Item No.: 8a_attach 
Date of Meeting: December 13, 2011 
REAL ESTATE PURCHASE AND SALE AGREEMENT 

THIS REAL ESTATE PURCHASE AND SALE AGREEMENT ("Agreement") is made
and entered into as of the ____day of ___________________ ("Effective Date") by and between
the Port of Seattle, a municipal corporation of the State of Washington ("Port") and the City of
Kirkland, a municipal corporation of the State of Washington ("City"). The Port and the City are
hereinafter sometimes referred to collectively as the "Parties". 
RECITALS 
A.    The Port is the owner of real property developed as a rail corridor approximately
100 feet wide commonly known as the Woodinville Subdivision, portions of which are located
between the City of Woodinville and the City of Renton ("South Segment"), and the City of
Woodinville and the City of Redmond ("Redmond Spur"), in King County, Washington 
(collectively, the South Segment and the Redmond Spur are referred to as the "Woodinville
Subdivision Rail Corridor"). The City desires to acquire a portion of the Port's interest in the
South Segment approximately 5.5 miles in length, located within the City of Kirkland and a
small portion of which is located in the City of Bellevue ("the Kirkland Segment"), which is
legally described in Exhibit A attached hereto and incorporated herein by this reference. 
B.    On November 5, 2009, the Port entered into a Memorandum of Understanding
(the "MOU") with King County, Central Puget Sound Regional Transit Authority ("Sound
Transit"), Cascade Water Alliance, Puget Sound Energy and the City of Redmond (collectively, 
the "Regional Partners") setting forth the mutual understanding of the parties for the completion
of future transactions where the Regional Partners would purchase from the Port interests in the
Woodinville Subdivision and thus share in the cost of acquiring it. 
C.    Consistent with the MOU, on June 30, 2010, the City of Redmond purchased
from the Port the portions of the Redmond Spur located within the city limits of Redmond (the
"City Segment") andthe City of Redmond agreed to convey to Sound Transit an easement for
transportation purposes in the City Segment at the time Sound Transit closes on a purchase of
interests in the remaining portions of the Woodinville Subdivision Rail Corridor owned by the
Port.
D. Consistent with the MOU, Sound Transit and the Port entered into a Real Estate
Purchase and Sale Agreement dated August 18, 2011 to purchase a portion of the corridor
located in Bellevue (the "Bellevue Property") along with a transportation easement for potential
future development of high capacity transportation facilities as a protective acquisition
throughout the South Segment (less the Bellevue Property) and the portions of the Redmond
Spur owned by the Port.
E.    The City and the Port are entering into this Agreement pursuant to the authority
granted in Chapter 39.33 Revised Code of Washington (Intergovernmental Disposition of
Property Act), which permits a political subdivision of the State of Washington to sell real
property to the state or any municipality or any political subdivision thereof on such terms and

conditions as may be mutually agreed upon by the proper authority of the state and/or the
subdivisions concerned. 
F.     The City and the Port have agreed upon the terms and conditions under which the
Port will sell the Kirkland Segment to the City, all as set forth herein.
G.    This Agreement was approved by Kirkland City Council on December 12, 2011 
H.    The Port Commission authorized execution of this Agreement on December 13,
2011, and will surplus the Kirkland Segment prior to closing. 
NOW, THEREFORE, in consideration of the agreements herein contained and for other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows: 
AGREEMENT 
1.     The Kirkland Segment. The Port agrees to sell to the City, and the City agrees to
purchase from the Port, the Kirkland Segment. The Kirkland Segment includes the land 
described in Exhibit A attached hereto ("the Land"), together with all of the Port's right, title and
interest in and to the buildings (if any) located on the Land ("the Buildings"), all of the Port's
right, title, and interest in any tangible personal property and fixtures of any kind owned by the
Port and attached to or used exclusively in connection with the ownership, maintenance or
operation of the Land or the Buildings, if any ("the Personalty"); and all of the Port's right, title
and interest in and to all Third Party Leases, Licenses and Contracts (defined in Paragraph 4.1
below) associated with the Kirkland Segment as of the Date of Closing. 
The Land, the Buildings and the Personalty are referred to collectively herein as the
"KirklandSegment." The Woodinville Subdivision Rail Corridor less (a) the City Segment
purchased in fee by the City of Redmond; (b) the Bellevue Property purchased in fee by Sound
Transit; and (c) the Kirkland Segment purchased by the City pursuant to this Agreement is
referred to herein as the "Port Property." 
2.     Purchase Price. The City shall pay to the Port a total purchase price of Five
Million Dollars ($5,000,000) for the Kirkland Segment ("Purchase Price") at the Closing
described in Paragraph 10 below. 
3.     Inspection Contingency. 
3.1    Inspection. The City  may, at its sole cost and expense,  conduct an
acquisition due diligence investigation of the Kirkland Segment (the "Inspection"), including a
physical inspection, to determine the condition of the Kirkland Segment, including the existence
of any environmental hazards or conditions, during the period commencing on the Effective Date
and ending at 5:00 p.m., Pacific Standard time sixty (60) calendar days  thereafter (the
"InspectionPeriod").  During the Inspection Period and subject to the limits set forth in this
paragraph, the City and its employees, representatives, consultants and agents shall have the right
and permission to enter upon the Kirkland Segment or any part thereof at all reasonable times
2

