ORDINANCE _________________

AN ORDINANCE related to the sale and redevelopment of the former Public Safety Building block; authorizing the execution of a Purchase and Sale Agreement, Project Agreement and other related documents necessary to implement the sale and redevelopment of such property; and exempting the sale of such property from the requirements of Resolution 29799 as amended by Resolution 30862.

WHEREAS, Resolution 30769, adopted in May 2005, stated the City's preferred approach to the redevelopment of the Public Safety Building Site, including objectives consistent with the Civic Center Master Plan vision for civic public open space, private development, underground parking, and pedestrian access to the Metro/Sound Transit bus tunnel; and directed the Director of the Fleets and Facilities Department to proceed with a public solicitation for development proposals; and

WHEREAS, a Request for Concepts for redevelopment of the Site was published and distributed in April 2006 and three of the development teams responding to the Request for Concepts were invited to respond to a Request for Proposals issued in September 2006; and

WHEREAS, Triad Civic Center LLC ("Triad") was selected as the preferred developer for redevelopment of the Site; and

WHEREAS, Triad has proposed to develop a signature project for this critical block situated in south downtown that will be consistent with the Civic Center Master Plan, enhance the vibrancy of the area, and contribute to its economic vitality; and

WHEREAS, the City and Triad signed a Letter of Intent in February 2007, demonstrating the City's intent to proceed with the sale of the Site to Triad and Triad's commitment to develop a portion of the Site

as a public plaza (the "Civic Square"); and

WHEREAS, in August 2007, Resolution 31007 requested that the Director of the Fleets and Facilities Department or his or her designee negotiate a Purchase and Sale Agreement with Triad for the Site; and

WHEREAS, the Fleets and Facilities Department has negotiated a Purchase and Sale Agreement and a Project Agreement with Triad ("Agreements"). The Agreements between the City and Triad contain the following business elements: The City agrees to sell the Site to Triad for consideration valued at $25,000,000. In return, Triad will develop the Site and will finance all aspects of the development. As part of the development of the Site, Triad agrees to construct the Civic Square on the south portion of the Site, consisting of a public plaza and associated retail space to help activate the Civic Square. After completion of the Civic Square, Triad will convey the Civic Square back to the City as part of the consideration for the Site.

The difference between the cost to construct the Civic Square and $25,000,000 will be paid to the City in cash; Now, therefore,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. The Director of the Fleets and Facilities Department or his or her designee is authorized to sell to Triad Civic Center LLC ("Triad") the property located at 600 Third Avenue in the City of Seattle, hereinafter referred to as the "Site" and legally described as follows:

Lots 1, 2, 3, 4, 5, 6, 7 and 8, Block 32, Addition to the Town of Seattle as laid out on the claims of C. D. Boren and A. A. Denny and H. L. Yesler (commonly known as C. D. Boren's Addition to the City of Seattle), according to the plat recorded in Volume 1 of Plats, Page

25, in King County, Washington; Together with the vacated alley in said Block adjoining said Lots; EXCEPT the southwesterly 9 feet of Lots 1, 4, 5 and 8, condemned in King County Superior Court Cause Number 54135 for the widening of Third Avenue as provided by Ordinance number 14345 of the City of Seattle; AND EXCEPT the northeasterly 9 feet of Lots 2, 3, 6 and 7, condemned in King County Superior Court Cause number 50320 for the widening of Fourth Avenue, as provided by Ordinance Number 13074 of the City of Seattle.

for TWENTY-FIVE MILLION DOLLARS ($25,000,000). The $25,000,000 will be paid to the City in the form of a conveyance of a completed Civic Square and cash equal to the difference between the cost of the Civic Square and $25,000,000.

Section 2. In order to carry out the sale authorized in Section 1, the Director of the Fleets and Facilities Department or his or her designee is authorized to execute the Purchase and Sale Agreement for the Site, in substantially the form attached hereto as "Attachment 1," and the Seattle Civic Square Project Agreement, in substantially the form attached hereto as "Attachment 2."

Section 3. The Director of the Fleets and Facilities Department is further authorized, after consultation with the City Council or its designee(s), to amend said Purchase and Sale Agreement or said Seattle Civic Square Project Agreement, before or after execution, and to make decisions and give approvals during the design and construction of the development project, as contemplated in the Seattle Civic Square Project Agreement. Decisions that are related to the City's financial rights or obligations, but that do not affect the City's overall remuneration, are further subject to the approval of the Director of Finance, provided that decisions or amendments affecting the City's overall remuneration shall be subject to approval by separate ordinance.

Section 4. The Director of the Fleets and Facilities Department is also authorized to execute, when completed, a reciprocal easement agreement and a master lease agreement. The reciprocal easement agreement shall be consistent with Exhibit B of the Project Agreement. The master lease agreement shall be consistent with Exhibit E of the Project Agreement. Approval of the Operations and Management Agreement of the Civic Square referenced in the Project Agreement shall be by separate ordinance.

Section 5. Proceeds from the transaction authorized herein shall be used first to reimburse costs incurred and paid by the Fleets and Facilities Department in connection with the sale. The remaining proceeds shall be deposited in the Unrestricted Subaccount of the Cumulative Reserve Subfund (00164) in accordance with SMC 5.80.030.

Section 6. The sale of the property authorized in Section 1 of this Ordinance is exempted from compliance with the property disposition policies and procedures set forth in Resolution 29799 as amended by Resolution 30862.

Section 7. Any acts pursuant to the authority and prior to the effective date of this ordinance are hereby ratified and confirmed.

Section 8. This ordinance shall take effect and be in force thirty (30) days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

Passed by the City Council the ____ day of _________, 2007, and signed by me in open session in authentication of its passage this _____ day of __________, 2007.

_________________________________

President __________of the City Council

Approved by me this ____ day of _________, 2007.

_________________________________

Gregory J. Nickels, Mayor

Filed by me this ____ day of _________, 2007.

____________________________________

City Clerk

(Seal)

Attachment 1 Purchase and Sale Agreement Between The City of Seattle and Triad Civic Center LLC

Exhibits to Attachment 1

Exhibit A Depiction of Civic Square Parcel

Exhibit B Seattle Civic Square Project Agreement

Exhibit C Form of Promissory Note

Exhibit D Form of Bargain and Sale Deed

Attachment 2 Seattle Civic Square Project Agreement

Exhibits to Attachment 2

Exhibit A Legal Description of Property

Exhibit B Development Schedule

Exhibit C Conceptual Design Documents

Exhibit D Tri-Party Agreement

Exhibit E Memorandum of Rights

Exhibit F Reciprocal Easement Agreement

Exhibit G Permitted Exceptions (Civic Square Parcel)

Exhibit H Master Lease (City to Triad)

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Ted Maslin/ks

Civic Square Ordinance.doc

November 5, 2007

Version #6

1

PURCHASE AND SALE AGREEMENT

Between

THE CITY OF SEATTLE,

a Washington municipal corporation

And

TRIAD CIVIC CENTER LLC,

a Washington limited liability company

January ___, 2008

TABLE OF CONTENTS

Page

1. Purchase and Sale 4

2. Purchase Price 5

3. Title to the Property 7

4. Waiver of Feasibility Period 8

5. Title Matters 8

6. License 8

7. Purchaser's Conditions to Closing 9

8. Seller's Conditions to Closing 9

9. Seller's Representations and Warranties 10

10. Purchaser's Representations and Warranties 10

11. Default and Termination 11

12. Closing and Escrow. 13

13. Condition of Property; Risk of Loss 15

14. Purchaser's Consent to New Contracts Affecting the Property; Termination of Existing Contracts 15

15. Permitting and Entitlements 15

16. Miscellaneous. 15

17. Brokers; Indemnification 16

18. Successors and Assigns 16

19. Amendments 17

20. Governing Law 17

21. Merger of Prior Agreements 17

22. Time of the Essence 17

23. Severability 17

24. Counterparts and Facsimile Signatures 17

Exhibits:

Exhibit A Legal Description

Exhibit B Civic Square Agreement

Exhibit C Promissory Note

Exhibit D -Deed

INDEX OF TERMS

Page

Agreement 1

business day 13

Cash Payment 3

Civic Square 2

Civic Square Agreement 2

Civic Square Area 2

Closing Date 10

Deed 11

Earnest Money 2

Expiration Date 9

Incurred Civic Square Design Costs 2

Interest Adjustment 3

Minimum Purchase Price 2

Note 3

Preliminary Report 5

Property 1

Purchaser 1

Purchaser's Closing Conditions 6

Qualification Costs 4

Reporting Person 11

Reznick 4

Seller 1

Seller's Closing Conditions 6

Supplement 5

Supplemental Payment 4

Title Company 2

Title Policy 4

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made on or as of the _____ day of January, 2008, by and between The City of Seattle, a Washington municipal corporation ("Seller"), and Triad Civic Center LLC, a Washington limited liability company ("Purchaser").

RECITALS

WHEREAS the City owns that certain real property located in King County, Washington which property is the site of the former Public Safety Building and is currently vacant and surplus to City needs; and

WHEREAS Triad intends to purchase the property and to construct a building for mixed residential, commercial and office uses, and parking; and

WHEREAS the City desires to establish a civic square on a

portion of the property to provide open space and services for the enjoyment and well-being of downtown workers, residents and visitors; and

WHEREAS as a condition to its purchase of the property Triad is willing to construct a civic square on the southern portion of the property and upon completion, to sell and convey the civic square to the City or its designee;

NOW, THEREFORE,

IN CONSIDERATION of the respective agreements hereinafter set forth, Seller and Purchaser do each hereby covenant and agree with the other as follows:

1. Purchase and Sale

.

(a) Seller agrees to sell and convey to Purchaser, and Purchaser agrees to purchase from Seller, on the terms and conditions set forth in this Agreement, the Property. As used herein, the term "Property" means, collectively:

(i) that certain parcel of land located at 600 Third Avenue in the City of Seattle and more particularly described as:

Lots 1, 2, 3, 4, 5, 6, 7 and 8, Block 32, Addition to the Town of Seattle as laid out on the claims of C. D. Boren and A. A. Denny and H. L. Yesler (commonly known as C. D. Boren's Addition to the City of Seattle), according to the plat thereof recorded in Volume 1 of Plats, Page 25, in King County, Washington, together with the vacated alley in said Block adjoining said Lots;

Except the southwesterly 9 feet of Lots 1, 4, 5 and 8, condemned in King County Superior Court Cause Number 54135 for the widening of Third Avenue, as provided by Ordinance Number 14345 of the City of Seattle; and

Except the northeasterly 9 feet of Lots 2, 3, 6 and 7, condemned in King County Superior Court Cause Number 50320 for the widening of

Fourth Avenue, as provided by Ordinance Number 13074 of the City of Seattle; and

(ii) all of Seller's right, title and interest in and to all rights and interests appurtenant to the Property including, but not limited to, any development rights, mineral rights, or other rights owned by, or leased to, Seller; and

(iii) all other improvements owned by Seller located on the Property.

(b) Seller and Purchaser hereby acknowledge that Purchaser intends to use the Property to construct and erect on the Property a mixed-use tower containing office, residential and commercial space, and underground parking. Purchaser has agreed, as a condition to its purchase of the Property, to construct a civic square (the "Civic Square") on a portion of the Property generally depicted in the attached Exhibit A (the "Civic Square Area"),

substantially similar in design, structure, composition and scale to the concept contained in Purchaser's "Seattle Civic Square Summary" submitted to Seller on December 1, 2006, as subsequently modified by Purchaser's third submission for early design guidance from the City of Seattle Department of Planning and Development and included in the Conceptual Design Documents (as defined in the Civic Square Agreement). Upon completion of construction of Purchaser's project, Purchaser shall sell and convey the Civic Square to the City or its designee. To accomplish these objectives, simultaneous with the execution of this Agreement the parties shall enter into an agreement (the "Civic Square Agreement") consistent in form and content as that set forth in Exhibit B attached hereto, providing, among other matters, for Purchaser's construction of the Civic Square in the Civic Square Area and its subsequent transfer to the City.

2. Purchase Price

.

(a) The "Minimum Purchase Price" for the Property shall be the sum of (1) TWENTY FIVE MILLION and 00/100 Dollars ($25,000,000.00), plus (2) the Interest Adjustment (defined below). The Minimum Purchase Price shall be paid as follows:

(i) Within five (5) days after the mutual execution and delivery of this Agreement, Purchaser shall deposit an amount equal to the amount by which $500,000 exceeds the Incurred Civic Square Design Costs as the initial earnest money deposit (the "Earnest Money") with the downtown Seattle office of Chicago Title Insurance Company ("Title Company"), to secure Purchaser's performance hereunder. The Earnest Money shall be non-refundable to Purchaser unless the transaction fails to close due to the condition of title to the Property, as described in Subsection 5(a); or for any of the reasons identified in Section 7; or due to Seller's default, or for another reason set forth in this Agreement or the Civic Square Agreement under which Purchaser is entitled to a refund of such Earnest Money. "Incurred Civic Square Design Costs" shall mean the costs actually incurred subsequent to the parties' execution of their Letter of Intent dated February 22, 2007 in connection with the design of the Civic Square (including, as applicable, conceptual design and schematic design, engineering and related costs), provided that the results and work product associated with such design work are assignable to the Seller for use at the Property in the event this Agreement terminates for any reason other than a default by Seller. Simultaneously with the execution of this Agreement, and again following issuance of the master use permit for the proposed project, Purchaser shall provide Seller with an accounting of the

then-current Incurred Civic Square Design Costs, together with evidence reasonably satisfactory to Seller that the work product associated therewith is assignable to Seller. To the extent Civic Square Design Costs also include an allocable share of design, engineering and related costs applicable to the project as a whole, the costs attributable to Civic Square Design Costs shall be as reasonably allocated by the architects, engineers and other service providers actually performing such work. Assignability of the designs and work product related to the Civic Square means that Seller may use such designs with respect to the Property, subject to customary restrictions and limitations imposed by the architects, engineers and other service providers who prepared the designs and work product; provided that, prior to Closing, Purchaser shall confirm to Seller's reasonable satisfaction that such architects, engineers and other service providers consent to the assignability to Seller of the designs and work product related to the Civic Square.

(ii) Three (3) business days after the City of Seattle has issued a master use permit for Purchaser's proposed project (such master use permit to be sought by Purchaser under the Civic Square Agreement) and the period for the filing of an appeal has expired without an appeal having been filed (or if an appeal is filed, the appeal is finally resolved), Purchaser shall adjust the Earnest Money to equal the amount by which $1,000,000 exceeds the Incurred Civic Square Design Costs. If the Closing does occur, the full amount of the Earnest Money shall be credited toward the payment of the Minimum Purchase Price to be paid by Purchaser to Seller at Closing. Purchaser shall be entitled to the benefit of any interest earned on the Earnest Money.

(iii) At Closing, Purchaser shall pay to Seller in cash (the "Cash Payment") the remainder of the Minimum Purchase Price after crediting toward the payment of the Minimum Purchase Price (a) the Earnest Money to the extent that any funds have been deposited (and if no funds have been deposited as a result of the magnitude of the Civic Square Design Costs, then there will be no Earnest Money credit toward the Minimum Purchase Price) and (b) the Civic Square Cost Cap (as defined in the Civic Square Agreement). Along with the Cash Payment, and as a portion of the Minimum Purchase Price due at Closing, Buyer shall also pay to Seller an amount equal to the accrued interest on the Cash Payment at the rate of 5.02% per annum (non-compounded) from the date Buyer is required to adjust Earnest Money under subsection (ii) above until Closing (the "Interest Adjustment"). A portion of the Cash Payment plus the Interest Payment shall be paid to Seller and such amount shall constitute the Civic Square Cost Contingency to be used in accordance with the terms of the Civic Square Agreement.

(iv) The remainder of the Minimum Purchase Price (which shall be equal to the Civic Square Cost Cap) shall be evidenced by a promissory note (the "Note") from Purchaser to Seller consistent in form and content as attached hereto as Exhibit C. The Note shall be due and payable at such time as Purchaser completes the construction of and conveys to Seller or its designee the Civic Square in accordance with the terms of the Civic Square Agreement, or as otherwise provided in the Note. There shall be credited toward the payment of the Note (A) the actual costs of design and construction of the Civic Square as provided in the Civic Square Agreement, and (B) $3,000,000.00 representing Seller's and Purchaser's agreed value of the Civic Square Contribution Amount under the REA.

(b) Purchaser intends to seek a portion of the financing for Purchaser's intended development project through debt and equity investments from a community development entity that qualifies for new market tax credits under Section 45D of the Internal Revenue Code. To the extent Purchaser is successful in doing so, Purchaser shall pay to Seller as additional consideration for the purchase of the Property an amount equal to the Net NMTC Value of such investment, not to exceed $1,270,000 (the "Supplemental Payment"), subject to adjustment pursuant to Section 11(d) below. For purposes hereunder, the Net NMTC Value shall be the amount by which the net present value of the debt and/or equity contributions to Purchaser that qualify for new market tax credits is less than net present value of obtaining such debt and/or equity financing from third parties at then current market rates. The determination of Net NMTC Value shall be made by Reznick, Fedder & Silverman ("Reznick") on behalf of Purchaser and Seller upon the later of Closing or the date the amount of debt and/or equity financing that qualifies for new market tax credits is finally established, and absent manifest error shall be binding on Purchaser and Seller.

