental reports, audits,
sampling results
and other information in Lessor's possession or control
regarding the Environmental Conditions, a complete listing of which
is set forth
on Exhibit G attached to this Agreement.
1.24
"Environmental Law"
means, as amended from time to time, local, state
or federal
laws, rules, ordinances, regulations, applicable permits and
applicable orders now
or hereafter enacted
relating to (a) the
protection of
human health or the environment or (b) the use, storage,
generation, production,
treatment, emission,
discharge,
remediation, removal
or disposal of Hazardous
Substances;
including,
without
limitation, the
Federal
Comprehensive
Environmental Response
Compensation,
and Liability Act of 1980, 42 U.S.C.
Section 9601 et 02., and the Washington Model Taxies Control Act, RCW Chapter
70.105D.
1.25
"Escrow Agent'
means First
American Title Insurance Company, or
another nationally recognized title insurance company selected by
Lessor and not
objected to by Lessee
which shall act as the escrow agent and provide the title
insurance policies to be delivered in connection with the
Closing.
1.26
"Final Completion
Date" means total
Project will be substantially
complete not later than September 17, 2008.
1.27
'Final Completion of Public Facilities District Improvements (or
Final
Completion)" means the date by which the following events have
occurred:
(a)
Certificate
of Occupancy.
The City of Wenatchee
shall have issued
a
final unconditional
certificate of occupancy for the Public Facilities District
Improvements
permitting their use and occupancy as a regional events center
and
it is available for occupancy and normal operations.
(b)
Contractor's
Certification.
The contractor shall have issued its
"Certificate of
Substantial
Completion"
for the Public
Facilities
District
Improvements together
with its Affidavit of Payment of Debts and
Claims, AIA
Forms 706 and 706A
together with final
waivers and releases of lien in form
satisfactory to Lessee
from such material men, laborers, contractors and
subcontractors as Lessee may require.
(c)
Punch-list Items
Completed. Following
Substantial
Completion of the
Public Facilities District Improvements, Lessor, the Architect and Lessee
shall
prepare a Punch-list
for the Public Facilities District Improvements. All
Punch-list items for the Public Facilities District Improvements
shall have been
completed to the reasonable satisfaction of Lessee, or if not completed, the
parties shall have
agreed upon a holdback of 150% of the cost estimated by
Lessee to complete the Punch-list items.
(d)
Construction
Lessor
shall have provided evidence reasonably
satisfactory to Lessee
that all construction
costs for the Public
Facilities
District Improvements
have been paid in full including evidence of full payment
for any Personal Property. The issuance of the Title Policy
insuring the Lessee
4
<PAGE>
against any material or labor liens and the submission of invoices
with evidence
of payment by Lessor
shall be evidence
acceptable to Lessee
of the payment of
all construction costs.
(e)
No Construction Liens. The period for filing construction liens for
the
Public Facilities
District Improvements shall have expired or releases or
discharges of
construction liens in
form and substance
satisfactory to Lessee
have been obtained
by the contractor in accordance with the articles and
conditions of the
construction
contract for the Public Facilities District
Improvements.
(f)
As-Built Plans and
Specifications. Lessor
shall have provided
Lessee
with a complete and detailed set of "as-built" plans and
specifications for
the
Project (to be provided on CAD or other format satisfactory to Lessee)
together
with all technical,
service, instruction
and procedure
manuals, warranties,
permits and licenses and an as- built survey of the Real Property showing all
improvements located thereon.
1.28
"General Construction Contract" means the agreement between the
Lessor
and the General
Contractor; for
construction of the Public Facilities District
Improvements.
1.29
"General Contractor"
means Hunt
Construction Group or
other General
Contractor as selected by the Lessor.