and after reasonable prior notice, and from time to time, at the City's own risk,for purposes of
analysis or other tests and inspections deemed necessary by the City for the Inspection. The Port 
may have a representative present at any inspection or testing made by the City on the Kirkland
Segment. The City shall not alter the physical condition of the Kirkland Segment without first 
providing the Port with detailed information of the City's intended activities on the Kirkland
Segment and obtaining the prior written consent of Port to any physical alteration of the Kirkland
Segment.  The City shall provide the Port with a copy of any reports or data regarding the
Kirkland Segment that the City possesses or obtains before, during or after the Inspection Period,
including without limitation any environmental reviews of the Kirkland Segment or data
regarding soil or groundwater quality at, on or under the Kirkland Segment. The City shall
defend, indemnify and hold harmless the Port from and against all liability, cost, damage and
expense (including, but not limited to, attorneys' fees) in connection withall claims, suits and
actions of any kind made or brought against the Port, its officers, agents or employees by any
person or entity as a result of or on account of actual or alleged injuries or damages to persons,
entities or property received or sustained, in any way arising out of, in connection with, or as a
result of the acts or omissions of the City, its officers, agents or employees, in exercising its
rights under the right of entry granted herein. The City's obligations under this Paragraph 3.1
shall survive the termination of this Agreement. 
3.2    Termination. If the City  determines, in its sole judgment, that the
Kirkland Segment is not suitable for any reason for the City's intended use or purpose, then City 
may terminate this Agreement by written notice to the Port before the expiration of the
Inspection Period, in which case neither party shall have any further right or obligation under this
Agreement except for those rights or obligations that expressly survive termination. In the event
this Agreement is terminated pursuant to this Paragraph 3.2 and the City altered the physical
condition of the Kirkland Segment in connection with its Inspection, the City shall return the
Kirkland Segment to its pre-Inspection condition unless otherwise agreed to in writing by the
Port. If this Agreement is not terminated on or before the expiration of the Inspection Period, the
Inspection condition shall be deemed to have been waived by the City for all purposes. 
4.     Title; Railbanking Obligations. 
4.1    Nature of Title. Subject to the City's satisfaction with or waiver of the
Inspection Contingency under Paragraph 3 above, the Kirkland Segment shall be conveyed with no
warranties of title (except that Port warrants it has the legal power and authority to execute and
deliver the documents described in Paragraph 10.2 below) and shall be subject to all matters affecting
the Kirkland Segment as of the Effective Date, whether of record or not, including but not limited to
(i) matters which would be disclosed by a current, accurate survey of the Kirkland Segment; and (ii)
the rights granted to third parties pursuant to any third party lease, license, permit, occupancy
agreement or other agreement demising space in or providing for the use or occupancy of the
Kirkland Segment ("Third Party Leases, Licenses and Contracts"). The Port represents and warrants
that Schedule 1 attached to this Agreement and incorporated herein by this reference, contains a
complete list of Third Party Leases, Licenses and Contracts of which the Port has knowledge. The
City acknowledges and affirms that the Port may not hold fee simple title to the Kirkland Segment,
that the Port's interest in all or part of the Kirkland Segment, if any, may rise only to the level of an
easement for railroad purposes. The City is willing to accept the Kirkland Segment on this basis.

