PURCHASE AND SALE AGREEMENT

EXHIBIT 10.1

PURCHASE AND SALE AGREEMENT

 

Recitals :

A.     Seller owns (i) the real property located in the City of Portland, Multnomah County, Oregon legally described on the attached Exhibit A , (ii) all appurtenances related thereto (including easements described on the attached Exhibit A ), (iii) the buildings located thereon, (iv) all personal property, if any, of Seller used in the management and operation of the real property, and (v) any transferable government licenses and permits of Seller to the extent pertaining to the real property (the Property ).

B.     Buyer leases substantially all of the Property pursuant to that certain SSI International Terminals Lease Agreement dated September 1, 1988, as amended by an Amendment to Lease dated July 2, 1990, a Second Amendment to Lease dated October 28, 1994, a Third Amendment to Lease dated February, 1998, a Fourth Amendment to Lease dated July 1, 1998, a Fifth Amendment to Lease dated July 9, 2001, and a Sixth Amendment to SSI International Terminals Lease Agreement dated August 7, 2003 (collectively, the SSI Lease ).

C.     Seller desires to sell the Property to Buyer and Buyer desires to acquire the Property on the terms and conditions contained herein.

Agreements:

NOW, THEREFORE, in consideration of the mutual promises of the parties set forth below, Seller and Buyer agree as follows:

Seller agrees to sell the Property to Buyer and Buyer agrees to purchase the Property from Seller, all on the terms and conditions set forth in this Purchase and Sale Agreement (the Agreement ). This Agreement shall be effective (the Effective Date ) as of the date first written above.

Buyer agrees to pay as the purchase price for the Property the sum of Twenty Million Dollars ($20,000,000.00) (the Purchase Price ), subject to any adjustments and credits set forth in this Agreement.

The Purchase Price shall be paid as follows:

2.2.1Three (3) business days after mutual execution of this Agreement, Buyer shall deliver to Chicago Title Insurance Company, 888 SW Fifth Avenue, Suite 930, Portland, OR 97204, Attention Malcom Newkirk (the Title Company ) an earnest money deposit (the Deposit ) of Two Hundred Fifty Thousand Dollars ($250,000.00) in the form of cash to be held in escrow by the Title Company.

 

 

 

 

 

 

2.2.2On the Closing Date, Buyer shall pay Seller cash in the amount of the Purchase Price (and Buyer shall receive a credit in the amount of the Deposit and all interest earned thereon).

3.1.1Buyer acknowledges that Buyer has been in possession of substantially all of the Property for many years and is familiar with the condition of the Property, including, without limitation, matters related to zoning, soils, wetlands, engineering, and environmental issues and the physical condition of all improvements on the Property. Therefore, Buyer is buying the Property without any contingency related to the condition of the Property.

3.1.2Notwithstanding Buyer s acquisition of the Property without any contingency related to the condition of the Property, Seller shall make available to Buyer at the offices of Seller all information regarding the Property that, to Seller s knowledge (as defined below), is in Seller s possession or control; provided, however, except as otherwise expressly stated in this Agreement, Seller is making no representation with respect to such documents and information and Buyer assumes and accepts the entire responsibility for interpreting and assessing the information provided.

Seller has provided to Buyer a preliminary title report for the Property (the Title Report ) from the Title Company. Attached as Exhibit C are the permitted title exceptions (the Permitted Exceptions ) that are to be attached to the Deed (as defined below). The Tract A Declaration included as part of the Permitted Exceptions shall be in the form attached as Exhibit D , the Southern Roadways Declaration included as part of the Permitted Exceptions shall be in the form attached as Exhibit E , the Railroad Declaration included as part of the Permitted Exceptions shall be in the form attached as Exhibit F , and the Storm Drain Easement Declaration shall be in the form attached as Exhibit J .

Although not a condition to Buyer s obligation to purchase the Property, Seller shall use commercially reasonable efforts (at no cost to Seller) to obtain such estoppel certificates as Buyer shall reasonably request with respect to any contracts related to the property to be assigned by Buyer on the Closing Date.

The closing of the purchase and sale of the Property will occur in an escrow to be administered by the Title Company. The parties agree to provide the Title Company with escrow instructions consistent with the terms of this Agreement.

The closing date shall occur on or before ten (10) days after mutual execution of this Agreement (the Closing Date ).

On or before the Closing Date, Seller shall deposit into Escrow:

4.3.1An executed and acknowledged statutory special warranty deed (the Deed ) conveying the real property to Buyer, in a form reasonably acceptable to Buyer.

4.3.5Two executed counterparts of a lease termination agreement in the form of the attached Exhibit G (the Lease Termination Agreement ), terminating the SSI Lease.

 

 

 

 

 

 

4.3.6Two executed counterparts of an assignment and assumption of agreements in the form of the attached Exhibit H (the Assignment of Prior Agreements ).

4.3.8An executed certificate verifying that all of the representations of Seller in Section 5.1, as may be modified therein, are true and correct in all material respects as of the Closing Date.

4.3.9An executed Easement for the benefit of Buyer with PGE in a form reasonably acceptable to Buyer and PGE (the PGE Easement ), if not previously recorded.

4.3.11                An executed Parking Easement for the benefit of Lampros Steel, Inc. in a form reasonably acceptable to Buyer and Lampros Steel, Inc. (the Lampros Parking Easement ), if not previously recorded.

On or before the Closing Date, Buyer shall deposit into Escrow:

4.4.1Such funds (by wire transfer) as are necessary to complete payment of the Purchase Price in accordance with Section 2.2 of this Agreement and to pay Buyer s portion of the closing costs.

On the Closing Date, the Title Company shall:

4.5.1Cause the PGE Easement (unless previously recorded), the Lampros Parking Easement (unless previously recorded), the Tract A Declaration, the Southern Roadway Declaration, the Railroad Declaration, the Storm Drain Easement Declaration, and the Deed, in that order, to be recorded in the Official Records of Multnomah County, Oregon;

4.5.2Deliver the Purchase Price and one executed counterpart of the Lease Termination Agreement and the Assignment of Prior Agreements to Seller;

(b)       one executed counterpart of the Lease Termination Agreement and the Assignment of Prior Agreements; and

4.5.5Promptly after closing, the Title Company shall deliver to each of Buyer and Seller an accounting of all funds received and disbursed and copies of all executed and recorded or filed documents deposited with the Title Company with the recording or filing information noted on such documents.

4.6.1On the Closing Date, the Title Company shall issue to Buyer an ALTA owner s policy of title insurance (the Buyer s Title Policy ), insuring Buyer as the owner of the Property subject only to non-delinquent real property taxes and assessments and the Permitted Exceptions. The Buyer s Title Policy shall have a liability limit equal to Purchase Price. Seller shall pay the premium for standard current form coverage, but Buyer shall pay all costs and expenses, including title insurance premiums, in obtaining any extended ALTA coverage and any title endorsements obtained by Buyer.

 

 

 

 

 

 

4.6.2On the Closing Date, the Title Company shall issue to Seller a seller s policy of title insurance, in the amount of the Purchase Price, in a form and substance satisfactory to Seller (the Seller s Title Policy ) and Seller shall pay the premium for such policy.