(i) Payment of the Supplemental Payment by Purchaser to Seller shall be made on the later of (i) ten (10) business days following the determination of the amount of the Supplemental Payment by Reznick, (ii) sixty (60) days following the actual receipt by Purchaser of the qualified debt and/or equity investment from the community development entity that qualifies for new market tax credits, and (iii) Closing. If such investment is advanced to Purchaser over time, the installment payments of the investment actually received by Purchaser shall first be used to pay the Supplemental Payment.

(ii) In determining the net present value of the debt and/or equity contributions to Purchaser that qualify for new market tax credits, there shall be taken into account the actual third party costs, fees and expenses incurred by Purchaser to seek, qualify for, arrange and obtain the debt and/or equity financing that qualifies for new market tax credits, including allocable fees, costs and expenses of the community development entity, its counsel, Purchaser's counsel and other third party consultants retained by Purchaser to facilitate such investment (collectively, the "Qualification Costs"). The Qualification Costs shall be limited to those which are actually incurred with respect to the project described by this Agreement and, upon Seller's request, Purchaser shall provide Seller with an itemization of the Qualification Costs sufficiently detailed to permit Seller to determine the nature of the costs, the identity of the provider of the service(s) associated with the costs, the amount of time spent by such service providers attributable to the costs and the time period during which the costs were incurred. In the event Seller disputes the inclusion of any item described in Purchaser's itemization of the Qualification Costs, such dispute shall be resolved by a determination made in good faith by Reznick. The fees and costs of Reznick to determine the Net NMTC Value and to resolve any dispute regarding the Qualification Costs shall be paid by Purchaser but shall also be taken into account in determining the net present value of the debt or equity contributions to Purchaser that qualify for new market tax credits.

3. Title to the Property

. At Closing, the Title Company shall issue to Purchaser an owner's standard coverage title insurance policy in the amount of the Minimum Purchase Price, insuring fee simple title to the Property, and subject only to the Permitted Exceptions (the "Title Policy"). As used herein, the term "Permitted Exceptions" means, collectively: (a) the preprinted exceptions commonly contained in an owner's standard policy, (b) non-delinquent liens for general real estate taxes and assessments; and (c) the transit tunnel easement in favor of King County. At Purchaser's option, Purchase may elect to obtain an extended coverage policy of title insurance, provided (y) Purchaser pays any increased premium for extended coverage, and (z) Purchaser provides any surveys required by the Title Company to issue extended coverage. If Purchaser elects to obtain extended coverage title insurance, Seller agrees to provide to the Title Company such affidavits and indemnities as the Title Company may reasonable request in order for the Title Company to issue such extended coverage.

4. Waiver of Feasibility Period

. Purchaser acknowledges that it has previously conducted and completed to Purchaser's satisfaction a feasibility investigation with respect to the Property, that Purchaser has determined the current condition of the Property to be acceptable, and that this Agreement does not contain a feasibility contingency.

5. Title Matters

. Purchaser acknowledges that it has received a copy of the Commitment for Title Insurance from Chicago Title Insurance Company, issued March 20, 2007, under Order No. 1232493 (the "Preliminary Report") and represents that the same contains no objectionable matters.

(a) Notwithstanding the foregoing, if the Title Company issues any supplement ("Supplement") to the Preliminary Report during the term of this Agreement, Purchaser shall have ten (10) business days following delivery of such Supplement to Purchaser to deliver an Objection Notice to Seller identifying any exceptions contained therein and not disclosed in the Preliminary Report, or any prior Supplement thereto to which Purchaser objects. Seller shall have three (3) business days after receipt of such Objection Notice to give Purchaser a Seller's Title Notice specifying which Objectionable Matters identified in the Objection Notice Seller shall cause to be removed from title on or before the Closing Date. If Seller shall fail to timely provide a Seller's Title Notice, Seller shall be deemed to have declined to remove all such Objectionable Matters.

(b) If Seller does not elect to remove all Objectionable Matters, Purchaser shall have five (5) business days from the date of Seller's Title Notice to elect by a Purchaser's Title Notice to proceed with the purchase (in which event all Objectionable Matters that Seller has not agreed to remove shall be deemed Permitted Exceptions) or to terminate this Agreement and obtain a refund of the Earnest Money if Purchaser determines in good faith that such exception, makes it commercially unfeasible to develop the Property as planned. If Purchaser shall fail to timely provide a Purchaser's Title Notice, Purchaser shall be deemed to have elected to proceed with the purchase.

6. License

. Seller grants to Purchaser and its agents (including prospective investors and lenders), a license to enter the Property during the term of this Agreement upon three (3) days' prior written notice to Seller, who shall arrange such access as Purchaser shall reasonably require, for the purpose of reviewing and investigating the Property in connection with Purchaser's proposed development thereof. The time, place and manner of investigation shall be fully described to Seller prior to entry and no investigation, inspection, analysis, study or survey shall be made that Seller has not approved in advance. Notwithstanding the foregoing, any invasive or destructive testing shall be conducted at an agreed time, and in a manner intended to minimize disruption to Seller and may require proof of insurance adequate to the risk of damage to persons or loss to the Property or any adjacent property owned by Seller. Seller shall not unreasonably withhold approval and shall endeavor to make access to the Property available for inspections. In the event that this Agreement terminates without Closing, Purchaser covenants and agrees to repair any damage to the Property occasioned by Purchaser's entry upon the Property or the conduct of any inspection, study or survey by or for Purchaser. Such repair shall be to the condition in which the Property existed immediately prior to Purchaser's initial entry upon the Property pursuant to the license granted herein. Purchaser shall indemnify and hold harmless Seller for any costs, loss or damage whatsoever incurred as a result of Purchaser's entry upon the Property and conduct of the inspection, study or survey (provided that Purchaser shall have no liability for the mere discovery of pre-existing conditions). The provisions of this Section 6 shall survive the Closing or termination of this Agreement.

7. Purchaser's Conditions to Closing

. The following conditions are precedent to Purchaser's obligation to acquire the Property and to deliver the Minimum Purchase Price ("Purchaser's Closing Conditions"). If any of Purchaser's Closing Conditions are not satisfied as of the Closing Date as determined by Purchaser in Purchaser's reasonable discretion, Purchaser may elect by written notice to Seller to terminate the Agreement hereunder. Upon such termination, neither party shall have any further obligations hereunder except as provided in Sections 6 and 11.

(a) This Agreement shall not have terminated pursuant to any other provision hereof, including, without limitation, Section 5, above.

(b) There shall be no litigation or administrative agency or other governmental proceeding of any kind whatsoever, pending or threatened which after Closing would materially adversely affect the value of the Property or the ability of Purchaser to construct and operate Purchaser's project.

(c) Title Company shall be irrevocably and unconditionally committed to issue to Purchaser the Title Policy as described in Section 3, above (subject only to payment of its premiums therefor).

(d) All of Seller's representations and warranties contained herein shall be true and correct in all material respects.

(e) Seller shall be in compliance with the provisions of the Civic Square Agreement.

(f) Seller shall have performed all of its covenants hereunder.

8. Seller's Conditions to Closing

. The following conditions are precedent to Seller's obligation to sell the Property and to deliver the Deed ("Seller's Closing Conditions"). If any of Seller's Closing Conditions are not satisfied as of the Closing Date as determined by Seller in Seller's reasonable discretion, Seller may elect by written notice to Purchaser to terminate the Agreement. Upon such termination, neither party shall have any further obligations hereunder except as provided in Sections 6 and 11.

(a) Purchaser shall be in compliance with the provisions of the Civic Square Agreement.

(b) Purchaser shall have (i) obtained all discretionary permits and approvals and the initial construction or development permits necessary to commence construction of Purchaser's project and that all appeal periods during which such permits and approvals may be challenged have expired; (ii) provided Seller with evidence demonstrating that Purchaser has arranged debt and/or equity financing in an amount sufficient to pay 100% of the estimated costs to construct Purchaser's project (including the Civic Square) and all conditions to the closing and initial funding of such financing have been satisfied (or will be satisfied upon the conveyance of the Property to Purchaser); (iii) provided Seller with evidence reasonably satisfactory to Seller that Purchaser has entered into a construction contract providing for the construction of the Civic Square for a cost not in excess of the Construction Cost Cap, and, if the cost of construction of the Civic Elements (as defined in the Civic Square Agreement) is greater than the Construction Cost Cap, Purchaser has sufficient funds to pay all construction costs in excess of the Construction Cost Cap; (iv) delivered to Seller the initial letter of credit for the benefit of the Seller in accordance with the terms of the Civic Square Agreement; and (v) delivered to Seller all other documents required to be delivered to Seller as a condition of commencement of construction of improvements upon the Property as provided in the Civic Square Agreement, including, but not limited to, certificates of insurance.

(c) Purchaser shall have performed all of its covenants hereunder.

(d) All of Purchaser's representations and warranties contained herein shall be true and correct in all material respects.

9. Seller's Representations and Warranties

. Seller hereby represents and warrants to Purchaser as follows:

(a) Seller is a municipal corporation duly organized, validly existing and in good standing under the laws of the State of Washington and has the power to own its property and assets.

(b) Seller is aware of no condition on or affecting the title to the Property, including but not limited to any material defect or material adverse fact relating to the Property, which will not be reflected as a matter of record title.

(c) This Agreement does not, and as of the Closing shall not, violate any provision of any agreement, law, City or other public process, or judicial order to which Seller is a party or to which Seller or the Property is subject.

(d) At Closing, Seller shall deliver to Purchaser a certificate certifying that each of Seller's representations and warranties contained in this Section 9 are true and correct as of the Closing Date in a form reasonably acceptable to Purchaser.

10. Purchaser's Representations and Warranties

. Purchaser hereby represents and warrants to Seller as follows:

(a) Purchaser is a duly organized and validly existing limited liability company in good standing under the laws of the State of Washington; this Agreement and all documents executed by Purchaser which are to be delivered to Seller at Closing or at the time of Closing will be duly authorized, executed and delivered by Purchaser, and do not and at the time of Closing will not violate any provisions of any agreement or judicial order to which Purchaser is subject.

(b) The individual(s) executing this Agreement and the instruments and documents that are to be executed by the Purchaser

and are referenced herein on behalf of the Purchaser has/have the legal power, right and actual authority to bind the Purchaser to the terms and conditions thereof.

(c) At Closing, Purchaser will have sufficient funds to Close and assets to perform all its obligations under this Agreement and all Exhibits hereto.

(d) Purchaser has not, and as of the Closing Purchaser shall not have (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Purchaser's creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Purchaser's assets, which remains pending as of such time, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Purchaser's assets, which remains pending as of such time, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally.

(e) Purchaser acknowledges and agrees that the Property is being sold AS IS, WHERE IS, and that Seller makes no warranties or representations concerning the condition of the Property, except as specifically set forth in this Agreement, or its suitability for Purchaser's purposes.

(f) At Closing, Purchaser shall deliver to Seller a certificate certifying that each of Purchaser's representations and warranties contained in this Section 10 are true and correct as of the Closing Date in a form reasonably acceptable to Seller.

(g) Purchaser shall, following the full execution of this Agreement, diligently pursue the issuance of all permits and approvals necessary for the development of Purchaser's proposed project in accordance with the Civic Center Agreement.

(h) Purchaser shall undertake the work necessary to have Approved Construction Documents for the Civic Elements and a Cost Estimate for the Civic Elements based upon such Approved Construction Documents (all as defined in the Civic Center Agreement) to be completed not later than July 30, 2009.

11. Default and Termination

. If either party to this Agreement shall fail or refuse to perform or satisfy a material obligation under this Agreement and such failure or refusal continues for a period of fifteen (15) days after written notice from the other party of such failure or refusal, and if the other party has performed all of its obligations hereunder then capable of being performed, then the party who has failed or refused to perform shall be in default and the non-defaulting party may elect from the following remedies:

(a) Seller in Default. In the event that Seller is in default, Purchaser may recover from Seller the Earnest Money together with accrued interest thereon and all of Purchaser's due diligence, pursuit, permitting and legal costs and expenses and, by written notice to Seller, abandon this transaction. In the alternative, Purchaser may seek specific performance of this Agreement.

(b) Purchaser in Default. In the event Purchaser is in default (including, but not limited to Purchaser's obligations under Section 10(g) above and Purchaser's obligation to close the purchase of the Property within the time period specified in Section 11(c) below), Seller shall have the right to terminate Purchaser's right to purchase the Property and retain the Earnest Money. In addition, Seller shall be entitled to an assignment from Purchaser of the plans, specifications and work product associated with the design of the Civic Square (at no cost to Seller, but otherwise without warranty from Purchaser). The foregoing rights shall be Seller's sole and exclusive remedies. The foregoing limitation on remedies shall not apply to Purchaser's indemnification obligations under this Agreement.

(c) Termination by Expiration of Time. Closing shall occur on or before December 31, 2009 (the "Expiration Date"), subject to the extension rights provided in this Section 11(c).

(i) The Expiration Date shall be extended for the period of time necessary to resolve any (A) appeal or (B) challenge by any administrative or judicial proceeding of any of the terms and conditions of the transaction set forth in this Agreement or the Civic Square Agreement or the issuance of any permit or approval necessary for the construction of Purchaser's proposed project, not to exceed an extension period of four (4) years.

(ii) Purchaser may extend the Closing Date established pursuant to Section 12(b) below for a period up to

eighteen (18) months by providing written notice to Seller of Purchaser's election to extend the Closing Date; provided, however, in no event shall the Closing Date be extended beyond December 31, 2013.

(iii) In no event shall the Expiration Date be extended beyond December 31, 2013.

(d) Effect of Extension.

(i) If Closing has not occurred by July 30, 2009, Purchaser shall be responsible for any increase in the cost of constructing the Civic Elements in accordance with the Approved Construction Documents above the Construction Cost Cap in effect as of July 30, 2009 and established pursuant to the Civic Square Agreement, other than increases caused by City-Initiated Change Orders or City Delays.

(ii) If Closing has not occurred by July 30, 2009, the Civic Square Contribution Amount paid by Purchaser pursuant to the REA shall increase in an amount equal to the percentage increase in the CPI from July 30, 2009, until the Closing Date, and shall thereafter increase commencing five (5) years following the commencement of the obligation to make payments of the Civic Square Contribution Amount, and each five (5) years thereafter, in an amount equal to the percentage increase in the CPI during such five (5) year periods.

(iii) If Purchaser elects to extend the Closing pursuant to Section 11(c)(ii) above for a period in excess of twelve (12) months, then the Supplemental Payment shall increase in an amount equal to fifty percent (50%) of the amount by which the total Net NMTC Value (including the first $1,270,000 to be paid to the Seller) exceeds Two Million Five Hundred Forty Thousand Dollars ($2,540,000.00). By way of example only, if the total Net NMTC Value is Three Million Dollars ($3,000,000.00), and Purchaser elects to extend the Closing for a period of fifteen (15) months pursuant to Section 11(c)(ii) above, then the Supplemental Payment would increase by fifty percent (50%) of Four Hundred Sixty Thousand Dollars ($460,000), or Two Hundred Thirty Thousand Dollars ($230,000.00). A summary of the allocation of the total Net NMTC Value under the foregoing example is:

Total Net NMTC Value = $3,000,000.00

The first $1,270,000.00 is paid to Seller as part of the Supplemental Payment;

The next $1,270,000.00 is retained by Purchaser;

The next $460,000.00 is split equally between Seller, as part of the Supplemental Payment and Purchaser; and

The total Supplemental Payment is $1,270,000.00 + $230,000.00 = $1,500,000.00.

12. Closing and Escrow.

(a) Upon mutual execution of this Agreement, the parties hereto shall deposit an executed counterpart of this Agreement with Title Company and this Agreement shall serve as instructions to Title Company for consummation of the purchase and sale contemplated hereby. Seller and Purchaser agree to execute such additional escrow instructions as may be appropriate to enable the Title Company to comply with the terms of this Agreement; provided, however, that in the event of any conflict between the provisions of this Agreement and any supplementary escrow instructions (other than joint escrow instructions), the terms of this Agreement shall control.

(b) The parties shall conduct an escrow Closing pursuant to this Section 12 on either (i) the date that is thirty (30) days after all permits necessary for the construction of Purchaser's proposed project have been issued and each of the conditions to Closing set forth in this Agreement and the Civic Square Agreement have been satisfied or waived, or (ii) on such other earlier date as designated by Purchaser upon ten (10) days prior written notice to Seller (provided the Seller's Closing Conditions have been satisfied and waived by Seller) (the date upon which Closing is to occur shall be referred to as the "Closing Date"). The Closing Date may be extended pursuant to Section 11(c) above with permitted extensions of the Expiration Date. In the event the Closing does not occur on or before the Closing Date, as the Closing Date may be extended pursuant to Section 11(c) above, the Title Company shall, unless it is notified by both parties to the contrary within five (5) days after the Closing Date, return to the depositor thereof any non-monetary items which were deposited hereunder. Any such return shall not, however, relieve either party of any liability it may have for its wrongful failure to close.

(c) At or before Closing, Seller shall deliver to Title Company (for delivery to Purchaser upon Closing) the following:

(i) a duly executed and acknowledged bargain and sale deed in the form attached hereto as Exhibit D (the "Deed");

(ii) such ordinances, authorizations, or other documents relating to Seller as Title Company shall require;

(iii) the certificate certifying as to Seller's representations and warranties as Section 9, above, requires;

(iv) any other customary and/or reasonable closing documents that Title Company or Purchaser reasonably request.