3

4.2    Railbanking Obligations. The Port and the City  acknowledge  that the
Woodinville Subdivision Rail Corridor is railbanked pursuant to 16 U.S.C. 1247(d). The Port and
King County, a political subdivision of the State of Washington ("King County")entered into that
certain  Public  Multipurpose  Easement  recorded  under  King  Country  Recording  No.
20091218001538 (the "Multipurpose Easement") which, amongother things, grants King County
certain rights to acquire develop, maintain and operate a public trail for public pedestrian, bicycle and
other non-motorized uses ("Trail") over portions of the Woodinville Subdivision Rail Corridor in its
capacity as the Interim Trail User subject to the terms and conditions of the Multipurpose Easement
so long as such Trail does not interfere with the use of the Woodinville Subdivision Rail Corridor for
other Transportation Use as defined in the Multipurpose Easement. 
5.     Condition of the Kirkland Segment.
5.1    The City acknowledges that the Kirkland Segment may contain Hazardous
Substances, and that Hazardous Substances released onto the Kirkland Segment may have
migrated onto neighboring properties at times prior to the Effective Date. The City waives,
releases and discharges forever the Port from any and all present or future claims or demands and
any and all damages, losses, injuries, liabilities, causes of action (including without limitation,
causes of action in tort), costs and expenses (including without limitation fines, penalties and
judgments and attorneys fees) of any and every kind or character, known or unknown
(collectively "Losses") that the City might have asserted against the Port arising from or in any
way related to environmental conditions in, at, on, under or originating from the Kirkland
Segment or the alleged presence, use, storage, generation, manufacture, transport, release, leak,
spill, disposal or other handling of any Hazardous Substances in, on or under the Kirkland
Segment. Losses shall include without limitation (a) the cost of any investigation, removal,
remedial or other response action that is required by any Environmental Law (defined below),
that is required by judicial order or by order of or agreement with any governmental authority, or
that is necessary or otherwise is reasonable under the circumstances, (b) Losses for injury or
death of any person, and (c) Losses arising under any Environmental Law enacted after the
Effective Date. The City further agrees to indemnify and defend the Port against any and all
Losses that the Port sustains as a result of claims by third parties, including but not limited to
BNSF Railway Company ("BNSF") and federal, state and local regulatory agencies for damages
or remediation costs related to environmental conditions in, at, on under or originating from the
Kirkland Segment. Nothing in this Agreement shall be construed to waive or discharge any
rights or claims the City may hold under the Environmental Laws, agreements or deeds to seek
indemnity or contribution from BNSF or other parties other than the Port for Losses arising from
or in any way related to environmental conditions on the Kirkland Segment. The term
"Environmental Law" means any federal, state or local statute, regulation, code, rule ordinance,
order, judgment, decree, injunction or common law pertaining in any way to the protection of
human health or the environment, including without limitation the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act,
the Toxic Substances Control Act, the Model Toxics Control Act, the Water Pollution Control
Act, laws concerning above ground or underground storage tanks, and any similar or comparable
state or local law. The term "Hazardous Substance" means any hazardous, toxic, radioactive or
infectious substance, material or waste as defined, listed or regulated under any Environmental
Law, and includes without limitation petroleum oil and any of its fractions. 

