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 r r ‘ ® t ® 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 ’ L ’ vr ' ® é 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 - 2 - r | ® | ® 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 ' | i} ® 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 - 4 - a r | | ® ® 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 | | ® é 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 1 | | | ( - ® Jb (> annual rate of six per cent of the estimated total construc- g rE10”£ 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 1 | | ® | ® 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 1 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 - TTe— total costs incurred at the time of said progress payments un- J | 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 - 10 - 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. - 12 - ® 0 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 - 13 - 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 - 14 - ® ® 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 - 15 - 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 - 16 - ® ¢ 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 - 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 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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