Item 6a Lease

é  ;

INDEX OF I    2 AND CONSTRUCTION AGREEMENT

Port of Se     2 and  Cargill,  Incorporated

Page

Leased Premises   ..c.ce.ee.. tees essen eaceneans oe

Effective Date and TeIrM  +. eeeseecoecesconnanaann

Rentals   ieee eeeeracencacnns eee maaan cecaca

Design and Constructiona Improvements on
Leased Premises by Cargill  ......ccieenicecccncns

Reimbursement to Cargill:  Total Construction
COSES   tiie vnnonaenan                                  10

Terminal Tariff Charges   .....iiiiiinnneneeennnnn       11

Bond   ..eiieceencnonse I I      I  I I    I REEE          13

13

15

10.   Stevedoring   .........                                       15

11.   Inspection and Weighing   ....euiieeeeennnneeceans        16

12.   Repairs and Maintenance   ........iceirirenneennnnnn        16

13.   Liability and  Insurance   .....iuieeieeeceenencnans        16

14.   Taxes   ..eiicevaevnnnn ® a @ 0 a 8 0 ee @ en eases ee se san sa        17

15.   Damage or Destruction   ® ® a 4 000 ve Eee  0 ee ean 0 eee.        18

16.   Utilities   .......ian.. ® 4a 8 ® 8 2 00% eee 0 essa eee a0 a0 a        19

17.   Acceptance of Premises                                      20

18.   Casualty Insurance   ..                                       21

19.   Use of Premises   .....                                       21

20.   Federal Maritime Commission Approval
..........       21

21.   Compliance with Laws                                        21

22.   Assignment or Sublease   ® ® @ 6 es 8 v8 EEE ANN ese ee nna        22

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LEASE AND COWSTRUCTION AGREEMENT


THIS LEASE AND CONSTRUCTION AGREEMENT made this  26th

day of March,  1968, by and between the PORT OF SEATTLE, a mu-

nicipal corporation, herein called the "Port" or "Lessor",  and

CARGILL,  INCORPORATED,  a corporation,  of Minneapolis, Minnesota,

herein called "Cargill" or "Lessee"

WITNESS SET H:

WHEREAS,  the Commission of the Port of Seattle has

determined and  finds  that  the Port of Seattle  1s  in need of

new and greatly improved grain elevator terminal facilities

to replace existing facilities and to make it possible to of-

fer concerns interested in the shipment of grain by water a

much improved type of facility not available elsewhere and

particularly on the Pacific Coast; and

WHEREAS,  the Commission also finds that Cargill is

one of the best qualified concerns in the United States in the

field of designing, building and operating grain terminal fa-

cilities in connection with the shipment of grain by water;

NOW,  THEREFORE,  1n consideration of the mutual cove-

nants of the parties hereto,  it 1s agreed as follows:

1.   Leased  Premises:   The  Port hereby leases  to Car-

gill the real property more particularly described in Exhibit

A,  attached hereto and by this reference  incorporated herein

and as further shown colored solid blue and colored with blue

cross hatching on Exhibit B,  said exhibit being a map identified

as Port of Seattle Drawing No.  50-103,  and said exhibit being

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also attached hereto and by this reference incorporated

herein.

The Port further grants Lessee an option to add

to the leased premises,  but only for the purpose of expanding

the grain terminal and facilities incidental and related

thereto,  all or any contiguous portion of that certain area

described in Exhibit A and shown on Exhibit B in blue double

cross hatching,  provided that this option shall be exercised

by giving written notice to the Port at least six months 1in

advance of any proposed effective date for obtaining posses-

sion of said area as an added portion of the leased premises.

It  is understood and agreed that the Port shall re-

tain at all times the right of secondary user of any unimproved

portion of  the  leased premises  for any purposes which  shall  not

unreasonably interfere with Lessee's uses thereof as herein

authorized.

The leased premises shall also include a right of

way via an underpass  (as shown by a blue dotted area on Exhibit

B)  under a proposed parkway  to be developed  and  controlled by
the City of Seattle  (as shown on Exhibit B colored solid green),
which right of way shall connect the grain terminal land area

with the related marine terminal wharf and facilities incidental

thereto for use by pedestrians and vehicular traffic and for

utility installations as needed.  Also,  the leased premises

shall include an aerial right of way which shall extend between

the aforesaid land side and marine terminal installations and



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improvements for use as an overhead gallery in the transporta-

tion of grain or other commodities,  thelocation to be approxi-

mately as  shown by  the blue dotted area  on Exhibit  B attached,

provided, however,  that the said aerial right of way shall be

so located and constructed particularly with reference to the

height above the City of Seattle's parkway so as to cause no

interference with the normal use of the parkway for vehicular

traffic and pedestrians.

The entire leased premises and other areas as de-

scribed in Exhibit A and shown or referred to in Exhibit B and

in this lease and construction agreement  shall be subject to

such changes as may be reasonable or necessary in the event

of further design changes or other modifications of plans pro-

vided such changes are mutually acceptable to the parties.

The parties hereto may by mutual agreement at any

time and from time to time add to or subtract from the leased

premises any parcel or parcels of land either adjoining or

presently within the leased premises in order to more adequately

carry out the purposes and intent of this agreement.  To accom-

plish the aforesaid change or changes in the leased premises,

appropriate new exhibits,  to be designated Exhibits A-1 and

B-1 or A-2 and B-2, etc.,  shall be prepared as may be appro-

priate,  and the parties hereto shall each endorse thereon their

acceptance of the said exhibits and shall affix their signatures

thereto.  Duplicate signed copies of the final executed exhibit

shall go to each party and a triplicate signed copy shall be

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sent to the Federal Maritime Commission for attachment to its

copy of this agreement.

It 1s understood by the parties that the Port has

heretofore acquired title in fee to portions of the leased

premises and that 1t is in the process of acquiring title in

fee to the remainder except only that portion of the leased

premises shown on Exhibit B cross hatched in blue which con-

stitutes a portion of the harbor area.  The Port will control

the indicated portion of the harbor area by arrangements with

the State of Washington.  In the event the Port should not ac-

quire  (1)  title in fee to those portions of the leased premises

(other than harbor area) which 1t does not presently own and

(2)  control of the designated harbor area by not  later  than

June 1,  1968,  then Cargill may terminate this agreement on S90

days notice in wrating; provided further that in the event the

Port shall acquire title in fee as specified and control of the

said harbor area prior to the expiration of said 90-day period,

then the termination notice shall be of no effect.

Furthermore, Cargill shall not be entitled to termin-

ate this lease and agreement as aforesaid unless 1t 1s then

ready to proceed with the construction of the improvements

which are provided for herein at the time that the said notice

to terminate is to become effective.

There shall also be available for use by Cargill as

Lessee herein a common user roadway for  ingress and egress by

pedestrians and vehicular traffic between the grain terminal


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site and West Galer Street at Alaskan Way West, as more par-

ticularly shown colored solid yellow on Exhibit B,  attached

hereto.

The leased premises shall also be available for in-

gress and egress by rail trackage from existing trackage used

by the Great Northern Railway,  the Chicago, Milwaukee,  St. Paul

and Pacific Railroad Company,  the Union Pacific Railroad Company

and the Northern Pacific Railway under arrangements which are

satisfactory to these railroads and which permit each railroad

to deliver its cars to the grain terminal railroad grid on the

leased premises as evidenced by letters from each of the rail-

roads,  copies of which are attached hereto and by this refer-

ence incorporated herein as Exhibit C.

The leased premises shall be available to the Lessee

on or before June 1,  1969 with the surface grade established

as designated on the plans and specifications for construction

of the improvement and facilities referred to in Exhibit B.

However,  1t 1s understood and agreed that the Port shall be

permitted an extension of time if necessary for completion

of the fill and grading as may become necessary due to causes

beyond the control of the Port.

2.   Effective Date  and  Term:   This  lease  shall become

effective upon execution by the Port and Cargill provided that

if approval  1s required by the Federal Maritime Commission this

lease shall be effective only after such approval is obtained.

However,  Cargill's right to cccupy the leased premises for the

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purposes provided in this agreement shall commence as expressly

provided in paragraph 1 above.  The term of the lease,  for Les-

see's operation of the grain terminal facilities and for       t
~ a

of rental as provided in paragraph 3 shall commence immediately

following the completion of the grain elevator and terminal

improvements and their acceptance by both parties to this lease

as herein provided and shall continue for 20 years immediately

following; provided, however,  that Cargill shall have an option

or options for six additional successive five-year term exten-

sions,  subject to the same terms and conditions as herein pro-

vided except that the rental shall be subject to adjustment by

the parties prior to the beginning of each of said five-year

option periods,  as more particularly set forth in paragraph

3(b)  hereinbelow.   It is  further provided that the option granted

herein shall be deemed to have been relinquished unless Cargill

shall have notified the Port in writing at least two years in

advance of the beginning of each such option period of its elec-

tion to exercise its option with respect to the immediately fol-

lowing five-year period.

3.   Rentals:

(2)    Cargill  shall pay  to  the  Port as  a  rental

for the lease of the described premises the sum of $600,000.00

per annum payable in advance in equal monthly installments of

$50,000.00 on or before the first day of each month during the

term.   (Rentals  for less than a  full month shall be prorated

according to the occupancy time.)  This rental 1s computed as

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Jb (> annual rate of six per cent of the estimated total construc-
g rE10ӣ
v           tion cost of $10,000,000.00.   Should the parties agree upon
460
ail             any adjustment with respect  to  the  total amount of construction
costs,  then the amount of the annual rental shall be adjusted

by application of the same formula.  The total construction

costs shall insofar as feasible be established prior to the

commencement of the construction of the required terminal im-

provements.   "Total construction costs” as herein used shall

be as  specified  in paragraph  5  of  this  agreement.

(b)   As  stated  in paragraph  2  above,  the  Port

has herein reserved the right to adjust the rental amount at

the beginning of each separate option period.  "In the event

that the Port desires to exercise its privilege to adjust the

rental it shall do so by giving written notice to Cargill with
4   respect to any such adjustment (including the amount thereof)
at least one year in advance of the beginning of any option

period, provided further that 1f Cargill shall thereupon deter-

mine that the Port's proposed adjustment of rental 1s believed

to be excessive then Cargill shall, within 30 days after re-

ceiving notice of the proposed readjustment of rental by the

Port,  give written notice to the Port of 1ts dissatisfaction

with the proposed readjustment amount and shall advise the Port

with respect to its views concerning a fair rental amount for

the ensuing option period.  Thereupon,  in the event the parties

reach no agreement with respect to an acceptable adjustment of

the rental not later than eight months prior to the beginning

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of the ensuing option period,  each party shall thereupon within

15 Jays thereafter deliver to each other in writing their re-

spew: Lve selection of an appraiser,  each of whom shall be a

member of the American Institute of Real Estate Appraisers

and who shall be qualified by experience in the appraising of

industrial real estate in the general Seattle area,  and the

said nominated appraisers shall together agree upon a third

appraiser.   If prompt agreement on the selection of a third

appraiser 1s not possible, then the selection of the third

appraiser shall be made forthwith by the  senior acting judge

of the superior court for King County, Washington,  and the

three appraisers shall be authorized to make such  further re-

evaluation as they may deem to be necessary and proper in order

to establish a  fair rental  for the  leased premises.   The rental

amount as  thus  redetermined  shall be applicable  for  the option

period following the time when the Port gave its notice of its

desire to have the rental amount adjusted.  The rental as thus

established shall be applicable as of the beginning of said op-

tion period and shall continue until a further adjustment shall

have been made as herein provided.  The costs for the three

appraisers shall be shared equally by the Port and Cargill.

(c)    It  1s mutually understood  and  agreed  that

the Port shall have the exclusive right to assess and collect

dockage charges on all vessels which shall be berthed at or

alongside the leased premises during the term of this lease.

Reference is made to paragraph 6 hereinbelow for a further

              statement of the understanding of the parties with respect to

the determination of the amount of the dockage charge to be

assessed and collected by the Port.

4.   Design and Construction of  Improvements  on Leased

Premises by Cargill:  Cargill shall promptly upon execution of

this  lease undertake the design of and build or cause to be

built a grain elevator and related improvements at the leased

premises 1n accordance with plans and specifications which

shall be prepared by Cargill and shall be submitted to and

require the approval in writing of the Port before any con-

struction work at the premises shall be undertaken.  The ap-

proximate location of the improvements on the leased premises

shall be as shown on Exhibit B.  The general nature of the

improvements shall be substantially as outlined in Exhibit

D,  attached hereto and by  this  reference  incorporated herein.

Cargill shall proceed with all reasonable diligence

to prepare detailed plans and specifications for the proposed

improvements at the leased premises,  including the grain ele-

vator,  marine terminal improvements,  loading and unloading

facilities for vessels,  rail cars and trucks,  related road-

ways,  rail trackage,  utility requirements,  etc.,  and shall

cooperate closely with the Port so that the latter may obtain

all essential information as soon as possible with respect to

its development of plans required for work in bulkheading,  fill-

ing and establishing the property at the necessary grades.  The

parties will each lend their fullest cooperation in carrying

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out the overall project generally within the scope as set out

herein as  soon as  possible  except  for causes which may be be-

yond the control of the parties.

It  is understood and agreed that  the improvements

at the leased premises shall insofar as feasible be performed

by contract after a general invitation for bids and that no

bid will be finally accepted except after consultation between

the parties and with the approval of the Port.