4

5.2    Subject to the Port's express representations, warranties and obligations
under this Agreement, THE CITY IS NOT RELYING ON, AND HEREBY WAIVES
WARRANTY OF MERCHANTABILITY, HABITABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND ANY OTHER REPRESENTATION OR WARRANTIES,
EXPRESS OR IMPLIED, OF ANY KIND WHATSOEVER FROM THE PORT WITH
RESPECT TO ANY MATTERS CONCERNING THE KIRKLAND SEGMENT including,
but not limited to the physical condition of the Kirkland Segment; zoning status; tax
consequences of this transaction; utilities; operating history or projections or valuation;
compliance by the Kirkland Segment with Environmental Laws (defined above) or other laws,
statutes, ordinances, decrees, regulations and other requirements applicable to the Kirkland
Segment; the presence of any Hazardous Substances (defined above), wetlands, asbestos, lead,
lead-based paint or other lead containing structures, urea formaldehyde, or other environmentally
sensitive building materials in, on, or under the Kirkland Segment; the condition or existence of
any of the above ground or underground structures or improvements, including tanks and
transformers in, on or under the Kirkland Segment; the condition of title to the Kirkland
Segment, and the Third Party Leases, Licenses, Contracts, permits, orders, or other agreements,
affecting the Kirkland Segment (collectively, the "Condition of the Kirkland Segment"). 
5.3    The City represents and warrants to the Port that except for the Port's
express representations, warranties and obligations under this Agreement, the City has not relied
and will not rely on, and the Port is not liable for or bound by, any warranties, guaranties,
statements, representations or information pertaining to the Kirkland Segment or relating thereto
made or furnished by the Port, any agent or contractor of the Port, or any real estate broker or
agent representing or purporting to represent the Port, to whomever made or given, directly or
indirectly, orally or in writing. 
5.4    Notwithstanding any provision of this Agreement to the contrary, the
provisions of this Paragraph 5 shall survive the Closing (defined in Paragraph 10 of this
Agreement) of the transaction contemplated herein and the delivery of the Deed (defined in
Paragraph 10 of this Agreement) to the City. The City and the Port acknowledge that their
willingness to enter into this Agreement reflects that the Kirkland Segment is being conveyed
subject to the provisions of this Paragraph 5.
6.     Closing Conditions.
6.1    The City's obligation to purchase the Kirkland Segment shall be subject to
the following conditions that must be satisfied as of Closing or such earlier date as specified
below:
6.1.1  All representations and warranties of the Port contained herein
shall be true, accurate and complete in all material respects at the time of Closing as if made
again at such time; and 
6.1.2  The Port shall have performed all obligations to be performed by
the Port under this Agreement on or before Closing (or, if earlier, on or before the date set forth
in this Agreement for such performance); 

5

6.1.3  The  City's  satisfaction  with  or  waiver  of  the  Inspection
Contingency under Paragraph 3 of this Agreement. 
6.1.4  The Port shall have provided the City with an updated Schedule 1 
reflecting any Third Party Leases, Licenses and Contracts of which the Port has become aware or
has entered into since the date of this Agreement. 
If the conditions set forth in this Paragraph 6.1 are not satisfied as of Closing and the City does
not waive the same, the City may terminate this Agreement by giving written notice to the Port
and thereafter neither party shall have any further liability to the other under this Agreement. 
6.2    The Port's obligation to sell theKirkland Segment shall be subject to the
following conditions that must be satisfied as of Closing: 
6.2.1  All representations and warranties of the City contained herein
shall be true, accurate and complete in all material respects at the time of Closing as if made
again at such time; and 
6.2.2  The City shall have performed all obligations to be performed by it
hereunder on or before Closing (or, if earlier, on or before the date set forth in this Agreement for
such performance). 
If the conditions set forth in this Paragraph 6.2 are not satisfied as of Closing and the Port does
not waive the same, the Port may terminate this Agreement by giving written notice to the City,
and thereafter neither party shall have any further liability to the other under this Agreement. 

7.     Covenants, Representations and Warranties of the Port.    The   Port   hereby
makes the following representations and warranties, which representations and warranties shall
be deemed made by the Port to the City as of the Date of Closing: 
7.1    From the date of this Agreement to the Date of Closing, the Port will
notify the City of each event of which the Port becomes aware is affecting the Kirkland Segment 
or any part thereof, promptly upon learning of the occurrence of such event. 
7.2    The Port is a municipal corporation of the State of Washington, duly
organized, validly existing and in good standing under the laws of the State of Washington, has
all requisite power and authority to execute and deliver this Agreement and to carry out its
obligations under this Agreement and the transactions contemplated hereby. 
7.3    The Port is not a foreign person and is a "United States Person" as such
term is defined in Section 7701(a) (30) of the Internal Revenue Code of 1986, as amended
("Code") and shall deliver tothe City on the Date of Closing an affidavit evidencing such fact
and such other documents as may be required under the Code. 