1.30
"Hazardous Substances" means:
(a)
Those substances included within the definitions of "hazardous
substances,"
"hazardous materials," "toxic substances," or "solid waste" in
the
Federal Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901
et the Federal .Comprehensive Environmental Response, Compensation, and
Liability act of 1980,
42 U.S.C. Section 9601
et mg., the Hazardous
Materials
Transportation Act, 49
U.S.C. Section 1801,
et and the Toxic Substance Control
Act, 15 U.S.C. Section 2601 et seq., and in the regulations
promulgated pursuant
to said laws, all as amended from time to time;
(b)
Those substances defined as "dangerous wastes," "hazardous wastes" or
as "hazardous substances" under the Water Pollution Control Act,
RCW 9048.010 et
seq., the Hazardous Waste Management Statute, RCW 70.105.010 et mi., the
Washington Toxic
Substance Control Act
RCW 70.1058.010 et seq., the Washington
Model Toxics Control
Act, RCW 70.105D.010 et seq., and the Toxic Substance
Control Act, 15 U.S .C. Section 2601 et seq., and in the
regulations promulgated
pursuant to said laws, all as amended from time to time;
(c)
Those substances listed in the United States Department of
Transportation Table
(49 C.F.R.
172.101 and amendments thereto) or by the
Environmental
Protection
Agency (or
any successor agency) as hazardous
substances (40 C.F.R. Part 302 and amendments thereto);
(d)
Storm water discharge regulated under any federal, state or local law,
ordinance or
regulation
relating to storm
water drains,
including,
but not
limited to, Section
402(p) of the Clean
Water Act, 33 U.S.C.
Section 1342 and
the regulations promulgated hereunder, all as amended from time to
time.
5
<PAGE>
(e)
Such other substances,
material and wastes which are dangerous or
injurious to human health or become regulated under applicable
local, state or
federal law,
or the United States government, or which are classified as
hazardous or toxic under federal, state or local laws or
regulations,
all as
amended from time to time, or which are deemed dangerous or injurious to
human
health; and
(f)
Any material, waste or
substance which is (A) petroleum, (B) asbestos,
(C) polychlorinated
biphenyls,
(D) designated as a "hazardous substance"
pursuant to Section 311 of the Clean Water Act, 33 U.S.C.
Section 1251, et gm.
(33 U.S.C. Section
1321) or listed
pursuant to Section
307 of the Clean Water
Act (33 U.S.C. Section 1317), (E) flammable explosives,
(F) radon gas, (0)
lead
or lead-based paint, (H) radioactive materials, (1) coal combustion
by-products,
(J) urea formaldehyde
foam insulation,
or (K) mold. Mold
includes any form of
multicellular fungi
that live on plant or animal matter and in indoor
environments.
1.31
"Indemnified
Parties" means Lessee and its successors and assigns,
including any Person
who acquires all or
any part of the Real
Property by any
sale, assignment,
deed-in-lieu
of foreclosure under any deed of trust on
Lessee's interest in the Real Property, or otherwise.
1.32
"Land" means that certain real property located in the City of
Wenatchee, Chelan
County, Washington,
more particularly described in Exhibit A
attached hereto and by this reference incorporated herein.
1.33
"Law" means any constitution, statute, ordinance, regulation, rule,
resolution, judicial decision, administrative order or other
requirement of any
federal, state,
county, municipal or other governmental agency or authority
having jurisdiction over the parties or the Property, or both, in effect either
at the time of
execution of this
Agreement or at any time during the term
of
this Agreement, including without limitation, any regulation or
order of a quasi
official entity or body (e.g. board of fire examiners, public utilities, design
review boards or hearing examiners); all rules, laws and regulations arising
under Title 111 of the
Americans with Disabilities Act and the regulations
issued hereunder by the United States Department of Justice.
1.34
"Lease" means this Lease by and between Lessor and Lessee.
1.35
"Lease Payment Date" means commencing thirty (30) days after
substantial Completion
Date, either (i) if
certificates of
participation are
issued as provided in Exhibit H, principal payments shall be due
each December 1
and interest
payments shall be due each June 1 and December 1 during the
remaining term of the Lease, or (ii) if certificates of participation are not
issued as provided in Exhibit H, the first day of each month during the
remaining term of the Lease.
1.36
"Lease Payments" means as provided in Exhibit H.
1.37
"Leased Premises" means the Land together with the
Improvements.
1.38
"Lessee or
"Public Facilities District" means Greater Wenatchee
Regional Events
Center Public Facilities District; a Washington municipal
corporation.
6
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1.39
"Lessee's Architectural Representative" means Robert
Knowles, or such
other Person as may be
designated
by Lessee to Lessor in
writing nuns time to
time.
1.40
"Lessor" means
Wenatchee Events Center, LW, a Washington limited
liability company.