(d) At or before the Closing, Purchaser shall deliver to Title Company (for delivery to Seller upon Closing), the following:

(i) such resolutions, authorizations, and/or other documents or agreements relating to Purchaser as Title Company shall require;

(ii) the certificate certifying as to Purchaser's representations and warranties as Section 10, above, requires;

(iii) the Cash Payment described in Subsection 2(a), together with a fully executed promissory note in the form attached hereto as Exhibit C; and

(iv) any other customary and/or reasonable closing documents that Title Company or Seller request.

(e) Seller and Purchaser shall each deposit such other instruments as Title Company reasonably requires or are otherwise required to close the escrow and consummate the acquisition of the Property in accordance with the terms hereof. Seller and Purchaser hereby designate Title Company as the "Reporting Person" for the transaction pursuant to Section 6045(e) of the Internal Revenue Code and the regulations promulgated thereunder and agree to execute such documentation as is reasonably necessary to effectuate such designation.

(f) The following are to be apportioned as of the Closing Date as follows, with Purchaser being deemed to be the owner of the Property during the entire day on which the Deed is recorded, and being obligated to pay all expenses of the Property, with respect to such day:

(i) Apportionments; Closing Costs. Seller shall pay all transfer taxes with respect to the Property, the premium for the Title Policy to the extent of the premium that would have been charged for a standard coverage policy, and one-half (1/2) of the escrow fee. Purchaser shall pay any recording fees, one-half (1/2) of the escrow fee and the additional premium for an extended coverage Title Policy and such other endorsements as Purchaser requests. All other costs and charges of the escrow for the sale not otherwise provided for in this Subsection 12(f)(i) or elsewhere in this Agreement shall be allocated in accordance with the applicable closing customs for the county in which the Property is located, as determined by the Title Company.

(ii) Real Estate Taxes and Special Assessments. Purchaser shall be liable for all real estate taxes and assessments accruing after the Closing Date. Purchaser and Seller acknowledge that the Property is currently exempt from taxes.

(iii) Post-Closing Reconciliation. If any of the aforesaid prorations cannot be calculated accurately on the Closing Date, then they shall be calculated as soon after the Closing Date as feasible. Either party owing the other party a sum of money based on such subsequent proration(s) shall promptly pay said sum to the other

(g) The provisions of Subsection 12 (f) shall survive the Closing.

13. Condition of Property; Risk of Loss

. Seller shall deliver the Property to Purchaser at Closing in substantially the same physical condition as of the date of Seller's execution of this Agreement, ordinary wear and tear and risk of loss due to casualty excepted. Seller shall bear the risk of loss or damage to the Property until Closing. Thereafter, Purchaser shall bear the risk of loss. The Property shall be delivered to Purchaser free and clear of all leases, occupancy agreements and parties in possession.

14. Purchaser's Consent to New Contracts Affecting the Property; Termination of Existing Contracts

. Seller shall not, after the mutual execution of this Agreement, create any new encumbrance or lien affecting the Property other than liens and encumbrances (a) that are reasonably capable of being discharged prior to Closing and (b) that in fact will be and are discharged prior to Closing. The obligations set forth in this Section 14 shall survive Closing to the extent such obligations are violated prior to Closing.

15. Permitting and Entitlements

. During the term of this Agreement, Purchaser shall be fully authorized to seek a master use permit and other permits and approvals for Purchaser's intended development of the Property (consistent with and subject to the terms of the Civic Square Agreement).

16. Miscellaneous.

(a) Notices. Any notice, consent or approval required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given upon (i) hand delivery, (ii) one (1) business day after being deposited with Federal Express or another reliable overnight courier service, with receipt acknowledgment requested, (iii) upon receipt if transmitted by facsimile telecopy, with a copy sent on the same day by one of the other permitted methods of delivery, or (iii) upon receipt or refused delivery deposited in the United States mail, registered or certified mail, postage prepaid, return receipt required, and addressed as follows:

If to Seller: City of Seattle

Fleets and Facilities Department

700 5th Avenue, 52nd Floor

PO Box 94689

Seattle, WA 98124-4689

Attn: Department Director

With a copy to: The City of Seattle

City Attorney's Office

600 Fourth Avenue 4th Floor

Seattle, WA 98124-4769

Attn: Rodney Eng

If to Purchaser: Triad Civic Center LLC

c/o Triad Development, Inc.

Pier 70

2801 Alaskan Way, Suite 107

Seattle, WA 98121-1135

Attn: Frederick W. Grimm

With a Copy to: Foster Pepper PLLC

1111 Third Avenue, Suite 3400

Seattle, WA 98101

Attn: Michael D. Kuntz

or such other address as either party may from time to time specify in writing to the other.

(b) Business Day. As used in this Agreement, the term "business day " means any calendar day other than Saturday, Sunday and any legal holiday observed by the City of Seattle, State of Washington or the federal government of the United States.

(c) Defined Terms. For all purposes of this Agreement, except as otherwise expressly provided or unless the context other wise requires, (a) the capitalized words and other terms defined in this Agreement shall have the meanings assigned to them and include the plural as well as the singular, (b) all capitalized terms not defined in this Agreement shall have the meanings assigned to them in the Civic Square Agreement, (c) all references in this Agreement to designated "Sections" and other subdivisions are to the designated Sections and other subdivisions of this Agreement and (d) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision:

17. Brokers; Indemnification

. Purchaser and Seller each warrant and represent that they will each be solely responsible for any and all commissions due their respective real estate broker or similar intermediary in connection with the purchase of the Property, and each shall hold harmless, indemnify and defend the other from and against any claim based on any alleged fact inconsistent with such party's warranty and representation contained in this Section 17. The parties acknowledge that Staubach Company has represented Seller in this transaction and is to be compensated pursuant to a separate agreement between Seller and Staubach Company. This indemnification obligation shall survive the Closing and the termination of this Agreement.

18. Successors and Assigns

. Purchaser shall not assign or transfer its rights under this Agreement without Seller's prior written consent, which consent shall not be unreasonably conditioned, withheld or delayed. Notwithstanding the foregoing, Purchaser may assign this Agreement upon notice to Seller (but without the consent of Seller) to an entity or entities in which Purchaser or the principals of Purchaser have an interest and only if (a) the Civic Square Agreement is simultaneously assigned to the same assignee consistent with the terms of the Civic Square Agreement; (b) the assignee agrees in writing to assume and perform all of the obligations of Purchaser under this Agreement and the Civic Square Agreement; and (c) any guaranties or other security provided to secure the performance of Purchaser under Civic Square Agreement shall be ratified and confirmed notwithstanding such assignment. Seller acknowledges that Purchaser expects to transfer this Agreement prior to Closing to one or more newly formed entities in connection with the debt and equity financing for Purchaser's proposed development, and in order to seek benefits associated with new market tax credits under Section 2(b) above. In the event that Purchaser shall assign its rights and obligations hereunder Purchaser, the assignor shall be released from any obligation or liability hereunder from and after the date of such assignment, and such assignee shall be substituted as Purchaser hereunder and shall be entitled to the benefit of and may enforce Seller's covenants, representations and warranties hereunder as if such assignee were the original Purchaser hereunder, and shall assume in writing all obligations and liabilities of Purchaser hereunder, subject to any limitations of such liabilities and obligations hereunder or provided by law. This Agreement shall be binding upon the successors and assigns of the parties hereto.

19. Amendments

. Unless otherwise provided herein, this Agreement may be amended or modified only by a written instrument executed by Seller and Purchaser.

20. Governing Law

. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington.

21. Merger of Prior Agreements

. This Agreement and the exhibits hereto, constitutes the entire agreement between the parties and supersede all prior

agreements and understandings between the parties relating to the subject matter hereof, other than the Civic Square Agreement (and any exhibits thereto) which for all purposes shall be an independent agreement as between Seller and Purchaser.

22. Time of the Essence

. Time is of the essence of this Agreement.

23. Severability

. If any provision of this Agreement, or the application thereof to any person, place, or circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or void, the remainder of this Agreement and such provisions as applied to other persons, places and circumstances shall remain in full force and effect.

24. Counterparts and Facsimile Signatures

. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, when taken together, shall be deemed to be one agreement. This Agreement may be executed pursuant to original or facsimile copies of signatures, with the same effect as if the parties had signed the document pursuant to original signature.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

SELLER: The City of Seattle,

a Washington municipal corporation

By:

Its:

PURCHASER: Triad Civic Center LLC, a Washington limited liability company

By:

Frederick W. Grimm

Its: Manager

EXHIBIT A

Depiction of Civic Square Parcel Sheet 1 Sheet 2 Sheet 3

EXHIBIT B

Seattle Civic Square Project Agreement

(Ordinance Attachment 2)

EXHIBIT C

Form of Promissory Note

PROMISSORY NOTE

$23,500,000.00 Seattle, Washington

___________, 20__

For value received, Triad Civic Center LLC, a Washington limited liability company ("Triad"), pursuant to that certain Purchase and Sale Agreement by and between Triad and The City of Seattle, a Washington municipal corporation (the "City") dated January ___, 2008 (the "Purchase Agreement"), promises to pay to the order of The City of Seattle, a Washington municipal corporation at The City of Seattle, Law Department, 600 Fourth Avenue 4th Floor, Seattle, WA 98124, Attn: Rodney Eng, the sum of Twenty Three Million Five Hundred Thousand and 00/100 Dollars ($23,500,000. 00) (the "Principal Balance").

The Principal Balance shall be due (a) at such time as provided for in Section 2(a)(iv) of the Purchase Agreement, or (b) upon demand of City at any time following a default (after giving effect to all cure periods) by Triad under the terms of the Purchase Agreement or the Civic Square Agreement (as defined in the Purchase Agreement).

If such amount is not paid when due, it will thereafter accrue interest at the rate of twelve percent (12%) per annum until paid.

TRIAD CIVIC CENTER LLC,

a Washington limited liability company

By: ________________________

Name: ________________________

Title: ________________________

EXHIBIT D

Form of Bargain and Sale Deed

After Recording Return to:

Triad Civic Center LLC

c/o Triad Development, Inc.

Pier 70

2801 Alaskan Way, Suite 107

Seattle, WA 98121-1135

Attn: Frederick W. Grimm

BARGAIN AND SALE DEED

GRANTOR: The City of Seattle, a Washington municipal corporation

GRANTEE: Triad Civic Center LLC, a Washington limited liability company

Legal Description:

Abbreviated Form: Lots 1-8, Block 32, Volume 1 of Plats, Page 25.

Additional Legal is on Exhibit A attached to document

Assessor's Tax Parcel ID No. 094200-0855-07

BARGAIN AND SALE DEED

THE GRANTOR, the City of Seattle, a Washington municipal corporation, for and in consideration of Ten Dollars ($10.00) in hand paid, bargains, sells and conveys to Triad Civic Center LLC, a Washington limited liability company the following described real estate, situated in the County of King, State of Washington:

See Exhibit A attached hereto and incorporated herein by this reference.

Subject to and excepting those matters listed in Exhibit B attached hereto and incorporated herein by this reference.

Dated ________________, 20__ THE CITY OF SEATTLE,

a Washington municipal corporation

By: ________________________

Name: ________________________

Title: ________________________

STATE OF WASHINGTON )

) ss.

COUNTY OF KING )

I certify that I know or have satisfactory evidence that _________________________________ is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the ____________________________ of THE CITY OF SEATTLE to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Dated: ________________________

Notary Public

Print Name

My commission expires

(Use this space for notarial stamp/seal)

Exhibit A

LEGAL DESCRIPTION

LOTS 1, 2, 3, 4, 5, 6, 7 AND 8, BLOCK 32, ADDITION TO THE TOWN OF SEATTLE AS LAID OUT ON THE CLAIMS OF C. D. BOREN AND A. A. DENNY AND H. L. YESLER (COMMONLY KNOWN AS C. D. BOREN'S ADDITION TO THE CITY OF SEATTLE), ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 1 OF PLATS, PAGE(S) 25, IN KING COUNTY, WASHINGTON;

TOGETHER WITH THE VACATED ALLEY IN SAID BLOCK ADJOINING SAID LOTS;

EXCEPT THE SOUTHWESTERLY 9 FEET OF LOTS 1, 4, 5 AND 8, CONDEMNED IN KING COUNTY SUPERIOR COURT CAUSE NUMBER 54135 FOR THE WIDENING OF THIRD AVENUE, AS PROVIDED BY ORDINANCE NUMBER 14345 OF THE CITY OF SEATTLE; AND

EXCEPT THE NORTHEASTERLY 9 FEET OF LOTS 2, 3, 6 AND 7, CONDEMNED IN KING COUNTY SUPERIOR COURT CAUSE NUMBER 50320 FOR THE WIDENING OF FOURTH AVENUE, AS PROVIDED BY ORDINANCE NUMBER 13074 OF THE CITY OF SEATTLE.

Exhibit B

EXCEPTIONS

TRANSIT WAY STATION ENTRANCE EASEMENT AND CONSTRUCTION AGREEMENT AND THE TERMS AND CONDITIONS THEREOF, BETWEEN THE KING COUNTY DEPARTMENT OF METROPOLITAN SERVICES AND THE CITY OF SEATTLE, RECORDED AUGUST 31, 1995, UNDER RECORDING NUMBER 9508310887.

Attachment 2 Seattle Civic Square Project Agreement

SEATTLE CIVIC SQUARE PROJECT AGREEMENT

THIS SEATTLE CIVIC SQUARE PROJECT AGREEMENT (the "Agreement") is entered into as of January ___, 2008 by and between TRIAD CIVIC CENTER LLC, a Washington limited liability company ("Triad") and CITY OF SEATTLE, a first class charter city of the State of Washington ("City") with reference to the following facts:

WHEREAS, the provision of safe, convenient, accessible and attractive public open space within the City's downtown is a traditional and well-recognized public purpose; and

WHEREAS, the provision of safe, convenient, accessible and attractive public open space in the City's downtown will increase positive civic and economic activity downtown; and

WHEREAS, on February 22, 2007, City and Triad executed a nonbinding letter of intent outlining a transaction in which Triad would purchase from City certain real property and develop upon such property an office/residential tower, underground parking garage and public plaza substantially similar in design, structure, composition and scale to the concept proposed to City in Triad's Seattle Civic Square Summary submitted to City on December 1, 2006 (the "Civic Square Summary"); and

WHEREAS, the project contemplates the construction of approximately 20,000 square feet of new retail space to be owned by City; and

WHEREAS, Triad and City are, simultaneously with the execution of this Agreement, entering into that certain Purchase Agreement of even date herewith (the "Purchase and Sale Agreement") pursuant to which the City will sell and convey to Triad, and Triad will purchase and accept from the City that certain real property commonly known as the Public Safety Building Site and legally described in Exhibit A attached hereto and by this reference incorporated herein (the "Property"); and

WHEREAS, after acquiring the Property, Triad will construct certain improvements thereon, as more particularly described in the Purchase and Sale Agreement and this Agreement; and

WHEREAS, Triad shall sell a portion of the Property to the City at a time consistent with this Agreement and thereafter the property owned by Triad and the City shall be operated in a coordinated manner, all as more specifically set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreement herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. References.

1.1. Incorporation of Recitals. Each recital set forth above is hereby incorporated as though fully set forth herein.

1.2. Definitions. All capitalized terms shall, unless the context of usage requires a different interpretation, have the meanings given to them in this Agreement, including, but not limited to the definitions set forth in Appendix 1, which is attached to this Agreement, made a part hereof and fully incorporated into the terms of this Agreement.

1.3. Gender and Number. Pronouns used in this Agreement importing any specific gender will be interpreted to refer to corporations, partnerships, men and women, as the identity of the Parties referred to, may require. Pronouns, verbs and/or other words in this Agreement importing the singular number will be interpreted as plural words, as the identity of the Parties or objects referred to, may require.

1.4. Fair Construction. The provisions of this Agreement shall be construed as a whole according to their common meaning not strictly for or against any party and consistent with the provisions contained herein in order to achieve the objectives and purposes of this Agreement. Each Party and its counsel have reviewed and revised this Agreement and agrees that neither Party shall be deemed the drafter of this Agreement.

1.5. Other References. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires (a) all accounting terms not otherwise defined in this Agreement have the meanings assigned to them in accordance with generally accepted accounting principles as are at the time applicable, (b) all references in this Agreement to designated "Articles," "Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this Agreement; (c) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section of other subdivision; (d) other capitalized terms defined in this Agreement shall have the meaning assigned them in this Agreement unless the context other wise requires; (e) this Agreement shall not be construed as if either City or Triad prepared the Agreement, but rather as if both City and Triad had prepared and fully negotiated all of the provisions of this Agreement and (f) capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings given such terms in the Purchase and Sale Agreement.

2. Acquisition of Property. Triad shall acquire the Property pursuant to the Purchase and Sale Agreement. Upon satisfaction of the conditions stated in this Agreement, Triad shall sell to City and City shall purchase from Triad the Civic Square Property.

3. Development of the Property. Subject to the terms and conditions set forth herein, Triad shall develop the Property consistent with this Agreement, the Conceptual Design Documents and the Development Schedule attached as Exhibit B and in accordance with all Legal Requirements.