It 1s further understood by the parties that the Port

may perform certain portions of the construction work as may be

feasible subject to agreement of the parties with respect thereto.

5.   Reimbursement  to Cargill:   Total Construction Costs:

It 1s agreed that the Port shall reimburse Cargill for or shall

itself pay or absorb the "total construction costs" for the

leasehold improvements as herein defined and shall accomplish

such reimbursement by customary progress payments with respect

to work which has been accomplished reserving, however, at all

times during the performance of the work,  ten per cent of the
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TTe—
total costs incurred at the time of said progress payments un-   J
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til all work has been completed  and accepted by the Port and

satisfactory evidence produced as may be requested by the Port
—                            ~~                          /
to substantiate that all costs have been fully paid and until

a period of at least 30 days has elapsed after the completion

of all work and its acceptance by the Port.  It is further

/
agreed that the total construction costs to be reimbursed to

Cargill or paid directly or absorbed by the Port shall not


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                                                4-7 67
4) sp0,p00 — enLA dite
exceed $10,000,000.00 except to the extent that any excess

shall have been expressly approved in writing by both parties.

It 1s understood and agreed that  "total construction costs”

shall include all direct out-of-pocket costs of the parties

but shall exclude the cost of all land acquisitions and for

the fill and grading of the said leased premises  (which shall

be paid for by the Port).  Further it is mutually agreed that

the parties shall not be entitled to include executive salaries

and administrative overhead as a part of the said "total con-

struction costs".  Title to all improvements,  for which reim-

bursement to Cargill has been made by the Port, shall pass to

the Port when total reimbursement 1s completed.

In the event it shall be determined by the parties
[==  the leasehold improvements will require "total construc-
tion costs" in excess of $10,000,000.00,then either party

shall have the option to either approve or disapprove its par-

ticipation in such excess.   In the event the parties do not

then reach agreement to proceed with the construction of the

improvements,  the project shall be discontinued and this lease

shall thereupon terminate, and it is further agreed that as to

all costs theretofore incurred Cargill will bear all of its

costs (including preliminary engineering work)  and the Port will

bear all  of  its  costs  incurred up to  the  time  of such disap-

proval  (including site preparations and land acqusition).

6.   Terminal Tariff Charges:   The  Port reserves  the

exclusive right to assess and collect dockage charges on all

vessels berthing at Terminal 86 and an appropriate tariff will

              be 1ssued by the Port stating such charges and their applica-

tion.

Cargill shall have the exclusive right to assess a

service and facility charge on all vessels berthing at the leased

premises and loading or discharging cargo at the said terminal.

The applicable rates for the above charges will be

established after mutual consultation of the parties hereto,

it being understood and agreed that both parties shall cooper-

ate in good faith to establish the level of their respective

charges so that the aggregate of all such charges will be at

a level which places and maintains the  facility in a competitive

position able to realize its earning potential.   The parties

further recognize the principle that it will be desirable 1inso-

far as  feasible  to establish  the  said  charges  at  levels which

can be justified by reference to the underlying costs of per-

forming the  services  and  the  costs  of creating and maintaining

the facilities which will be utilized by,  or from which bene-

fits will be received by,  those who shall be required to pay

terminal charges.  It 1s further agreed that the respective

level of these charges shall be established on a basis which

insofar as possible will be equitable and fair to the Port

and to Cargill.   The initial level of these charges shall be

agreed upon ‘as soon as  feasible and thereafter each party will

cooperate in good faith to assure the maintenance of fair and

equitable charges and practices which are fair to each party

and are otherwise consistent with the objectives and purposes

herein stated.

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7.   Bond:   Cargill  shall  furnish  the  Port with  a

lease bond before this lease shall be effective.  This bond

shall be 1n accordance with the statutory provisions requir-

ing such bonds  for all Port leases.   In the event the annual

rental shall be established at $600,000.00 per annum as stated

in paragraph 3  above,  the bond  shall be  in  the amount of

$2,000,000.00 and shall be conditioned 1n accordance with

statutory requirements.  If the rent is established at a dif-

ferent level in accordance with the basis of computation re-

ferred to in said paragraph 3,  then the amount of the bond shall

be adjusted accordingly.  In the event the amount of the rent

is  thereafter changed  in accordance with  the provisions  of

this lease,  the amount of the lease bond shall likewise be

adjusted to comply with the statutory requirements.

\            8.    Termination:    In addition  to  the  termination

rights otherwise provided for herein,  this lease may be ter-

minated as follows:

(2)    In  the  event  that the United  States  Govern-

ment,  the State of Washington,  or any agency or instrumentality

of said Governments shall, by condemnation or otherwise,  take

title,  possession or the rights to possession of the premises

or any substantial part thereof,  the Port may,  at its option,

terminate this lease,  and 1f the taking has substantially im-

paired the utility of the premises to Lessee,  the Lessee may,

at its option,  terminate this lease as of the date of such tak-
P=
ing,  and,  if Lessee  1s not  in default under any of the provisions


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               of this lease on said date,  any rental prepaid by Lessee shall,

to the extent allocable to any period subsequent to the effec-

tive date of termination, be promptly refunded to Lessee and

all further obligations of the parties shall end except as to

liabilities which shall theretofore have accrued and,  specifi-

cally (but without limitation of the generality of the fore-

going statement) Lessee shall be relieved of any further obli-

gation to pay any rental amounts which would have become due

after the effective date of such termination.

(b)    In  the  event that any court having  juris-

diction in the matter shall render a decision which has become

final and which will prevent the performance by the Port of

any of its obligations hereunder then either party hereto may

terminate this lease by written notice and all rights and obli-

gations hereunder  (with the exception of any undischarged rights

and obligations that accrued prior to the effective date of

termination)  shall thereupon terminate.   If Lessee is not in

default under any of the provisions of this lease on the effec-

tive date of such termination, any rental prepaid by Lessee

shall,  to the extent allocable to any period subsequent to

the effective date of the termination be promptly refunded

to Lessee and all further obligations of the parties shall

end except as to liabilities which shall theretofore have ac-

crued and,  specifically  (but without  limitation of  the  gener-~

ality of the foregoing statement)  Lessee shall be relieved

of any further obligation to pay any rental amount which



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would have become due after the effective date of such termina-

tion.

9.   Hanford Street Elevator  Lease:   The existing

Port lease with Cargill which covers the Hanford Street  (Pier

25)  elevator and  related premises  shall upon activation of

the grain elevator facilities provided for in this lease be

subject to termination at the option of either Cargill or the

Port.   In the event the Port shall thereafter find that the

economic utilization of Hanford Street elevator for bulk grain

movements shall be feasible, the Port agrees that it will of-

fer to Cargill a  first right of refusal with respect to any

then proposed lease for the said Hanford Street facilities.

It 1s also understood that to the extent that any existing

machinery or equipment at the Hanford Street elevator may be

utilized in connection with the construction referred to herein,

the parties may by mutual consent arrange for such utilization

and in that event they shall agree upon an evaluation which

shall be applicable for said equipment and machinery.

10.   Stevedoring:   The parties  recognize the  impor-

tance of having reliable stevedoring services readily avail-

able for use in connection with the grain terminal operation

and in this connection the Port reserves the right if it should

become desirable to perform such stevedoring services.  Both

parties, however,  recognize that the quality of the stevedoring

is of particular  importance  to  the contemplated grain operation

of Cargill, and Cargill shall have the right to approve or



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              disapprove of any particular stevedoring arrangement.

11.   Inspection and Weighing:   The Port reserves

the right after it has investigated what may be possible ar-

rangements for the conduct of grain inspection and weighing

functions at the elevator facility to determine whether the

Port desires to perform andprovide these services for compen-

sation.   The amount of the compensation shall be subject to

joint agreement between the parties hereto.

12.   Repairs and Maintenance:   The Lessee shall at

all times keep the premises neat,  clean and orderly and free

from waste,  and shall be wholly responsible for repairs or

maintenance as  necessary from time to time  to keep all of the

structures and improvements in good operating condition except

with respect to unavoidable casualty losses.  The Port shall

have no obligation for maintenance and repair except as pro-

vided in paragraph 15.  At theend of the lease the premises

shall be returned to the Port in good condition  (fair wear and

tear and unaviodable casualty losses excepted).

13.   ILaabilaity and Insurance:

(a)   The  Port,  its  employees  and  agents  shall

not be liable for any injury including death to any persons

or for damage to any property regardless of how such injury

or damage be caused,  sustained or alleged to have been sus-

tained by the Lessee or by others as a result of any condi-

tron  (including existing or future defects in the premises)

or occurrence related to theleased premises or related to




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Lessee's use or occupancy of the premises.  The Lessee agrees

to defend and to hold and save the Port harmless from all ha-

bility or expense  (including expense of litigation)  in connec-

tion with any such items of actual or alleged injury or damage.

In addition,  the Lessee shall at its own expense maintain appro-

priate liability insurance with an insurance company Or com-

panies satisfactory to the Port with a single limit of

$2,000,000.00 to indemnify the Lessee against any such lia-

bility or expense,  including the contractual liability assumed

by Lessee under this paragraph 13(a).  The Lessee agrees to

supply the  Port with appropriate  evidence  to establish  (1)

that its insurance obligations as herein provided have been

met and  (2)  that the insurance policy or policies as herein

required are not subject to cancellation without at least 60

days advance written notice to the Port.

(b)   The  "leased premises"  as  referred  to  in

subparagraph  (a) of this paragraph 13 shall not include the
common user right of way area as colored solid yellow on Ex-

hibit B.

14.   Taxes:   Cargill agrees  to pay all taxes which

shall become due and owing based upon its operations and against

property owned or controlled by Cargill at the leased premises;

however,  in the event that any advalorem taxes on Port-owned

property to be paid by Cargill under this paragraph shall ex-

ceed in any one calendar vear the sum of $60,000.00, Cargill

may terminate the lease unless the Port shall allow Cargill a


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              credit against rentals due under the lease 1n an amount equal

to the excess payable by Cargill over the said amount of

$60,000.00 in one calendar year; provided further that as to

any lease option period after expiration of the original 20-

year term this paragraph shall not apply with respect to any

credit by the Port to Cargill on advalorem tax payments; how-

ever,  the anticipated taxes during any option period may be

considered in establishing the fair rental amounts for said

option period.

15.   Damage or Destruction:

(a)    Should  the premises  or  the buildings  or

structures of which the premises are a part be damaged by fire

or other insured casualty  (as carried by the Port), and if the

damage is repairable within four  (4) weeks from the date of

the occurrence  (with the repair work and the preparations

therefor to be done during regular working hours on regular

work days),  the premises shall be repaired with due diligence

by the  Port,  and  in  the meantime  the monthly minimum rental

shall be abated in the same proportion that the untenantable

portion of the premises bears to the whole thereof,  for the

period from the occurrence of the damage to the completion of

the repairs.

(b}   Should  the premises  or any buildings  or

structures of which the premises are a part be completely de-

stroyed by fire or other casualty, or should they be damaged

to such an extent that the damage cannot be repaired within

               four  (4) weeks of the occurrence,  the Port shall have the op-

tion to terminate this lease on thirty  (30) days'  notice,  ef-

fective as of any date not more than sixty  (60) days after the

occurrence.   In the event that this paragraph shall become ap-

plicable,  the Port shall advise Lessee within thirty  (30) days

after the happening of any such damage whether the Port has

elected to continue the lease in effect or to terminate 1t.

If the Port shall elect to continue this lease in effect,  it

shall commence and prosecute with due diligence any work nec-

essary to  restore  or  repair  the premises.   If  the  Port  shall

fail to notify Lessee of its election within said thirty  (30)

day period,  the Port shall be deemed to have elected to ter-

minate this lease, and the lease shall automatically terminate

sixty  (60) days after the occurrence of the damage.  For the

period from theoccurrence of any damage to the premises to the

date of completion of the repairs to the premises  (or to the

date of termination of the lease 1f the Port shall elect not

to restore the premises),  the monthly minimum rental shall be

abated in the same proportion as the untenantable portion of

the premises bears to the whole thereof.

16.   Utilities:   Lessee shall be  liable  for,  and

shall pay throughout the term of this lease, all charges for

all utility  services furnished to the premises,  including but

not limited to,  light, heat,  electricity,  gas, water,  sewerage,

garbage disposal and janitorial services.   In the event that

the premises are part of a building or are part of any larger

premises to which any utility services are furnished on a con-

-  19 -

               solidated or joint basis,  Lessee agrees to pay to the Port 1its

(Lessee's)  pro rata share of the cost of any such utility ser-

vices,  and Lessee's pro rata share of any such services may

be computed by the Port on any reasonable basis,  and separate

metering or other exact segregation of cost shall not be re-

quired.

17.   Acceptance of Premises:   The Lessee shall before

commencing the construction work as herein provided examine the

leased premises and in theevent it begins or authorizes con-

struction work thereon it shall be deemed to have accepted the

premises in their then condition.

18.   Casualty Insurance:   The  Port shall after  it

has accepted the improvements to be placed upon the premises

by Cargill carry usual fire and extended coverage insurance

for its own account with respect to the improvements to which

it shall hold title; provided that Cargill will be named as an

additional insured as its interests may appear and provided that

whenever the Port shall desire to use any proceeds from casualty

insurance for repairs or reconstruction of any portion of the

premises,  the Port shall be entitled to receive all such pro-

ceeds.  The Port and Cargill hereby mutually releaseeach other

from liability and waive all right of recovery against each

other for any loss from perils insured against under their re-

spective fire insurance contracts including any extended cover-

age endorsement thereto; provided that this paragraph shall be

inapplicable  (1)  if it would have the effect but only to the

               extent that 1t would have the effect of invalidating any insur-

ance coverage of the Port or Cargill and  (2)  as to that portion

of any insured loss coming within a deductible.