6

7.4    There is no litigation pending against the Port that pertains to the Port
Property or the Port's ownership thereof, other than as disclosed in Paragraph 11.2.
7.5    The Port has not received any written notice of, and the Port has no
knowledge of, any written notice from any governmental authority alleging any uncured existing
violation of any applicable governmental laws, statutes, ordinances, rules, codes, regulations or
orders, including Environmental Laws, affecting the Kirkland Segment. 
7.6    From the date of this Agreement to the Date of Closing, the Port will not
grant or create any easement, right-of-way, encumbrance, restriction, covenant, lease, license,
option to purchase or other right which would affect the Kirkland Segment after Closing without
the City's written consent first having been obtained. 

8.     Covenants, Representations and Warranties of the City.    The   City   hereby
makes the following representations and warranties, which representations and warranties shall
be deemed made by the City to the Port as of the Date of Closing: 
8.1    From the date of this Agreement to the Date of Closing, the City will
timely perform all of its monetary and non-monetary obligations required by the terms of this
Agreement to be performed by the City. 
8.2    The City is a municipal corporation of the State of Washington, duly
organized, validly existing and in good standing under the laws of the State of Washington, has
all requisite power and authority to execute and deliver this Agreement and to carry out its
obligations under this Agreement and the transactions contemplated hereby. 
8.3    There is no litigation pending against the City which could prevent or
impair the City's obligations hereunder.
9.     Hazardous Substances.      The Port acquired the Woodinville Subdivision Rail
Corridor from BNSF Railway Company ("BNSF") pursuant to a Purchase and Sale Agreement
and Donation Agreement both dated May 12, 2008 (collectively, referred to as "PSA"). The
PSA obligates BNSF, in specified situations, to investigate, remediate, respond to or otherwise
cure (collectively, "Remediate" or "Remediation") certain environmental conditions related to
releases of Hazardous Substances or the violation of any Environmental Law. As between the
City and the Port, the City will be responsible for all costs of Remediation of Hazardous
Substances released on or from the Kirkland Segment or violations of any Environmental Law 
relating to the Kirkland Segment except to the extent caused by or resulting from the acts of Port
or its officers, employees, agents or contractors. The Port and the City agree that in the event the
City is required to Remediate Hazardous Substances released on or from the Kirkland Segment,
the Port shall cooperate with the City to obtain reimbursement of costs of Remediation from 
BNSF as provided in the deed from BNSF to the Port.


7

9.1    Survival.     Notwithstanding any provision of this Agreement or the 
Easement to the contrary, the provisions of this Paragraph 9 shall survive the Closing of the
transaction contemplated herein and the delivery of the Deed to the City. 
10.    Closing. 
10.1   Time and Place.     The closing of this sale ("Closing") shall take place
at the offices of Escrow Agent, located at Pacific Northwest Title, 215 Columbia Street, Seattle,
Washington, escrow agent for the closing of this transaction ("Escrow Agent"), onMarch 15,
2012 ("Date of Closing"); provided, however that either party may extend the Date of Closing
for up to thirty (30) days by giving written notice of such extension to the other party at least
fifteen (15) days in advance of the Date of Closing.
10.2   Port Obligations.    At or before Closing, the Port shall deliver to
Escrow Agent, for delivery to the City, the following: 
10.2.1 Quit Claim Deed. A fully executed Quit Claim Deed in
substantially the form attached hereto as Exhibit B ("Deed");
10.2.2 Excise Tax Affidavit. An appropriate excise tax affidavit, signed
by the responsible and authorized officials of the Port; 
10.2.3 Third Party Leases. A fully executed assignment to the City, in the
form attached hereto as Exhibit C, of all of the Port's right, title and interest in and to the Third
Party Leases, Licenses or Contracts listed in Schedule 1 hereto that affect the Kirkland Segment,
and of any other Third Party Leases, Licenses or Contracts that pertain to the Kirkland Segment 
and of which the Port acquires knowledge prior to Closing (collectively, the "Kirkland Leases");
and 
10.2.4 Bill of Sale. A Bill of Sale in substantially the form attached
hereto as Exhibit D; and 
10.2.5 Other Documents. Such other documents and funds as may be
required to close this transaction, including a Foreign Investment in Real Property Tax Act
("FIRPTA") certificate. 
10.3   The City's Obligations. At or before Closing, the City shall deliver to
Escrow Agent, for delivery to the Port, the following: 
10.3.1. Purchase Price. The Purchase Price; 
10.3.2 Excise Tax Affidavit. An appropriate excise tax affidavit, signed
by the responsible and authorized officials of the City; and 
10.3.3 Other Documents. Such other documents and funds as may be
required to close this transaction. 