The following closing costs shall be paid by the parties as follows: (i) Buyer shall pay: one-half of the Title Company s escrow fee and the recording fees for the Deed, and (ii) Seller shall pay one-half of the Title Company s escrow fee and all recording fees for all documents other than the Deed.

4.8.1The Title Company shall NOT prorate real property taxes and assessments on the Closing Date as such taxes and assessments are payable by Buyer under the SSI Lease.

4.8.2Rent payable under the SSI Lease and all items of income or expense from the operation of the Property shall be prorated in escrow, as of the Closing Date.

Seller hereby represents and warrants as follows:

5.1.1All requisite corporate action has been taken by Seller in connection with entering into this Agreement, the instruments and documents referenced herein, and the consummation of the transaction contemplated hereby. No consent of any member, partner, shareholder, trustee, trustor, beneficiary, creditor, investor, judicial or administrative body, governmental authority or other party is required for Seller to consummate the transaction contemplated by this Agreement.

5.1.2The individuals executing this Agreement and the instruments and documents referenced herein on behalf of Seller have the legal power, right, and actual authority to bind Seller to the terms and conditions hereof and thereof.

5.1.3There are no pending or, to Seller s knowledge, threatened (in writing) actions, suits, arbitrations, claims or proceedings affecting all or any portion of the Property relating to the ownership, use or operation of the Property. Except as described in Section 5.8, Seller is not involved in any dispute with any governmental entity relating to the use or operation of the Property.

5.1.4Seller has not received written notice of any planned condemnation action that would materially adversely affect the use of the Property for its intended uses.

5.1.5Except as described in Section 5.8, Seller has not received any written notices from any governmental entity that the Property is in violation of any applicable law, rule or regulation and such violation has not been cured, and to Seller s knowledge, Seller has not received any written notice of any such violation of any applicable law, rule or regulation other than any such notice for which Buyer was an addressee.

5.1.6At the Closing, there will be no service agreements, maintenance or repair contracts, on-site property management contracts, leasing listing or brokerage agreements, contracts for the purchase or delivery of labor, services, materials, goods, inventory or supplies, equipment rental agreements or leases, or other similar contracts or agreements (whether oral or written) which affect or will affect the Property or which will be obligations of Buyer or the Property or any portion thereof following the Closing other than the agreements to which: (i) Buyer is a party, (ii) are terminable upon thirty (30) days prior written notice, or (iii) are Permitted Exceptions or are specifically assigned to Buyer under Exhibit H. All such agreements are in full force and effect, shall not be modified by Seller prior to the Closing, and, to Seller s knowledge, no default exists thereunder.

5.1.7Seller has not entered into any contracts for the sale of the Property or any portion thereof.

5.1.8Seller is not a foreign person within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended.

 

 

 

 

 

 

5.1.9To Seller s knowledge, Seller has provided Buyer access to all files in Seller s possession containing documents regarding the condition of the Property.

5.1.10                The express representations and warranties made by Seller in this Section 5.1 are in addition to any other representations or warranties of Seller made elsewhere herein. All representations and warranties, as modified, supplemented or updated by the Seller s Certificate, shall be continuing and shall be true and correct as of the Closing with the same force and effect as remade by Seller at that time; provided, however, if Seller becomes aware after the date of this Agreement that any representation by Seller is untrue in any material respect, Seller may give Buyer written notice of such change in Seller s representation and Buyer shall have seven (7) days after the date of such notice to terminate this Agreement by written notice to Seller and receive a refund of the Deposit, but the failure of Buyer to timely terminate this Agreement shall be deemed a modification of such representation and Seller shall only be obligated to remake such representation at Closing as so modified. The truth and accuracy of the representations and warranties made by Seller in this Section 5.1 shall constitute a condition to the Closing, shall not merge into the execution and delivery of the Deed and shall survive the Closing for a period of one (1) year from and after the Closing and shall automatically expire upon the expiration of such one (1) year period unless prior thereto Buyer has delivered written notice to Seller of a breach or claim thereunder. Seller s knowledge should be defined as the actual knowledge of Susan Davidson after a reasonable investigation of Seller s files, but Susan Davidson shall have no personal liability for the inaccuracy of any representations or warranties.

Buyer hereby represents and warrants that Buyer has full power and authority to enter into and perform this Agreement in accordance with its terms, and all requisite action will have been taken by Buyer in connection with the execution of this Agreement and the transactions contemplated hereby.

5.3.1Except as expressly set forth in Section 5.1, no warranties, guarantees or representations have been or are being made by Seller or any agent or representative of Seller concerning: the financial and operating records of the Property; any governmental permits or approvals obtained or to be obtained in connection with Buyer s use of the Property; the suitability of the Property for Buyer s intended use; the physical condition of the Property; the compliance of the Property with any past or present zoning, land use, building, fire, safety, environmental or other ordinances, restrictions, laws and regulations; the sub-surface condition of the Property; or the presence of any material in, under, or on the Property which is regulated by any ordinance, regulation or law.

5.3.2The Property is located within the area listed by the United States Environmental Protection Agency on the Comprehensive Environmental Response, Compensation and Liability Act ( CERCLA ) National Priorities List and thus is within a Superfund Site.

5.3.3The Property is located in flood zone B, as designated by the Federal Emergency Management Agency.

5.4.1Buyer shall maintain strict confidentiality with respect to any of Seller s documents so provided except to the extent (i) already in Buyer s possession or (ii) Buyer is obligated to disclose the information by any court, tribunal of competent jurisdiction or under any securities laws applicable to Buyer, and, shall return such documents (uncopied) to Seller in the event escrow fails to close. Seller may specifically enforce this Section 5.4.1 to prevent Buyer s breach of this confidentiality covenant.

5.4.2Buyer accepts the Property in its present condition, AS IS, WITH ALL FAULTS without any representations or warranties by Seller or any agent or representative of Seller, expressed or implied, except as set forth in Section 5.1. Buyer acknowledges that Buyer has ascertained for itself the value and condition of the Property and Buyer is not relying on, nor has Buyer been influenced by, any representation of Seller or any agent or representative of Seller regarding the value, condition, or any aspect of the Property. Buyer acknowledges that it has had every opportunity to conduct whatever inspection, test, or analysis of the Property that Buyer deemed to be relevant to Buyer s decision to purchase the Property. Buyer expressly waives any right of rescission and all claims for damages by reason of any statement, representation, warranty, promise and/or agreement, if any, not specifically set forth in this Agreement.