3.1. Development Team.

3.1.1. Design Team. As of the Effective Date, Triad has retained the architects and engineers identified in Schedule 3.1.1 in connection with the preparation of the master use permit ("MUP") application for the Project and with respect to the design of the Civic Elements (the "Design Team"). Triad shall not substitute any member identified as part of the Design Team with respect to the MUP for the Project as a whole and the design of the Civic Elements without the prior written consent of the City, such consent not to be unreasonably withheld or delayed.

3.1.2. Development Team. With respect to the elements of the Project other than the MUP application and the design of the Civic Elements, Triad shall have the right to select architects, engineers, contractors, consultants and professionals as necessary or desirable for the design, permitting and development of the Project. However, in the event Triad desires to retain a general contractor, civil engineer or structural engineer for any of the Civic Elements other than those contractors and engineers identified in Schedule 3.1.2, Triad shall obtain the prior written consent of the City prior to such retention, such consent not to be unreasonably withheld or delayed.

3.1.3. Contracting. Triad shall enter into all contracts with, and pay all amounts payable to, the architects, engineers, contractors, consultants and professionals hereinafter engaged by Triad in connection with the performance of the duties under this Agreement. All such contracts shall be private contracts between Triad and the applicable service providers, and the City shall not be a party to any such contracts.

3.2. Elements. The Project shall include the following elements (the "Project Elements"): (i) a below grade parking garage as more fully described in Section 3.2.1 below (the "Garage"); (ii) an open space civic square as more fully described in Section 3.2.2 below (the "Civic Square"); (iii) retail space located upon the Civic Square as more fully described in Section 3.2.2 below (the "Civic Square Retail Space"); (iv) a mixed-use tower containing approximately 600,000 square feet of office space, approximately 16,000 square feet of retail space and approximately 180,000 square feet of residential space as more fully described in Section 3.2.3 below (the "Tower"); and (v) the improvements to be constructed pursuant to the Metro Easement (the "Metro Access Improvements"), provided that the responsibility to obtain Permits for and to construct, improve and pay for the Metro Access Improvements shall be as set forth in the Metro Easement and/or other agreements among Triad, the City and Metro. The Civic Square and Civic Square Retail Space together with the features comprising the same shall be referred to collectively as the "Civic Elements." The total design and construction of the Project Elements, including, but not limited to, all required professional design services, all services required to obtain all necessary Permits and all labor, materials and equipment used, supplied and incorporated into the Project Elements, together with all improvements to be made to the Property under the terms of this Agreement and appurtenances reasonable and necessary to the construction thereof are collectively referred to as the "Project." All work consistent with and reasonably inferable from the Conceptual Design Documents which is necessary to produce the intended results and all work necessary to render the Project Elements fully operational and in compliance with all Legal Requirements shall be included in the Project. All Project Elements shall be functionally integrated at ground level so that invitees and customers may easily access each element from the other.

3.2.1. Garage. The Garage shall be a below-grade parking structure having a total minimum capacity necessary to comply with Legal Requirements. At the option of Triad, elements of Garage shall be reserved for the exclusive use of residential units in the Tower and/or other Tower occupants and also include options for valet parking. The Garage shall be operated in accordance with a parking program included as part of the REA (defined below). Among other matters, the parking program shall provide for the following: (i) operation of the Garage after normal business hours and on weekends to encourage use and activation of the Civic Square; (ii) transient use of parking stalls in the Garage for use by the tenants and customers of the Civic Square and the Civic Square Retail Space; and (iii) that all Garage revenue derived from either (1) transient parking after normal business hours or (2) transient weekend parking, to the extent either (1) or (2) exceeds Two Dollars ($2.00) per paying customer during such times (increasing annually by increases in the CPI), shall be paid to the City and credited to the Civic Square Account.

3.2.2. Civic Square. The Civic Square shall be developed on the Civic Square Parcel and shall be constructed in accordance with the requirements of this Agreement. The Civic Square (including the Civic Square Retail Space) shall be an integral part of the Project and shall be comprised of an area substantially as set forth in Exhibit C which shall, together with the Civic Square Retail Space, cover at least fifty-five percent (55%) of the surface area of the Property, or such other area as approved by the City as reflected in the Approved Construction Documents. Operation and management of the Civic Square shall be governed by an operation and management plan (the "O&M Plan") to be mutually approved by City and Triad acting reasonably and in good faith prior to Closing under the Purchase and Sale Agreement. Among other matters, the O&M Plan (and/or the REA) will contain provisions establishing a Civic Square Account into which Triad and the City will make certain deposits and payments (including certain payments from after hours operation of the Garage, certain payments under the Master Lease and certain payments from Triad to the City) and which fund shall be used exclusively for maintenance, repair, operation and security for the Civic Square.

3.2.3. Civic Square Retail Space. The Civic Square Retail Space shall be comprised of approximately 20,000 square feet of Rentable Area and shall be constructed on the Civic Square Parcel in accordance with this Agreement.

3.2.4. Tower. The Tower shall be a high-rise structure designed for commercial, office and residential uses. The Tower shall have a floor area of between 650,000 and 850,000 square feet. The Tower shall be a private building.

3.2.5. Metro Access Improvements. The Metro Access Improvements shall be those Improvements necessary to be constructed pursuant to the Metro Easement (and/or other agreements among Triad, the City and Metro) to provide access to and from the Project to public transportation services operated by Metro.

4. Project Design. Triad shall, at Triad's sole cost and expense, diligently design the Project and apply for all Permits required for the construction of the Project in accordance with the terms of this Agreement and all Legal Requirements (provided that Permits associated with the Metro Access Improvements may be separately applied for by Metro and/or jointly by Triad and Metro).

4.1. Schedule for Design and Construction. City and Triad acknowledge and agree that the timing of Triad's performance of its obligations under this Agreement to complete the Project shall conform to the Development Schedule attached hereto as Exhibit B (subject to Unavoidable Delays, City Delays and revisions to the Development Schedule as provided herein). The Development Schedule contains time periods for Triad to make certain submittals in connection with design and permitting of the Project and certain estimates of the time periods to complete construction of the Project Elements. The Development Schedule shall be updated from time to time during the design and permitting process, and the Development Schedule with respect to construction of the Civic Elements will be updated and finalized (based on construction schedules provided by the contractors and subcontractors retained by Triad to construct the Project) after issuance of the Permits for initial construction of the Project and prior to Closing under the Purchase and Sale Agreement.

4.2. Plans and Specifications.

4.2.1. Conceptual Design Documents. As of the date of this Agreement, City and Triad have reviewed and approved the initial Conceptual Drawings and a narrative description addressing scale and relationship of the Project and its various fundamental elements, including, but not limited to, driveways, sidewalks, plazas, landscaping, building envelopes, and water features to be located on the Civic Square, as well as the interface of the Civic Square with the other elements of the Project (which initial Conceptual Drawings and narrative description are referred to collectively as the "Conceptual Design Documents") and are listed on Exhibit C. The Conceptual Design Documents and narrative is a refinement of the concept proposed by Triad in the Civic Square Summary.

4.2.2. Design Development Documents. Upon execution of this Agreement, Triad shall, in conjunction with the Design Team, commence and complete designs, plans and specifications for the development of the Project (collectively, "Design Documents") in substantial accordance with the Development Schedule. Design Documents shall be drafted, revised and approved in phases as follows:

a. Schematic Design. During Schematic Design, the schematic design of the Project Elements shall be prepared, and the Project shall be submitted to the City for approval of the fundamental architectural elements of the design and location of Improvements within the Property. Compliance of the Project with zoning regulations and codes affecting the work shall be confirmed and site inspections shall be completed. Schematic Design shall determine the general scope, preliminary design, scale and relationships among the components of the Project. The Design Documents shall evidence a clearly defined design with a comprehensive scope, budget and schedule. The Design Documents at the conclusion of "Schematic Design" shall show a level of complete detail for the Civic Square and the interface of the Civic Square with the remainder of the Project (exclusive of mechanical and electrical elements) consistent with City of Seattle requirements for submittal of an application for a MUP for the Project. All Design Documents completed during Schematic Design shall be generally consistent with the Conceptual Design Documents. The Schematic Design shall be reviewed and approved by the City pursuant to terms of this Agreement prior to the MUP application for the Project.

b. Early Design Development. During Early Design Development, the scope of work previously approved in the Schematic Design phase shall be refined and the Civic Elements shall be further developed to a level of detail necessary to complete a basic, coordinated description of all aspects of the Civic Square and the interface of the Civic Square with the rest of the Project. The Design Documents at the completion of the "Early Design Development" shall show an approximately thirty-five percent (35%) complete detail for the Civic Square and the interface of the Civic Square with the remainder of the Project (or other level of detail mutually approved by the City and Triad and representing a logical early design review point). Major elements including equipment, fire protection, mechanical, electrical, structural, telecommunications, plumbing and landscaping systems shall be included in the Design Documents at the completion of Early Design Development. All Design Documents and the scope of work of the Project completed during Early Design Development shall be generally consistent with the Schematic Design previously approved by the City.

c. Late Design Development. Following Early Design Development, Drawings shall be prepared that incorporate a higher level of design and coordination of the Civic Square and the interface of the Civic Square with the remainder of the Property including equipment, fire protection, mechanical, electrical, structural, telecommunications, plumbing and landscaping systems through enlarged scale Drawings, detailed elevations and plans, and design mock-ups as required, to achieve an approximately sixty-five percent (65%) level of complete detail of the Civic Square and the interface of the Civic Square with the remainder of the Project (or other level of detail mutually approved by the City and Triad and representing a logical late design review point) (the "Late Design Development" phase). Drawings establishing all major elements and outline specifications shall be prepared during the Late Design Development phase. All designs and scope of work of the Project completed during Late Design Development shall be generally consistent with the Early Design Development Documents previously approved by the City.

d. Construction Documents. The final phase for production of the Design Documents shall be the production of Construction Documents. Drawings shall be finalized and specifications for all components and systems of the Civic Square and the interface of the Civic Square with the remainder of the Project shall be completed. These Drawings (the "Construction Documents") shall provide a comprehensive, fully coordinated set of construction documents and specification to an approximately ninety-five percent (95%) level of complete detail. Construction Documents shall include a detailed construction schedule. All designs and statements regarding the scope of work of the Project completed as part of the Construction Documents shall be generally consistent with the Late Design Development.

4.2.3. City Review. Triad shall deliver to the City copies of the Design Documents and draft plans and specifications for the Civic Elements and the interface of the Civic Square with the rest of the Project contemporaneously with their production during each phase of development of the Design Documents. Triad will inform the City and its Designated Representative of the time and place of all meetings involving Triad, the Design Team or the proposed or selected General Contractor(s) at which the design and construction of the Civic Elements and the interface of the Civic Square with the remainder of the Project is to be reviewed, and the City, or its Designated Representative may attend any such meetings. At the time Triad seeks approval of the City of the plans and specifications at the end of each phase of design development identified above, Triad shall identify in writing the Design Documents to be approved by the City and include a written notification to the City that Triad is seeking the City's approval of the Design Documents. The review periods for the review and approval of the Design Documents by City are established based upon the assumption that Triad has made available to the City the opportunity to participate in the on-going and iterative design process occurring during each phase of Design Development.

4.2.3.1. For approvals of the Design Documents prepared for the Schematic Design and Late Design Development, the City shall have a thirty (30) day review period. For approvals of Design Documents for all other phases of design development, the City shall have a fifteen (15) day review period. Before the expiration of the applicable review period, City shall give Triad notice of City's approval or disapproval of the proposed Design Documents. If the City disapproves the proposed design, the notice shall specify City's reason for disapproval with particularity. City may only disapprove proposed designs which (1) fail to comply with any Legal Requirement, (2) fail to materially comply with the most recent set of Design Documents formally approved by the City, (3) propose material changes in the size, quality, appearance, layout or configuration of the Civic Square or interface of the Civic Square with the remainder of the Project from that previously approved by the City during the prior design phase, or (4) materially and adversely impact the construction schedule for the Civic Square. The parties acknowledge that adjustments to the Project will occur at each level of design as the designs become more detailed, and as value engineering opportunities become available, and that adjustments to designs for such reasons shall not be a basis for the City to disapprove such

designs unless such adjustments fall within the standards for City disapproval set forth in this Section 4.2.3.1.

4.2.4. Resubmittals. If revisions and comments are timely submitted by City in writing in accordance with the preceding Section 4.2.3, Triad shall cause the Design Team to respond to such comments which response may include making changes in the plans, Drawings and/or specifications consistent with objections or comments made by the City and Triad shall resubmit the same for further review by City. The process of resubmittal and review shall continue until City and Triad have approved the documents prepared in conjunction with the Schematic Design, Early Design Development, Late Design Development phases and the Construction Documents. The Construction Documents, as approved by the City and Triad are referred to as the "Approved Construction Documents." City approval of such documents at each stage of the design process shall be reflected in a written approval issued by the Designated Representative and referencing the approved documents.

4.2.5. Construction Estimates and Project Redesign. At each phase of the design process and again immediately prior to closing under the Purchase and Sale Agreement, Triad shall provide to the City an estimate of the costs to construct the Civic Elements (including sales tax and a reasonable contingency for the applicable level of design, but excluding Soft Costs (as defined below (the "Triad Cost Estimate"). The City shall also be entitled to obtain at the City's cost its own estimate of the costs to construct the Civic Elements (the "City Cost Estimate"). If the Triad Cost Estimate and the City Cost Estimate differ and Triad and the City cannot agree on the cost estimate to use for purposes of this Section 4.2.5, the cost estimators for Triad and the City shall meet and discuss their respective cost estimates and the basis pursuant to which they were prepared, and then each estimator (exercising good faith) shall prepare a revised estimate. The "Cost Estimate" to be used for purposes of this Section 4.2.5 shall be (a) the Triad Cost Estimate if the City does not prepare a City Cost Estimate, (b) the cost estimate jointly approved by Triad and the City if Triad and the City both prepare a cost estimate and then mutually approved an estimate, or (c) the higher of the revised estimate prepared by the Triad cost estimator or the City cost estimator if Triad and the City both prepare a cost estimate and cannot thereafter agree on an estimate.

In the event that at each phase of the design process and again immediately prior to Closing under the Purchase and Sale Agreement, the Cost Estimate exceeds the Construction Cost Cap (as defined in Section 5.4 below), Triad and the City, working together and in good faith, shall cause the Civic Elements to be redesigned and/or value-

engineered and/or Civic Element features changed or revised so that the estimated costs to construct the Civic Elements do not exceed the Construction Cost Cap. The process of redesign may be undertaken as part of the design process for the next phase of Design Development, but with the understanding that the commitment of the City and Triad is to implement design changes as may be necessary to provide reasonable assurance to both Triad and the City that the construction costs for the Civic Elements will not exceed the Construction Cost Cap (unless the City agrees to increase the Construction Cost Gap as provided in Section 5.4 below).

The Cost Estimate to be obtained immediately prior to closing under the Purchase and Sale Agreement shall be based upon a guaranteed maximum price or not-to-exceed construction cost price to be provided by the general contractor for the Civic Elements.

Notwithstanding the foregoing, in the event the closing under the Purchase and Sale Agreement has not occurred by July 30, 2009 for any reason other than a City Delay or a City-Initiated Change Order, Triad shall not have the right (unless expressly approved by the City) to seek to redesign the Civic Elements in the event the estimated costs to construct the Civic Elements exceeds the Construction Cost Cap, and Triad shall be responsible for the costs to construct the Civic Elements in excess of the Construction Cost Cap in effect as of July 30, 2009, based upon the then-existing Approved Construction Documents.

4.2.6. Permit and Working Drawings. Triad shall cause the Design Team and other design professionals to prepare any Drawings or other documents in addition to the Construction Documents that may be

required to be submitted for the issuance of the MUP, building Permits and other Permit applications in accordance with Section 4.4 below, and as required for development of the Project.

4.2.7. Changes to Construction Documents. After closing under the Purchase and Sale Agreement and the commencement of the construction of the Project, changes in the Approved Construction Documents affecting the Civic Elements or the exterior appearance of the Tower may only be undertaken as part of a Change Order in accordance with the provisions of Section 5.5 below.

4.2.8. Alternatives. In connection with the design of the Civic Elements and the permitting relating thereto, Triad may propose project features, elements and finishes for the Civic Elements which are in addition or alternative to those approved by the City pursuant to Section 4.2 (the "Alternatives"). In the budgeting and cost estimating process for the Civic Elements, the costs of the Alternatives shall be separately determined, but shall not be included within the Costs Estimates or the Construction Cost Cap. During the design approval process, approvals granted by the City may, in the City's reasonable discretion, also include approval for such Alternatives. As to any Alternative which has been approved by the City, either Triad or the City may add such Alternatives to the Civic Elements in accordance with the provisions of this Agreement.

4.3. Design Dispute Resolution Process. City and Triad agree to follow the independent resolution process set forth in this Section 4.3 to resolve disputes regarding preparation and approval of the Schematic Designs, Design Documents, Construction Documents and changes to Approved Construction Documents in an economic and time efficient manner so that the documents conform to the requirements of this Agreement, the Development Schedule is not adversely impacted, and the Civic Elements of the Project are designed in the manner required by this Agreement.