19.   Use of Premises:   Cargill shall use  the premises

for the construction,  maintenance and operation of a public

marine grain terminal facility and activities incidental thereto

and shall not use them for any other purpose without the written

consent of the Port.  Cargill agrees to operate the terminal as

a public grain terminal facility in a non-discriminatory, non

preferential and reasonable manner.

20.   Federal Maritime Commission Approval:   The parties

mutually agree to submit this lease and agreement  to the Federal

Maritime Commission for determination as to whether 1t is subject

to the requirement or approval as provided for in Section 15 of

the United States Shipping Act of 1916,  as amended.  In the

event that approval 1s required,  the parties mutually agree

that this agreement shall not become effective until it has

been approved by the Federal Maritime Commission in accordance

with the requiremencs of the Shipping Act.

21.   Compliance with Laws:   Lessee agrees  to comply

with all applicable rules and regulations of the Port pertain-

ing to the building or other realty of which the premises are

a part now in existence or hereafter promulgated for the general

safety and convenience of the Port,  its various tenants,  invitees,

licensees and the general public, provided such rules and regula-

tions shall not conflict with the provisions of this lease.

               Lessee further agrees to comply with all applicable federal,

state and municipal laws,  ordinances and regulations.  Any fees

for any inspection of the premises during or for the lease term

by any federal,  state or municipal officer and the fees for any

so-called "Certificate of Occupancy” shall be paid by Lessee.

22.   Assignment or Sublease:   Lessee shall not assign

or transfer this  lease or any interest therein nor sublet the

whole or any part of the premises,  nor shall this  lease or any

interest thereunder be assignable or transferable by operation

of law or by any process or proceeding of any court,  or other-

wise, without the written consent of the Port first had and

obtained.   If Lessee 1s a corporation,  Lessee further agrees

that if at any time during the term of this lease more than

one-half  (1/2) of the outstanding shares of any class of stock

of Lessee corporation shall belong to any stockholders other

than those who own more than one-half  (1/2) of the outstanding

shares of that class of stock at the time of the execution of

this lease or to members of their immediate families,  such change

in the ownership of the stock of the Lessee shall be deemed an

assignment of  this  lease within the meaning of  this paragraph.

If the Port shall give its consent to any assignment or sub-

lease,  this paragraph shall nevertheless continue in full force

and effect and no further assignment or sublease shall be made

without the Port's consent.





-  22  -

                             23.   Increase  1n Cost of Insurance:   Lessee shall

not use the demised premises  in such manner as to increase

the existing rates of insurance applicable to the buildings

or structures of which the premises are a part.   If it never-

theless does so,  then, at the option of the Port,  the full

amount of any resulting increase in premiums paid by the

Port with respect to the buildings or structures of which

the leased premises are a part,  and to the extent allocable

to the term of this lease,  may be added to the amount of

rental hereinabove specified and shall be paid by Lessee

to the Port  upon the monthly rental day next thereafter

occurring.

24.   Defaults:   Time  1s of the essence of this

agreement,  and in the event of the failure of lessee to pay

the rentals or other charges at the time  and in the manner

herein specified,  or to keep any of the covenants or agree-

ments herein set forth to be kept and performed,  the Port

may elect to terminate this lease and reenter and take pos-

session of the premises with or without process of law; pro-

vided, however,  that Lessee shall be given fifteen  (15)  days’

notice in writing stating the nature of the default in order

to permit such default to be remedied by Lessee within said

fifteen  (15) day period.   If upon such reentry there remains

any personal property of Lessee or of any other person upon

the leased premises,  the Port may, but without theobligation




-  23 -

           ®           o

so to do,  remove said personal property and hold it for the

owners thereof or may place  the same in a public garage or

warehouse, all at the expense and risk of the owners thereof,

and Lessee shall reimburse the Port for any expense incurred

by the Port in connection with such removal and storage.

The Port shall have the right to sell such stored property,

without notice to Lessee, after it has been stored for a

period of thirty  (30) days or more,  the proceeds of such

sale to be applied first to the cost of such sale,  second

to the payment of the charges for storage, and third to the

payment of any other amounts which may then be due from Les-

see to the Port,  and the balance,  if any,  shall be paid to

Lessee.  Notwithstanding any such reentry,  the liability of

Lessee for the full rental provided for herein shall not be

extinguished for the balance of the term of this lease,  and

Lessee shall make good to the Port any deficiency arising

from a  reletting of  the  leased premises  at  a  lesser  rental

than that hereinbefore agreed upon.   Lessee shall pay such

deficiency each month as the amount thereof 1s ascertained

by the  Port.

25.   Signs:   No signs or other advertising matter,

symbols,  canopies or awnings shall be attached to or painted

on or within the leased premises,  including the windows and

doors thereof, without the approval of the  General Manager

of the Port first had and obtained.  At the termination or




-  24  -~

               sooner expiration of this lease,  all such signs, advertising

matter,  symbols,  canopies or awnings attached to or painted

by Lessee shall be removed by Lessee at its own expense,

and Lessee shall repair any damage or injury to the premises,

and correct any unsightly condition,  caused by the mainten-

ance and removal of said signs,  etc.

26.   Insolvency:   If Lessee  shall file a petition

in bankruptcy,  or if Lessee shall be adjudged bankrupt or

insolvent by any court,  or  if a receiver of the property

of Lessee shall be appointed in any proceeding brought by

or against Lessee, or if Lessee shall make an assignment

for the benefit of creditors, or 1f any proceedings shall

be commenced to foreclose any mortgage or any other lien

on Lessee's interest in the premises or on any personal

property kept or maintained on the premises by Lessee,  the

Port may,  at its option,  terminate this lease.

27.   Waiver:   The acceptance of rental by the  Port

for any period or periods after a default by Lessee hereunder

shall not be deemed a waiver of such default unless the Port

shall so intend and shall so advise Lessee in writing.  No

waiver by the Port of any default hereunder by Lessee shall

be construed to be or act as a waiver of any subsequent de-

fault by Lessee.  After any default shall have been cured by

Lessee,  it shall not thereafter be used by the Port as a ground

for the commencement of any action under the provisions of para-

graph 20 hereof.


-  25  —

                                                                                                        .



28.   Surrender of  Premises:   At the expiration or

sooner termination of this lease,  Lessee shall promptly sur-

render possession of the premises to the Port, and shall de-

liver to the Port all keys that i1t may have to any and all

parts of the premises.

29.   Holding Over:   If Lessee shall,  with the con-

sent of the Port, hold over after the expiration or sooner

termination of the term of this  lease,  the resulting tenancy

shall,  unless otherwise mutually agreed,  be for an indefinite

period of time on a month-to-month basis.  During such month-

to-month tenancy,  Lessee shall pay to the Port the same rate

of rental as  set  forth herein,  unless  a different  rate shall

be agreed upon, and shall be bound by all of the additional

provisions of this lease agreement insofar as they may be

pertinent.

30.   Advances by Port for Lessee:   If Lessee shall

fail to do anything required to be done by 1t under the

terms of this lease,  except to pay rent,  the Port may,  at

its sole option,  do such act or thing on behalf of Lessee,

and upon notification of Lessee of the cost thereof to the

Port, Lessee shall promptly pay the Port the amount of that

cost.

31.   Liens and Encumbrances:   Lessee shall keep the

leased premises free and clear of any liens and encumbrances

arising or growing out of the use and occupancy of the said



-  26  -

                                                                                                        .

’        » ®                                             @


premises by Lessee.  At the Port's request,  Lessee shall fur-

nish the Port with written proof of payment of any item which

would or might constitute the basis for such lien on the leased

premises 1f not paid.

32.   Notices:   All notices hereunder may be delivered

or mailed.   If mailed,  they shall be sent by certified or

registered mail to the following respective addresses:

To Lessor:

The Port of Seattle
Post Office Box 1209
Seattle, Washington 98111

To Lessee:

Cargill,  Incorporated
Cargill Building
Minneapolis, Minnesota 55402

or to such other respective addresses as either party hereto

may hereafter from time to time designate in writing.  Notices

sent by mail shall be deemed to have been given when properly

mailed,  and the postmark affixed by the United States Post

Office shall be conclusive evidence of the date of mailing.

33.   Captions:   The captions  in this  lease are for

convenience only and do not in any way limit or amplify the

provisions of this lease.

34.   Invalidity:   If any term or provision of this

lease agreement or the application thereof to any person or

circumstance shall,  to any extent, be invalid or unenforceable,

the remainder of this lease agreement or the application of



-  27  -

            such term or provision to persons or circumstances other than

those as  to which  it  1s held invalid or unenforceable  shall

not be affected thereby and shall continue in full force and

effect.

35.   Non-discrimination Services:   The Lessee agrees

that it will not discriminate by segregation or otherwise against

any person or persons because of race,  creed,  color or national

origin in furnishing, or by refusing to furnish, to such person,

or persons, the use of the facility herein provided,  including

any and all services, privileges,  accommodations,  and activities

provided thereby.

It is agreed that the Lessee's noncompliance with

the provisions of this clause shall constitute a material breach

of this lease.   In the event of such noncompliance, the Port

may take appropriate action to enforce compliance, may terminate

this lease, or may pursue such other remedies as may be provided

by law.

36.   Non-discrimination Employment:   The lessee  cove-

nants and agrees that in all matters pertaining to the perfor-

mance of this lease,  Lessee shall at all times conduct its

business in a manner which assures fair,  equal and non-dis-

criminatory treatment of all persons without respect to race,

creed or national origin and,  in particular:

(a)   Lessee will maintain open hiring and em-

ployment practices and will welcome applications

for enwployment in all positions from qualified


-  28 =

                                                                                                         .

|                         ®                                             @



individuals who are members of racial or other

minorities,  and

(b)    Lessee will  comply strictly with all  re-

quirements of applicable federal,  state or local

laws or regulations issued pursuant thereto relating

to the establishment of non-discriminatory require-

ments in hiring and employment practices and assuring

the service of all patrons or customers without dis-

crimination as to any person's  race,  creed,  color or

national origin.

37.   Alterations and Improvements:   Lessee shall

make no alterations or improvements to or upon the premises

or install any fixtures  (other than trade fixtures which can

be removed without injury to the premises) without first ob-

taining written approval from the General Manager of the Port.

In the event any alterations or improvements shall be made or

fixtures  (other than trade fixtures which can be removed with-

out injury to the Premises)  installed by the Lessee, they shall

at once become a part of the realty and become the property of

the Port.  Movable furniture and trade fixtures which are re-

movable without injury to the premises shall be and remain the

property of Lessee.

38.   Inspection:   The Port  reserves the right to

inspect the leased premises at any and all reasonable times

throughout the term of this lease:  provided, that it shall

not interfere unduly with Lessee's operations.  The right


-  29 -

                                                                                                         .
9          ®

of inspection reserved to the Port hereunder shall impose no

obligation on the Port to make inspections to ascertain the con-

dition of the premises,  and shall impose no liability upon the

Port for failure to make such inspections.

39.   Outside Areas  and Roof:   The use of the outside

areas of the walls  (other than the front of the premises) and

the roof of the building in which the premises are located is

reserved to the Port,  which shall have the right to utilize

the same for any purpose,  including the maintenance of signs.

40.   Integration:   This agreement  constitutes the

whole agreement between the Port and Lessee.  There are no

terms, obligations or conditions other than those contained

herein.   No modification or amendment of this agreement shall

be valid and effective unless evidenced by an agreement in writing.

IN WITNESS WHEREOF, the parties hereto have executed

this lease and construction agreement as of the day and vear

first above written.

PORT OF SEATTLE
a municipal corporation

By Yurl. © GA
President
ATTEST:

By  )                      -
Secretary
LESSOR

CARGILL,  INCORPORATED
a  corporation of Minneapolis,  Minnesota
on
ayCen
W B Sannders, Vice President

ATTEST:

By                          ’
"  eo   or
NORTHERN PACIFIC RAILWAY COMPANY
Operating Depariment
LINES LIVINGSTON  MONTANA  AND WEST

N M LORENTZSEN
General Monoger
326 Kirg Street Station

SEATILE, WASH   98104
At Pasco, Washinzton
Septerber 18, 1957
.

Dear Mre Simmonsse

Please refer to your letter of September 13
in comeciicn with the Port of Seatile having reached
egrecment with Cargill,
g               varglll,  Inc., ’ in the matter of construc
tion and operaticn of a  provcced elevator,        >
<                 i              3 Pier 85
2
Seattle, Washington,©
It is noted that Cargill has requested the
Port of Scavtle to obtain an agreewent with the S=attie
railrcads which will assure that the four roads have
equal access to the facility to the end ihat there will
be no siitching cherges assessed agcinst shippers                       .
or tous
signees.  In this respect, and as oullined in your letter,
several. conferences have  been held regarding extension of
the fourepariy cc.vion-user irackeze north from ths soath
sida of Froad Strazt to connect vith tae Pori's trackage
ladder for the Port Terminal.