 

 

 

 

 

 

Buyer hereby releases Seller, Seller s partners, employees, and agents, and their respective heirs, successors, personal representatives and assigns, from and against any and all suits, causes of action, legal or administrative proceedings, claims, demands, actual damages, punitive damages, losses, costs, liabilities, interest, attorneys fees and court costs and expenses of whatever kind and nature, in law or in equity, known or unknown, which Buyer may have and which arise out of or are in any way connected with: (i) the use, maintenance, condition, operation, ownership and possession of the Property after the Closing Date, except for a breach of this Agreement by Seller; and (ii) the use, generation, manufacture, storage, discharge, disposal or transportation of Hazardous Materials on the Property after the Closing Date. Hazardous Materials means: (a) any petroleum, including crude oil or any fraction thereof, natural gas, natural gas liquids, liquefied natural gas or synthetic gas usable for fuel, or any mixture thereof, flammable substances, explosives, radioactive materials, hazardous wastes or substances, toxic wastes, wastes or substances or any other materials or pollutants which: (i) pose a hazard to the Property or to persons on or about the Property or (ii) cause the Property to be in violation of any federal, state or local law, ordinance, regulation, code, or rule relating to Hazardous Materials; (b) asbestos in any form which is or could become friable, urea formaldehyde foam insulation, transformers or other equipment which contain dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty (50) parts per million; and (c) any chemical, material or substance defined as or included in the definition of hazardous substances, hazardous wastes, hazardous materials, extremely hazardous waste, restricted hazardous waste, waste or toxic substances or words of similar import under any applicable local, state or federal law or under the regulations adopted or publications promulgated pursuant thereto.

Buyer hereby agrees to indemnify, protect, defend and hold Seller, Seller s employees and agents and their respective successors and assigns for, from and against any suits, causes of action, legal or administrative proceedings, claims, demands, actual damages, punitive damages, losses, costs, liabilities, interest, attorneys fees and court costs and expenses of whatever kind asserted by a third party and which arise out of or are in any way connected with: (i) the use, maintenance, operation, ownership or possession of the Property after the Closing Date, and (ii) the use, generation, manufacture, storage, discharge, disposal or transportation of Hazardous Materials on the Property after the Closing Date. This indemnity shall survive the closing or the termination of this Agreement.

Except to the extent arising out of the acts or omissions of Buyer or Buyer s agents, employees, contractors or invitees, Seller hereby agrees to indemnify, protect, defend and hold Buyer, Buyer s employees and agents and their respective successors and assigns for, from and against any suits, causes of action, legal or administrative proceedings, claims (both known and unknown), demands, actual damages, punitive damages, losses, costs, liabilities, interest, attorneys fees and court costs and expenses (collectively, Claims ) of whatever kind asserted by a third party and which arise out of or are in any way connected with the use (including, without limitation, the use, generation, manufacture, storage, discharge, disposal, or transportation of Hazardous Materials), maintenance, or operation of that certain portion of the Property that portion of the Property located in Lot 2 depicted on the attached Exhibit I to the extent such Claims arise out of events occurring during the period beginning on March 1, 1998 and ending on the date of the Closing. This indemnity shall survive the closing or the termination of this Agreement.

5.8.1The State of Oregon, through the Division of State Lands ( DSL ), has put Buyer and Seller on notice that DSL may have an ownership interest in portions of the Property that might have been created by artificial means in certain formerly submerged or submersible land adjacent to the Willamette River (the Submerged Lands ). If Buyer acquires the Property, then Seller shall, within a reasonable period after the Closing Date, commence and thereafter diligently pursue discussions with DSL to obtain an agreement from DSL relinquishing any claim DSL and the State of Oregon may have to any portion of the Property, including the Submerged Lands.

5.8.2Buyer acknowledges that Seller owns other real property that DSL claims has been created by artificial means and agrees that Seller shall have the sole right, for a period of two (2) years after the Closing Date (the Outside Date ), to negotiate on Buyer s behalf the financial terms by which DSL will relinquish any claim to the Submerged Lands. If on the Outside Date Seller or DSL has commenced litigation with respect to the status of the Submerged Lands and such litigation is still pending on such date, the Outside Date shall be

 

 

 

 

extended to the date that is ninety (90) days after the date such litigation has been finally resolved and all appeal periods have expired.

5.8.3Buyer shall assist and cooperate with Seller as reasonably required by Seller in connection with such negotiations with DSL, but in no event may Buyer voluntarily have any direct or indirect communications with DSL or any other agency of the State of Oregon with respect to settlement of the dispute regarding ownership of the Submerged Lands without the prior written consent of Seller, which consent may be withheld by Seller in Seller s sole discretion. Seller shall pay all costs and expenses incurred by Seller in connection with its negotiations with DSL.

5.8.4If prior to the Outside Date Seller obtains an agreement from DSL and the State of Oregon to relinquish any claim DSL and the State of Oregon may have to the Submerged Lands, such that Buyer shall have marketable fee title to the entire Property, free and clear of any claim of DSL or the State to the Submerged Land, Buyer shall pay the first $250,000 of any amount payable to DSL and/or the State of Oregon in connection with such agreement and Seller shall pay the balance of any amounts payable under such agreement. If Seller is unable to obtain an agreement from DSL and the State of Oregon to relinquish any claim DSL and the State of Oregon may have to the Submerged Lands by the Outside Date, thereafter: (i) Buyer may contact directly DSL and the State of Oregon regarding the relinquishment of any claim DSL and the State of Oregon may have to the Submerged Lands, and (ii) Seller shall indemnify Buyer for any and all amounts in excess of $250,000 that Buyer reasonably incurs pursuing such a settlement, by way of litigation or otherwise, including reasonable legal fees, expert fees, and other third party expenses, and/or which Buyer is required to pay to DSL and the State of Oregon to relinquish any claim DSL and the State of Oregon may have to the Submerged Lands. Seller shall provide periodic reports, not less than quarterly, on the status of negotiations with DSL and the State of Oregon.

5.8.5During each fiscal year commencing with the end of the fiscal year during which Closing occurs and continuing until the earlier of seven (7) years after Closing or the final settlement of the DSL claims as described in this Section, Seller shall cause its certified public accountant to notify Buyer, within ten (10) business days after Seller s certified public accountant finalizes its annual audit of Seller, whether Seller s net worth for such fiscal year is in excess of $50,000,000. In the event such certified public accountant determines that Seller s net worth is less than $50,000,000, Seller shall either: (1) deposit into an escrow account for the benefit of Buyer cash, securities or cash equivalents in the sum of $1,500,000, or (2) deliver to Buyer an irrevocable letter of credit in the amount of $1,500,000. Such deposit by Seller shall be made within ten (10) days after the date Buyer is notified that Seller s net worth is less than $50,000,000 and shall be made to secure any obligation which Seller may have under this Section. If thereafter Seller delivers to Buyer a notice from Seller s certified public accountant that Seller s net worth is more than $50,000,000, all amounts held in such escrow account (or the letter of credit, if applicable), shall be released to Seller. The terms and provisions of this Section 5.8 shall survive the Closing Date.

Seller shall pay the brokerage commission payable to Norris Beggs & Simpson pursuant to the terms of a separate agreement. Buyer shall protect, defend, indemnify, and hold Seller harmless for, from and against any and all other claims, liabilities or demands with respect to any fees or other compensation asserted as a result of Buyer s actions in connection with this Agreement. Seller shall protect, defend, indemnify, and hold Buyer harmless for, from and against any and all claims, liabilities or demands with respect to any fees or other compensation asserted as a result of Seller s actions in connection with this Agreement. These indemnities shall survive the closing or the termination of this Agreement.

In the event that Buyer is obligated to pay the Purchase Price and fails to do so, then Seller, as its sole remedy, shall be entitled to retain the Deposit.

In the event that Seller is obligated to convey the Property to Buyer but fails to do so, then Buyer, as its sole remedies, shall be entitled to specific performance of this Agreement or return of the entire Deposit.