4.3.1. Disputes Resolution Arbitrator. In the event that during the design process for the Civic Elements a dispute arises between City and Triad regarding: (i) the adequacy of, or the City's right to comment upon or disapprove, any Drawing or specification (including any dispute over whether any Project Element is consistent with and reasonably inferable from the Project as contemplated by the most recent set of designs approved by the City); (ii) the responsibility for any cost of any addition or change; or (iii) whether the Construction Documents are consistent with the design approved during the prior phases of the preparation of the Design Documents; the Parties first shall proceed in good faith to resolve such dispute as expeditiously as possible and shall cooperate so that the progress of the design and construction of the Project is not delayed. This process shall include at least one (1) meeting to be held within two (2) Business Days after a request for a meeting has been delivered by either Party to the other, at which meeting there shall be in attendance individuals from Triad and from the City, each of whom have the authority to resolve the dispute on behalf of their respective Party. During the meeting, the consultants and various advisors to both Parties shall present a succinct summary of the issues requiring resolution and the respective positions of the Parties. If the Parties are unable to resolve the dispute, either Party may, by delivering written notice (the "Arbitration Notice") to the other, refer the matter to the arbitrator named in Section 4.3.2 below (the "Design Arbitrator").

4.3.2. Arbitration Process. The City or Triad, by delivering the Arbitration Notice to the other, shall refer any dispute described above to a single individual mutually approved by Triad and the City, to act as Design Arbitrator to resolve such dispute. If the City and Triad cannot so agree on a single Design Arbitrator within 5 Business Days of an Arbitration Notice, either Party may seek the appointment of such Design Arbitrator by the Presiding Judge of the King County Superior Court.

4.3.3. Consideration of Disputes or Claims. Within five (5)

Business Days following selection of a Design Arbitrator, the Design Arbitrator shall convene a hearing to review and consider the dispute. Within two (2) Business Days following the selection of the Design Arbitrator, both the City and Triad shall deliver to the Design Arbitrator and one another a written statement of their respective position with respect to the issue subject to arbitration and exhibits, calculations, and other pertinent material upon which each Party relies in support of its position. All material provided to the Design Arbitrator shall be given in the same form and content to the other Party to this Agreement prior to the hearing.

4.3.4. Procedures. Upon the first referral to the Design Arbitrator of a dispute hereunder, the Design Arbitrator shall establish procedures for the conduct of any hearings for consideration of disputes and claims consistent with this Agreement; provided, however, the procedures shall be designed so that the hearing shall not last more than one (1) day. It is expressly understood that the Design Arbitrator is to act impartially and independently in the consideration of facts and conditions surrounding any dispute presented by Triad and City, and that the Design Arbitrator's decision concerning any such dispute shall be conclusive and binding upon the Parties.

4.3.4.1. The Design Arbitrator shall be restricted to considering only the alternative resolutions proposed by the City and Triad, and the Design Arbitrator shall select the result proposed by either the City or Triad that in the opinion of the Design Arbitrator is the result that is most consistent with the pertinent Agreement provisions, the facts and circumstances involved in the dispute and Applicable Law. The Design Arbitrator may also recommend other solutions to the Parties, which the Parties agree to consider in good faith, but absent mutual agreement of Triad and the City to a solution proposed by the Design Arbitrator, the result proposed by either Triad or the City and selected by the Design Arbitrator shall apply.

4.3.4.2. The Design Arbitrator's decision may be made orally upon the conclusion of the hearing, and a written decision must be provided not later than two (2) business days following the conclusion of the hearing.

4.3.4.3. The Design Arbitrator's decision shall be incorporated into the Design Documents for the next phase of the decision process and shall be included within the Cost Estimate for the next phase of Design Documents.

4.3.5. Payment. The fees charged by the Design Arbitrator shall be shared equally by the Parties. Payments shall be full compensation for work performed, services rendered, and for all

materials, supplies, travel, office assistance and support and incidentals necessary for the Design Arbitrator to serve. Payment for services rendered by the Design Arbitrator and for the Design Arbitrator's expenses shall be at the rate or rates established by the Design Arbitrator, which in any event shall not exceed the usual and customary rate or rates prevailing in King County, Washington, for arbitration services of the sort described herein.

4.3.6. Resolution. The time periods set forth in this Section 4.3 are not jurisdictional, and may be revised by the Design Arbitrator for good cause. However the intention of the Parties in mutually agreeing to the provisions of this Section 4.3 is to provide for a quick and efficient dispute resolution process so as to maintain orderly progress of the Project.

4.3.7. Termination. The foregoing arbitration provisions shall terminate upon final approval or deemed approval of the Approved Construction Drawings immediately prior to closing under the Purchase and Sale Agreement and shall not apply to disputes or claims arising thereafter. In addition, the foregoing arbitration provisions do not apply to the agreements between Triad and the Design Team.

4.4. Permits; Costs; Compliance with Legal Requirements. Triad shall, at is sole cost and expense, on or before April 15, 2008, make its initial MUP application for the authorization of the construction of the Project, and thereafter diligently pursue the issuance of any and all approvals required by appropriate governmental authorities having jurisdiction over the Property or Triad and (i) relating to the construction, operation or initial occupancy of the Project, or any portion thereof or (ii) relating to any zoning, subdivision, environmental, building and construction laws and/or regulations restricting, regulating or otherwise affecting the use, initial occupancy or enjoyment of the Project, as the same may be issued, modified or amended from time to time (hereinafter collectively "Permits" and as to each, "Permit"). Triad shall cause all work on the Property to be performed in accordance with this Agreement, all Legal Requirements and Applicable Law. Nothing in this Agreement shall be construed as an approval by the City, in the exercise of its governmental authority and police power to review and approve development applications of any Permit, and the City shall review all Permit applications in accordance with Applicable Law.

4.5. Use of Plans. Triad shall include in the terms of its agreement(s) for services with the Design Team provisions providing that City may utilize the plans, concepts and designs prepared by the Design Team for the development of the Civic Elements, subject to customary restrictions and limitations imposed by the Design Team for such use, which restrictions shall be made known to the City prior to Triad's execution of such agreement(s), and which restrictions (if the plans are not complete) shall include the requirement for the City to retain the Design Team to complete such plans.

4.6. Land Use Matters. In connection with Triad's efforts to secure Permits and other approvals for the Project, the Parties acknowledge that the Project will be submitted to the City and other agencies with jurisdiction as a single, integrated project for land use and zoning purposes. Triad shall be entitled to use and shall be the owner of all available FAR and development rights with respect to the Property to obtain such Permits, which Triad may use and apply in such manner as Triad determines in its sole discretion. Similarly, any excess or unused FAR or development rights with respect to the Property shall remain the sole property of Triad. Finally, any public benefit features associated with the Project shall inure to the benefit of Triad, and may be used by Triad regardless of the actual location of such public benefits (e.g. public benefits included within the Civic Elements may be applied by Triad for other elements of the Project).

5. Construction of Project. Triad shall at its sole cost and expense, following the issuance of necessary Permits and the Closing under the Purchase and Sale Agreement, construct and cause the Substantial Completion of the Civic Elements on or before the Substantial Completion Date, in a good and workmanlike manner, free and clear of all liens, all in accordance with the terms of this Agreement and Legal Requirements.

5.1. Construction Contracts. Triad and Triad's selected general contractor shall enter into a contract (the "General Construction Contract") for the construction of the Civic Elements of the Project. In the event the General Construction Contract includes elements of the Project in addition to the Civic Elements, the General Construction Contract shall provide for a separate and identifiable budget and scope of work for the construction of the Civic Elements, which budget and scope of work shall be consistent with the Construction Cost Cap.

5.1.1. Wages Compliance with Law. Triad shall be responsible for requiring that all contractors, subcontractors and any other person or entity employed for the construction of the Civic Elements pay their workers as required by Applicable Law. Triad specifically assumes the risk that the wages paid by any contractor, subcontractor and any other person or entity employed for the construction of the Civic Elements, do not comply with Applicable Law, and shall indemnify, defend and hold City harmless for any claim, loss, liability, or judgment arising out of or for the payment of improper wages. Irrespective of any contrary provision of Applicable Law, Triad agrees to include in the terms of its agreements with all contractors employed in the construction of the Civic Elements and require all contractors to include in the terms of their agreements with subcontractors a requirement that they shall pay their workers a livable wage (which shall be union wages or their equivalent).

5.1.2. Disadvantaged Business Enterprises. Triad recognizes the importance of involving historically underutilized businesses ("HUBs") in the development of the Project. Triad shall seek such involvement by HUBs in the construction of the Project. In this connection, Triad shall require in the terms of its agreement with the General Contractor that the General Contractor establish a program to inform HUBs of the opportunity to participate in the construction of the Project, and to have an aspiration to contract with HUBs for at least Two Million Seven Hundred Sixty Seven Thousand Five Hundred Dollars ($2,767,500) of the General Construction Contract(s) or subcontract(s) attributed to the Project.

5.1.3. Apprentice Program. Triad shall require in the terms of its agreement with the General Contractor for the Project that such General Contractor seek as a goal to assign at least Two Million Seven Hundred Sixty Seven Thousand Five Hundred Dollars ($2,767,500) of construction work attributable to the Project to apprentices enrolled in an apprenticeship program approved and recognized by the Washington State Apprenticeship and Training Council.

5.1.4. LEED(tm) Certification. The General Construction Contract shall require that the Project be constructed under the Leadership in Energy and Environmental Design ("LEED(tm)"), which is the copyrighted trademark of the Green Building Rating System 2.0, developed by the U.S. Green Building Council under contract with the U.S. Department of Energy, to qualify for at least a gold LEED(tm) Certification (with an aspiration to achieve a platinum rating) following Substantial Completion.

5.1.5. Warranties. All construction contracts prepared in connection with construction of the Civic Elements shall contain warranties (in favor of Triad) of work and materials consistent with market practices and not restrict the right of Triad to assign to City any warranties applicable to the Civic Elements.

5.2. Construction. Triad shall, at its sole cost and expense, complete construction of the Civic Elements substantially in accordance with the Approved Construction Documents and in a good and workmanlike manner, free of defects in the work and materials and in accordance with the requirements of this Agreement and all Legal Requirements. Triad shall cause the General Contractor to commence construction of the Project as soon as practicable following receipt of necessary Permits and the Closing under the Purchase and Sale Agreement, and shall thereafter cause construction to be diligently and continuously prosecuted in accordance with the milestones set forth in the Development Schedule subject only to Unavoidable Delays. Triad shall advise the City of the progress and quality of the work on a timely basis.

5.2.1. Progress Reports. Triad shall submit written quarterly progress reports to the City including information on the General Contractor and the General Contractor's work, showing percentages of completion of the Project and all updates to the critical path schedule for the Project maintained by the General Contractor and the Design Team.

5.2.2. Records. Triad shall maintain at the Property with respect to the Civic Elements one record copy of all Construction Documents, all Drawings, specifications, addenda, Change Orders and other modifications, Permits and inspection reports, in good order and marked currently to record changes and selections made during construction together with approved shop drawings, product data, samples and similar required submittals. Triad shall maintain records for the Civic Elements, in duplicate, of principal building layout lines, elevations of the bottom of the footings, floor levels and key site elevations certified by a qualified surveyor or professional engineer. All such records shall be made available to the City upon request and, upon completion of the Civic Elements, duplicate originals shall be delivered to the City.

5.2.3. Communications. All communications to or from the City with respect to the Project shall be through the Designated Representative. The Designated Representative shall have the right to attend all construction progress meetings associated with the Civic Elements including those related to the interface between the Civic Elements and the remainder of the Project.

5.3. Civic Square Retail Space. Triad shall pay all costs incurred with the construction of the Civic Square Retail Space required to complete the "Building Shell," which shall consist of the

following:

a. A completely dried-in space with roof, with the roof properly insulated to meet Washington state energy code;

b. All fireproofing must be complete and consistent with all applicable codes;

c. No acoustical ceiling or lighting installed;

d. Floor to deck clear height shall be minimum 14';

e. Concrete slab level, properly cured and ready for floor finishes shall be installed. Entire floor area must be concrete and on one level with no level changes. All concrete shall be installed in accordance with ACI 301. Floor area must be level within 1/8" per 12'-0";

f. Storefront glass and glazing with one pair of glass entrance doors centered on storefront to include all hardware and weatherstripping (window coverings are not included);

g. Main electrical and utility services shall be "stubbed-in" at each floor in each building at a point designated by or agreed to consistent with the retail "cold-shell" design depicted in the Conceptual Design and Approved Construction Documents;

h. Communication service access shall be provided at each floor in each building at a point designated or agreed to according to retail design;

i. Domestic water line, adequately sloped and sized sewer service lines and vault to accommodate any restaurant usage requiring a grease interceptor shall be installed. Water and sewer lines shall be capped and valved at point of entry of general space;

j. Complete and ready for occupancy to include all adjacent common areas, landscaping, truck loading dock, trash and recycling facilities and similar features, and evidenced by copy of the shell and core Certificate of Occupancy;

k. Temporary electric unit heaters are included at 5 kw per 2500 square fees of space; HVAC equipment and ductwork are not included. There shall be adequate provision for installation of HVAC equipment including air handling unit, exhaust fan, interior shafts and kitchen exhaust;

l. Sprinkler coverage (drops and heads) distributed throughout Civic Square Retail Space per local fire code requirements. Sprinkler system to include flow and tamper device(s), fire alarm system disconnect and back flow prevention as required by agencies having jurisdiction. Pressure tested, fully operational, inspected and approved by local agencies having jurisdiction;

m. Base building monitoring and fire protection alarm system brought to Civic Square Retail Space in compliance with applicable jurisdictional codes;

n. Connection to Project security system;

o. All ADA provisions for general access to space to be provided;

p. Natural gas service shall be provided to the building(s) in which the Civic Square Retail Space is situated.

The cost of Tenant Improvements for the Civic Square Retail Space shall be allocated and paid in accordance with the terms of the Master Lease.

5.4. Civic Square Development Costs; Cost Cap. Triad and the City have mutually agreed upon a total design, development and construction cost cap for the development of the Civic Elements to Substantial Completion of $20,500,000 (the "Civic Square Development Cost Cap") and an agreed present value of the Civic Square

Contribution Amounts to be paid by Triad of $3,000,000 (the "Contribution Value") resulting in a total cost associated with the construction, development and funding of the Civic Square of $23,500,000 (the "Civic Square Cost Cap"). The Civic Square Development Cost Cap (and Civic Square Cost Cap) shall increase only (a) upon the approval of the City, or (b) in the event development costs for the Civic Elements increase due to a City Delay or a CityInitiated Change Order. The Civic Square Cost Cap does not include the costs of tenant improvements for the Civic Square Retail Space, which will be paid in accordance with the terms of the Master Lease.

Triad agrees and guarantees to the City that the actual costs to design, construct and develop the Civic Elements to Substantial Completion in accordance with the terms of this Agreement and consistent with the Approved Construction Documents (the "Development Costs") shall not exceed the Civic Square Development Cost Cap.

An amount equal to ninety percent (90%) of the Civic Square Development Cost Cap (as such Civic Square Development Cost Cap may adjust from time to time as provided herein) shall constitute the Construction Cost Cap under this Agreement for purposes of the provisions of Section 4.3.5 of this Agreement. The remaining ten percent (10%) of the Civic Square Development Cost Cap represents an allocation to Triad towards the design and other Soft Costs associated with the development of the Civic Elements.

For purposes of this Agreement, the Construction Cost Cap (and the Cost Estimates related thereto) shall include and be limited to the costs associated with the construction of the Civic Elements and customarily included within construction cost budgets routinely used in the construction industry, and shall include construction costs (including shell and core costs, change orders, landscaping) construction testing, start up and commissioning costs, utility hookups and interconnection changes, builder's risk or other construction related insurance, sales, b & o and related taxes, off-site improvement costs, the general contractor's fee and overhead, general contractor reimbursables, and a reasonable design and construction contingency given the level of design. The Construction Cost Cap (and the Cost Estimates related thereto) shall not include those items customarily regarded as soft costs, including, but not limited to, architectural and engineering fees, permit fees, legal and accounting fees, developer's fees, costs or reimbursables, tenant improvement costs, financing fees or construction period interest ("Soft Costs").

5.5. Changes to the Work.

5.5.1. No Changes; Change Orders. There shall be no changes in the Approved Construction Documents relating to the Civic Elements or the interface of the Civic Elements with the rest of the Project except as agreed in writing by Triad and the City or as imposed by governmental authorities with jurisdiction over the Project.

For purposes of this Agreement, a "Triad-Initiated Change Order" shall be a change in the Approved Construction Documents requested by Triad to address value engineering opportunities or unforeseen conditions in connection with the construction of the Civic Elements. A "City-Initiated Change Order" shall be a change in the Approved Construction Documents requested by City to add or delete features and facilities relating to the Civic Elements. A Change Order can increase or decrease the costs to construct the Project Elements.

5.5.2. Government Requested Change Orders. Triad shall be authorized to make such changes to the Approved Construction Documents which are required by government authorities or as may be necessary to comply with all Legal Requirements ("Government Requested Change Orders"). Triad shall provide City with a copy of any such government change order promptly following receipt and shall give City five (5) Business Day's written notice prior to implementing any Government Requested Change Order during which time the City shall make known to Triad any objection City has to implementation of the Government Requested Change Order. There shall be no adjustment to the Civic Square Development Cost Cap as a result of any Government Requested Change Orders arising after commencement of construction (Government Requested Change Orders arising during the Design process and/or prior to closing under the Purchase and Sale Agreement may result in re-design of the Civic Elements in accordance with the provisions of Section 4.2.5 above).