This is to sdvise that Northe
share, ¢1 an equal joint oimers       s
of the four-perty coron~user trzck no
Street sides to comnoet with the Port t
for the Tewminall!s propossd facilities
» and you my so
advige Cargill, Ince

Yours very truly,

Mre Co,  Eo  Sirsmors
Traffic Manager
—,                       7
Port of Sealile                                               Zora.
ME Stas PT  NCEESC >
Ps 0. Box 1209
Seattle, Veshe  931M

cc~llroJ.E,Cpheim
MreCeolioRasussen
MroGoloB-Xeor
MrisGarelick:

                      -       .     no, ®                                             ® a   »n
»


EXHIBIT D

General Nature of Improvements

Cargill will design and build, or cause to be built,

the elevator and related improvements in accordance with plans

and specifications approved by the Port as hereinafter mentioned

to include:

(a)   Elevator with  initial minimum storage  capacity

of 5,000,000 bushels,  a minimum of 3,000,000 of which will be

conventional concrete storage space.

(b)    Rail trackage designed to accommodate approxi-

mately 215  cars.

(c)   Rail hopper and box  car unloading  devices  de-

signed to be expandable to achieve a  combined grain unloading
rate of approximately 2,500 tons per hour and constructed

with an initial minimum combined grain unloading rate of
ap-
proximately 1,250 tons per hour.

(d)   Marine terminal structure and vessel  loading

devices to pour grain to the vessel at a design rate of 3,500

tons per hour.
Z
(d)    Truck unloading devices to unload grain at
a
design rate of 600 tons per hour;

the layout and design of the above items all to be subject to

Port review and approval of plans and specifications.

It  is recognized by the parties  that  the elevator

specifications and requirements set Forth above consitute the

Port's optimum requirements for immediate construction of a

    CP     ® LY

high speed,  large  capacity,  modern  export  elevator.   Construc-

tion of such an elevator may result in unused capacity in the

early years of its operation.  An alternative approach to the

construction of such a facility 1s to design it with specific

built-in potential for expansion to the optimum requirements

but to construct it initially with capacity equal to current

projections of business actually to be handled in its early

years of operation. Inorder to have a comparison of the eco-

nomics of these two approaches Cargill will obtain bids on

such an alternative elevator with the following characteristics:

(a)    Elevator with  initial minimum storage capacity

of between 3,000,000 and 5,000,000 bushels,  a minimum of 3,000,000

of which will be conventional concrete storage space.

(b)   Rail trackage designed to accommodate
approxi-

mately 175  cars  and expandable  to  215  cars.

(c)   Rail hopper and box  car unloading  devices  de-

signed to be expandable to achieve a combined grain unloading
rate of approximately 2,500 tons per hour and constructed with

an initial minimum combined grain unloading rate of approxi-

mately 1,000 tons per hour.

(d)   Marine terminal  structure and vessel  loading

devices to pour grain to the vessel at a design rate of 3,000

tons per hour and expandable to 3,300 tons per hour,

(e)   Truck unloading devices  to unload grain at  a

design rate of 600 tons per hour.

                                     AGREEMENT


made and entered  into this /0 2
THIS AGREEMENT
of
day of     (oeombt                  and between the Port
,   1975,   by

and Cargill,  Incorporated,  for and  in  consideration
Seattle

mutual  promises contained herein,  the parties agree
of the

as  follows:

1.    Status  of  the  Parties.
(a)   Lease  ind  Construction Agreement.   On March 26,
1968 the Port of Seattle  (the Port)  and Cargill,  Incorporated
Agreement (the
(Cargill)  entered  into a Lease and Construction
and          executed
Lease)  and subsequent  to that date the Port      Cargill

four amendments to the Lease.   The Lease  imposed an obligation

design and build or cause to be built a grain
on  Cargill  to

and related improvements at Pier 86,  Seattle, Washington
elevator
Cargill
1n  accordance with  plans  and  specifications  prepared  by

and approved by  the Port.
(b)   Construction  Contract.   The  Port  approved  the
and          awarded
plans and specifications prepared by Cargill      Cargill
(CMG)  for
a  contract  to  the  joint  venture  of Cope-Manson-General

construction of the grain handling facility.   CMG failed to
with the        and specifica-
construct the facility in accordance           plans
the facility.
tions and neither Cargill  nor the Port has accepted
(c)   Rentals.    Since  November  15,  1970  Cargill  has

been  paying the Port monthly rental  of $57,500.

                                                             11/24/75



(d)   Construction  Costs.   The  Lease  as  now amended

obligates the Port to reimburse Cargill  $11,500,000 of the

costs of construction.   The Port has heretofore reimbursed

Cargill  $11,227,150.71  of that sum and $272,849.29 is owing by

the Port to  Cargill.   Cargill's  total  construction costs are

$11,698,956.30 which exceeds $11,500,000 by $198,956.30.

(e)   Commencement  of Actions.   In  late  1971  CMG
commenced an action against the Port and Cargill,  King County

Superior Court Cause No.  747401, to recover damages for allaged

site delay and other items.   The Port and Cargill  counterciaimed

against CMG and cross-claimed against the three sureties on

CMG's payment and performance bond for damages for construction

deficiencies.

Subcontractors of CMG have filed the following actions

against CMG,  its  sureties,  the Port and Cargill  seeking payment of

various claims:

1.    Linn  Pacific,  Inc.  v.  Cope  Construction,  et  al,
Cause No.  737663  (Cargill  not a party);

2.   American  Sheet  Metal,  Inc.,  Urban,  Inc.,  and
Tri-M Erectors, Inc.  v.  Cope Construction, et al,
Cause No.  735997;

3. Lone Star Industries v. CMG, et al, Cause No.
741158.

The actions  by the subcontractors  have been consolidated with and

under Cause No.  747401.   CMG and each of the five subcontractors with

the exception  of Lone Star  Industries  has  recorded a claim of lien

against  the interests of Cargill  and the Port in the grain handling

facility.

                              (f)   Repair  of  Silos.   Cargill  employed  Mr.  William  L.

Clark,  an engineer,  to identify and analyze the construction defects

in  the  silo  portion  of  the  grain  handling  facilities  and  to  design

a  method  for  repairing  the  silo  slabs,  walls  and  roofs.    Mr.

Clark's design for repairs  is contained in his report dated

September 6,  1973.

Contractors employed by Cargill  are now in the process

of performing the Clark repairs  subject to inspection and acceptance

of the  repaired  bins  by the  Port  of Seattle.
(g)   Agreement with  CMG.   The  Port  of  Seattle,  Cargill
and CMG have verbally agreed  to a stay of proceedings, a conditional

covenant by the Port and Cargill  not to sue CMG and dismissal of

CMG's claims against the Port and Cargill, and the Port and Cargill

have executed the Agreement which  is attached as  Exhibit  "I".

Throughout the settlement negotiations CMG has insisted that the

settlement include payment to CMG of a specific sum of money in

settlement of CMG's claim for site delay and other claims.

CMG offered $2,500,000 and the $2,450,000 which CMG

is  obligated  to  pay  under  the  terms  of  the  Agreement  reflects  a

credit to CMG in the amount of $50,000 for its site delay claim and

other claims against the Port and Cargill  although neither the

Port  nor Cargill  recognizes  any liability to CMG for site delay

or other claims.   The  Port agrees  to contribute  $25,000 of the
$50,000 credit by payment of that sum to Cargill  as  hereinafter

provided in paragraph 6.

                                                             11/24/75



2.    Release  by Port  of  Seattle.    The  Port  hereby  releases

Cargill  from any liability for failure to cause the grain handling

facility to have been constructed in accordance with the original

plans and  specifications approved by the Port.   Cargill  shall

continue to be obligated to maintain the facility in accordance

with the provisions of the Lease and Construction Agreement and

to  perform  all  other obligations  undertaken  in  said Lease  and

Construction Agreement and all  amendments thereto except as

expressly modified herein.

3.   Repairs  and  Acceptance.   Cargill  agrees  to  complete

at  its  expense  the Clark  repairs  subject  to the  rights  of the  Port

to  inspect  the  performance  of the  repairs  and  to  reject  the  same

if  they  do  not  comply with  the  said  Clark  repair design  and  the

performance specifications contained in the letter from Mr. V. L.

Ljungren to Cargill  dated January 29,  1975, and in the letter from

Mr.  Gerald  Hand  to Mr.  V.  L.  Ljungren dated January 31,  1975.

4.    Funds  Received.   The  parties  recognize  that

Cargill's cost of completing the Clark repairs will  exceed the total

of monies to be received from CMG pursuant to Exhibit "I" and

the Port therefore agrees  that Cargill  shall  be the owner of

all  such  funds  so  received  from CMG.
,
5.    Indemnity.    Cargill  hereby  agrees  to  defend,  pay,

indemnify and hold the Port harmless on all  claims asserted or

hereafter asserted against the Port or against the Port's interest

in  the  grain  handling  facility  by  the  subcontractors  in  the

litigation  including but not limited to those identified in

-4-

                                                      TV L719



paragraph 1  (e)  of this agreement,

6.    Payments  to  Cargill,   Upon  execution  of  this

agreement and the Agreement the Port will  pay to Cargill  the

amount of $272,849.29 described in paragraph  1  (d) above and

will  pay Cargill  the additional  $25,000 described  in

paragraph 1  (g) above.



Eldon Opheinyx    Co
eneral  Manage

CARGILL,  INCORPORATED


W.”   B.   Saunders
Group Vice President

                                     AGREEMENT


THIS AGREEMENT is made and entered into this

day of November,  1975,  by and  between the Port of Seattle  (Port),

Cargill,  Incorporated  (Cargill) and Cope-Manson-General, a joint

venture (CMG).   In consideration of the mutual  promises contained

herein the parties agree as follows:

1.   Status  of  the  Parties.
(a)   Lease  and  Construction  Agreement.   On
March 26,  1968, the Port and Cargill  entered into a Lease and

Construction Agreement (the Lease).   The Lease was subsequently

modified by four amendments, and imposed an obligation on Cargill

to design and  build,  or cause to be built,  a  grain  elevator

at  Pier 86,  Seattle,  Washington,  in accordance with  plans  and

specifications prepared by Cargill and approved by the Port.

(b)   Construction  Contract.   The  Port  approved
the plans and specifications prepared by Cargill  and Cargill

awarded a contract to CMG for construction of the Grain Handling

Facility.   The Port and Cargill  contend that CMG failed to

construct the facility in accordance with the plans and specifica-

tions and CMG denies  this contention and claims  that  if defects

exist they are caused by others.   CMG also claims that performance

was delayed and construction costs  increased  by the unavailability

of the site at the  time  construction was  to commence and for

other reasons.

EXHIBIT  "pn

                                                                                                            PV é fy = Ty I



(c)   Bond.   United  Pacific  Insurance  Company

(United Pacific), General  Insurance Company of America  (General

Insurance),  and The Travelers  Indemnity Company (Travelers)  issued

and delivered to Cargill  their payment and performance bond in

the amount of $8,146,275 naming CMG as  principals,  United Pacific,

General  Insurance and Travelers as  sureties and Cargill  as obligee.
(d)   Commencement  of Actions.   In  late  1971  CMG
commenced King County Superior Court Cause No.  747401, an action

against Cargill  and the Port,  to recover money judgments against

the Port and Cargill  and to foreclose a  lien against the

interests of Cargill  and the Port in the Grain Handling Facility.

At  the commencement of the action  CMG recorded a claim of lien

against the interests of the Port and Cargill  in the Grain Handling

Facility.   The Port and Cargill  counterclaimed against CMG and

cross-claimed against the three sureties on CMG's payment and

performance bond for damages.   A joint venture, Morrison Knudsen/

Willamette Western, was joined as additional defendant in that

action.

Subcontractors of CMG have filed the following

actions against CMG,  its sureties,  the Port and Cargill seeking

payment of various claims:
(1)   Linn  Pacific,  Inc.  vs.  Cope  Construction,  et  al,
Cause No.  737663  (Cargill  not a party);

(2)   American  Sheet  Metal,  Inc.,  and  Urban,  Inc.,  vs.
Cope Construction,  et al,  Cause No.  735997;

(3)   Lone  Star  Industries  vs.  CMG,  et  al,
Cause No   741158

-2-

                                                                                       Iv / cay 1a




The  actions by the subcontractors  have been consolidated

with and under Cause No.  747401.   Each of those subcontractors

with the exception of Lone Star has recorded a claim of lien

against the interests of Cargill  and the Port in the

Grain Handling Facility.

CMG has filed indemnity actions and declaratory

judgment actions which are still  pending against subcontractors

and  insurance carriers as follows:

(1)   CMG  vs. ABAM,  Cause  No.  776005

(2)   CMG  vs.  Bethlehem  Steel  Co.,  Cause  No.  776048
and U.S.  District Court Cause No.  C-74-94S
(3)   CMG  vs.  American  Home Assurance  Co.,  et al,
(Builders Risk Carriers) Cause No.  795603
(4)   CMG  vs.  Underwriter's  at  Lloyd's,  et  al,  (Broad
Form Property Damage Carrier)  Cause No.  795504
(e)   Retainage.   Cargill  has  not  paid  CMG  retainage

totaling $201,744.14,
2.    Purpose  of Agreement.   On  January  7,  1975,  representa-

tives of the Port,  Cargill  and CMG agreed in  principle on a

settlement of all claims by and against the parties to this Agreement

arising out of construction of the Grain Handling Facility.   On

July 31,  1975, the same representatives met with their respective

counsel  present and certain clarifications of the understanding of

of  the  parties were reached.   None of the parties admits  Tiability

and the purposes  of this Agreement are  to provide  for a stay of

proceedings,  a conditional  covenant by the Port and Cargill  not to

sue  CMG,  and dismissal  of  CMG's  claims  against  the  Port and  Cargill.