1.41
"Mandatory Improvements" means those improvements that are part of
the
Project and are described in the Construction Documents.
1.42
"Mediator"
means a natural person
not employed by Lessor, Lessee or
any affiliate or
subsidiary of either of them who shall also be a professional
mediator with at least
five (5) years
experience in complex
commercial
real
estate disputes
approved by Lessor and Lessee whom Lessee and Lessor shall
mutually designate
to act as a
dispute' resolution mediator to assist in
resolution of such dispute pursuant to Section 5.6 below.
1.43
"Permit(s)" has the meaning stated in Section 5.15(b) below.
1.44
"Permit Allowance"
means the sum of
Seventy-Five
Thousand Dollars
($75,000.00), which
amount is included within the Lease Payments as the
anticipated cost to be Incurred by Lessor in obtaining permits and
licenses from
the applicable regulatory agencies required to construct the
Project.
1.45
"Permitted
Exceptions"
has the meaning set forth in Section 15.6
below.
1.46
"Person" means a
natural person,
corporation,
trust, partnership,
limited partnership,
Limited Liability Company, government subdivision or
agency, Municipal Corporation, city or other legal entity.
1.47
"Personal Property"
means all personal
property located on or
in or
used in connection
with the Public
Facilities District
Improvements or
which
will be Stalled or incorporated into the Public Facilities District
Improvements
as part of the Project
including but not limited to those items of personal
property identified in the Detailed Specifications.
1.48
"PFD" means that certain inter-local agreement approved June 15,
2006
to create a regional public facilities district.
1.49
"Project" means the total design, development, and construction,
including all
professional
design services, and all labor, materials and
equipment used or
incorporated in the design, development and construction of
the Public Facilities District Improvements, all as more fully described in
the
Schematic Design
Documents. The Project
shall include work consistent with and
reasonably inferable
from the approved Project Requirements as being
necessary
to produce the
intended results and all work necessary to render the Public
Facilities District Improvements fully operational.
1.50
"Project Budget" means the budget for the development and
construction
of the Project
approved by Lessee and
Lessor, a copy of which is attached to
this Agreement as Exhibit E.
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1.51
"Project Requirements"
means the Construction
Documents and Detailed
Specifications and as
issued by the
Architect and as
otherwise specifically
agreed to by Lessor and Lessee.
1.52
"Project Schedule" means the schedule for design, development,
repair,
renovation and
construction
of the Project as revised from time to time by
Lessor and lessee. The
First Revised Project Schedule is set forth in Exhibit F
attached hereto and by this reference incorporated herein.
1.53
"Property"
means the Real Property, Personal Property, Service
Contracts, and other
items to be
leased, sold and transferred to Lessee as
described in Section 3.1 below.
1.54
"Public Facilities
District Improvements"
means the Regional
Events
Center and associated facilities.
1.55
'2,Ea" means a list of items required to be completed
prior to Final
Completion that are minor items which do not affect Lessee's
ability to use the
Public Facilities District Improvements for their intended use.
1.56
"Real Property" means the Land and the Public
Facilities
District
Improvements, together
with all rights, privileges, easements and appurtenances
thereto.
1.57
"Regional Events Center" means a multi-purpose event center facility,
consisting of a total of approximately 161,000 square feet, which shall
include
a main arena, a practice ice facility, exhibition and meeting rooms,
restaurant
and food service facilities, team changing and showering rooms,
viewing suites,
offices, media and broadcasting suites, and technical support
areas, and related
support facilities including service areas, sidewalks, public
stairs, corridors,
hallways, lobbies,
public restrooms,
retail space,
loading dock, storage
and
administrative spaces
and on-site parking
area. The main arena fixed seating
capacity shall be
approximately 4,300
with a maximum variable seating capacity
of approximately 5,600 for certain event configurations.
1.58
"Requirements
of Law" means all
requirements
relating to land and
building construction
(including
those specifically applicable to Lessee's
contemplated use of the Public Facilities District Improvements), including,
without limitation,
planning, zoning, public works and procurement, prevailing
wage, subdivision,
environmental,
air quality, flood
hazard, fire safety, the
Americans with
Disabilities
Act and other
governmental
approvals,
permits,
licenses and/or
certificates
as may be necessary
from time to time to
comply
with all the foregoing and other applicable statutes, rules, orders,
regulations, laws, ordinances, and covenants, conditions and
restrictions, which
now apply to and/or
affect the design,
construction,
existence, intended
use
operation and/or
occupancy of the Real Property, the Project or any part
thereof.