8

10.4   Proration. All taxes, assessments, interest and other income and expenses
associated with the Kirkland Segment, shall be prorated as of Closing.
10.5   Closing Costs. The Port and the City shall share equally the escrow fees
with respect to the sale of the Kirkland Segment. To the extent the City is able to obtain title
insurance for the Kirkland Segment, the City shall be solely responsible for the cost of title
insurance premiums, title endorsements, extended coverage or other title coverage requested by
the City. 
10.6   Kirkland Lease Payments. No later than ten (10) days before Closing, the
Port and the City shall jointly review the list of Kirkland Leases and agree in writing as to which 
Kirkland Leases will require proration under Paragraph 10.4. The Port shall be entitled to all
sums due from any Kirkland Leases (collectively "Kirkland Rents") owing for the month in
which the Closing occurs (regardless of when the Kirkland Rents are paid) for the portion of the
Kirkland Segment to which such Kirkland Leases relate prorated to the Date of Closing. The
Port shall not receive a credit for any such Kirkland Rents that are due but unpaid as of the Date
of Closing but the City shall remit to the Port the Port's prorated portion of any such Kirkland 
Rents received by it after such Closing. The City shall be entitled to any Kirkland Rents owing
for time periods after the month in which the Closing occurs (regardless of when the Kirkland 
Rents are paid) for the portion of the Kirkland Segment to which such Kirkland Leases relate
prorated to the Date of Closing and the Port shall pay to the City the City's prorated portion of
any such Kirkland Rents received by the Port, if any, after the Date of Closing. On the day after
the Date of Closing (or the next business day, if it should fall on a weekend or holiday), the Port
and the City shall deliver to the tenants and other obligated persons under the Third Party Leases,
Licenses or Contracts, a letter in a form mutually acceptable to the Port and the City advising of
the sale of the Kirkland Segment and instructing such tenants or obligated persons to make all
future payments due under the Third Party Leases, Licenses or Contracts to the City or the City's 
designated agents ("New Owner Letter"). The New Owner Letter shall also advise such tenants
or obligated persons that may be in arrears as of the Date of Closing that all Kirkland Rents due
for the month in which the Closing occurred shall be remitted to the Port. All Kirkland Rents
received by the City after the Date of Closing shall be applied first to current rents and then to
rents in arrears. In the event the City receives any rents in arrears due to the Port, the City shall
remit them to the Port within thirty (30) days of receipt. The City shall have no obligation to
collect any sums in arrears owed to the Port. Within ninety (90) days after Closing, the Port shall
pay to the City the amount, if any, of all prepaid Kirkland Rents owed to the City and all security
or other deposits held by the Port under the Kirkland Leases. The City shall not be entitled to
receive any sums due or security deposits held by the Port related to Third Party Leases,
Licenses or Contracts that do not affect the Kirkland Segment. This Paragraph 10.6 shall survive
the Closing of the transaction contemplated under this Agreement and delivery of the Deed and
Easement to the City. 
11.    Possession; Post Closing Obligations. 
11.1   The City  shall be entitled to possession of the Kirkland Segment 
immediately following Closing.