5.5.3. Approval of Triad-Initiated Changes; Field Orders. The City shall not unreasonably withhold or delay its consent to a TriadInitiated Change Order, provided that the proposed Change Order (i) is minor in nature and does not affect overall appearance, safety or mechanical systems and operations of the Civic Elements, and (ii) will not result in an extension of the date by which the Civic Elements must be Substantially Complete. Triad may also add as a Triad-Initiated Change Order any of the Alternatives previously approved by the City in accordance under Section 4.2.7 above (upon notice to City but without any additional approval by the City).

City and Triad anticipate that there will be field orders and Change Orders that will result in changes to the scope of work. Triad shall use its reasonable efforts to apprise City of proposed changes in the work and its recommendations regarding them prior to any action being taken. Triad and City anticipate that it may not always be possible for Triad to receive City's prior approval to these changes in a timely manner. Therefore, field orders and Change Orders may be approved by Triad, without prior City approval, but only if the changes authorized by these field orders and Change Orders have no material effect upon the construction or operation of the Civic Elements. As soon as practical, Triad shall provide the City with all field orders and Change Orders approved by Triad. In the case of either an alteration that will materially affect the construction or operation of the Civic Elements or a change that would result in an extension of the date by which the Civic Elements must be Substantially Completed, prior written approval by the City of the proposed change must be received. All Triad-Initiated Change Orders shall be at Triad's sole cost and expense.

5.5.4. Approval of City-Initiated Change Orders. CityInitiated Change Orders may only be initiated by the Designated Representative. City-Initiated Change Orders may increase or decrease the scope of the Civic Elements and/or add any one or more of the Alternatives. With respect to City-Initiated Change Orders, as soon as reasonably possible after Triad's receipt of the requested Change Order, Triad will provide a detailed estimate of the effect on the Civic Square Development Cost Cap and construction time of the Civic Elements for such change order, and any associated Drawings or Permits which may be necessary together with a decision deadline for such change order to be approved or disapproved. The City shall reimburse Triad for all actual and reasonable costs incurred preparing the estimates and Drawings associated with all CityInitiated Change Orders, whether or not City accepts Triad's proposal to perform the work included in the City-Initiated Change Order. City shall approve or disapprove of the change order within five (5) business days after receipt of the cost estimate from Triad. Failure to timely approve the City-Initiated Change Orders shall be deemed disapproval. Upon receipt of City's written approval, Triad shall incorporate the City-Initiated Change Order into the work of the General Contractor. The Civic Square Development Cost Cap shall be adjusted from time to time as necessary to take into account all City-Initiated Change Orders.

5.5.5. Costs. All costs and expenses of approved CityInitiated Change Orders as calculated in Triad's cost estimate provided to the City shall be the responsibility of the City; provided, however, the costs and expenses shall not exceed the actual costs to implement such City-Initiated Change Orders (including design costs, permitting costs and the actual charges of the contractors and subcontractors constructing such City-Initiated Change Orders). City shall pay the costs and expenses of City Initiated Change Orders as such costs and expenses are incurred.

5.5.6. Course of Construction Dispute Resolution Process. City and Triad agree to follow the resolution process set forth in this Section 5.5.6 to resolve disputes arising during the course of construction in an economic and time efficient manner so that construction may continue in an efficient manner, the Development Schedule is not adversely impacted, and the Project is constructed in the manner required by this Agreement. City and Triad shall attempt to resolve their disputes by reasonable business-like negotiations in accordance with the following procedures, and without resort to litigation.

a. Disputes Resolution Steps. In the event that a dispute arises between City and Triad during the construction of the Project as to the responsibility as between City and Triad for any costs or schedule delays associated with any Project Element or compliance of Project features with the terms of this Agreement and the Approved Construction Documents, the Parties first shall proceed in good faith to resolve such dispute as expeditiously as possible and shall cooperate so that the progress of the construction of the Project is not delayed. If a dispute arises, City or Triad may call a special meeting ("Special Meeting") for the resolution of that dispute. The Special Meeting shall be held at the Project site within a reasonable time not to exceed five (5) days of a written request for the meeting, which request shall specify the nature of the dispute to be resolved. The Special Meeting shall be attended by non-attorney representatives of City and Triad, who shall attempt in good faith to resolve the dispute and have authority sufficient to do so.

b. If the representatives are unable to resolve the dispute, a senior representative from City and Triad each shall review the dispute in detail and then meet face-to-face to discuss and resolve the matter. This meeting of senior representatives (the "Senior Meeting") shall occur no later than three (3) Business Days after the meeting of the project representatives have declared an impasse in their efforts to resolve the dispute, unless the parties agree upon a longer period of time. The parties shall promptly designate a senior representative for purposes of this Section. Any party may, if necessary, designate a different senior representative at any time during the course of the Project. This meeting shall be for the express purpose of: (1) exchanging and reviewing all pertinent nonprivileged documents and information relating to the matters and issues in dispute; (2) freely and candidly discussing each party's position; and (3) reaching agreement upon a reasonable, compromise resolution of the claim.

c. If the dispute has not been resolved within five (5) Business Days of the Senior Meeting, any party thereto may, at its option, initiate mediation proceedings. These proceedings shall be conducted by an impartial third-party mediator who is acceptable to all of the parties to the mediation and experienced in design and construction in Washington on projects of similar type and scope. The mediator shall be given written statement(s) of the parties and may inspect the Project site and other documents. The mediator shall schedule a mediation to be attended by City and Triad within a reasonable time of its selection. This meeting shall be attended by representatives of City and Triad with authority sufficient to resolve the dispute. The cost of the mediation shall be borne equally by the parties to the dispute. No minutes shall be kept and the proceeding shall be confidential and not admissible except as provided below. The entire mediation process must be completed within ten (10) Business Days of the Special Meeting, unless all parties involved in the dispute extend the mediation period. If, as a result of the mediation, a negotiated settlement is reached, the parties agree that such settlement shall be reduced to writing.

5.6. Delays.

5.6.1. Unavoidable Delay. The existence of Unavoidable Delays shall excuse Triad for resulting delays and changes in the Development Schedule.

5.6.2. City Delay. City shall be responsible for all costs incurred by Triad as a result of City Delay. Triad shall notify City in writing of the occurrence of any City Delay and shall provide a statement of any damages or costs incurred as a result of City Delay on a timely basis and prior to Substantial Completion. As used in this Agreement, "City Delay" shall mean one or more of the following which cause a delay of the Substantial Completion Date:

a. City's failure to timely supply information necessary to complete the Design Documents (or revisions to such Drawings); or

b. City's request for new work involving work not identified in the Approved Construction Documents; or

c. City-Initiated Change Orders.

All costs incurred by Triad caused by City Delay will be the responsibility of City. City Delay shall not include any delay in the completion of the Project caused by the lawful, normal and customary enforcement of building, health and safety codes, ordinances and regulations applicable to the Project.

5.7. Right to Accelerate Closing and Complete. At any time following substantial completion of the Garage (as such term is customarily used in the construction industry), if the Civic Elements will not be completed in accordance with the Development Schedule and Triad is not proceeding with diligence and in good faith to seek to complete the Civic Elements, the City may give Triad written notice of the City's intention to elect to accelerate the Closing Date on which the City shall acquire the Civic Square Parcel (a "PreAcceleration Notice"). If within thirty (30) days following the date of such Pre-Acceleration Notice Triad does not provide to the City reasonable evidence that Triad is proceeding diligently and in good faith to complete the Civic Elements, the City may give Triad written notice of the City's election to accelerate the Closing Date (an "Acceleration Notice"). The Acceleration Notice shall state a date on which the City intends to complete the acquisition of the Civic Square Parcel, which date shall not be earlier than ninety (90) days following the date on which the Acceleration Notice is given. On the date specified in the Acceleration Notice for the acquisition of the Civic Square Parcel, Triad shall convey the Civic Square Parcel to the City in the manner and upon the conditions described in Section 9 below. Following the acquisition of the Civic Square Parcel pursuant to the Acceleration Notice, the City shall have the right to possession of the Civic Square Parcel and may undertake whatever action is reasonable and necessary to complete the Civic Elements. Further, City shall thereupon be entitled to draw upon the Letter of Credit (up to the full amount thereof) to the extent required to pay for all reasonable and necessary Development Costs incurred in completion of the Civic Elements. To the extent the funds payable to the City pursuant to the Letter of Credit are not sufficient to pay the reasonable and necessary Development Costs of completing the Civic Elements, Triad shall reimburse the City for all Development Costs reasonably and necessarily incurred in the completion of the Civic Elements in excess of the amounts the City would have been responsible for pursuant to the terms of this Agreement had Triad completed the Civic Elements. Any such reimbursements shall be due within thirty (30) days following written demand by City, which demand shall include a statement of the completion costs incurred by the City in reasonable detail. In the event the City acquires the Civic Square Parcel pursuant to an Acceleration Notice as set forth in this paragraph, the City shall thereupon grant Triad a temporary construction easement in a form reasonably acceptable to both Parties (which shall contain customary indemnities in favor of the City) for the purpose of permitting Triad or its successor to utilize the Civic Square Parcel for staging of construction equipment necessary to complete construction of the Project excluding the Civic Elements. To the extent the Civic Square Parcel has not been created prior to any conveyance to be made under this paragraph, the parties hereby covenant to take all action necessary to create the Civic Square

Parcel as set forth in Section 6. Any disputes between the parties with respect to the right of the City to issue an Acceleration Notice, and any disputes between the parties with respect to the terms of the construction easement shall be subject to the arbitration process set forth in Section 5.5.6 above; provided, however, the City shall be entitled to an decree of specific performance from the King County Superior Court to enforce any properly given Acceleration Notice.

5.8. Indemnity. The Parties specifically and expressly agree that, to the fullest extent permitted by law, Triad shall indemnify, defend and hold harmless the City, and its officers, officials, employees, and agents (individually each an "Indemnified Party" and collective the "Indemnified Parties"), from and against any and all claims, liability, damages, losses and causes of actions, arising out of or resulting from, or alleged to arise out of or to result from, the performance of the construction of the Civic Elements (hereinafter singularly and collectively referred to as "Indemnity Claims"), provided that such Indemnity Claim is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the work of the Project itself), but only to the extent directly or indirectly caused by the negligence of willful misconduct of Triad, its officers, employees, agents, and/or subcontractors of all tiers (individually each an "Indemnified Party" and collectively the "Indemnified Parties"). Triad shall defend all lawsuits, arbitration proceedings and similar proceedings filed against an Indemnified Party in connection therewith, and reimburse each Indemnified Party for all reasonable expenses incurred by such Indemnified Party in connection with Indemnity Claims and lawsuits, arbitration proceedings and similar proceedings, including but not limited to attorney fees, expert witness fees, court costs, arbitration costs and all other reasonable costs (not limited to statutory costs). The Parties specifically and expressly agree that if Indemnity Claims are caused or alleged to be caused in part by any joint or concurrent negligent act (either active or passive) or omission by an Indemnified Party, Triad shall indemnify, defend and hold harmless such Indemnified Party, as provided above, from such Indemnity Claims to the extent such Indemnity Claims arise out of or result from the negligence or willful misconduct of Triad or its officers, employees, agents, and/or subcontractors of all tiers. In no event shall Triad be obligated to indemnify an Indemnified Party for Indemnity Claims which arise out of or result from the sole negligence of such Indemnified Party or its agents, servants or independent contractors who are directly responsible to such Indemnified Party, excluding Triad herein. Triad's obligations under this Section shall include, but not be limited to:

5.8.1. The duty to promptly accept tender of defense and provide defense to City at Triad's own expense;

5.8.2. The duty to indemnify and defend City from any claim, demand, and/or cause of action brought by or on behalf of any of Triad's officers, employees or agents. The foregoing duty is specifically and expressly intended to constitute a waiver of Triad's immunity under Washington's Industrial Insurance Act, RCW Title 51, as respects City only, with a full and complete indemnity and defense of claims made by Triad's officers, employees and agents. The Parties acknowledge that these provisions were mutually negotiated and agreed upon by them.

In the event City incurs any judgment, award, and/or costs arising therefrom, including attorneys fees, to enforce the provisions of this Section, all such reasonable fees, expenses, and costs shall be recoverable from Triad. Notwithstanding the provisions contained in this Section above, Triad's obligation to indemnify City shall not extend to any claim, demand or cause of action arising or in connection with the gross negligence, intentional acts or breach of this Agreement by City.

5.9. Insurance During Construction. By the date of closing under the Purchase and Sale Agreement, Triad shall procure and maintain or cause the General Contractor to procure and maintain, at a minimum, for the duration of the Project the following insurance against claims for injuries to persons or damages to property which may arise from, or in connection with the performance of work hereunder by Triad, its agents, representatives, employees and/or contractors. The cost of such insurance shall be paid by Triad or its contractors. Coverage shall be at least as broad as:

5.9.1. Property insurance insuring all equipment, trade fixtures, inventory, fixtures and other personal property located on or in the Property ("Insured Personalty") for perils covered by the cause of loss special form (or the equivalent ISO form in use from time to time in the state where the Property is located), or, during construction, perils typically covered under a so-called "builder's risk" policy of insurance. Such insurance shall be written on a replacement cost basis in an amount equal to the full insurable value of the aggregate of the Improvements, without coinsurance and with an agreed amount endorsement to prevent co-insurance.

5.9.2. General Liability: Insurance Services Office form number GC 00 01 or equivalent covering Commercial General Liability ("CGL Policy"), with a limit of not less than; $5,000,000 combined single limit per occurrence, $5,000,000 aggregate.

5.9.3. Automobile Liability: Insurance Services Office form number CA 00 01 or equivalent covering Business Automobile Liability, with a limit of not less than $1,000,000 combined single limit per occurrence.

5.9.4. Workers' Compensation: Workers' Compensation coverage, as required by the Industrial Insurance Act of the State of Washington, statutory limits.

5.9.5. General Requirements.

5.9.5.1. The policies required to be or otherwise maintained by Triad or its General Contractor shall be issued by companies rated A (X) or better in the most current issue of Best's Insurance Reports. Insurers shall be admitted insurers in the State of Washington, and domiciled in the USA.

5.9.5.2. Certified copies of the policies or a binder (ACORD 13) followed before expiration of the binder by a copy of the declarations page(s) of the policy with a schedule of all endorsements, shall be delivered to City with ten (10) days following the Effective Date and annually thereafter at least thirty (30) days prior to the expiration date of the old policy. Such forms shall indicate applicable deductibles, retention, coverage and sub-limits of coverage and shall contain an endorsement each of the insurance companies named thereon adding any additional insured party(ies) required herein.

5.9.5.3. Each policy of insurance required to be or otherwise maintained by Triad shall name the City as an additional insured and provide written notification to City and any other additional insured party at least thirty (30) days prior to any cancellation or modification to reduce the insurance coverage.

5.9.6. Failure to Provide. In the event Triad does not purchase the insurance required by this Agreement or keep the same in full force and effect, City may, but shall not be obligated to purchase the required insurance or such lesser alternative insurance coverage as City may elect, and pay the premium therefor. Triad shall repay to City the amount so paid promptly upon demand plus an administrative fee of 15% of such premium. In addition, City may recover from Triad and Triad agrees to pay any and all reasonable expenses (including attorneys' fee) and damages which City may sustain by reason of the failure of Triad to obtain and maintain such insurance and/or efforts to obtain same from Triad or from other sources.

5.9.7. Waiver of Claims. Triad waives and releases its right of recovery against City, and against the elected officials, officers, employees, agents, contractors, subcontractors, tenants and subtenants of City, directly or by way of subrogation or otherwise, for any claim, and for any loss of, or damage to, Triad's property, any of Triad's business or operations and/or any personal injury to the extent that such claim, loss, damage or injury results from a cause of loss which is covered by any property or CGL Policy actually maintained by a party or which would have been covered by any property or CGL Policy required pursuant to the terms of this Agreement to be in effect at the time of such loss, damage or injury. Subject to any limitations on such amounts set forth in this section, such waiver or release shall include any deductible, retention and self insured loss or damage. Such waiver or release shall be effective without regard to whether such required policy was in effect and without regard to the availability of coverage or limits of liability under any such policy. Triad shall obtain any special endorsements required by its insurer to allow such waiver of rights of subrogation but the failure to obtain same shall not impair the effectiveness of this waiver and/or release between City and Triad. Any cost for a special endorsement shall be paid for by Triad.

5.10. Security for Performance. To secure Triad's performance under this Agreement, Triad shall provide to the City a letter of credit issued by a national bank or other credit-based issuer reasonably acceptable to City (the "Letter of Credit") in the amount of $35,000,000.00 which shall be reduced: (i) upon substantial completion of the Garage (as such term is customarily used in the construction industry), to $27,500,000; and (ii) following the commencement of construction of the Civic Elements, on a monthly basis, to one hundred ten percent (110%) of the then estimated costs to complete construction of the Civic Elements to Substantial Completion. It is anticipated that if Triad provides the Letter of Credit, it will be issued by the construction lender for the Civic Elements or equity investor in the Project and the Letter of Credit may be reduced on a monthly basis pursuant to clause (ii) above as Triad incurs costs associated with the construction of the Civic Elements such that at all times following commencement of construction of the Civic Elements the amount available under the Letter of Credit shall be equal to one hundred ten percent (110%) of the then estimated costs to complete the Civic Elements.