 

 

 

 

 

 

Buyer shall not assign, transfer or convey its interest in this Agreement without Seller s prior written consent, which consent may be withheld in Seller s sole discretion. Any attempted assignment without Seller s prior written consent shall be void. Seller shall not assign its interest in this Agreement without Buyer s prior written consent, which consent may be withheld in Buyer s sole discretion except that no consent shall be required in connection with an assignment by Seller as part of a 1031 exchange. Any permitted transfer shall not relieve the assigning party from its liability under this Agreement. Except as provided herein, this Agreement shall be binding upon and inure to the benefit of any permitted assignee or successor in interest to a party.

Notice may, unless otherwise provided herein, be given or served (a) by certified mail, return receipt requested, with postage prepaid, (b) by delivering the same to such party, or an agent of such party, in person or by commercial courier, (c) by facsimile transmission, if the time of facsimile delivery is confirmed by sender s receipt of a transmission report, generated by sender s facsimile machine, which confirms that the facsimile was successfully transmitted in its entirety and provided the facsimile was forwarded prior to 5:00 P.M., or (d) by depositing the same into custody of a nationally recognized overnight delivery service. Notice given in any manner shall be effective only if and when received by the party to be notified between the hours of 8:00 A.M. and 5:00 P.M. of any business day with delivery made after such hours to be deemed received the following business day. For the purposes of notice, the addresses of Seller and Buyer shall, until changed as hereinafter provided, be as set forth below. The parties hereto shall have the right from time to time to change their respective addresses, and each shall have the right to specify as its address any other address within the United States of America by at least five (5) days written notice to the other party.

 

Any such communication shall be deemed to have been given at the time of such personal delivery, or on the day when sent if given by fax transmission (provided that it was transmitted in the manner specified above), or one (1) business day after deposit with an overnight air courier, or three (3) business days after deposit in the United States mail as set forth herein. Any party may change the address at which it is to receive notices by so notifying the other party to this Agreement in writing.

The headings of the sections of this Agreement are intended for reference only and are not intended to be used to interpret this Agreement.

 

 

 

 

 

 

If any provision of this Agreement shall be invalid or unenforceable the remaining provisions shall not be affected thereby, and every provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

If, prior to the Closing, all or a portion of the Property that materially interferes with Buyer s use of the Property is subjected to a bona fide threat of condemnation by a body having the power of eminent domain, or is taken by eminent domain or condemnation (or sale in lieu thereof) (each a Taking ), Buyer may, by written notice to Seller within thirty (30) days of Buyer s receipt of notice of such event, elect to cancel this Agreement, in which event both parties shall be released from any further liability under this Agreement, and the Deposit shall promptly be returned to Buyer. If Buyer does not elect to cancel this Agreement, this Agreement shall remain in full force and effect, Seller shall assign and turn over, and Buyer shall be entitled to receive and keep, any award or settlement available to Seller by reason of such Taking, and the parties shall proceed to Closing pursuant to the terms hereof, without modification of the terms of this Agreement and without any reduction in the Purchase Price.

In the event a suit, action, arbitration, or other proceeding of any nature whatsoever, including, without limitation, any proceeding under the U.S. Bankruptcy Code, is instituted, or the services of an attorney are retained, to interpret or enforce any provision of this Agreement or with respect to any dispute relating to this Agreement, the prevailing party shall be entitled to recover from the losing party its reasonable attorneys , paralegals , accountants , and other experts fees and all other fees, costs, and expenses actually incurred and reasonably necessary in connection therewith. In the event of suit, action, arbitration, or other proceeding, the amount thereof shall be determined by the judge or arbitrator, shall include fees and expenses incurred on any appeal or review, and shall be in addition to all other amounts provided by law.

The terms of this Agreement are intended by the parties as a final expression of their agreement and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement constitute the exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial proceedings involving this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Oregon.

Time is of the essence in this Agreement.

This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.

The terms of this Agreement may not be modified or amended except by an instrument in writing executed by Seller and Buyer.

The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof.

This Agreement shall not be effective and shall not be binding on Buyer and Seller unless and until fully executed by Buyer and Seller.

All exhibits attached to this Agreement are an integral part of this Agreement and are incorporated into this Agreement by reference.

 

 

 

 

 

 

Seller and Buyer shall have the right to convey all or a portion of the Property in exchange for real property or properties of like kind pursuant to Section 1031 of the Internal Revenue Code, either in a simultaneous exchange or in a deferred exchange. Buyer agrees to cooperate with Seller in effecting such an exchange and, if requested by Seller, Buyer shall execute any exchange agreement reasonably requested by Seller and consistent with the above. Seller agrees to cooperate with Buyer in effecting such an exchange, and if requested by Buyer, Seller shall execute any exchange agreement reasonably requested by Buyer and consistent with this Section. Neither party shall be required to take title to any property, incur any costs or be subject to any liability whatsoever in connection with such cooperation.

THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT TO LAND USE LAWS AND REGULATIONS, WHICH, IN FARM OR FOREST ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE AND WHICH LIMIT LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930 IN ALL ZONES. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE REAL PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND EXISTENCE OF FIRE PROTECTION FOR STRUCTURES.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates set forth below.

 

 

 

 

 

 

 

 

EXHIBIT A

Order No: 249271

LEGAL DESCRIPTION

A tract of land being a portion of Lot 2 and a portion of Lot 1, BURGARD INDUSTRIAL PARK, a duly recorded subdivision in the Southwest quarter and Southeast quarter of Section 35, Township 2 North, Range 1 West of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, being more particularly described as follows:

Beginning at the Northeast corner of said Lot 2, BURGARD INDUSTRIAL PARK; thence along the North line of said Lot 2 South 8846 12 West, 510.66 feet to the beginning of a tangent 90.00 foot radius curve to the left; thence leaving the North line of said Lot 2 and along the arc of said curve 91.68 feet through a central angle of 5822 06 (the long chord bears South 5935 09 West, 87.77 feet); thence South 3024 06 West, 143.18 feet to the beginning of a tangent 100.00 foot radius curve to the right; thence along the arc of said curve 59.05 feet through a central angle of 3349 49 (the long chord bears South 4719 01 West, 58.19 feet) to a point on the most Northerly South line of said Lot 2; thence along last said line South 8955 ^. 04 East, 71.46 feet to an angle corner in the West line of said Lot 2; thence along said West line South 0004 56 West, 623.63 feet to the Southwest corner of said Lot 2; thence along the South line thereof North 8701 13 East, 509.64 feet; thence North 6341 39 East, 26.32 feet; thence North 3101 39 East, 28.39 feet to an angle corner in the West line of said Lot 1; thence along said West line South 5858 21 East, 28.50 feet; thence South 3101 39 West, 34.33 feet to the beginning of a non-tangent 337.50 foot radius curve to the right, a radial line bears North 1514 39 East to said point; thence Southeasterly along the arc of said curve 97.19 feet through a central angle of 1630 00 (the long chord bears South 6630 21 East, 96.86 feet); thence South 5815 21 East, 38.59 feet to the beginning of a tangent 250.00 foot radius curve to the right; thence along the arc of said curve 119.99 feet through a central angle of 2730 00 (the long chord bears South 4430 21 East, 118.84 feet); thence South 3045 21 East, 35.58 feet; thence South 2618 21 East, 296.70 feet; thence leaving said West line of said Lot 1 North 6341 39 East, 34.72 feet to a point on the arc of a non-tangent 471.00 foot radius curve to the right, a radial line bears South 6938 24 West to said point; thence Northwesterly and Northerly along the arc of said curve 175.23 feet through a central angle of 2119 00 (the long chord bears North 0942 06 West 174.22 feet); thence North 0057 24 East, 74.53 feet; thence North 3027 20 East, 40.73 feet to a point on the East line of said Lot 1; thence along said East line North 5932 40 West, 224.56 feet to an angle corner therein; thence North 3802 00 West, 149.18 feet to the Southeast corner of said Lot 2; thence along the East line of said Lot 2 North 0113 48 West, 736.01 feet to the point of beginning.