9

11.2   The Parties acknowledge that a lawsuit has been filed in King County
Superior Court under Cause No. 10-2-25591-5 SEA challenging the authority of the Port to
purchase portions of the Woodinville Subdivision and seeking various remedies including
rescission of the purchase of the Redmond Spur by the Port in that certain case captioned Lane,
et al v. the Port of Seattle et. a l. If, at any time subsequent to Closing, a final judicial decree
nullifies, changes, or alters all or any portion of the City's or Port's acquisition of the Kirkland
Segment (1) such action shall not be a breach of the Covenants, Representations and Warranties
of either the Port or the City, and (2) upon thirty (30) days written notice from the City, the Port
shall deliver to the City the full amount of the Purchase Price (the "Full Reimbursement");
provided, however, if such action nullifies only a portion of the Port's or the City's acquisition of
the Kirkland Segment, the City shall cause its appraiser to value the portion of the property rights
affected by such action as of the Date of Closing (the "Appraised Value") and the City shall
reduce the Full Reimbursement by an amount equal to the Appraised Value (the "Adjusted
Reimbursement"). The Port and the City shall share equally in the cost of the appraisal to
determine the Appraised Value. This paragraph 11.2 shall survive the Closing. 
12.    Indemnification. 
12.1   By Port. Subject to and without in any way limiting the provisions of
Paragraphs 5 and 9 of this Agreement, the Port shall pay, protect, pay the defense costs of,
indemnify and hold the City and its successors and assigns harmless from and against any and all
loss, liability, claim, damage and expense suffered or incurred by reason of (a) the breach of any
representation, warranty or agreement of the Port set forth in this Agreement; (b) the failure of
the Port to perform any obligation required by this Agreement to be performed by the Port;
(c) liabilities arising out of the ownership, maintenance and/or operation of the Kirkland
Segment by the Port prior to Closing; or (d) any injuries to persons or property from any cause
occasioned in whole or in part by any acts or omissions of the Port, its agents or employees, that
occurred prior to Closing. The Port upon notice from the City shall defend any such claim at its
expense and with counsel reasonably satisfactory to the City. This indemnification shall survive
the Closing of the transaction contemplated by this Agreement and the delivery of the Deed to
the City. This indemni fication is intended for the sole benefit of the City and shall not inure to
the benefit of any third party.
12.2   By the City. Subject to and without in any way limiting the provisions of
Paragraphs 5 and 9 of this Agreement, the City shall pay, protect, pay the defense costs of,
indemnify and hold the Port and its successors and assigns harmless from and against any and all
loss, liability, claim, damage and expense suffered or incurred by reason of (a) the breach of any
representation, warranty or agreement of the City set forth in this Agreement; (b) failure of the
City to perform any obligation required by this Agreement to be performed by the City;
(c) liabilities arising out of the ownership, maintenance and/or operation of the Kirkland
Segment by the City after Closing; or (d) any injuries to persons or property from any cause
occasioned in whole or in part by any acts or omissions of the City, its agents or employees, that
occurred after Closing. The City upon notice from the Port shall defend any such claim at its
expense and with counsel reasonably satisfactory to the Port. This indemnification shall survive
the Closing of the transaction contemplated by this Agreement and the delivery of the Deed to

10

the City. This indemnification is intended for the sole benefit of the Port and shall not inure to
the benefit of any third party.
12.3   Additional Indemnification Provisions. Solely to give full force and effect
to the indemnification provisions contained herein and not for the benefit of any person, each
party specifically and expressly waives any immunity it may have under the Washington State
Industrial Act, RCW Title 51 or any other industrial insurance, workers' compensation or similar
laws of the State of Washington and acknowledge that this waiver was mutually negotiated by
the parties hereto as part of the consideration for this Agreement. This provision shall not be
interpreted or construed as a waiver of any party's right to assert such immunity, defense or
protection directly against any of its own employees. In no event shall either  party's
indemnification obligations under this Agreement be limited to the extent of any insurance
available to or provided by the obligated party.
13.    Default.
13.1   By Port. If there is an event of default under this Agreement by the Port,
the City will be entitled (a) to seek specific performance of the Port's obligations under this
Agreement or (b) to terminate this Agreement by written notice to the Port and Escrow Agent. If
the City terminates this Agreement, all documents will be immediately returned to the party who
deposited them, and neither party will have any further rights or obligations under this
Agreement, except as otherwise provided in this Agreement, other than that the Port shall pay
any costs of terminating the escrow. 
13.2   By the City. If there is an event of default under this Agreement by the
City, the Port will be entitled (a) to seek specific performance of the City's obligations under this
Agreement or (b) to terminate this Agreement by written notice to the City and Escrow Agent. If
the Port terminates this Agreement, all documents will be immediately returned to the party who
deposited them, and neither party will have any further rights or obligations under this
Agreement, other than that the City shall pay any costs of terminating the escrow. 
14.    Notices. All notices to be given by each party to the other pursuant to this
Agreement shall be delivered in person, by facsimile or deposited in the United States mail,
properly addressed, postage fully prepaid, for delivery by certified or registered mail, return
receipt requested. Notices given by personal delivery or facsimile shall be deemed effective
upon receipt (provided notice by facsimile is on a business day and receipt is acknowledged);
notices given by mail shall be deemed effective on the third business day after deposit. Notices
may be given at the following addresses and facsimile numbers, until further notice by either
party: 
If to Port:             Port of Seattle 
Real Estate Division 
P. O. Box 1209 
Seattle, WA 98111 
Attn: Managing Director Real Estate Division 
Facsimile: (206) 787-3280 