1.59
"Savings" means the amount equal to eighty percent (80%) of the
Contract Savings, as defined in Section 1.16.
1.60
"Schematic Design
Documents"
means the Construction Documents and
other documents
illustrating the scale
and relationship of the Regional Events
Center and its various
components including,
but not limited to, furniture,
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furnishings and equipment, sidewalks, lighting, landscaping
and other ancillary
improvements. The
Schematic Design
Documents shall include a conceptual
site
plan and preliminary building plans, sections, elevations and Detailed
Specifications.
1.61
"Service Contacts" means all architectural drawings, plans and
specifications,
consulting agreements,
engineer's reports,
design contracts,
utility contracts,
water and sewer
service contracts,
other contracts of
any
nature, maintenance contracts, management contracts, certificates of occupancy,
warranties, permits,
licenses, approvals,
soil reports, and other contracts or
documents of any nature relating to the Project entered
into by Lessor pursuant
to the provisions of this Agreement.
1.62
"Stated Contingency"
means the amount of
$500,000 identified as
the
general contingency
in the Project Budget which may be used in the manner
described in Section 5.10(6) of this Agreement.
1.63
"Substantial
Completion
Date" means the date on which
Substantial
Completion of the Public Facilities District Improvements has
occurred.
1.64
"Substantial
Completion of Public Facilities District Improvements"
means the date on which the following events have occurred:
(a)
Completion
of Construction. The Regional Events Center is
SubstantiallyComplete.
(b)
Architect's
Certification.
The Architect shall have issued its
"Certificate of
Substantial
Completion
ALA Document
0704," stating that
the
construction of the Public Facilities District Improvements is substantially
completed in strict accordance with the o Construction
Documents.
(c)
Certificate
of Occupancy
The City of
Wenatchee shall have issued a
temporary
certificate of
occupancy for the Public Facilities District
Improvements permitting the use and occupancy of the Regional
Events Center as a
multi-purpose regional events center.
(d)
Lessee Acceptance. Lessee shall have confirmed that the Public
Facilities District
Improvements have been
completed in strict accordance with
the Construction Documents subject to completion of normal
punch-list items.
(e)
Fixtures and Equipment. All furniture, furnishings, fixtures and
equipment specified in
the Construction
Documents for the Public Facilities
District Improvements or required for the operation of a
multi-purpose
regional
events center under
applicable law have
been installed and are in good working
order, condition and repair.
(f)
And shall be no later than September 17, 2008.
1.65
"Substantially
Complete" or "Substantially Completed" means, for the
Public Facilities
District Improvements,
that the Public
Facilities
District
Improvements
have been constructed in substantial accordance with the
Construction Documents and (a) all elements 'required for the
functioning of the
Public Facilities District Improvements shall be operational and in
good working
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order and condition including, but not limited to, satisfying applicable
Requirements of Law;
(b) the Regional
Events Center shall be weather tight and
waterproof; (c) the
fire and life safety
systems within the
Regional Events
Center shall be
operational
and in good
working order and condition; (d)
elevators shall operate and function in good working order and
condition but may
still require
touch up installation and cleaning; (e) the mechanical and
electrical systems,
including the HVAC
system shall be individually tested and
in good working order able to support the Regional Events Center and shall also
be tested to assure
that the Regional
Events Center systems operate on an
integrated basis,
but the HVAC system
may still require final balancing work;
(f) the finish work is substantially completed, including but not
limited to any
public lobbies, decks, patios, elevators, restrooms, HVAC, plumbing, fire and
life safety, sprinkler
and electrical systems, doors, partitions, cabinetry,
floor coverings,
including removal of all construction debris; (g) the computer
system for the Regional Events Center has been
installed and is
operational in
accordance with
the applicable specifications; (h) all site utilities,
sidewalks, driveways,
street improvements,
public spaces, landscaping, street
furniture,
fencing, and
lighting have been substantially completed and
construction
barricades and
equipment have been removed; (i) all lighting,
furniture,
furnishings, fixtures
and equipment have been installed in the
Regional Events Center; except in each case minor punch
list items which do not
materially affect
use and occupancy of the Regional Events Center as a
first-class multi-purpose regional events center;
1.66
"Taxes" means all real property taxes and assessments (including
assessments for
special improvements),
license and permit
fees, charges for
public utilities, leasehold excise taxes, other excise taxes,
levies, sales, use
and occupancy taxes,
and any taxes levied or assessed in addition to or in lieu
of, in whole or in part, such taxes, assessments or other charges and
all other
governmental
impositions and
charges of every kind
and nature,
general and
special, ordinary and extraordinary, foreseen and unforeseen of
every character.