-3-

                               3.    Payments  by  CMG.    In  consideration  of  a  stay  of

proceedings and in further consideration of the conditional  covenant

by the  Port and  Cargill  not  to  sue,  CMG will  pay Cargill

$2,450,000, plus  interest (inclusive of any and all  applicable

sales taxes),  as hereinafter provided.   As between the Port and

Cargill,  the parties recognize that all  monies received under this

agreement will  be applied towards the completion of necessary

repairs of the Grain Handling Facility, and the Port therefore

agrees that Cargill  shall  be the owner of all  such funds.  Payment
shall  be made as  follows:
(a)   Upon  receipt of  a  fully executed  copy  of  this

Agreement, CMG shall, by December 31,  1975,  pay Cargill  the sum

of Six Hundred Twenty-Five Thousand Dollars  ($625,000.00).

The retainage of Two Hundred One Thousand Seven

Hundred Forty-Four and 14/100 Dollars  ($201,744.14)  shall  be paid

directly by the Port to Cargill within thirty (30) days following

receipt by the Port of a fully executed copy of this Agreement,

and credited to CMG's account.   Upon completion of these two

transactions the unpaid balance owed  by CMG to Cargill will

be  One  Million  Six  Hundred Twenty-Three Thousand Two  Hundred  Fifty-

Five and 86/100 Dollars  ($1,623,255.86).
(b)   John  Cope  and  Cope  Investment  Corporation  shall,

within a period of ten  (10)  days following receipt of an executed
:
copy of this Agreement convey to Cargill,  by statutory warranty

deed,  clear  title,  free and clear of mortgages,  liens  or other

similar encumbrances,  the  7Tollowing described real  property.

-4-

                              (See  Exhibit  A Attached)

There  shall  be credited  to  the account of CHG by

virtue of such conveyance,  a sum equal  to ninety percent  (90%)

¢f the  fair market  value of such  realty.   Fair market  value

shall  be determined  by appraisal  to  be made  by a member of the

American Institute of Appraisers  (MAI) acceptable to CMG and

Carg111.   The appraiser's fee and expenses shall  be shared 50/50

by Cargill  and  CMG.

In  the  event  any  trial  court  shall  enter  Judgment

setting aside as a preference, or for any reason,  the conveyance
of  the  said  real  property  to  Cargir11  by  John  Cope  and/or  Cope
Investment Corporation, then CMG will  pay to Cargi111 within 30 days

from entry of such judgment,  cash in an amount equal  to the credit

given  to CMG by virtue of the conveyance,  plus Cargi111's  share

of the appraiser's  fee and expenses.

(c)   The  "remaining  balance"  shall  then  be
determined and the principal  shall  be paid in four equal annual

installments.   Interest shall  also be payable annually on the

declining balance and shall  be calculated quarterly at two  (2)

percentage points greater than the weighted average rate of

interest charged by the Chase Manhattan Bank to its  larger

and most credit-worthy customers  (the prime  rate) ‘during the

quarter then ended provided,  however,  that the rate of interest

shall  not  be  greater  than  the  highest  legal  rate of interest

In  the  State  of  Washington.

           ®          ®

The date of the first payment of the  "remaining

balance” of principal  and interest shall  be no later than

December 31,  1976, and interest shall  be calculated from

December 31,  1975.   There shall  be no penalty for prepayment

of any  portion of the  "remaining balance”  before  it becomes  due.

4.   Indemnity  and  Hold  Harmless.   CMG  agrees  to  defend,

pay,  indemnify and hold Cargill  and the Port harmless  from any

claims asserted against either of them by the Subcontractors

in  pending  actions  identified  in  paragraph  1  (d)  above.   In  the

event any laborer, materialman or subcontractor of CMG, or any
laborer or materialman or other person in privity of contract

with any subcontractor of CMG asserts a claim against Cargill

or the  Port arising out of the construction contract  described

in  paragraph  1  (b)  on  page  one  of  this  Agreement,  CMG  will

defend,  indemnify,  pay,  save and hold Cargill  and the Port

harmless from such claim.   The parties hereto agree that no

third party beneficiary rights are created by or intended to be

created by this paragraph.

5.    Reservation  of  Rights  Against  Sureties.    Cargill

hereby expressly reserves  its rights against United Pacific,

General  Insurance and Travelers on their bond.

6.    Attorney's  Fees.    If  in  the  event  of  default  Cargill

refers this Agreement to an attorney for the purpose of enforcing

the  obligations  imposed herein,  CMG agrees  to pay reasonable

attorneys'  fees,  legal  expenses and court costs  incurred by

Cargill,  including those  1ncurred  1n trial  and appellate courts

or  incurred without  suit.

                                7.   Dismissal,  Stay  of  Proceedings,  Conditional

Covenant Not to Sue,  Dismissals  and Releases.
(a)   The  parties  agree  that  immediately  following
execution of this agreement,  and on notice to the sureties and

other parties  to the consolidated action, the order, a copy of

which  is attached to this agreement as Exhibit "B", shall  be

entered dismissing forthwith all  claims of CMG against Cargill

and the Port and  staying all  proceedings  by Cargill  and the Port

on  their claims  against  CMG  until  further order of the  court.

Cargill  and the Port hereby conditionally covenant not to sue

CMG on  their claims against it and agree that all  proceedings  on

their claims  against CMG shall  be stayed until  such time as

CMG shall  default  in  any of the obligations  imposed on CMG under

this agreement.   In the event of any such default,  Cargill and

the  Port shall  be entitled to  entry of an order vacating the

stay of proceedings and to proceed against CMG on their claims

against it.   In such event CMG shall  be credited with the amount

of any  payments made pursuant  to this agreement.

(b)   The  Port and  Cargill  hereby waive,  release
and discharge Morrison  Knudsen/Willamette Western from any

and all  claims of whatsoever nature arising out of,  and in any

way connected with,  preparation of the site at Pier 86,  including

but not  limited to  their claim for delay  in site preparation.

(c)   If  full  payment  is  made  by  CMG pursuant to~   <
the terms  of this  agreement,  then Cargill  and  the Port will  upon

receipt of such full  payment release and discharge John Cope,

               CMG,  Cope Construction  Corporation,  Cope  Investment Corporation

and all  of their shareholders,  directors, officers,  agents  and

employees, Manson Construction & Engineering Company and all
of  its  shareholders, directors,  officers,  agents  and employees,

General  Construction Company and all  of its shareholders, directors,

officers, agents and employees,  United Pacific Insurance Company

and all  of their shareholders,  directors,  officers,  agents and

employees,  General  Insurance Company of America and all of its

shareholders, directors, officers,  agents and employees and

The Travelers  Indemnity Company and all  of its shareholders,
directors, officers, agents and employees and each of them
jointly, as well  as severally,  unconditionally from any and all

claims of whatsoever kind or legal  nature,  specifically including

any claim the existence of which  is not now known,  arising  in the

past,  now or in the future, out of the Grain Handling Facility

Terminal 86, excepting only the indemnity obligations created by

paragrapn 4 of this agreement.

(d)   Upon  receipt  of full  payment as  provided  herein,

Cargill  and the Port shall  have entered an order dismissing with

prejudice their claims against CMG excepting only the indemnity

obligations created by paragraph 4 of this agreement.

(e)   John  Cope,  CMG,  Cope  Construction  Corporation,

Cope  Investment Corporation,  Manson Construction & Engineering

Company and General  Construction Company hereby forever release

and discharge Cargill  and all  of its  shareholders,  directors,

officers,  agents,  attorneys,  and  employees and the Port of Seattle,

its  Commissioners,  officers.  agents,  attorneys  and  employees  and

-8-

              each of them jointly as well  as  severally,  unconditionally from

any and all  claims of whatsoever kind or legal  nature, specifically

including any claim the existence of which  is not now known

arising in the past, now or in the future,  out of the Grain

Handling Facility Terminal  86.   In executing this document as

an  individual  John  Cope  obligates  himself,  individually,  only

under the provisions of this paragraph 7  (e).

COPE-MANSON-GENERAL, A Joint Venture
By  COPE  INVESTMENT CORPORATION,
Its  Sponsor
JOHN COPE

By
President,.         :
Cope Investment Corporatior

COPE CONSTRUCTION CORPORATION

By
President

MANSON CONSTRUCTION & ENGINEERING CO.

By
President

GENERAL CONSTRUCTION COMPANY

By
President

PORT OF SEATTLE

By        oo                  }
Eldon  Opheim,  General  Manager

CARGILL,  TNCORPORATED

By
W.  B.  Saunders,  Group  Vice  President

                                    EXHIBIT "A"










That portion of the Southwest Quarter of the Northeast Quarter of Section 32,
Township 25 North,  Range 5 East,  W.M.,  in King County, Washington, described a:
follows:

Beginning at the intcrsection of the East Margin of 110th Avenue Northeast,  as
now established with a line parallel to and 277.5 feet North of, when measured
at right angles to the East =- West center line of said Section 32; thence
Easterly along said parallel line to a point in a line parallel to and 476.8
feet West of, when measured at right angles, to the East line of said subdivi-
sion;  thence Northerly along said parallel line to a point in a line parallel
to and 577.5 feet North of, when measured at right angles to,  the said center
line of said  Section; thence Westerly along said parallel line, 14.09 feet to
a point in a  line parallel  to and 162.00  feet West of,  when measured at right
angles to, the East line of the West three quarters of the South  half of said
subdivision; thence Northerly along said parallel line to  the South margin
of Northeast 2nd Street as now established;  thence Westerly along said South
margin of Northeast 2nd Street to the said East margin of 110th Avenue North-
east;  thence Southerly along said East margin to the Point of Beginning.

EXHIBIT "A"

                                                                             COPY OF
COMMISSION
FEDISATL SISTINE
AcRoEMENT NO. T- 206        3PROP&0

INDEX OF LEASE AND CONSTRUCTION AGREL!

Port of Seattle and Cargill,  Ircorpora

™ ~~ ®                                                       '  9

MAR 10 112g™                                  70 2  T= =  <
1.   Leased  PremlsSesS
Ee)                                     +t .oecesvsecoooses Fray en EA
Co  TUTE
2.   Effective Date and TEM    «..uee  wovotels gale 0 3
‘              oa      WO
\
2       EN
2A
3.   Rentals1                                                   NS
........ ceca ranean cesarean ye

ws
4.   Design and Construction Improvements  on
Leased Premises py Cargill    ........icaarannnnn

5.   Reimburs=2ment  to Cargill-   Total Construct.cn
COSES   i iieii iii tiiniencenasesana   “ev  eeceaanna

6.   Terminal Tariff Charges   .   ...cc... Ceres.  case

7.   Bond    ..a.ih  tee  tere  ee   eee  sessions  areas  cea

8.   Terminatlon   ....uee  oe  eveesnen      veers   seneen

9.   Hanford  Street Elevator  Ledse       ee ee een

10    Stevedoring   ..........  cata raceaaan Caer   ease

11.   Inspection and Weighing     ©  eee  eaaaa  Ceeeaeaan

12.   Repairs and Maintenance   ...  ...  .    cee eae

13.   Liability and  Insurance   .. <....... een

14.   TAXES   tuieeevee  cee  caaaannaana  «ean       SERRE

15.   Damage or Destruction   .......... cee ea ae.        18

16.   Utilities   tui.  ei  eeiinnvaaaann   ce  tremresaaaen        le

17.   Acceptance of  Premises   ...  ..  ...      cr  ee  eae        20

18.   Casualty Insurance    -    caer  sreees  ar  sessasee        21

19.   Use of  Premises   ........ Steerer rasrersnsrenrann        21

20.   Federal Maritime Commission Approval   ..........        21

21.   Compliance with  Laws   ....... Masses serrrranas ..a        21

22.   Assignment or Sublease   ..  ..... Getter eaaaaanena        22

                                                                                                    Page

23.   Increase  1n Cost Of INSUFANCE    «.uvece  «tae  aaa        23

24.   Defaults    stant  Be  sedssenernn  sesvns ea  aaa. .        23

25.   Signs... eeeeann   Ceres racrsati ssn ences aaasens

26.   Insolvency     ciiveiiiienannnn +  sreesenassnsarsean        25

27.   WALVer   i.  tr  ci  titer eennsconncnonns Cesar aeens        25

28.   Surrender of Premises   .......... ceee  +  s  aseaana        26

29.   Holding Over   ..... Ceci eaaacacsaana ters ee  vu        26

30.   Advances by  Port  for Lessee   ..  .c.iieieceenn cee        26

31.   Liens  and Encumbrances   cuvueceeecceaces  sovscocas        26

32.    0wsTo=                                                          27

33.   Captions   ....  ciiiireietnoancoranrans cress acesns        27

34.   Invalidity   .  ....  o.oo...                      rp       27

35.   Non-discrimination Services   tessa ranne   [RP          28

36.   Non-discraimi-~ation Emplovment    “eete oe  esees        28

37.   Alterations and  Improvements   ....   .....c......        29

38.   Inspection   .....iii itis   tiiiiiet  cae csacananen        29

39.   Outside Areas  and  Roof       ........00oii tonnes        30

40.   INEegratlon   tues eeeees ceaacacaescassacsnseesn       30

                                                LEASE AND CONSTRUCTION AGREE'ENT

A
THIS LEASE AND CONSTRUCTION AGREEMENT made this Vé—

day of March,  1968,  by and between  the  PORT OF SEATTLE,  a  mu-

nicipal corporation, herein called the "Port" or "Lessor", and

CARGILL,  INCORPORATED,  a corporation,  of Minneapolis, Minnesota,

herein called "Cargill" or "Lessee"