11

With a copy to:        Port of Seattle 
Legal Department 
P.O. Box 1209 
Seattle, WA 98111 
Attn: General Counsel 
Facsimile: (206) 787-3205 
If to City:             City of Kirkland 
123 Fifth Avenue 
Kirkland, WA 98033 
Attn: Public Works Director 
Facsimile: (425) 587-3807 

With a copy to:        City of Kirkland 
123 Fifth Avenue 
Kirkland, WA 98033 
Attn: City Attorney 
Facsimile: (425) 587-3025 
15.    Miscellaneous: 
15.1   Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington. 
15.2   Entire Agreement. This Agreement constitutes the entire agreement
between the parties concerning the sale of the real property interests in the Kirkland Segment and
any and all prior agreements, understandings or representations with respect to its subject matter
are hereby canceled in their entirety and are of no further force or effect. The parties do not
intend to confer any benefit under this Agreement to any person, firm or corporation other than
the parties.
15.3   Modification or Amendment. No amendment, change or modification of
this Agreement shall be valid, unless in writing and signed by all of the parties hereto. 
15.4   Counterparts. This Agreement may be executed in more than one
counterpart, each of which shall be deemed an original. 
15.5   Successors and Assigns. This Agreement shall bind and inure to the
benefit of the respective successors and permitted assigns of the parties. The City or the Port
shall not assign this Agreement, or any part thereof, without the other party's prior written
consent, which consent may be withheld in the other party's sole and absolute discretion. 
15.6   Event Date. If any event date falls on a Saturday, Sunday or legal holiday,
then the time for performance shall be extended until the next business day. 

12

15.7   Non-Waiver. No term or condition of this Agreement will be deemed to
have been waived or amended unless expressed in writing, and the waiver of any condition or the
breach of any term will not be a waiver of any subsequent breach of the same or any other term
or condition. 
15.8   Exhibits and Schedules. This Agreement contains the following Exhibits
and Schedules which are attached and made a part of this Agreement: Exhibits A, B, C, D and
Schedule 1. 
15.9   Brokers. Neither party has had any contact or dealings regarding the
Kirkland Segment, or any communication in connection with the subject matter of this
transaction, through any licensed real estate broker or other person who can claim a right to a
commission or finder's fee based on the purchase and sale contemplated by this Agreement.
15.10  Time. Time is of the essence of this Agreement. 
15.11  Attorneys Fees/Litigation Expenses. Each party shall pay their respective
attorneys fees with respect to this Agreement and Closing. In any controversy, claim or dispute
arising out of, or relating to, this Agreement, the prevailing party shall be entitled to recover its
costs and expenses of suit, including reasonable attorneys' fees. 
15.12  Recitals; Construction; Definitions. Each of the recitals set forth above is
incorporated into this Agreement as though fully set forth herein. Captions are solely for the
convenience of the parties and are not a part of this Agreement. This Agreement shall not be
construed as if it had been prepared by one of the parties, but rather as if both parties had
prepared it. Except as otherwise expressly provided herein, all references in this Agreement to
the Port, King County or the City shall mean the Port, King County or the City, each solely in its
capacity as owners of fee or easement interests in the Port Property and with reference to King
County, its status as the Interim Trail User.
15.13  Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or unenforceable, shall
not be affected thereby; and each such term and provision of this Agreement shall be valid and
be enforced to the fullest extent permitted by law. 
15.14  Survival. The covenants and indemnifications made in this Agreement
shall survive the Closing unimpaired and shall not merge into the Deed and the recordation
thereof. The representations and warranties made in this Agreement shall not merge into the
Deed but shall survive the Closing. 

Signatures appear on following page 

13

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first set forth above. 
CITY OF KIRKLAND: 

By: ________________________ 
Its: ________________________ 

PORT OF SEATTLE: 

By: _________________________ 
Its: _________________________ 











14