1.67
"Tide Company" means First American Tide Insurance Company, or
another
nationally recognized
title insurance company selected by Lessor, and not
objected to by Lessee,
which will be issuing the title insurance policy to be
issued at the Closing.
1.68
"Title Policy" has the meaning set forth in Section 15.6 below.
1.69
"Unavoidable Delay" means, with respect to a party, strikes, acts of
God, unavoidable
casualties and similar
events beyond the control of the party
which, after the
exercise of due
diligence to mitigate
the effects
thereof,
delay construction of the Public Facilities District Improvements.
Delay or work
stoppage caused by
appeals of permits
issued by the City of Wenatchee or other
municipal agencies and
necessary to authorize the construction of the Project
shall constitute
Unavoidable
Delay. The inability to obtain
construction or
other financing
to pay for all or any
portion of the Project
Costs shall not
constitute Unavoidable
Delay. Lessor shall provide written notice to Lessee
within ten days of the date it becomes aware, or should have become aware, of
a
condition resulting in an unavoidable delay.
1.70
"Warranty Period"
means that period commencing on Final Completion of
Public Facilities
District Improvements and expiring one (1)
year thereafter.
Notwithstanding the
foregoing, if any
longer warranty or
guarantee period
is
specified for any particular equipment, materials, structural component of the
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<PAGE>
Project (including,
but not limited to skylights and roof) or workmanship under
this Agreement or any contract in connection with the design, development, or
construction of the
Project, the longer
warranty period or guarantee period
shall govern. Lessor
shall convey to Lessee such warranties with the Operation
and Maintenance Manuals.
ARTICLE II
GREATER WENATCHEE REGIONAL EVENTS CENTER DEVELOPMENT
2.1
Development of Public
Facilities
District Improvements. Lessor has
acquired or intends to acquire fee title to the Land. Lessor shall construct on
the Land, the Public
Facilities District
Improvements.
The Public
Facilities
District Improvements
and certain personal property to be located on or used in
connection with
the Public Facilities District Improvements are more
particularly described
in the Schematic Design Documents prepared by Lessor and
approved by Lessee, a
copy of which is attached hereto as Exhibit B and by this
reference incorporated herein.
2.2
Parking Requirements.
The Project includes 600 On-Site Parking Stalls.
The Lessee will provide the remainder of the required parking stalls off-site
through shared parking
agreements with
surrounding property
owners to satisfy
local code requirements to obtain a certificate of occupancy. At
Closing, Lessor
shall assign to Lessee all of Lessor's right, title and interest in and to
the
On-Site Parking Facilities at no additional cost to Lessee.
ARTICLE III
DESCRIPTION OF PROPERTY
3.1
Agreement to Lease.
Lessor hereby agrees to lease to Lessee and Lessee
hereby agrees to lease
from Lessor,
subject to the terms
and conditions
set
forth in this Agreement, the following upon Final Completion of the
Project:
(a)
The Land and Public Facilities District Improvements (Leased
Premises);
(b)
Fixtures and equipment, shown on Exhibit D.
3.2
Agreement to Purchase. Lessor hereby agrees to sell to Lessee and
Lessee agrees to purchase from Lessor provided Lessee exercises its option to
purchase:
(a)
All interest of Lessor in any intangible personal property owned by
Lessor and used in
connection with the
ownership,
use and operation of the
Project; and,
to the extent the same
are approved
by Lessee pursuant to the
provisions of
this Agreement, any and all contracts and lease rights,
warranties,
guarantees,
agreements, licenses
and other rights relating to the
ownership, use or
operation of all or any part of the Property, including, but
not limited to any warranty or other right under the Construction
Contract, all
of Lessor's rights under the Contract Documents, and all of Lessor's rights in
the Construction Documents; and
(b)
All Service Contracts.