TOGETHER WITH an undivided one-quarter interest in the following described property for roadway purposes.

A tract of land being a portion of Tract A , Lot 2 and Lot 3, BURGARD INDUSTRIAL PARK, a duly recorded subdivision in Section 35, Township 2 North, Range 1 West of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, being more particularly described as follows:

Beginning at the Northeast corner of said Tract A thence along the East line thereof South 1729 34 East, 62.50 feet to the Southeast corner of said Tract A thence along the South line thereof south 8846 12 West, 1563.75 feet to the beginning of a tangent 90.00 foot radius curve to the left; thence leaving the North line of said Lot 2 and along the arc of said curve 91.68 feet through a central angle of 5822 06 (the long chord bears South 5935 09 West, 87.77 feet); thence south 3024 06 West, 143.18 feet to the beginning of a tangent 100.00 foot radius curve to the rights thence along the are of said curve 59.05 fact through a central angle of

(Continued)

 

 

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Order No: 249271

LEGAL DESCRIPTION

3349 49 (the long chord bears South 4719 01 West, 58.19 feet) to a point on the most Northerly South line of said Lot 2; thence along last said line North 8955 04 West, 43.60 feet to an angle corner in the West line of said Lot 2; thence along said West line North 0004 ^. 56 East, 201.97 feet to an angle point therein; thence North 6506 ^. 14 West, 361.13 feet; thence South 8955 04 East, 80.16 feet, thence North 0004 56 East, 29.07 feet; thence South 6646 00 East, 293.17 feet; thence North 9000 00 East, 162.76 feet to the West line of Lot 4, BURGARD INDUSTRIAL PARK; thence along said West line South 3231 53 East, 19.14 feet to a point on the arc of a non-tangent 140.00 foot radius curve to the right, a radial line bears North 1704 11 West to said point; thence along the arc of said curve 38.70 feet through a central angle of 1550 23 (the long chord bears North 8051 01 East, 38.58 feet); thence North 0113 48 West, 10.00 feet thence North 8846 12 East, 1546.25 feat to the point of beginning.

ALSO TOGETHER WITH the right of ingress an egress over a private roadway called Time Oil Road as created in an Easement Agreement recorded November 18, 2004, Recorder s Fee No. 2004-209519.

ALSO TOGETHER WITH an easement for ingress and egress as reserved in Warranty Deed recorded

September 28, 1990, Book 2347, Page 2475.

ALSO TOGETHER WITH an easement for utility purposes as set forth in instrument recorded

September 28, 1990, in Book 2347, Page 2524.

ALSO TOGETHER WITH a right of way easement as reserved in instrument entitled Electric

Transmission Line and Road Easement , recorded April 20, 2005, as Recorder s Fee No. 2005-

069269, and re-recorded April 22, 2005 as Recorder s Fee No. 2005-070779.

ALSO TOGETHER WITH easements for railroad use and railroad right of way, as set forth in the Railroad Declaration, recorded, as Recorder s Fee No.

 

 

 

 

 

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Order No: 249133

LEGAL DESCRIPTION

A tract of land being a portion of those lands conveyed to Schnitzer Investment Corp. recorded September 22, 1972, in Book 883, Page 784, Multnomah County Deed Records, and Lot 1, BURGARD INDUSTRIAL PARK, a duly recorded subdivision in Section 35, Township 2 North, Range 1 West of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, described as follows:

Commencing at the intersection of the westerly extension of the South line of said Section 35 with the Easterly Harborline of the Willamette River; thence along said Harborline North 2553 30 West, 253.93 feet to the true point of beginning of the herein descsribed tract of land; thence South 8808 52 East, 1388.01 feet; thence parallel with the South line of said Section 35, South 8953 00 East, 1904.74 feet; thence North 6151 50 East, 396.75 feet to a point on the Westerly right of way line of N. Burgard Road, 60.00 feet wide; thence along said Westerly right of way line North 2247 26 West, 30.13 feet to the Southeast corner of said Lot 1, BURGARD INDUSTRIAL PARK; thence continuing along said westerly right of way line North 2247 26 West, 58.26 feet; thence leaving said westerly right of way line South 6548 00 West, 223.00 feet; thence South 7225 00 West, 190.41 feet; thence North 8953 00 West, 255.00 feet; thence South 8248 21 West, 357.00 feet to a point on the arc of a non-tangent 433.00 foot radius curve to the left, a radial line bears South 1719 27 East to said point; thence Southwesterly and Westerly along the arc of said curve 131.81 feet through a central angle of 1726 27 (the long chord bears South 8123 46 West, 131.30 feet); thence North 8953 00 West, 321.47 feet to the beginning of a tangent 503.40 foot radius curve to the right; thence along the arc of said curve 169.19 feet through a central angle of 1915 25 (the long chord bears North 8015 17 West, 165.40 feet) to the most Northerly Southwest corner of said Lot 1, said corner being coincident with the most Southerly corner of the Northwest Pipe Co. tract described in Recorder s Fee No. 98090513, said Deed Records, said corner also being on the arc of a tangent 332.50 foot radius compound curve to the right; thence along the Westerly line of said Northwest Pipe Co. tract and along the arc of said curve 151.00 feet through a central angle of 2601 12 (the long chord bears North 57 36 59 Went, 149.71 feet) to the beginning of a tangent 286.00 foot radius compound curve to the right; thence along the arc of said curve 91.35 feet through a central angle of 1818 02 (the long chord bears North 3527 22 West, 90.96 feet); thence North 2618 21 West, 1240.30 feet to the Northwest corner of said Northwest Pipe Co. tract; thence along the North line thereof North 8701 13 East, 262.63 feet to the Southwest corner of Lot 2, BURGARD INDUSTRIAL PARK; thence along said West line North 0004 56 East, 427.10 feet; thence leaving the West line of said Lot 2 North 9000 00 West, 2360.36 feet to a point on the Harborline on the Easterly side of the Willamette River; thence along said Harborline South 2339 54 East, 186.68 feet to Harborline Point #17; thence South 2553 30 East, 1747.52 feet to the true point of beginning.

TOGETHER WITH a right of way easement as reserved in instrument entitled Electric Transmission Line and Road Easement , recorded April 20, 2005, as Recorder s Fee No. 2005-069269, and re-recorded April 22, 2005 as Recorder s Fee No. 2005-070779.