WITNESSETH

WHEREAS,  the Commissio~ of the Port of Seattle has

determined and finds that the Port of Seattle 1s in need of

new and greatly improved grain elevator terminal facilities

to replace existing facilities and to make 1t possible to of-

fer concerns interested in the shipment of grain by water a

much improved type of facility not available elsewhere and

particularly on the Pacific Coast, and

WHEREAS,  the Commission also finds that Cargill is

one of the best qualified concerns in the United States in the

field of designing, building and operating grain terminal fa-

cilities in connection with the shipment of grain by water,

NOW,  THEREFORE,  1n consideration of the mutual cove-

nants of the parties hereto,  1t 1s agreed as follows

1.   Leased  Premises    The Port hereby  leases  to Car-

g1ll the real property more particularly described  in Exhibit

A,  attached hereto and by  this  refererce  incorporated herein

and as further shown colored solid blue and colored with blue

cross hatching on Exhibit B,  said exhibit being a map identified

as Port of Seattle Drawing No.  50-103,  and said exhibit being

                                          |

also attached hereto and by this reference 1ncorporatsd

herein

The Port further grants Lessee an option to add

to the  leased premises,  but only for the purpose of expanding

the grain terminal and facilities  incidental and related

thereto,  all or any contiguous portion of that certain area

described in Exhibit A and shown on Exhibit B in blue double

cross hatching, provided that this option shall be exercised

by giving written notice to the Port at least six months 1in

advance of any proposed effective date for obtaining posses-

sion of said area as an added portion of the leased premises.

It 1s understood and agreed  that the Port shall re-

tain at all times the right of secondary user of any unimproved

portion of the leased premises for any purposes which shall not

unreasonably interfere with Lessee's uses thereof as herein

authorized.

The leased premises shall also include a right of

way via an underpass  (as shown by a blue dotted area on Exhibit

B)  under a proposed parkway  to be developed  and  controlled by

the City of Seattle  (as shown on Exhibit B colored solid green),

which right of way shall connect the grain terminal land area

with the related marine terminal wharf and facilities incidental

thereto for use by pedestrians and vehicular traffic and for

utility installations as needed.  Also,  the leased premises

shall include an aerial right of way which shall extend between

the aforesaid  land side and marine terminal  installations and

                          §                         |
:


improvements for use as an overhead gallery in the transporta-

tion of grain or other commodities,  thelocation to be approxi-

mately as shown by the blue dotted area on Exhibit B attached,

provided, however,  that the said aerial right of way shall be

so located and constructed particularly with reference to the

height above the City of Seattle's parkway so as to cause no

interference with the normal use of the parkway for vehicular

traffic and pedestrians.

The entire leased premises and other areas as de-

scribed in Exhibit A and shown or referred to in Exhibit B and

in this lease and construction agreement shall be subject to

such changes as may be reasonable or necessary in the event

of further design changes or other modifications of plans pro-

vided such changes are mutually acceptable to the parties.

The parties hereto may by mutual agreement at any

time and from time to time add to or subtract from the leased

premises any parcel or parcels of land either adjoining or

presently within the leased premises in order to more adequately

carry out the purposes and intent of this agreement.  To accom-

plish the aforesaid change or changes in the leased premises,

appropriate new exhibits,  to be designated Exhibits A-1 and

B-1 or A-2 and B-2,  etc.,  shall be prepared as may be appro-

priate, and the parties hereto shall each endorse thereon their

acceptance of the said exhibits and shall affix their signatures

thereto.  Duplicate signed copies of the final executed exhibit

shall go to each party and a triplicate signed copy shall be

                                   sent to the Federal Maritime Commission for attachment to its

copy of this agreement.

It  1s understood oy the parties  that the Port has

heretofore acquired title in fee to portions of the leased

premises and that it 1s in the process of acquiring title in

fee to  the remainder sxcept only that portion of the  leased

premises shown on Exhibit B cross hatched in blue which con-

stitutes a portion of the harbor area   The Port will control

the  indicated portion of the harbor area by arrangements with

the state of Washington.   In the event the Port should not ac-

quire  (1)  title in fee to those portions of the leased premises

(other than harbor area} which 1t does not presently own and

{2}  control  of  the designated harbor area by  not  later  than

June 1,  19683,  then Cargill may terminate this agreement on 90

days notice 1n writing; provided further that in the event the

Port shall acquire title  in fee as specified and control of the

said harber area prior to the expiration of said 90-day period,

then the termination notice shall be of no effect.

Furthermore,  Cargill shall not be entitled to termin-

ate this  lease and agreement as aforesaid unless  1t 1s then

ready to proceed with the construction of the improvements

which are provided for herein at the time that the said notice

to terminate 1s  to become effective

There shall also be available for use by Cargill as

Lessee herein a common user roadway  for  ingress and egress by

pedestrians and vehicular traffic between the grain terminal


-  4  -

1Coe.


site and West Galer Street at Alaskan Way Vest,  as more par-

ticularly shown colored solid yellow on Exhibit B,  attached

hereto.

The leased premises shall also be available for in-

gress and egress by rail trackage from existing trackage used

by the Great Northern Railway,  the Chicago,  Milwaukee, St. Paul

and Pacific Railroad Company,  the Union Pacific Railroad Company

and the Northern Pacific Railway under arrangements which are

satisfactory to these railroads and which permit each railroad

to deliver 1ts cars to the grain terminal railroad grid on the

leased premises as evidenced by letters from each of the rail-

roads,  copies of which are attached hereto and by this  refer-

ence 1ncorporated herein as Exhibit C.

The leased premises shall be available to the Lessee

on or before June 1,  1969 witn the surface grade established

as designated on the plans and specifications for construction

of the improvement and  facilities referred to in Exhibit B.

However,  it 1s understood and agreed that the Port shall be

permitted an extension of time 1f necessary for completion

of the f1ll and grading as may become necessary due to causes
|
beyond the control of the Port.

2.   Effective  Date and Term    This  lease  shall become

effective .pon execution by the Port and Cargill provided that

1f approval  1s  required by the Federal Maritime Commission this

lease shall be effective only after such approval 1s obtained

However,  Cargill'sg       right to occupyPY  the leased premises for the
:                                   C

                                   purposes provided 1in this agreement shall commence as expressly

provided in paragrapn 1 above.  The term of the lease,  for Les-

see's operation of the grain terminal facilities and for payment

of rental as provided 1n paragraph 3 shall commence immediately

following the completion of the grain elevator and terminal

improvements and thelr acceptance by both parties to this lease

as herein provided and shall continue for 20 years immediately

following; provided,  however,  that Cargill shall have an option

or options for six additional successive five-year term exten-

sions,  subject to the same terms and conditions as herein pro-

vided except that the rental shall be subject to adjustment by

the parties prior to the beginning of each of said five-year

option periods,  as more particularly set forth in paragraph

3(b)  hereinbelow.   It 1s  further provided that the option granted

herein shall be deemed to have been relinquished unless Cargill

shall have notified the Port in writing at least two years in

advance of the beginning of each such option period of its elec-

tion to exercise 1ts option with respect to the immediately fol-

lowing five-year period

3.   Rentals:

(a)    Cargill shall pay  to  the  Port  as  a  rental

for the lease of the described premises  the sum of $600,000 00

per annum payable 1n advance in equal monthly installments of

$50,000.00 on or before the first day of each month during the

term.   (Rentals  for less  than a  full month shall be prorated

according to the occupancy time.   This rental 1s computed as

 an





an annual rate of six per cent of the estimated total construc-

tion cost of $10,000,000 00.  Should the parties agree upon

any adjustmert with respect to the total amount of construction

costs,  then the 2mount of tne annual rental shall be adjusted

by application of the same formula.  The total construction

costs shall insofar as feasible be established prior to the

commencement of  the conscruction of  the  required  terminal  im-

provements   "Total construction costs" as herein used shall

be as  specified  in paragrapn  53  of  this  agreement.

(b)   As  stated  in paragraph  2  above,  the  Port

has herein reserved the right to adjust the rental amount at

the beginning of each separate option period.   In the event

that the Port desires to exercise its privilege to adjust the

rental 1t shall do so by giving written notice to Cargill with

respect to any such adjustment  (including the amount thereof)

at least one year  in advance of the beginning of any option

period,  provided further that if Cargill shall thereupon deter-

mine that the Port's proposed adjustment of rental 1s believed

to be excessive then Cargill shall, within 30 days after re-

ceiving notice of the proposed readjustment of rental by the

Port,  give written notice to the Port of its dissatisfaction

with the proposed readjustment amount and shall advise the Port

with respect to 1ts views concerning a fair rental amount for

the ensuing option period.  Thereupon,  in the event the parties

reach no acreement with respect to an acceptable adjustment of

the rental not later than eight months prior to the beginning

                                   of the ensuing option period,  each party shall thereupon within

15 days thereafter deliver to each other in writing their re-

spective selection of an appraiser,  each of whom shall be a

member of the American Institute of Real Estate Appraisers

and who shall be qualified by experience in the appraising of

industrial real estate in the general Seattle area, and the

said nominated appraisers shall together agree upon a third

appraiser.   If prompt agreement on the selection of a third

appraiser 1s not possible,  then the selection of the third

appraiser shall be made forthwith by the senior acting judge

of the superior court for King County, Washington,  and the

three appraisers shall be authorized to make such further re-

evaluation as they may deem to be necessary and proper in order

to establish a  fair  rental  for  the  leased premises.   The  rental

amount as  thus  redetermined  shall be applicable  for  the option

period following the time when the Port gave its notice of its

desire to have the rental amount adjusted.  The rental as thus

established shall be applicable as of the beginning of said op-

tion period and shall continue until a further adjustment shall

have been made as herein provided.  The costs for the three

appraisers shall be shared equally by the Port and Cargill.

(c)    It  1s mutually understood and  agreed  that

the Port shall have the exclusive right to assess and collect

dockage charges on all vessels which shall be berthed at or

alongside the leased premises during the term of this lease.

Reference 1s made to paragraph 6 hereinbelow for a further



-  8  -

                                             statement of  the understanding of  the parties with  respect  to

the determination of the amount of the dockage charge to be

assessed and  collected by the  Port.

4.   Design and Construction of  Imorovements  on Leased

Premises by Caroill   Cargill shall promptly upon execution of

this lease undertake the design of and build or cause to be

built a grain elevator and related improvements at the leased

premises in accordance with plans and specifications which

shall be prepared by Cargill and shall be submitted to and

require the approval in writing of the Port before any con-

struction work at the premises shall be undertaken.  The ap-

proximate location of the improvements on the leased premises

shall be as shown on Exhibit B.  The general nature of the

improvements shall be substantially as outlined in Exhibit

D,  attached hereto and by this  reference  incorporated herein.

Cargill shall proceed with all reasonable diligence

to prepare detailed plans and specifications for the proposed

improvements at the leased premises,  including the grain ele-

vator,  marine terminal improvements,  loading and unloading

facilities for vessels,  rail cars and trucks,  related road-

ways,  rail trackage,  utility requirements,  etc.,  and shall

cooperate closely with the Port so that the latter may obtain

all essential information as soon as possible with respect to

1ts development of plans required for work in bulkheading,  fill-

ing and establishing the property at the necessary grades.  The

parties will each lend their fullest cooperation in carrying

                                    out the overall project generally within the scope as set out

herein as soon as possible except for causes wnich may be be-

yond the control of the parties.

It 1s understood and agreed  that the improvements

at the leased premises shall insofar as feasible be performed

by contract after a general invitation for bids and that no

bid will be finally accepted except after consultation between

the parties and with the approval of the Port.

It  1s further understood by the parties that the Port

may perform certain portions of the construction work as may be

feasible subject to agreement of the parties with respect thereto.

5.   Reimbursement  to Carqill    Total Construction Costs:

It  1s agreed  that  the  Port shall  reimburse Cargill  for or shall

itself pay or absorb the "total construction costs" for the

leasehold improvements as herein defined and shall accomplish

such reimbursement by customary
progress payments with respect

to work which has been accomplished
reserving, however,  at all

times during the performance of the work,  ten per cent of the

total costs incurred at the time of said progress payments un-

til all work has been completed  and accepted by the Port and

satisfactory evidence produced as may be requesied by the Port

to substantiate that all costs have been fully paid and until

a period of at least 30 days has elapsed after the completion

of all work and 1ts acceptance by the Port.   It 1s further

agreed that the total construction costs to be reimbursed to

Cargill or paid directly or absorbed by the Port shall not


-  10  -

                                     exceed $10,000,000.00 except to the extent that any excess

shall have peen eapressly approvea 1n writing by both part.es.

It 1s understood and agreed  that  "total construction costs”

shall include all direct out-of-pocket costs of the parties

but shall exclude the cost of all land acquisitions and for

the  fill and grading of the said leased premises  (which shall

be paid for by the Port).  Further 1t 1s mutually agreed that

the parties shall not be entitled to include executive salaries

and administrative overhead as a part of the said "total con-

struction costs".  Title to all improvements,  for which reim-

bursement to Cargill has been made by the Port, shall pass to

the Port when total reimbursement 1s completed.

