Item 6c LOI
PO. Box 1209 ' s 111 ,WA 98111-1209 Port_ T213236) 7213-3000 of seatt Ie wwwportseattleorg December 8, 2009 Kevin Marchetti Bay Grove Capital 423 Washington Street 7th Floor San Francisco, CA 98411 Dear Kevin: In an effort to summarize lease negotiations between the Port of Seattle ("the Port"), Bay Grove Capital LLC ("Bay Grove") and CityIce Cold Storage Company ("CityIce") related to the sale of CityIce to Bay amended Grove, the following Letter of Intent is the Port's summary of the major terms of the leases to be as we have discussed. 1. Premises No change to leased premises ("the Premises") for the following leases (hereinafter referred to collectively as, "the Leases"): o CityIce L131, CityIce L594, CityIce L842, CityIce L1481 o Seafreeze Acquisition L1532 2. Use No change to use provisions. 3. Term _E_ 1/1/2010-12/31/2029 5x5 45 smaximum lease term 12/31/2059 1/1/201012/31/2039 ml-m__ 1/1/201012/31/2039 12/31/2059 I_2x10 50 smximumleasetexm 1/1/2010-12/31/2029 12/31/2054 20 8 5x5 45 smaximum lease term 1/1/2010-11/22/2027 11/22/2057 (17 yrs 10 mos. 22 days) (3x10 yr) 47 s 10 mos. 22 da s maximum lease term All future lease options to extend term would be at Bay Grove's discretion. The above-described base terms and options provide Bay Grove the option of extended term periods and the Port staggered lease term end dates. Bay Grove LOI December 8, 2009 Page 2 of 3 4. Lease Rate Lease Rate Increase 131 (Master) Bldg 3 28 01/01/10 5% 2010 then annual CPI until 2014 39 and land594 C-175 01/01/10 5% each ear 2010-13, Ca of 10% 2014 842 A-86 01/01/10 5% 2010 then CPI until 2014 1481 (BLDG40) 01/01/10 5% 2010 then CPI until 2014 1532 SF 01/01/10 5% 2010 then CPI until 2013 Notes: 1. All lease rates to increase on January 1, 2010 2. No caps on annual CPI rate increase. 3. Rental rate re-negotiation in 2014 for all leases except #1532 which opens for rate renegotiation in 2013, with renegotiation every 60 months thereaer and annual CPI increase in between. 5. Security Deposit rent for all leases to be Bay Grove would provide surety in an amount equivalent to twelve (12) month's submitted in the form of a letter of credit, surety bond or cash, at the effective date of the consummated lease amendments. 6. Maintenance and Repair The parties will negotiate standardized language for all CityIce leases. The parties intend for Bay Grove maintenance and repair language will to have full responsibility except in Lease 594 for which the current remain unchanged. The parties also will negotiate specic amendment language for Lease number 1481 and 131 affecting Buildings 40, 28 and 39 that allows lessee to terminate the applicable lease subject to certain conditions, completion of guaranteed occupancy period and notication of intent to terminate schedule. This is intended to address Bay Grove's concerns regarding the age of the building structures included in Lease 1481 and 131 and the potential extraordinarily high maintenance costs that can occur on older buildings. 7. Alterations and Improvements The Port will make no alterations or improvements to the Premises. Insurance insurance in the amount of Bay Grove would provide the Port with a certicate of commercial liability automobile $2,000,000 per occurrence/$4,000,000 aggregate, $250,000 property damage $1,000,000 insurance with an endorsement naming the Port as additional insured. 9. Leasehold Mortgages The Port will draft language allowing leasehold mortgages in all leases to the extent necessary. Bay Grove is expecting to obtain outside nancing for its acquisition of the CityIce business and that loans from nancing will be secured by the Port leases. Bay Grove will be allowed to obtain future lenders (institutional lenders which hold assets exceeding $750 million) and those proceeds may be used for purposes beyond the Port leases. 10. Damage and Destruction In the event of an incident causing signicant damage to the improvements on the Premises or the Premises themselves, the parties will decide who will undertake repairs. Either party will have certain under Lease 131 will rights to terminate the lease if they choose not to do repairs. The current language Bay Grove LOI December 8, 2009 Page 3 of 3 remain the same for Building 390 located at Terminal 91 and current Seafreeze facility improvements located at Terminal 1 15 (which are owned by the lessees). 11. Environmental on each of the Bay Grove will not be obligated to indenmify the Port for pre-existing contamination leaseholds, or for contamination that migrated onto the leasehold through no fault of Bay Grove. Bay Grove will be subject to other provisions that are common in other Port leases. 12. Assignment and Subleasing The Port has the right to approve any request for assignment of the leases or subletting of the premises, but the Port cannot unreasonably withhold or delay its consent. The Port will have the absolute right to withhold its consent under certain specic conditions. The Port specically grants its consent for future or any entity directly or assignment of the leases to West Coast Cold LLC, Bay Grove Capital LLC indirectly owned by either West Coast Cold or Bay Grove Capital. 13. Conrmation of Transaction. If the Port proceeds with amending the leases, it will do so based on the representation by Bay Grove and CityIce that the sale of 100% ownership interest of CityIce to Bay Grove will be fully and consummated by February 1, 2010. The Port will be provided a copy of the executed purchase sale agreement for the transfer of ownership from CityIce to Bay Grove. If this sale does not occur by will be null and this deadline (or if the nal sale is not as represented), then the lease amendments void upon Bay Grove's and CityIce's receipt of notice from the Port. 14. Financial Due Diligence Financial due diligence per agreed process has been completed to satisfaction of Port. 15. Port Termination Rights Domain. All lease amendments will reect that the Port reserves its right to exercise Eminent 16. Non-Binding Intent of leases between This document is only a list of proposals that may or may not eventually become part the parties. It is not based on any agreement between the parties. It is not intended to impose any faith an obligation to bargain in good obligation whatsoever on either party, including without limitation, The parties do not intend to be bound by any agreement until or in any way other than at arm's length. on any both agree to and sign a formal written lease or leases, and neither party may reasonably rely all other conicting language. The promises inconsistent with this paragraph. This paragraph supersedes for any reason. Any lease amendments parties may withdraw from further negotiations at any time and has authorized the between the parties will only become binding upon the Port when the Port Commission execution of such amendments. PORT OF SEATTLE BAY GROVE CAPITAL LLC By: Title:
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