EXCEPTING THEREFROM that portion thereof described in Deed to Beall Pipe & Tank Corp., an Oregon corporation recorded March 31, 1979 in Book 1095, Page 1139, Multnomah County Deed Records.

TOGETHER WITH the right of ingress and egress over a private roadway called Time Oil Road, as created in an Easement Agreement recorded November 18, 2004, Recorder s Fee No. 2004-209519.

(Continued)

 

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Order No: 249133

LEGAL DESCRIPTION

ALSO TOGETHER WITH easements for railroad use and railroad right of way as set forth in the Railroad Declaration, recorded              , as Recorder s Fee No..

 

 

 

 

 

 

 

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EXHIBIT B

[INTENTIONALLY DELETED]

 

 

 

 

 

EXHIBIT C

 

Permitted Title Exceptions

 

 

 

 

 

 

 

 

 

 

 

 

 

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The Tract A Permitted Exceptions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SCHEDULE B - SECTION 2

 

Order No. 249449

SPECIAL EXCEPTIONS

 

(Continued)

 

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Order No. 249449

SPECIAL EXCEPTIONS (Continued)

 

(Continued)

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Order No: 249449

SPECIAL EXCEPTIONS (Continued)

 

	Page:	2247
	By and Between:	Container Corporation of America, a Delaware corporation and Schnitzer Investment Corp., an Oregon corporation

(Continued)

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Order No: 249449

SPECIAL EXCEPTIONS (Continued)

 

 

 

 

 

 

Order No: 249449

SPECIAL EXCEPTIONS (Continued)

 

 

 

TRACT A is subject to public and private easements necessary to provide sewer, water, drainage and other necessary utilities. "If public sewer facilities are located within TRACT A, an exclusive easement, 7.50 feet from the centerline of both sides of the pipeline, shall exist. No other facilities are to be located within this easement without the prior written consent of the Director of the Bureau of Environmental Services, City of Portland."

 

"All sewer easements indicated as "public" are exclusive easements. No other utilities, facilities, or easements are to be located within the boundaries of public sewer easements without the prior written consent of the Director of the Bureau of Environmental Services, City of Portland.

 

Public sewer easements include the right of access for construction, inspection, maintenance, or other sewerage system activities.

 

No building construction, material storage, grade reduction, or tree planting shall

be permitted within public sewer easements without the prior written consent of the

Director of the Bureau of Environmental Services. Landscaping which by its nature is

shallow rooted and may be easily removed to permit access to the sewer lines shall

not require consent."

 

(Continued)

 

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Order No: 249449

SPECIAL EXCEPTIONS (Continued)

 

(Continued)

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The Lot 2 Permitted Exceptions

 

 

 

 

 

 

 

 

 

 

 

 

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SCHEDULE B - SECTION 2

Order No. 249271

SPECIAL EXCEPTIONS

 

 

(Continued)

 

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Order No: 249271

 

 

 

(Continued)

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Order No: 249271

(Continued)

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Order No: 249271

 

(Continued)

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Order No: 249271

(Continued)

 

 

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Order No: 249271

 

 

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The Lot 17 Permitted Exceptions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SCHEDULE B SECTION 2

 

Order No: 249133

 

SPECIAL EXCEPTIONS

 

 

 

 

 

 

 

 

 

 

 

(Continued)

 

 

 

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Order No: 249133

 

	Book:	1573
	Page:	806

 

 

(Continued)

 

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Order No: 249133

 

 

(Continued)

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Order No: 249133

SPECIAL EXCEPTIONS (Continued)

 

 

 

 

 

 

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EXHIBIT D

TRACT A DECLARATION

When recorded return to:

Bradley S. Miller

Ball Janik LLP

101 SW Main Street, Suite 1100

Portland, Oregon 97204

THIS DECLARATION (this Declaration ) is made as of the day of April, 2005, by SCHNITZER INVESTMENT CORP., an Oregon corporation ( Declarant ).

Declarant is the owner of real property in the City of Portland, County of Multnomah, State of Oregon, more particularly described as on the attached Schedule 1 ( Tract A ).

Declarant desires to grant utility and access easements (including provisions regarding the repair and maintenance of the access roadway) over Tract A for the benefit of Declarant and any future owners (each an Owner, collectively the Owners ) of the portion of the real property described on the attached Schedule 2 (the Benefited Property ).

In accordance with the requirements of that certain plat map recorded with the County Recorder of Multnomah County, Oregon on in October 1994 in Book 1227, Page 96 through 104 (the Plat ), upon the sale of the first to occur of Lots 2, 3, 4, or 5, BURGARD INDUSTRIAL PARK, in the City of Portland, County of Multnomah and State of Oregon (each a Tract A Ownership Lot and collectively, the Tract A Ownership Lots ), Declarant will deed a twenty-five percent (25%) tenancy in common interest in Tract A to each of the Owners of the Tract A Ownership Lots.

NOW, THEREFORE, Declarant declares as follows:

1.               Waiver of Partition . By accepting a deed to a tenancy in common interest in Tract A, each Owner of a Tract A Ownership Lot shall be deemed to have irrevocably waived the right to seek a partition of Tract A.

(a)       Reservation of Easement . Declarant reserves a perpetual non-exclusive easement for the Owners of the Benefited Property to install, operate, maintain, repair and replace utility lines under, across and within Tract A, provided such utility lines do not materially interfere with or violate any restrictions, easements or other agreements affecting Tract A. The Owners of the Benefited Property shall not damage or cause interference with the operation of any improvements or facilities installed in accordance with the terms hereof by such other authorized users of Tract A, including, without limitation, the overhead electric utility line to be installed by Portland General Electric Company ( PGE ), on behalf of the Owner of the portion of the Benefited Property described on the attached Schedule 3 (the SSI Property ) pursuant to an easement granted by Declarant to PGE, reserved for the benefit of the Owner of the SSI Property, and their successors and assigns, and recorded in the real property records of Multnomah County, Oregon as Document Number 2005-069269 and re-recorded as Document Number 2005-070779. If the activities or facilities of such other utility providers result in any conflicts, each affected Owner shall cooperate and work with such other providers to eliminate such damage or interference; provided, however that cooperation hereunder shall not require an Owner to incur any cost or expense as a result of another Owner s installation of a new utility line pursuant to the easement rights granted to it in this Section 0 nor shall it be obligated to relocate its installations, and Declarant shall have no responsibility or liability for the same other than from the negligence or willful misconduct of Declarant; provided however, that to the extent Declarant is an Owner, Declarant s rights, duties and obligations shall be those of an Owner hereunder.

(b)       Performance of Utility Work . When performing utility work in Tract A, each Owner shall use or shall cause anyone performing utility work on behalf of or claiming under such Owner to use, commercially reasonable efforts to minimize any disruption to vehicular ingress and egress across Tract A; provided, however that the Owners acknowledge and accept that vehicular ingress and egress across Tract A may be temporarily limited as a result of utility work in Tract A. After the performance of any utility work in Tract A by or on behalf of an Owner for the purposes set forth in this Section 0, such Owner shall cause the affected portions of Tract A to be properly compacted and shall be responsible, at its sole cost and expense, for the restoration of all improvements and landscaping affected in any way by such work to at least the condition of such improvements and landscaping as it existed prior to such installation (including, without limitation, replacing any damaged trees with trees of similar size and type to the trees damaged), and such Owner shall warranty that all such work shall be free

 

 

 

 

of material defects for a period of one (1) year following the completion of such work. In its use of Tract A and in the performance of the utility work which an Owner is authorized to perform within Tract A, such Owner shall use its reasonable efforts to avoid causing any damage to, or interference with, any improvements on or within Tract A (including, without limitation, any other utility lines installed under, across or within Tract A) or on or within the real property adjacent to Tract A; and each such Owner shall, during the performance of any utility work in Tract A, use commercially reasonable efforts to provide vehicular access to each Owner of Benefited Property.