In the event it shall be determined by the parties

that the leasehold improvenents will require "total consktruc-

tion costs" 1n excess of $10,000,000.00,  then either party

shall have the option to either approve or disapprove 1ts par-

ticipation in such excess   In the event the parties do not

then reach agreement to proceed with the construction of the

improvements,  the project shall be discontinued and this  lease

shall thereupon terminate,  and 1t 1s further agreed that as to

all costs theretofore incurred Cargill will bear all of its

costs (ancluding preliminary engineering work} and the Port will

bear all of its costs incurred up to the time of such disap-

proval  (including site preparations and land acqusit:ionr}.

6.   Terminal Tariff  Charges:   The  Port  reserves  the

exclusive right to assess and collect dockage charges on all

vessels berthing at Terminal 86 and an appropriate tariff will


- 11 -

                                      be 1ssued by the Port stating sucn charges and tneir applica-

tion

Cargill shall have the exclusive right to assess a

service and facility charge on all vessels berthing at the leased

premises and loading or discharging cargo at the said terminal

The applicable rates for the above charges will be

established after mutual corsultation of the parties hereto,

1t being understood and agresd that both parties shall cooper-

ate 1n good faith to establish the level of their respective

charges so that the aggregate of all such charges will be at

a  level which places and maintains  the  facility  in a competitive

position able to realize its earning potential.   The parties

further recognize the principle that it will be desirable inso-

far as feasible to establish the said charges at levels which

can be justified by reference to the underlying costs of per-

forming the services and the costs of creating and maintaining

the facilities which will be utilized by,  or from which bene-

fits will be received by,  those who shall be required to pay

terminal charges.   It 1s further agreed that the respective

level of these charges shall be established on a basis which

insofar as  possible will be equitable and  fair  to  the  Port

and to Cargill.  The initial level of these charges shall be

agreed upon as soon as feasible and thereafter each party will

cooperate in good faith to assure the maintenance of fair and

equitable charges and practices which are fair to each party

and are otherwise consistert with the objectives and purposes

herein stated.

                                                           7.   Bond.   Cargill  shall  furnish  the  Port with  a

lease bond before this lease snall be eifective.  This bond

shall be in accordance with the statutory provisions reguir-

ing such bonds  for all Port  leases.   In the event the annual

rental shall be estaplished at $600,000.00 per annum as stated

in paragraph 3 apove,  the bond shall be 1n the amount of

$2,000,000 00  and  shall be  conditioned  in accordance with

statutory requirements   If the rent 1s established at a dif-

ferent level in accordance with the basis of computation re-

ferred to in said paragraph 3,  then the amount of the bond shall

be adjusted accordingly.  In the event the amount of the rent

1s  thereafter changed  1n accordance with  the provisions  of

this  lease,  the amount of the lease bond shall likewise be

adjusted to comply with the statutory requirements.

8.   Termination.   In addition  to  the termination

rights otherwise provided for herein,  this lease may be ter-

minated as  follows

(a)   In  the  event  that  the United  States  Govern-

ment,  the State of Washington,  or any agency or instrumentality

of said Governments shall, by condemnation or otherwise,  take

title,  possession or the rights  to possession of the premises

or any substantial part ttrereof,  the Port may, at its option,

terminate this lease,  and 1f the taking has substantially im-

paired the utility of the premises to Lessee,  the Lessee may,

at its option,  terminate this  lease as of the date of such tak-

ing,  and,  1f Lessee  1s  not in default under any of the provisions



-  13  -

                                      of this lease on said date,  any rental prepa.d by Lesse= shall,

to the extent alleocable to any period suosequent to the effec-

tive date of termination, be promptly refurmed to Lessee and

all further obligations of the parties snall end except as to

liabilities which shall theretofore have accrued and,  specifi-

cally  (but without limitation of the generality of the fore-

going statement)  Lessee shall be relieved of any further obli-

gation to pay any rental amounts which would have become due

after the effective date of such termination.

(b)    In  the  event  that any court having  juris-

diction in the matter shall render a decision which has become

final and which will prevent the performance by the Port of

any of 1ts obligations hereunder then either party hereto may

terminate this lease by written notice and all rights and obli-

gations hereunder  {with the exception of any undischarged rights

and obligations that accrued prior to the effective date of

termination)  shall thereupon terminate.   If Lessee 1S not in

default under any of the provisions of this lease on the effec-

tive date of such termination,  any rental prepaid by Lessee

shall,  to the extent allocable to any period subsequent to

the effective date of the termination oe promptly refunded

to Lessee and all further obligations of the parties shall

end except as to liabilities which shall theretofore have ac-

crued and,  specifically  (but without limitation of the gener-

ality of  the  forecoing  statement)  Lessee  shall be  relieved

of any  further obligation to pay any rental amount which



-  14  -

                                   would have become cue after the effective date of such termina-

tion.

9.   Hanford  Street  Elevator  Lease:   The existing     t

Port lease with Cargill whicn covers the Hanford Street  (Pier

25)  elevator and  related premises  shall upon activation of

the grain elevator facilities provided for in this lease be

subject to termination at the option of either Cargill or the

Port   In the event the Port shall thereafter find that the
economic utilization of Hanford Street elevator for bulk grain

movements shall be feasible,  the Port agrees that 1t will of-

fer to Cargill a  first right of refusal with respect to any

then proposed lease for the said Hanford Street facilities.

It 1s also understood  that to the extent that any existing

machinery or equipment at the Hanford Street elevator may be

utilized in connection with the construction referred to herein,

the parties may by mutual consent arrange  for such utilization

and 1n that event they shall agree upon an evaluation which

shall be applicable for said equipment and machinery.

10.   Stevedoring    The  parties  recognize  the  1mpor-

tance of having reliable stevedoring services readily avail-

able  for use  in connection with the grain terminal operation

and  1n this connection the Port reserves the right 1f 1t should

become desirable to perform such stevedoring services.  Both

parties,  however,  recognize that the quality of the stevedoring

1s  oI particular  importance  to  the  contemplated grain operation

of Carcill,  and Cargill shall have the right to approve or



-  15  -

                                     disapprove of any particular stevedoring arrangement.

11.   Inspection and weichina.   The  Port reserves

the right after it has investigated what may be possible ar-

rangements for the conduct of grain inspection and weighing

functions at the elevator facilitv to determine whether the

Port desires to perform andprovide these services for compen-

sation.  The amount of the compensation shall be subject to

joint agreement between the parties hereto.

12.   Repairs and Maintenance-   The Lessee  shall  at

all times keep the premises neat,  clean and orderly and free

from waste,  and shall be wholly responsible for repairs or

maintenance as  necessary from time  to time  to keep all  of  the

structures and improvements in good operating condition except

with respect to unavoidable casualty losses.  The Port shall

have no obligation for maintenance and repair except as pro-

vided 1n paragraph 15.  At theend of the lease the premises

shall be returned to the Port in good condition  (fair wear and

tear and unaviodable casualty losses excepted).

13.   Liabilaitv and  Insurance

{a)   The  Port,  1ts  employees  and agents  shall

not be liable for any injury including death to any persons

or for damage  to any property regardless of how such injury

or damage be caused,  sustained or alleged to have been sus-

tained by the Lessee or by others as a result of any condi-

tion  (including existing or future defects  in the premises)

or occurrence related to theleased premises or related to

|


-  16  -

                                     Lessee's use or occupancy of the prem.ses.  The Lessee agrees

to defend and to hold and save the Port harmless from all ha-

bility or expense  (including expense of litigation}  in connec-

tion with any such items of actual or alleged injury or damage.

In addition,  the Lessee shall at 1ts own expense maintain appro-

priate liability insurance with an insurance company or com-

panies satisfactory to the Port with a single limit of

$2,000,000 00 to indemnify the Lessee against any such lia-

bility or expense,  including the contractual liability assumed

by Lessee under this paragraph 13(a).  The Lessee agrees to

supply the Port with appropriate evidence to establish  (1)

that 1ts insurance obligations as herein provided have been

met and  (2)  that the insurance policy or policies as herein

required are not subject to cancellation without at least 60

days advance written notice to the Port.

(b)   The  "leased  premises"  as  referred  to  in

subparagraph  (a)  of this paragraph 13 shall not include the

common user right of way area as colored solid yellow on Ex-

hibit B

14.   Taxes.   Cargill agrees  to pay all  taxes which

shall become due and owing based upon 1ts operations and against

property owned or controlled by Cargill at the leased premises:

however,  1n the event that any advalorem taxes on Port-owned

property to be paid by Carg:ll under this paragraph shall ex-

ceed 1n any one calendar year the sum of $60,000 00, Cargill

may terminate the lease unless the Port shall allow Cargill a


-  17  -

                                    credit against rentals due under the lease 1n an amount equal

to the excess payable by Cargill over the said amount of

$60,000.00 1n one calendar year, provided further that as to

any lease option period after expiration of the original 20-

year term this paragraph s*all not apply with respect to any

credit by the Port to Cargill on advalorem tax payments, how-

ever,  the anticipated taxes during any option period may be

considered 1n establishing the fair rental amounts for said

option period.

15.   Damage or Destruction:

(a)   Should  the premises  or  the  buildings  or

structures of which the premises are a part be damaged by fire

or other insured casualty  (as carried by the Port),  and 1f the

damage 1s repairable within four  (4) weeks from the date of

the occurrence  (with the repair work and the preparations

therefor to be done durinc regular working hours on regular

work days),  the premises s*>all be repaired with due diligence

by the Port,  and in the meantime the monthly minimum rental

shall be abated in the sar= proportion that the untenantable

portion of the premises bears to the whole thereof,  for the

period from the occurrence of the damage to the completion of

the repairs

(b)    Should  the premises  or any buildings  or

structures of which the oremises are a part be completely de-

stroyed by fire or other casualty,  or should they be damaged

to such an extent that the Zamage cannot be repaired within



-  18  -

                                     four  (4) weeks of the occurrence,  the Port shall have the op-

tion to terminate this lease on thirty  (30)  days'  notice,  ei-

fective as of any date not more than sixty  (60) days after the

occurrence   In the event that this paragraph shall become ap-
plicable,  the Port shall advise Lessee within thirty  (30) days

after the happening of any such damage whether the Port has

elected to continue the lease in effect or to terminate it.

If the Port shall elect to continue  this  lease  in effect,  it

shall commence and prosecute with due diligence any work nec-

essary to restore or repair the premises.   If the Port shall

fail to notify Lessee of its election within said thirty  (30)

day period,  the Port shall be deemed to have elected to ter-

minate this lease, and the lease shall automatically terminate

sixty  (60) days after the occurrence of the damage.  For the

period from theoccurrence of any damage to the premises to the

date of completion of the repairs to the premises  (or to the

date of termination of the lease 1f the Port shall elect not

to restore the premises),  the monthly minimum rental shall be

abated in the same proportion as the untenantable portion of

the premises bears to the whole thereof.

16.   Utilities    Lessee shall be  liable  for,  and

shall pay throughout the term of this lease, all charges for

all utility services furnished to the premises,  including but

not limited to,  light,  heat,  electricity,  gas, water,  sewerage,

garbage disposal and janitorial services   In the event that

the pr=mises are part of a building or are part of any larger

premises to which any utility services ars furnished on a con-

-  19  -

                                     solidated or joint basis,  Lessee agrees to pay to the Port its

(Lesse_'s)  pro rata share of the cost of any such utility ser-

vices,  and Lessee's pro rata share of any  such services may

be computed by the Port on any reasonacle basis, and separate

metering or  other  e<2ct segregation of cost  shall not be  re-

quired

17.   Acceptance of  Premises.   The Lessee  shall before

the
commencing the construction wor< as herein provided examine

leased premises and in theevent 1t begins or authorizes con-

struction work thereon 1t shall be deemed to have accepted the

premises in their then condition.

18.   Casualty Insurance    The  Port shall after  it

has accepted the improvements to be placed upon the premises

by Cargill carry usual fire and extended coverage insurance

for 1ts own account with respect to the improvements to which

1t  shall hold  title;  provided  that Cargill will be named as an

additional insured as 1ts interests may appear and provided that

whenever the Port shall desire to use any proceeds from casualty

insurance for repairs or reconstruction of any portion of the

premises,  the Port shall be entitled to receive all such pro-

ceeds.   The Port and Cargill hereby mutually releaseeach other

from liability and waive all right of recovery against each

other for any loss from perils insured against under their re-

spective fire insurance contracts including any extended cover-

endorsemant thereto, provided that this paragraph shall be
age

1napplicanl-  (1)  1f 1t would have the effect but only to the


- 20  -

                                   extent that it would have the effect of invalidating any insur-

ance coverage of the Port or Cargill and  (2) as to that portion

of any insured loss coming within a deductible.

19.   Use of Premises.   Cargill  shall use  the premises

for the construction,  maintenance and operation of a public

marine grain terminal facility and activities incidental thereto

and shall not use them for any other purpose without the written

consent of  the  Port.   Cargill agrees  to operate  the  terminal  as

a public grain terminal facility in a non-discriminatory,  non

preferential and reasonable manner.