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<PAGE>
3.3
Identifications
of Personal
Property. Upon Final Completion of the
Project and in any event no later than thirty (30) days prior to
Closing, Lessor
and Lessee shall identify all Personal Property, including any
personal property
identified in the Detailed Specifications.
3.4
Service Contracts.
Lessee specifically acknowledges and agrees that
Service Contacts
do not include any architectural agreements, construction
contracts,
subcontracts, or
other agreements relating to the design or
construction of the
Project, except for the assignment of any warranties
contained therein
to Lessee upon Closing pursuant to Article XVI of this
Agreement
3.5
Ice Rink Fixtures and
Equipment.
Lessee or Obligor,
as a portion of
Obligor's local match required by RCW 82.14.390(4), and as partial
consideration
for Lessor's obligations hereunder, agrees, following completion of the 2007
-
2008 ice arena season, to convey to Lessor the following fixtures
and equipment,
currently located on
the Ice Rink Property,
legally described in Exhibit C, to
be incorporated
into the Leased
Premises: Heating and cooling units,
dasher
boards and
glass, floor coverings, hockey goals and netting, scoreboard,
bleachers, and
Zamboni. This
conveyance is
conditioned
upon Lessor being
in
substantial compliance with the Project Schedule, Exhibit F.
ARTICLE IV
DUE DILIGENCE
4.1
Project Information.
(a)
Lessee acknowledges
that, prior to the
Effective Date, Lessee has had
the opportunity to prepare, review and copy all studies relating to
the Property
and Project
that Lessee has
determined,
in the exercise of its reasonable
business judgment,
are necessary for Lessee to evaluate
the suitability
and
feasibility of the Property and the Project for Lessee's intended
uses.
(b)
Lessor acknowledges
that, prior to the
Effective Date, Lessor has had
the opportunity
to detente
the availability of the permits and financing
necessary to construct and complete the Project, and otherwise satisfy Lessor's
obligation under this Agreement
ARTICLE V
CONSTRUCTION OF REGIONAL EVENTS CENTER IMPROVEMENTS
5.1
Construction of Public Facilities District Improvements.
Lessor agrees
to diligently design,
construct,
and complete the
Public Facilities
District
Improvements on the
Property on or before the Substantial Completion Date, at
Lessor's sole cost and expense, in a good and workmanlike manner,
free and clear
of all liens,
all in accordance with the terms of this Agreement and all
Requirements of Law.
5.2
(This Section intentionally left blank.
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5.3
Schedule for Design and Construction. Lessor and Lessee acknowledge
and
agree that the initial
Project Schedule attached hereto as Exhibit F, shall
govern the performance of the work.
5.4
Selection of
Development
Team for Project.
Lessor has or intends
to
employ the following Persons in connection with the Project:
(i)
Architect
Sink Combs Dethlefs Architects
(ii)
General
Contractor: Hunt Construction Group
(iii) Project Manager:
International Coliseums Company (ICC)
(iv)
Structural
Engineers: Martin/Martin Consulting Engineers
(v)
Land
Surveyors: Munson Engineers
(vi)
Mechanical
Design Building Engineers: M-E Engineers. Inc.
(vii) Geotechnical
Engineers: Nelson Geotechnical Associates. Inc.
(viii) Environmental Consultants: Cascade Earth Sciences
(ix)
Electrical
Design Engineers: M-E Engineers. Inc.
(x)
Traffic
Consultant: Heffron Transportation. Inc.
(xi)
Civil Engineer:
Pacific Engineering and Design
Lessor shall select other professionals as necessary or desirable for
the
design, permitting,
development mid
construction of the Project. Lessor shall
pay all amounts payable to the design professionals outlined above
and any other
professionals hereinafter engaged by Lessor in commotion with the
performance of
its duties and responsibilities under this Agreement Lessor shall
enter into all
contracts for the
design, permitting, development and construction of the
Project.
5.5
Plans and Specifications.