(c)       Use of Tract A for Utility Purposes . In its use of Tract A for utility purposes, an Owner shall: (i) use commercially reasonable efforts to provide for the safety and convenience of all persons using Tract A; (ii) regularly inspect, and, at all times, maintain its facilities and related equipment in good order and repair and in proper operating condition; (iii) not permit any claim, lien or other encumbrances arising from its use of Tract A to accrue against or attach to Tract A or any adjacent lands; and (iv) indemnify, protect, defend and hold harmless the Declarant and other Owners of the Benefited Property for, from and against claims, liabilities, costs and expenses arising out of the installation, maintenance, repairs, operation, or replacement of the utility lines and related equipment in Tract A by or on behalf of such Owner.

(d)       Failure to Perform . If an Owner fails to perform any obligation set forth in this Section 0, the Owner of any of the Benefited Property may send the non-performing Owner written notice of non-performance pursuant to the notice provisions of Section 0. If within thirty (30) days of such notice the non-performing Owner fails to send the Owner sending the non-performance notice a written notice either (i) disputing the non-performance (which dispute shall be resolved by arbitration as provided herein); or (ii) acknowledging such non-performance and agreeing to commence the cure of such non-performance and diligently pursue such cure to completion, any such other Owner of the Benefited Property shall have the right, but not the obligation, to institute arbitration hereunder to determine whether performance is required and, if required, to compel performance. In any emergency, an Owner shall make commercially reasonable efforts to notify the non-performing Owner of the emergency and necessary performance but no written notice to a non-performing Owner pursuant to Section 0 shall be required before any other Owner of the Benefited Property shall have the right to cure such non-performance that resulted in such emergency. In the event of an emergency in which an Owner of Benefited Property cures non-performance, the performing Owner shall, at its option, have the right to seek reimbursement of the reasonable costs of performance from the non-performing Owner or the Owners in the percentages provided in Schedule 4; provided, however that if Owners whose collective Maintenance and Approval Percentage (as defined in Section 0 below) equals or exceeds fifty-one percent (51%), dispute that an emergency existed and object to reimbursement of the cost of performance, then the objecting Owners may, but shall not be required to, institute arbitration as provided herein in which the performing Owner must demonstrate that an emergency existed requiring it to immediately perform the work for which reimbursement is sought.

(a)       Reservation of Access Easement . Declarant hereby declares and reserves for the benefit of the Owners of the Benefited Property perpetual, non-exclusive easements for vehicular ingress and egress over Tract A in the location of the existing roadway or any relocation thereof located on Tract A (the Roadway ). The Owners may allow the use of the Roadway for ingress and egress by their employees, agents, invitees, licensees or tenants (each, an Authorized Roadway User ), but each Owner shall at all times remain responsible for the performance of all obligations hereunder by its Authorized Roadway Users. There shall be no parking or storage of vehicles or equipment in Tract A, and Tract A shall be used for roadway and utility purposes only. The Owners acknowledge and accept that the grant of this easement is subject to applicable laws and governmental regulations and restrictions and any temporary limitations on the use of the Roadway in connection with the repair, replacement or relocation of the Roadway (which relocation may be initiated by the Managing Owner (as defined below) at its sole cost and expense to any location reasonably selected by such Managing Owner so long as the location of the Roadway, as relocated, is within Tract A); provided, that during any repair, replacement or relocation of the Roadway by the Managing Owner, the Managing Owner shall use commercially reasonable efforts to provide vehicular access to each Owner of Benefited Property. The initial Managing Owner shall be the Owner of the portion of the Benefited Property described on the attached Schedule 5 ; provided, that the Managing Owner may convey portions of such property to third parties without relinquishing its role as Managing Owner and may assign its rights and delegate its duties as Managing Owner to an Owner of Benefited Property who must agree to assume the rights and duties of the Managing Owner.

(1)       SSI Storm Drain Easement . Declarant hereby declares and reserves a perpetual non-exclusive easement for the benefit of Declarant and the Tract A Ownership Lots to use the existing storm drain lines under, across and within the portion of the SSI Property pictorially shown on the attached Schedule 9 (the SSI Storm Drain Easement ). The SSI Storm Drain Easement encompasses portions of the existing storm water and processed water collection system located on the SSI Property, as depicted on the attached Schedule 9 .

 

 

 

 

 

(2)       SSI Storm Water System . There is an existing storm water and processed water collection system located on the SSI Property, a portion of which is located within the SSI Storm Drain Easement and a portion of which is located within the 10 Storm Drain Easement created under the Plat, which includes, without limitation, the piping and the outfalls, all catch basin filters and all oil/water separators (together the SSI Storm Water System ). There is an existing storm water and processed water collection system located on Tract A, which includes, without limitation, the piping, all catch basin filters and all oil/water separators (the Tract A Storm Water System ). The Tract A Storm Water System connects to the SSI Storm Water System. The Tract A Storm Water System and the SSI Storm Water System are jointly referred to herein as the Storm Water System.

(3)       Inspection . The Managing Owner shall regularly inspect, and, at all times, maintain the Tract A Storm Water System in good order and repair and in proper operating condition. The Owner of the SSI Property shall regularly inspect, and, at all times, maintain the SSI Storm Water System in good order and repair and in proper operating condition.

(4)       No Liens . The Managing Owner shall: (i) not permit any claim, lien or other encumbrances arising from its use of the Storm Water System to accrue against or attach to the SSI Property; (ii) comply with all laws, ordinances, regulations, requirements and permits applicable to the discharge from Tract A into the Storm Water System from and after the date hereof, including, without limitation, permits issued by the Oregon Department of Environmental Quality ( DEQ ) and the City of Portland Bureau of Environmental Services ( BES ) (collectively, the Regulatory Requirements ); (iii) provide for emergency response to prevent spills, releases or other unlawful discharges from Tract A from entering into the Storm Water System and to prevent spills from discharging from an outfall into or beyond the slip (including provisions of appropriate sorbent booms or other response in the event of a discharge); and (iv) periodically monitor stormwater quality, to the extent required by permits issued by the DEQ and/or the BES or pursuant to any other Regulatory Requirements and provided to Managing Owner. Any stormwater quality monitoring data which the Managing Owner is required to provide to DEQ or BES pursuant to Regulatory Requirements shall be provided to the Owner of the SSI Property not later than concurrently with its submission to DEQ and/or BES or other applicable regulatory agency.