20    Federal Maritime Commission Approval:   The parties

mutually agree to submit this lease and agreement to the Federal

Maritime Commission for determination as to whether it 1s subject

to the requirement or approval as provided  for  in Section 15 of

the United States Shipping Act of 1916, as amended.  In the

event that approval 1s required,  the parties mutually agree

that this agreement shall not become effective until 1t has

been approved by the Federal Maritime Commission 1n accordance

with the requirements of the Shipping Act.

21.   Compliance with Laws    Lessee agrees  to comply

with all applicable rules and regulations of the Port pertain-

ing to the building or other realty of which the premises are

a part now in existence or hereafter promulgated for the general

safety and convenience of the Port,  its various tenants,  invitees,

licensees and the general public, provided such rules and regula-

tions shall not conflict with the provisions of this  leas=.



-  21  -

                                    Lessee further agrees to coriply with all applicable federal,

state and municipal laws,  ordinances and regulations.  Any fees

for any inspection of the premises during or for the lease term

by any federal,  state or municipal officer and the fees for any

so-called "Certificate of Occupancy" shall be paid by Lessee.

22.   Assignment or Sublease    Lessee shall not assign

or transfer this lease or any interest therein nor sublet the

whole or any part of the premises,  nor shall this  lease or any

interest thereunder be assignable or transferable by operation

of law or by any process or proceeding of any court,  or other-

wise, without the written consent of the Port first had and

obtained.  If Lessee 1s a corporation,  Lessee further agrees

that 1f at any time during the term of this lease more than

one-half  (1/2) of the outstanding shares of any class of stock

of Lessee corporation shall belong to any stockholders other

than those who own more than one-half  (1/2) of the outstanding

shares of that class of stock at the time of the execution of

this lease or to members of their immediate families,  such change

in the ownership of the stock of the Lessee shall be deemed an

assignment of this lease within the meaning of this paragraph

If the Port shall give 1ts consent to any assignment or sub-

lease,  this paragraph shall nevertheless continue in full force

and effect and no further assignment or sublease shall be made

without the Port's consent.





- 22-

                                                       23.   Increase  1n Cost of Insurance    Lessee  shall

not use the demised premises  in such manner as to increase

the existing rates of insurance applicable to the buildings

or structures of which the premises are a part.   If it never-

theless does so,  then,  at the option of the Port,  the full

amount of any resulting increase in premiums paid by the

Port with respect to the buildings or structures of which

the leased premises are a part,  and to the extent allocable

to the term of this  lease,  may be added to the amount of

rental hereinabove specified and shall be paid by Lessee

to the Port  upon the monthly rental day next thereafter

occurring.

24,   Defaults:   Time  1s  of the  essence  of this

agreement, and in the event of the failure of Lessee to pay

the rentals or other charges at the time and in the manner

herein specified, or to keep any of the covenants or agree-

ments herein set  forth to be kept and performed,  the  Port

may elect to terminate this lease and reenter and take pos-

session of the premises with or without process of law; pro-

vided,  however,  that Lessee shall be given fifteen  (15) days’

notice in writing stating the nature of the default in order

to permit such default to be remedied by Lessee within said

fifteen  (15) day period.   If upon such reentry there remains

any personal property  of Lessee or of any other person upon

the leased premises,  the Port may, but without theobligation




-  23  -

                                       so to do,  remove said personal property ard hold it for the

owners thereof or may place  the same in a public garage or

warehouse, all at the expense and risk of the owners thereof,

and Lessee shall reimourse the Port for any expense incurred

by the  Port  in connection with such  removal  and  storage

The Port shall have the right to sell such stored property,

without notice to Lessee,  after 1t has been stored for a

period of thirty  (30) days or more,  the proceeds of such

sale to be applied first to the cost of such sale,  second

to the payment of the charges for storage, and third to the

payment of any other amounts which may then be due from Les-

see to the Port,  and the balance,  1f any,  shall be paid to

Lessee.   Notwithstanding any such reentry,  the liability of

Lessee for the full rental provided for herein shall not be

extinguished for the balance of the term of this lease,  and

Lessee shall make good to the Port any deficiency arising

from a reletting of the leased premises at a  lesser rental

than that hereinbefore agreed upon.  Lessee shall pay such

deficiency each month as the amount thereof 1s ascertained

by the  Port.

25.   Signs:   No signs or other advertising matter,

symbols,  canopies or awnings shall be attached to or painted

on or within the leased premises,  including the windows and

doors thereof, without the approval of the  General Manager

of the Port  first had and obtained.  At the termination or




-  24  -

                                     sooner explraclion of this lease,  all such signs, advertising

matter,  symbols,  canopies or awr:ings attached to or painted

by Lessee shall be removed by Lessee at 1ts own expense,

and Lessee shall repair any damage or injury to the premises,

and correct any unsightly condition, caused by the mainten-

ance and removal of said signs,  etc.

26.   Insolverc    If Lessee  shall  file a petition

in bankruptcy,  or 1f Lessee shall be adjudged bankrupt or

insolvent by any court,  or 1f a receiver of the property

of Lessee shall be appointed in any proceeding brought by

or against Lessee, or 1f Lessee shall make an assignment

for the benefit of creditors,  or if any proceedings shall

be commenced to foreclose any mortgage or any other lien

on Lessee's interest in the premises or on any personal

property kept or maintained on the premises by Lessee,  the

Port may,  at its option,  terminate this lease

27.   Waiver    The acceptance of rental by the  Port

for any period or periods after a default by Lessee hereunder

shall not be deemed a waiver of such default unless the Port

shall so intend and shall so advise Lessee in writing.  No

waiver by the Port of any default hereunder by Lessee shall

be construed to be or act as a waiver of any subsequent de-

fault by Lessee   After any default shall have been cured by

Lessee,  1t shall not thereafter be used by the Port as a ground

for  tr, commencement of any action under the provisions of para-

graph 20 hereof.


-  25  -

                                                     28.   Surrender of Premises    At the expiration or

sooner termination of this lease,  Lessee shall promptly sur-

render possession of the premises to the Port,  and shall de-

liver to the Port all keys that it may have to any and all

parts of the premises

29.   Holding Over:   If Lessee shall,  with  the con-

sent of the Port,  hold over after the expiration or socner

termination of the term of this lease,  the resulting tenancy

shall,  unless otherwise mutually agreed, be for an indefinite

period of time on a month-to-month basis.  During such month-

to-month tenancy,  Lessee shall pay to the Port the same rate

of rental as  set  forth herein,  unless  a different rate  shall

be agreed upon, and shall be bound by all of the additional

provisions of this lease agreement insofar as they may be

pertinent.
30.   Advances by Port for Lessee+   If Lessee shall

fail to do anything required to be done by 1t under the

terms of this lease, except to pay rent,  the Port may,  at

its sole option, do such act or thing on behalf of Lessee,

and upon notification of Lessee of the cost thereof to the

Port,  Lessee shall promptly pay the Port the amount of that

cost.

31.   Liens and Encumbrances    Lessee  shall keep the

leased premises free and clear of any liens and encumbrances

arising or growing out of the use and occupancy of the said



-  26  -

                                    premises by Lessee.  At the Port's request,  Lessee shall fur-

nish the Port with written proof of payment of any item which

would or might constitute the basis for such lien on the leased

premises 1f not paid.

32.   Notices:   All notices hereunder may be delivered

or marled.   If mailed,  they shall be sent by certified or

registered mail to the following respective addresses-

To Lessor.

The Port of Seattle
Post Office Box 1209
Seattle, Washington 98111

To Lessee

Cargill,  Incorporated
Cargill Building
Minneapolis, Minnesota 53402

or to such other respective addresses as either party hereto

may hereafter from time to time designate in writing.  Notices

sent by mail shall be deemed to have been given when properly

mailed,  and the postmark affixed by the United States Post

Office shall be conclusive evidence of the date of mailing.

33.   Captions:   The captions  in this  lease are  for

convenience only and do not in any way limit or amplify the

provisions of this lease.

34.   Invalidity    If any term or provision of this

lease agreement or the application thereof to any person or

circumstance shall,  to any extent, be invalid or unenforceable,

the remainder of this lease agreement or the application of



.
-27 -

                                  such term or provision to persons or circumstances other than

those as to which  it  1s held invalid or unenforceable shall

not be affected thereby and shall continue in full force and

effect.

35.   Non-discrimination Services:   The Lessee agrees

that 1t will not discriminate by segregation or otherwise against

any person or persons because of race,  creed,  color or national

origin in furnishing, or bv refusing to furnish, to such person,

or persons,  the use of the facility herein provided,  including

any and all  services,  privileges,  accommodations,  and activities

provided thereby.

It 1s agreed that the Lessee's noncompliance with

the provisions of this clause shall constitute a material breach

of this lease.   In the event of such noncompliance,  the Port

may take appropriate action to enforce compliance, may terminate

this lease, or may pursue such other remedies as may be provided

by law.

36.   Non-discrimination Employment:   The Lessee cove-

nants and agrees that in all matters pertaining to the perfor-

mance of this lease,  Lessee shall at all times conduct its

business in a manner which assures fair,  equal and non-dis-

criminatory treatment of all persons without respect to race,

creed or national origin and,  in particular:

(a)   Lessee will maintain open hiring and em-

ployment practices and will welcome applications

for employment in all positions from qualified


-  28 -

                                            individuals who are members of racial or other

minorities, and

(b)    Lessee wirll comply strictly with all  re-

quirements of applicable federal,  state or local

laws or regulations issued pursuant thereto relating

to the establishment of non-discriminatory require-

ments in hiring and employment practices and assuring

the service of all patrons or customers without dis-

crimination as to any person's race,  creed,  color or

national origin.

37.   Alterations and Improvements:   Lessee shall

make no alterations or improvements to or upon the premises

or install any fixtures  (other than trade fixtures which can

be removed without injury to the premises) without first ob-

taining written approval from the General Manager of the Port.

In the event any alterations or improvements shall be made or

fixtures  (other than trade fixtures which can be removed with-

out injury to the Premises)  installed by the Lessee, they shall

at once become a part of the realty and become the property of

the Port.   Movable furniture and trade fixtures which are re-

movable without injury to the premises shall be and remain the

property of Lessee.

38.   Inspection:   The Port  reserves  the right to

inspect the leased premises at any and all reasonable times

throaghoat the term of this lease:  provided, that it shall

not interfere unduly with Lessee's operations.   The right

                                    of inspection reserved to the Port hereunder shall impose no

obligation on the Port to make inspections to ascertain the con-

dition of the premises,  and shall impose no liability upon the

Port for failure to make such inspections.

39.   Outside Areas  and Roof:   The use of the outside

areas of the walls  (other than the front of the premises)  and

the roof of the building in which the premises are located 1s

reserved to the Port, which shall have the right to utilize

the same for any purpose,  including the maintenance of signs.

40.   Integration-   This agreement  constitutes the

whole agreement between the Port and Lessee.   There are no

terms,  obligations or conditions other than those contained

herein.  No modification or amendment of this agreement shall

be valid and effective unless evidenced by an agreement in writing.


IN WITNESS WHEREOF, the parties nereto have executed

this lease and construction agreement as of the day and year

first above written.

PORT OF SEATTLE
a municipal corporation

By % eal ( LA  -
President
ATTEST:

;
By AN\      i VoxdesAD         as
Secretary
LESSOR

CARGILL,  INCORPORATED
a  corporation of Minneapolis,  Minnesota
- —-

’ ce     By  Pa       pa
fh——a    ~~ -
-
W B Sanders Vice President
ATTEST:

(raat Seca
LESSEE

                                  STATE OF WASHINGTON    )
COUNTY OF KING            SS
)
On this  26th day of  March
,  1968,  before me,
the undersigned notary public in and for the State of Washing-
ton,  duly commissioned and sworn,  personally appeared
Merle D.  Adium                 and     Miner H.  Baker
etan                                     ’
to me known to be the AraiT¥ont and Secretary,  respectively,  of
the Port Commission of the PORT OF SEATTLE,  a municipal corpora-
tion,  the corporation that executed the foregoing instrument,
and acknowledged said instrument to be the free and voluntary
act and deed of said corporation,  for the uses and purposes
therein mentioned,  and on oath stated that they were duly author-
1zed to execute the same and that the seal affixed 1s the cor-
porate seal of said corporation.
WITNESS my hand and official seal hereto the day and
year in this certificate first above written.

J
’            pe

Alm  ovLr  7Zan
Notary Public in al 4 for the State
of Washington,  residing at   Seattle.
lo.

STATE OF__MINNESOTA     )
COUNTY OF                 SS
HENNEPIN      y

On this  14th   day of    March        ,  1968, before me
personally appeared   W. B. Saunders              and
Calvin J. Anderson
,  to me known to be the    Vice         President
and the   Assistant    Secret_.ry,  respectively,  of the corporation
that executed the within and foregoing instrument,  and acknowledged
said instrument to be the free and voluntary act and deed of said
corporation,  for the uses and purposes therein mentioned,  and on
oath stated that they were authorized to execute said instrument
and that the seal affixed 1s the corporate seal of sai@ corpora-
tion.
IN WITNESS WHEREOF I have hereunto set my hand and
affixed my official seal the day and year first above written.
A
4
Seer fer  7 (7dn    --
Notary Public  An and for the State
of   MINNESOTA      ,  residing at
Minneapolis, Minnesota  .     '
ROC. _      nr~-~
Noo, ua   r    F170 Devml  Minn,
My Commugiion Lar 1.5 Dec 8 1908



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