(a)
Schematic Design
Documents. As of the
date of this Agreement, Lessee
has reviewed and approved the Project Requirements, which are incorporated into
the Schematic
Design Documents listed on Exhibit B to this Agreement. In
addition, Lessee has
reviewed and approved the Project Budget setting forth an
itemization of the
major components of
the Project that will be constructed by
subcontractors and including the Design Contingency and Stated
Contingency. Upon
execution of this Agreement, Lessor shall, in conjunction with the Architect,
commence and complete
Design Development,
Construction
Drawings. and permit
applications necessary
for the construction of the Public Facilities District
Improvements.
(b)
Lessee's Review.
Following execution of
this Agreement, Lessor
shall
cause Architect
to prepare Design Development Drawings, which shall be
consistent with the
Schematic Design Documents in all material
respects and
shall submit
the Design Development Drawings to Lessee for its review and
approval. Following
approval of the Design Development Drawings, Lessor shall
cause Architect
to prepare Construction Documents consistent with the
Lessee-approved
Design Development
Drawings, and submit the Construction
Documents to
Lessee for its review and approval. Following approval of
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Construction
Documents, Lessor
shall deliver Lessee an updated Project Budget
prepared by Lessor on the basis of the approved Construction
Documents.
Lessee
shall give Lessor
written notice within thirty (30) days following the later of
its receipt of the Design Development Drawings and Construction
Drawings, as the
case may be, of Lessee's approval or disapproval, which notice shall, in the
case of disapproval,
specify Lessee's reason for disapproval. Lessee shall only
disapprove Design
Development Drawings
and Construction
Drawings which (i) do
not comply with all Requirements of Law, (ii) fail to materially
comply with the
Schematic Design
Documents,(iii)
propose
changes in the size, quality,
appearance,
layout or configuration of the Public Facilities District
Improvements
contemplated by the
Schematic Design Documents, (iv)adversely
impact the
construction
schedule
for the Public Facilities District
Improvements, or (v) increase the project budget.
(c)
Resubmittals.
If objections or comments are submitted in
writing in
accordance with the
preceding paragraph, Lessor shall cause the Architect
to
make changes in the
plans, drawings and/or specifications consistent with
objections or
comments made by the Lessee and shall resubmit the same in
accordance with the
foregoing schedule for further review. The process of
resubmittal and review
shall continue until Lessee and Lessor have approved the
Design Development Drawings and Construction Documents.
(d)
Permit and Working Drawings. Lessor shall cause the Architect and
other
design professionals
to prepare any
Drawings or other documents in addition to
the Construction Documents that may be required to be submitted for
the issuance
of building permits and other permit applications in accordance
with Section 5.7
hereof, and as
required for construction of the Project by the General
Contractor.
(e)
Value Engineering.
"The Lessor shall have
the right to value engineer
and propose changes to the Design Specifications 1.23 and the Drawings 1.24 in
order to keep this project within the Project budget. The value
engineering must
be consistent
with the integrity and scope of the project as
outlined in the
schematic drawings and detailed specifications, be within
reasonable engineering
standards, and have no adverse effect on the functionality,
aesthetics, and long
term operating and maintenance costs. The value engineering by the Lessor with
an accompanying
detailed comparative analysis shall be presented to Robert
Knowles, the Lessee's
representative in
regard to this project, for review and
approval on behalf
of Lessee. Lessee's approval shall not be =reasonably
withheld. The parties
agree the Public Facilities District improvements will be
constructed by Lessor for a GUARANTEED MAXIMUM cost of $52,809,670,
inclusive of
Construction Loan
Financing Cost, with a contract savings pass-back of 80% to
the Lessee and 20% to the Lessor, all as set forth in this
Lease.
(f)
Changes to Construction Documents. After completion and approval,
there
shall be no change in
the Construction
Documents without the prior written
consent of Lessee.
5.6
Dispute Resolution Process. Lessee and Lessor agree to follow the
independent resolution process set forth in this Section 5.6 to
resolve disputes
regarding preparation of the Design Development Documents,
Construction Drawings
14
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and changes to Construction Documents in an economic and time
efficient manner
so that the documents conform to the requirements of this
Agreement, the Project
Schedule is
not adversely impacted, and the Public Facilities District
Improvements as constructed will satisfy the Project
Requirements.
(a)
Disputes Resolution Mediator. In the event that a dispute arises
between Lessee and Lessor during (i) the Design Develo