5.11. Monitoring and Management of Construction. Triad and its contractors and subcontractors shall supervise and manage the design, development and construction of the Project. City shall have the right to review and approve designs, Drawings and pricing for the Civic Elements and revisions thereto in accordance with the provisions of Section 4.2 above. The City and its Designative Representative shall be provided with completed and detailed contractor pricing during the four (4) phases of Document Design. Notwithstanding the foregoing, City shall have no supervisory authority over the construction of any element of the Project and its participation in any design or construction related activity shall be for the sole purpose of monitoring the progress of the Project and the construction of the Civic Elements, and the Project for all purposes shall be a privately designed, constructed and financed Project.

5.12. Disclaimer. Notwithstanding any other provision of this Agreement to the contrary, City is under no obligation to, nor shall it construct or supervise the construction of the Project. It is understood and agreed that City's right to inspect the Civic Elements is for the sole purpose of protecting City's rights as a vendee under this Agreement. Except as otherwise provided herein, no part of the cost of construction of the Project shall ever become an obligation of City. City is not responsible to any contractors or to any subcontractors under any subcontracts for design, development, repair, renovation or construction of the Project or any other third parties for any purpose whatsoever. Nothing contained in this Agreement shall be construed as the consent or request of City, express or implied, for the performance of any labor or services or for the furnishing of any materials or equipment for any construction, alteration, addition, repair or demolition of or to the Property (or any part thereof). Triad shall include in the construction contracts and the contracts for architectural and engineering services the following or substantive equivalent disclaimer: NOTICE IS HEREBY GIVEN THAT THE CITY OF SEATTLE WILL NOT BE LIABLE FOR ANY LABOR, SERVICES, MATERIALS OR EQUIPMENT FURNISHED OR TO BE FURNISHED TO TRIAD, OR ANYONE HOLDING AN INTEREST IN THE PROPERTY (OR ANY PART THEREOF) THROUGH OR UNDER TRIAD, AND THAT NO CONSTRUCTION OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES, MATERIALS OR EQUIPMENT SHALL ATTACH TO OR AFFECT THE INTEREST OF CITY IN THE PROPERTY.

5.13. Construction of Civic Square. Triad shall, at its sole cost and expense, design, develop and manage the construction of the Civic Square in accordance with the Approved Construction Documents and the Development Schedule. City acknowledges that Triad may, subject to City's approval, in the course of discharging its construction responsibilities enter into a single construction contract with a contractor for construction of the entire Project, or enter into a series of construction contract(s) for various Elements of the Project including a separate construction contract for the Civic Elements as Triad may determine necessary after taking into consideration availability of labor, materials, weather, permitting restrictions, progress of overall design and development and other construction-related factors. City further acknowledges that due to the nature of the Project, the Project may be constructed in stages, with the Garage and Tower constructed first and prior to construction of the Civic Elements. In the event Triad constructs the Civic Elements prior to constructing other elements of the Project, Triad shall be fully responsible to repair any damage to the Civic Elements caused by any construction staging.

5.14. Oversight. In consultation with the Design Team, Triad shall oversee the course of construction and shall conduct such inspections of the course of construction and testing of work related to the Civic Elements to insure that the work of each contractor is being performed in substantial accordance with the requirements of the Approval Construction Documents, Legal Requirements, in a good and workmanlike manner, free of defects and deficiencies in work not inherent in the quality required or permitted under the Approved Construction Documents, and free and clear of all liens. Triad shall reject all work which does not substantially conform to the requirements of the Approved Construction Documents and cause

corrective action to be taken (unless the City has previously given Triad a written acceptance of the condition). Triad shall record the progress of the Civic Elements and shall cause the contractors performing work on the Civic Elements to submit written monthly progress reports to Triad and City, including information on each Contractor and each Contractor's work, as it relates to the Civic Elements, showing percentages of completion both in terms of cost incurred and physical construction. Triad shall maintain or cause each such contractor to maintain a daily log, containing a record of weather, each Contractor's work on the site, number of workers, identification of equipment, work accomplished, problems encountered and such other information as City reasonably may require. All of the records required under this Section 5.14 shall be made available to the City and its Designated Representative as required by this Agreement. If the City or its Designated Representative makes any objections concerning any aspect of the Project during construction, such objections shall be in writing and shall be solely for the purpose of protecting the City's rights under this Agreement to receive the Civic Elements in the condition and upon the schedule set forth in this Agreement. Triad shall respond to any written objections so made within five (5) business days so that the Parties may determine as soon as possible whether either Party has any claim that work is not in compliance with this Agreement.

5.15. Substantial Completion of Civic Elements. The Civic Elements shall be "Substantially Complete" and the "Substantial Completion Date" shall be the date upon which the following events have occurred with respect to the Civic Elements:

5.15.1. Notice to City. Triad shall have notified City in writing that the Civic Elements are substantially completed in substantial accordance with the Approved Construction Documents (inclusive of any Change Orders);

5.15.2. Contractor Certification. Each Contractor providing construction services with respect to the Civic Elements has issued its "Certificate of Substantial Completion."

5.15.3. Architect's Certification. Architect has issued its "Certificate of Substantial Completion" AIA Document G704, stating that the Civic Elements are sufficiently complete in substantial accordance with the Approved Construction Documents to permit the City to occupy or utilize the Civic Elements.

5.15.4. Certificate of Occupancy. City has issued a temporary certificate of occupancy for all of the Civic Elements (which may be the certificate of occupancy for the entire Project if a certificate of occupancy is not separately available for the Civic Elements, and which may be a shell and core certificate of occupancy for the Civic Square Retail Space until the Tenant Improvements for such space have been installed).

5.15.5. Triad Acceptance. Triad has accepted the Civic Elements and the Garage as substantially complete subject to completion of normal punch-list items

5.15.6. City Acceptance. City has accepted the Civic Elements as substantially complete, subject to completion of normal punch list items, in accordance under the provisions of Section 5.16 below.

5.15.7. Removal of Staging. All staging, material storage and other items that may be related to the use of the Civic Square as a staging area for the construction of the Tower shall have been removed, and the Civic Square is in a neat, clear and fully functionally condition (storage and staging may continue to occur in the Garage).

Within ninety (90) days following Substantial Completion, Triad shall also provide to the City an Affidavit of Payment of Debts and Claims (AIA Forms 706 and 706A) from each general contractor and final waivers and releases of liens in form satisfactory to Triad from the principal subcontractors and suppliers. Also following Substantial Completion, Triad shall proceed diligently to complete the work necessary to obtain a final certificate of occupancy for the Civic Elements.

5.16. Notice of Substantial Completion; Punchlist. Triad shall give notice to City and the Designated Representative at least thirty (30) days prior to the date which Triad anticipates the Civic Elements will be Substantially Complete. During the 15-day period after such notice, Triad, City, the Designated Representative, and the general contractor shall meet and inspect the Civic Elements and determine if the Civic Elements are Substantially Complete. In the event the parties dispute whether or not the Civic Elements are Substantially Complete, such dispute shall be subject to arbitration in accordance with Section 4.3 above.

During the inspections noted above, the parties shall also prepare a punchlist (as such term is used generally in the construction industry) of the items requiring to be repaired or completed with respect to the Civic Elements. The preparation of the punchlist shall not be required in order for the Civic Elements to be Substantially Complete, provided the standards for Substantial

Completion set forth above have been met. Triad shall correct all punchlist items promptly and in accordance with the Approved Construction Documents. The costs to complete those punchlist items which are not completed as of the date of the Civic Square Closing shall be escrowed in a holdback in accordance with the provisions of Section 9 below.

5.17. Construction Representations; Warranties. Upon Substantial Completion of the Civic Elements, Triad shall represent and warrant to City as follows:

5.17.1. The Civic Elements have been completed in substantial accordance with the Approved Construction Documents (inclusive of any Change Orders), and the materials and equipment furnished are of good quality and new unless otherwise required or permitted by the Approved Construction Documents, and the work is free from defects in workmanship and materials in connection with the construction thereof not inherent in the quality required or permitted under the Approved Construction Documents. Triad's warranty excludes remedy for damage or defect caused by abuse, modifications not executed by Triad, improper or insufficient maintenance, improper operation, or normal wear and tear and normal usage. Triad shall also assign to City at the Civic Square Closing on a non-exclusive basis all express and implied warranties made or assigned at any time to Triad by any contractors or subcontractors or material suppliers relating to the Civic Elements, with Triad reserving the right to enforce such warranties in connection with other elements of the Project and/or in connection with any warranty claims made by City against Triad under this Agreement.

5.17.2. Notwithstanding the foregoing, City acknowledges and agrees that Triad will not independently warrant any aspect of the materials, equipment and construction work and City shall instead solely rely upon the assigned warranties of Triad's contractors or subcontractors or material suppliers with respect to the portions/aspects of the Civic Elements identified in Schedule 5.17 attached hereto.

5.17.3. Triad has no knowledge of any structural defects, latent defects or building systems defects within the Civic Elements.

5.17.4. The Civic Elements have been constructed in accordance with all Legal Requirements, regulations and requirements in effect at the time of commencement of construction.

5.17.5. The Civic Elements are served by water, storm and sanitary sewage facilities, telephone, electricity, fire protection and other required public utilities adequate to serve the same.

5.17.6. All contractors, suppliers, materialmen and consultants have been paid all properly due amounts for work related to construction of the Civic Elements and there are no liens, encumbrances or other defects affecting title to the Civic Square Parcel. Provided that in the event of any good faith dispute with contractors, suppliers, materialmen or consultants, Triad may satisfy this condition by posting satisfactory lien release bond(s).

5.17.7. The Improvements constructed on the Civic Square Parcel do not encroach onto adjoining land or onto any easements (except as permitted by such easements) and there are no encroachments of improvements from adjoining land onto the Civic Square Parcel other than as expressly agreed to by City or permitted by easements approved by City. The location of the Civic Square Retail Space does not violate any applicable setback requirements.

5.17.8. Except as disclosed to City in writing, there is no litigation pending, or to the best knowledge of Triad, threatened, with respect to the Civic Square Parcel.

5.17.9. To the best of Triad's knowledge and except as disclosed to City in writing, there are no Hazardous Substances located in, on, under or affecting the Civic Square Parcel or any Hazardous Substances incorporated into the structure of the Garage.

5.17.10. To the best of Triad's knowledge, all Permits necessary for the construction, use and initial occupancy of the Civic Elements have been obtained and are in full force and effect (other than Permits to permanently occupy the Civic Square Retail Space and which cannot be issued until Tenant Improvements in the Civic Square Retail Space have been completed).

5.17.11. To the best of Triad's knowledge, it shall have delivered to City all documentation required to be delivered pursuant to this Agreement after the Civic Elements are Substantially Complete.

5.18. Failure to Commence Construction. In the event the Triad has not commenced construction of the Project within one hundred twenty (120) days following Closing under the Purchase and Sale Agreement, City may at any time provide notice to Triad (the "Termination Notice") of City's intent to rescind the Purchase and Sale Agreement and terminate this Agreement effective not sooner that thirty (30) days after the Termination Notice is given. If the commencement of construction of the Project has not started by the date specified in the Termination Notice, this Agreement shall terminate, the Purchase and Sale Agreement shall be rescinded, and neither City nor Triad shall have any further rights, duties or obligations except as otherwise provided in this Agreement and the Purchase and Sale Agreement. Triad hereby agrees to execute such documents as are reasonably requested by City to evidence rescission of the Purchase and Sale Agreement and re-conveyance of the Property in the event of termination of this Agreement pursuant to this paragraph.

5.19. Survival. All of the obligations of Triad under this Section 5 shall survive the transfer of the Civic Square Parcel.

6. Conveyance of the Civic Square Parcel. As more fully set forth below and subject to Section 5.7 (pursuant to which conveyance of the Civic Square Parcel to City may be accelerated) when the Civic Elements are Substantially Complete, Triad shall sell to City a newly created air space parcel having boundaries described as follows (the "Civic Square Parcel"): from the roof the Garage above the Garage waterproofing membrane extending upward to a plane forty (40) feet above the level of the sidewalk above Fourth Avenue; having an easterly boundary running adjacent to Fourth Avenue, a westerly boundary adjacent to Third Avenue, a southerly boundary adjacent to James Street and a northerly boundary generally as depicted on the Conceptual Design Documents. City and Triad shall cooperate with the King County Assessor's Office and other governmental offices, as necessary, in performing all obligations necessary to create the Civic Square Parcel and causing the Civic Square Parcel to be treated a stand-alone tax parcel separate and distinct from the remainder of the Property.

7. Limitation upon Encumbrance of the Project. Except as otherwise expressly provided in this Agreement, prior to the Civic Square Closing Triad shall not engage in any financing or other transaction creating any mortgage or other lien or encumbrance upon the Property (including the Civic Square Parcel), whether by express agreement or operation of law, or suffer any encumbrance or lien to be made upon or attach to the Property except as permitted by the terms of this Agreement and only for the purposes of obtaining funds necessary for the acquisition, development, construction and operation of the Project.

7.1. Construction Financing. Triad shall, at its sole cost and expense, use commercially reasonable efforts to obtain all construction or other debt and/or mezzanine or construction financing necessary to design, develop and construct the Project consistent with the terms of this Agreement and the Conceptual Design Documents ("Construction Loans"). Triad shall have the right to modify, alter, revise or amend said Construction Loans as it may deem necessary from time to time to order to complete the Project and shall have the right to encumber the Property by executing such mortgages, deed of trust or other encumbrances and such other or additional documents as such construction lender(s) may require in connection with any Construction Loans, including, but not limited to, an assignment of Triad's interest(s) under this Agreement, the Master Lease, and any subleases relating to the Civic Square Retail Space (collectively, the "Leases"). All documents executed by Triad in favor of said construction lender(s) shall hereinafter be referred to as the "Construction Loan Documents" and all persons or entities providing initial, additional or supplementary construction loan funds or refinancing a Construction Loan whether or not secured by an encumbrance upon the Property or any portion thereof shall be collectively referred to as the "Construction Lender". After conveyance of the Civic Square Parcel to City as set forth herein, Triad shall have no further right, title or interest in the Civic Square Parcel and shall not cause, allow or attempt any pledge, hypothecation or encumbrance of the Civic Square Parcel for any purpose and the Civic Square Parcel shall be delivered to City free and clear of any monetary encumbrances.

7.2. Construction Loan Documentation Requirements. The Construction Loan Documents shall contain such terms and provisions as shall be acceptable to Triad and Construction Lender but shall contain the following requirements:

7.2.1. Partial Release. The Construction Loan Documents shall provide for a release of the Civic Square Parcel from any liens created by the Construction Loan Documents which release shall be granted upon the Civic Square Transfer Date (the "Partial Release"), as such Civic Square Transfer Date may be accelerated pursuant to any Acceleration Notice provided by City. Following the transfer of the Civic Square Parcel to City, Triad shall have no right to encumber the Civic Square Parcel in connection with any loan or other financing arrangement.

7.2.2. Conveyance of Civic Square Parcel to City. The Construction Loan Documents shall contain a provision acknowledging that Triad is obligated to convey the Civic Square Parcel in accordance with the terms of this Agreement.

7.2.3. Notices by Construction Lender to City. The Construction Loan Documents shall require the Construction Lender to notify City in writing of a default by Triad under any of the Construction Loan Documents.

7.2.4. Subordination; Tri-Party Agreement. If requested by a Construction Lender, City agrees to subordinate its rights under this Agreement to the lien of the Construction Loans, provided: (i) City has been (or will be) provided the Letter of Credit as provided in Section 5.10 above, and (ii) the Construction Lender enters into a Tri-Party Agreement with City containing the fundamental business terms set forth in Exhibit D attached hereto and giving City an option to purchase the Construction Loan from the Construction Lender in the event of a default under the Construction Loan whereby the Construction Lender accelerates the Construction Loan and/or institutes judicial or non-judicial foreclosure proceedings thereunder.

8. Civic Square Cost Contingency Account. Upon Triad's purchase of the Property under the Purchase and Sale Agreement, the cash payment payable to City pursuant to section 2(a)(iii) of the Purchase and Sale Agreement (the "Cash Payment") shall be paid to City and such amount shall constitute the "Civic Square Cost Contingency Account." The Civic Square Cost Contingency Account shall be used to pay the development and construction costs associated with the Civic Elements that are to be paid by City.

9. Transfer of Civic Square and Other Property Interests.

9.1. Obligation to Convey. For and in consideration of the undertakings set forth in this Agreement, Triad agrees to sell to City or its permitted assignee and City agrees to purchase from Triad the following rights in real property (collectively the "Property Interests") on the Civic Square Transfer Date:

a. Fee simple title to the Civic Square Parcel free and clear of all monetary encumbrances except as expressly permitted by City prior to Closing. A Memorandum of Rights describing the foregoing, in form and substance as set forth in Exhibit E (but subject to the subordination requirements set forth in Section 7.3 above) shall be executed and recorded in the real property records of King County, Washington upon closing under the Purchase and Sale Agreement.

b. All rights conferred upon City, its successors, assigns, customers, permittees and invitees as set forth in the Reciprocal Easement Agreement containing the essential business terms set forth in Exhibit F pursuant to which the Project shall be subject to a recorded reciprocal easements providing for access, ingress and egress, to, from and across each of such elements so that invitees and customers of any of those elements may easily access the others, and also addressing maintenance, security, damage and destruction and other issues applicable to the Project as a whole (the "REA").