(5)       Emergency Actions . In any emergency, the Managing Owner shall make commercially reasonable efforts to notify the non-performing Owner of a Tract A Ownership Lot of the emergency and necessary performance. No written notice to a non-performing Owner of a Tract A Ownership Lot pursuant to Section 6(h) shall be required before the Managing Owner shall have the right, but not the obligation, to cure any non-performance that resulted in such emergency, including, without limitation, such actions as may be necessary to prevent spills, releases or discharges by operating an emergency shut off valve. In the event the Managing Owner does not take immediate action to cure the non-performance that resulted in such emergency, the Owner of the SSI Property shall have the right, but not the obligation, to do so, and no prior written notice pursuant to Section 6 (h) shall be required. Upon taking action to cure non-performance, the Owner of the SSI Property shall make commercially reasonable efforts to notify the non-performing Owner of a Tract A Ownership Lot and the Managing Owner of the emergency and necessary performance. The Managing Owner and the Owner of the SSI Property shall have reasonable access to the Tract A Ownership Lots as necessary to access an emergency shut off valve. In the event of an emergency in which the Managing Owner or the Owner of the SSI Property cures or takes affirmative action to cure non-performance, the Managing Owner or the Owner of the SSI Property shall have the right to seek reimbursement of its own reasonable costs of performance from the non-performing Owner of a Tract A Ownership Lot. The Managing Owner shall indemnify and hold the Owner of the Tract A Ownership Lot harmless to the extent that the actions of the Managing Owner pursuant to this section are negligent and exacerbate the spill, release or discharge. The Owner of the SSI Property shall indemnify and hold the Owner of the Tract A Ownership Lot harmless to the extent that the actions of the Owner of the SSI Property pursuant to this section are negligent and exacerbate the spill, release or discharge.

(c)       Maintenance and Repairs of Roadway and Storm Water System Budget . The Managing Owner shall maintain and repair the Roadway in good condition and repair consistent with the standards described on the attached Schedule 6 (the Roadway Minimum Standards ). As a part of the Budget (defined below), the Managing Owner shall include amounts as necessary to reimburse the Owner of the SSI Property for the cost of maintaining the SSI Storm Water System to the extent that system serves Tract A, which shall be determined based on the estimated volume of use from Tract A, and the Owner of the SSI Property shall be reimbursed for such costs. Each Budget shall provide the amounts necessary for the repair and maintenance costs for the Roadway, the Tract A Storm Water System and the SSI Storm Water System (to the extent serving Tract A based on the estimated volume of use), including reserves (the Budget ). The Budget for calendar year 2005 is attached as Schedule 7 . The Budget for calendar year 2005 shall be prorated from the date of this Declaration. Not less than 30 nor more than 60 days before the beginning of each calendar year, Managing Owner shall provide written notice to each other Owner of the proposed Budget for the upcoming calendar year. Each notice of proposed Budget shall include an accounting

 

 

 

 

of all repair and maintenance expenditures made since the prior accounting, and a summary of the amount of all repair and replacement reserves then held on account and the purpose of each reserve consistent with prior Budgets. The proposed Budget shall include, in reasonable detail, projected maintenance expenses for the upcoming year, and a proposed assessment for maintenance or replacement reserves to be paid during the coming year, and the purpose or purposes for such reserves. Unless Owners responsible for aggregate Maintenance and Approval Percentages of greater than 50% object to the proposed Budget by written notice to Managing Owner within thirty (30) days of the date notice of the proposed Budget is given, the proposed Budget shall be deemed approved. In the event Owners responsible for aggregate Maintenance and Approval Percentages of greater than 50% do timely object to such proposed Budget, Managing Owner shall seek the recommendation of a Qualified Independent Engineer (as defined below) reasonably selected by the Managing Owner, which engineer shall make a determination of the maintenance, repairs and/or replacements, and reasonable reserves, required during the upcoming calendar year to maintain the Roadway in a condition comparable to the Roadway Minimum Standards or for a needed improvement to the Storm Water System. Any Extraordinary Assessment for Reserves (as defined below) shall be supported by the opinion of a Qualified Independent Engineer. For purposes of this Agreement, a Qualified Independent Engineer shall be an expert in road design, maintenance and construction if the increase in the Budget is due to roadway improvements, and shall be an expert in storm water systems design and construction if the increase in the Budget is due to storm water system improvements. For purposes of this Agreement, an Extraordinary Assessment for Reserves shall initially mean an assessment for reserves for future repairs, replacements or maintenance for all Owners, in the aggregate of $50,000 or more for the coming calendar year. The amount qualifying as an Extraordinary Assessment for Reserves shall be adjusted every five (5) years, starting with calendar year 2010 by an amount equal to the percentage change over the previous five (5) year period in the Consumer Price Index Seasonally Adjusted U.S. City Average for all Items for All Urban Consumers (1982-84=100) published in the Monthly Labor Review by the Bureau of Labor Statistics of the United States Department of Labor (a CPI Adjustment ). The recommendations of the Qualified Independent Engineer shall be binding upon the Managing Owner and all other Owners, and shall be the basis for the reserve portion of the Budget for the year or years during which the reserve is to be collected for the improvement(s) in question. To the extent the Qualified Independent Engineer does not provide cost estimates for maintenance, repairs, replacements, reserves or any Extraordinary Assessment for Reserves recommended by such engineer, Managing Owner shall seek one or more bids from qualified contractors reasonably selected by Managing Owner, which bid or bids shall be the basis for the budgeted amount for the work recommended by the Qualified Independent Engineer. In performing the maintenance and repair of the Roadway and the Storm Water System, Managing Owner may, without the consent of the other Owners, spend all amounts contained in the Budget designated for standard maintenance and repair for such calendar year and any unspent amounts at the end of each calendar year shall be applied to each Owner s pro rata payment of monthly payments to the Managing Owner based on the Budget for the subsequent calendar year. The Managing Owner may only spend money held in reserve for a specific repair or replacement on the repair or replacement for which the reserve was established, except as provided in the following sentence. During a calendar year, the Managing Owner may only expend money in excess of the Budget (exclusive of the reserves) for such calendar year if: (i) an emergency exists, (ii) Owners whose collective Maintenance and Approval Percentage (as defined below) equals or exceeds sixty-five percent (65%) have consented to such expenditure, or (iii) Managing Owner performs the repair of damage or additional maintenance caused by a Defaulting Owner as defined and provided in Section 3(d) below.

(d) Damage or Excessive Maintenance . If an Owner s or such Owner s Authorized Roadway Users use the Roadway in such a way as to cause damage to the Roadway (other than normal wear and tear from vehicular ingress and egress) or require maintenance at a level that is greater than the Roadway Minimum Standards, then the Managing Owner may notify such Owner (the Defaulting Owner ) of such damage and/or need for additional maintenance. If within thirty (30) days of such notice such Defaulting Owner fails to send the Managing Owner a written notice either disputing the such damage and/or need for additional maintenance (which dispute shall be resolved by arbitration as provided herein) or acknowledging such damage and/or need for additional maintenance and agreeing to commence the repair of such damage and/or performance of such additional maintenance and diligently pursue such cure to completion, the Managing Owner shall have the right, but not the obligation, to perform such repairs or additional maintenance and such Defaulting Owner shall reimburse the Managing Owner for the cost of such repair or additional maintenance costs within thirty (30) days of written request therefor by the Managing Owner.

(e)