9.2. Transfer Date. The date on which City's acquisition of the Property Interests has been completed (which date is referred to as the "Civic Square Closing"), and delivery of all items to be made at the Closing under the terms of this Agreement shall be made at the offices of Chicago Title Insurance Company, Seattle, Washington on a date designated by City which date shall be no earlier than fifteen (15) days and no later than forty-five (45) days following Substantial Completion of the Civic Square. The date of the Civic Square Closing shall be known as the "Civic Square Transfer Date" which shall be the date upon which a deed conveying fee simple title to the Civic Square Parcel to City in accordance with the terms of this Agreement is recorded in the real property records of King County, Washington.

9.3. Title to Civic Square Parcel. At the Closing, Triad shall convey fee simple title to the Civic Square Parcel to City, subject to the REA, general governmental building or use restrictions consistent with the zoning for the Property, utility easements and other easements not inconsistent with use of the Property, all easements, covenants, conditions and restrictions which may be imposed on the Property during the course of construction as a result of Permits or other conditions imposed by any governmental authority as a condition to issuing a master use permit, building permit or any other license or approval required in connection with development and construction of the Project, and any exceptions to title to the Property approved by City as of the date of this Agreement and listed in Exhibit G to this Agreement ("Permitted Exceptions"). Triad shall cause any Construction Lender holding a Construction Deed of Trust on the Property to execute and record a partial reconveyance of such Construction Loan Documents as to the Civic Square Parcel as of the Civic Square Closing. Delivery of Triad's interest in the Civic Square Parcel shall be made by a bargain and sale deed to City as further described herein and the issuance of an ALTA form extended coverage owner's policy of title insurance with policy limits in the amount of Development Costs for the Civic Square ("Title Policy") issued by a Chicago Title Insurance Company ("Title Company") insuring that the Civic Square Parcel is vested in City, subject only to the Permitted Exceptions.

9.4. Closing. On or before the Civic Square Transfer Date, Title Company shall appoint an escrow officer to facilitate the Closing (the "Escrow Holder") and the parties shall deposit with the Escrow Holder the following:

9.4.1. Delivery by Triad. Provided all of the items listed in Section 9.4.2 are delivered by City to the Escrow Holder on or before the Civic Square Transfer Date, Triad shall deposit with Escrow Holder the following:

a. A bargain and sale deed to the Civic Square Parcel naming City, as grantee together with an executed real estate excise tax affidavit;

b. Affidavit executed by Triad which satisfies the requirements of Section 1445 of the United States Internal Revenue Code, regarding foreign investors;

c. Any reconveyance documents required to eliminate of record any existing deeds of trust and other security documents which are not Permitted Exceptions and any affidavit required to eliminate the Title Company exception for mechanics liens and the rights of parties in possession;

d. Copies of books and records of Triad which City would require to operate and maintain the Civic Square (including applicable warranties and maintenance records) together with the originals of all Permits licenses, and approvals necessary for the initial occupation, use and operation of the Civic Square Parcel;

e. An executed copy of the REA;

f. Two complete paper sets and one complete electronic/digital set of final as-built plans and specifications prepared by General Contractor for the Civic Elements (which delivery may be made within three (3) months following the Civic Square Transfer Date);

g. All technical and service, instruction and procedure manuals relating to the operation and maintenance of all HVAC systems and other mechanical devices and equipment installed in the Civic Square Retail Space;

h. An as-built survey of the Civic Square showing the location of all improvements constructed thereon;

i. The O & M Plan (defined in Section 3.2.2 above).

j. An executed master retail lease between City as a landlord and Triad as tenant for the Civic Square Retail Space (the "Master Lease") under which Triad pays to City $21 per square foot of Rentable Area per year, which Master Lease is in the form attached hereto as Exhibit H.

k. Any other documents, instruments, data, records or other agreements called for hereunder which have not been previously delivered.

The failure of Triad to deliver any of the foregoing items shall not excuse the performance of Triad under this Section 9. City may waive the right to require any of the foregoing items.

9.4.2. Delivery by City. Provided all of the items listed in Section 9.4.1 are delivered by Triad to the Escrow Holder on or before the Civic Square Transfer Date, City shall deposit with Escrow Holder the following:

a. An executed copy of Master Lease conveying a leasehold interest in the Civic Square Retail Space to Triad in the form attached hereto as Exhibit H;

b. An executed copy of the REA;

c. A counterpart of the real estate excise tax affidavit;

d. A counterpart of the O & M Plan;

e. Such ordinances, authorizations, certificates or other documents or agreements relating to City as shall be reasonably required by Triad or the Title Company in connection with this transaction; and

f. Any other documents, instruments, data, records, or other agreements called for herein which have not been previously delivered.

g. The purchase price of the Civic Elements, in the form of cash equal to the amount by which the Actual Development Costs for the Civic Square plus the Contribution Value exceed the amount then due under the promissory note made by Triad in favor of City pursuant to Section 2(a)(iv) of the Purchase and Sale Agreement, but in no event more than the difference between the Civic Square Cost Cap and the amount then due under such promissory note. For purposes hereof, the Actual Development Costs shall be the sum of (i) the actual costs incurred by Triad with respect to the construction and development of the Civic Elements (based upon those costs customarily included within construction cost budgets routinely used in the construction industry (i.e., the construction cost categories included within the Construction Cost Cap as set forth in the last paragraph of Section 5.4), but excluding Soft Costs, plus (ii) an amount equal to ten percent (10%) of the amount set forth in (i) above as a Soft Costs allowance. At the Civic Square Closing, the promissory note made by Triad in favor of the City pursuant to Section 2(a)(iv) of the Purchase and Sale Agreement shall also be returned to Triad marked "paid in full." If the sum of the Actual Development Costs and the Contribution Value are less than the amount due under the promissory note, Triad shall pay the remaining amount due to the City under such promissory note at the Civic Square Closing.

9.4.3. Other Instruments. Triad and City shall each deposit such other instruments as may be reasonably required by Escrow Holder or as otherwise required to close the escrow and consummate the acquisition of the Property Interests in accordance with the terms hereof.

9.5. Prorations. All revenues and all expenses of the Civic Square Parcel, including, but not limited to, real and personal property taxes, special assessments, rents, water, sewer and utility charges, amounts payable under contracts assumed by City, annual Permits and/or inspection fees (calculated on the basis of the respective periods covered thereby), and other expenses normal to the ownership, use, operation and maintenance of the Civic Square Parcel shall be prorated as of 12.01 a.m. on the Civic Square Transfer Date. If any revenue or expense amount cannot be ascertained with certainty as of the Civic Square Transfer Date, it shall be prorated on the basis of the parties' reasonable estimates of such amounts, and shall be the subject of a final proration sixty (60) days after Closing or as soon thereafter as the precise amounts can be ascertained. Either party owing the other party a sum of money based on adjustments made to the prorations after the Civic Square Transfer Date shall promptly pay that sum together with interest thereon at the rate of twelve (12%) per annum from the date of demand therefor to the date of payment if payment is not made within ten (10) days after the delivery of a statement therefor.

9.6. Costs and Expenses. Triad shall pay the premium for the Title Policy and all real estate excise taxes, if any, applicable to the transfer of the Civic Square Parcel. The escrow fee shall be borne equally by Triad and City. City shall pay all recording costs.

9.7. Close of Escrow; Recording. On the Civic Square Transfer Date, the Escrow Holder shall record the deed to the Civic Square Parcel and the REA in the real property records of King County, Washington and deliver the Title Policy to City. Escrow Holder shall deliver copies of all documents executed, delivered and/or recorded in connection with this transaction to both Triad and City, together with closing statements in form customarily prepared by Escrow Holder within five (5) days following the Civic Square Transfer Date.

10. Default.

10.1. Remedies; Waiver of Consequential Damages. If either party defaults in the performance of its obligations under this Agreement and such default continues for a period of fifteen (15) days (with respect to a default related to the payment of money) or sixty (60) days (with respect to a default with respect to an obligation other than the payment of money), the non-defaulting party may seek any and all remedies provided by law or in equity, limited however to actual damages only. Triad and the City waive claims against each other for consequential damages arising out of or relating to this Agreement (which waiver includes, without limitation, damages incurred for loss of use, income, profit, financing, business and/or reputation, loss of management or employee productivity or of the services of such persons. Notwithstanding the foregoing, the liquidated damages set forth in Section 10.3.1 below shall be the sole remedy of the City against Triad if Triad defaults prior to the reduction of the amount of the Letter of Credit, and the liquidated damages set forth in Section 10.3.3 below shall be the sole remedy of the City against Triad with respect to late delivery of the Civic Square Parcel. In the event Triad defaults in its obligations to complete the Civic Elements following the conveyance of the Civic Square Parcel to the City, the City may draw upon the Letter of Credit to pay the costs incurred by the City in completing the Civic Elements.

10.2. Default by City. In the event the City defaults in the acquisition of the Civic Square Parcel, the remedies of Triad under this Agreement shall include, at the option of Triad, the right to seek specific performance of this Agreement. In this respect, the Parties acknowledge that the Civic Square Parcel and the improvements to be constructed thereon are unique, have been designed for a limited use as a civic square, and that a remedy of actual damages will not adequately compensate Triad for the City's failure to acquire the Civic Square Parcel in accordance with the terms of this Agreement.

10.3. Liquidated Damages. If Triad fails to complete the conveyance of the Civic Square Parcel in a timely manner as required by this Agreement (for reasons other than Unavoidable Delays and City Delays), the damages to be suffered by City are difficult, if not impossible to calculate, such damages including, but not limited to, the time and effort required of City employees arising from such default, the delay of the availability of a significant public space to the general public of City, and the adverse impact on adjacent property owned by City.

10.3.1. A good faith estimate of damages incurred by the City is $35,000,000.00 if Triad defaults in its obligations under this Agreement prior to the reduction in the amount of the Letter of Credit, and it is the intention of the Parties that the $35,000,000.00 proceeds from the Letter of Credit shall be the sole damages paid to the City in such event (and with the proceeds of such Letter of Credit also satisfying the obligations of Triad under the promissory note made by Triad in favor of the City pursuant to Section 2(a)(iv) of the Purchase and Sale Agreement).

10.3.2. A good faith estimate of damages incurred by the City if completion of the Civic Elements does not occur within four (4) months following the estimated date of Substantial Completion established in the Development Schedule approved by Triad and the City prior to the commencement of construction (for reasons other than Unavoidable Delays or City Delays) are: (i) $1,000 for each day of delay for the first thirty (30) days; (ii) $2,000 for each day of delay for the next thirty (30) days of delay and (iii) $4,000 per day for each day of delay thereafter until the Civic Elements are completed. The amount of damages owed under this Section 10.3.2 shall be paid by Triad to City on the Civic Square Transfer Date. City may apply any amount due from Triad under this Section 10.3.2 toward the satisfaction of City's obligation to pay any amounts due from City to Triad on the Civic Square Transfer Date.

11. Miscellaneous.

11.1. Notices. All notices, demands, requests, consents and approvals which may, or are required to, be given by any party to any other party hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, sent by fax, sent by a nationally recognized overnight delivery service, or if mailed or deposited in the United States main and sent by registered or certified mail, return receipt requested, postage prepaid to:

Triad at: 2801 Alaskan Way, Suite 107

Seattle, WA 98121-1135

Attention: Frederick W. Grimm

William W. Krippaehne

Fax No.: (206) 770-5910

Email: fred@triaddev.com

copy to: Foster Pepper PLLC

1111 Third Avenue, Suite 3400

Seattle, WA 98101

Attention: Michael D. Kuntz

Fax No.: (206) 749-1976

Email: kuntm@foster.com

City at: City of Seattle

Fleets and Facilities Department

700 Fifth Avenue, 52nd Floor

P.O. Box 94689

Seattle, WA 98124-4689

Attention: Brenda Bauer

Fax: (206) 684-7898

Email: Brenda.bauer@seattle.gov

copy to: The City of Seattle

City Attorney's Office

600 Fourth Avenue 4th Floor

Seattle, WA 98124-4769

Attention: Rodney Eng

Fax: (206) 684-8284

Email: Rodney.Eng@seattle.gov

or to such other addresses as either party hereto may from time to time designate in writing and deliver in a like manner. All notices shall be deemed to be complete upon actual receipt or refusal to accept delivery. Facsimile transmission of any signed original document, and retransmission of any signed facsimile transmission shall be the same as delivery of an original document. At the request of either party, the parties will confirm facsimile transmitted signatures by signing an original document. The Parties will endeavor to provide contemporaneous copies of notices by email transmission; provided, however, email notification and communications shall not constitute written notice under this Agreement.

11.2. Amendment; Waiver. No modification, termination or amendment of this Agreement may be made except by written agreement or as otherwise may be provided in this Agreement. No failure by Triad or City to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or any other a covenant, agreement, term or condition. Any party hereto, by notice in the manner provided herein, may waive any of its rights or any condition to its obligations hereunder, or any duty, obligation or covenant of any other party hereto. No waiver shall affect or alter this Agreement and each and every covenant, agreement, term and condition of this Agreement shall continue in full force and effect with respect to any breach thereof. All the terms, provisions and conditions of this Agreement shall inure to the benefit of and be enforceable by Triad or City's respective successors and assigns.

11.3. Survival. All representations, warranties and indemnifications made in or to be made pursuant to this Agreement shall survive: (i) the closing under the Purchase and Sale Agreement; (ii) the Civic Square Transfer Date (or the earlier transfer of the Civic Square Parcel pursuant to an Acceleration Notice); and (iii) termination of this Agreement.

11.4. No Joint Venture. It is not intended by this Agreement to, and nothing contained in this Agreement shall, create any partnership, joint venture or other arrangement between Triad and City. No term or provision of this Agreement is intended to be, or shall be, for the benefit of any person, firm, organization or corporation not a party hereto, and no such other person, firm, organization or corporation shall have any right or cause of action hereunder.

11.5. Severability. In case any one or more or the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

11.6. Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.

11.7. Further Assurances. Each party hereto agrees that it will execute or furnish such documents and further assurances to the other or to proper authorities as may be necessary for the full implementation and consummation of this Agreement and the transactions contemplated hereby.

11.8. Successors and Assigns. Prior to the Civic Square Transfer Date, the obligations of any party under this Agreement may not be assigned, encumbered or otherwise transferred, whether voluntarily, involuntarily, by operation of law or otherwise, by any party without the prior written consent of the other party (such consent not to be unreasonably withheld or delayed); provided however, (1) City may assign its rights under this Agreement (without releasing City) to one or more designees which shall be public development authorities charged with the general duties of operation and management of the Civic Square and (2) Triad may assign its rights under this Agreement to any entity owned or controlled by John Goodman and Fred Grimm or in which John Goodman and Fred Grimm have a Substantial Interest and which has been formed with third party equity participants to develop the Project. For purposes of this paragraph, the term "Substantial Interest" shall mean that Messrs. Goodman and Grimm or entities controlled by them are managers of the limited liability company or general partners of the partnership to which this Agreement is assigned, with at least a ten percent (10%) profits interest in such limited liability company or partnership. Triad shall have the right to assign its interest in this Agreement, for security purposes, to any lender providing Construction Financing for the Project. Subject to the foregoing, this Agreement shall be binding upon, and shall inure to the benefit of the Parties and their respective successors and assigns.

11.9. Authority. The persons signing below represent and warrant that they have the requisite authority to bind the party on whose behalf they are signing.

11.10. Time is of the Essence. For the purposes of this Agreement and all transactions contemplated thereunder, time is of the essence.

11.11. Governing Law; Venue. This Agreement and the rights of the parties hereto shall be governed by and construed in accordance with the laws of the State of Washington. Venue for any action arising under this Agreement shall lie in King County Superior Court.

11.12. City Approval. Whenever under the terms of this Agreement the consent or approval of City is required, such consent or approval shall be given by the Designated Representative on behalf of City. Such consent or approval shall be given or withheld (and if withheld, the specific reasons relating thereto) within fifteen (15) days of Triad's request for such consent or approval. If the City has not withheld such consent or approval in a written notice to Triad within such 15-day period, such consent or approval shall have been deemed to have been given. Notwithstanding the foregoing, the approvals required of the City under Section 4.2 above shall be subject to the time periods set forth therein and shall not be deemed to have been given until the Designated Representative has issued a formal approval under Section 4.2.

[signatures follow]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

"TRIAD"

TRIAD CIVIC CENTER LLC, a Washington limited liability company

By:

Name:

Its:

"City"

CITY OF SEATTLE, a municipal corporation

By:

Its:

INDEX OF EXHIBITS, APPENDICES AND SCHEDULES

TO CIVIC SQUARE PROJECT AGREEMENT

[to be updated]

Exhibit A Legal Description of Property

Exhibit B Development Schedule

Exhibit C Conceptual Design Documents

Exhibit D Tri-Party Agreement

Exhibit E Memorandum of Rights

Exhibit F Reciprocal Easement Agreement

Exhibit G Permitted Exceptions (Civic Square Parcel)

Exhibit H Master Lease (City to Triad)

Appendix 1 Definitions

Schedule 3.1.1 Design Team

Schedule 3.1.2 List of Approved Contractors and Engineers

Schedule 5.17 List of Items Not Subject to Triad Warranty

APPENDIX 1

Definitions

As used in that certain Seattle Civic Square Project Agreement, dated as of October __, (the "Agreement") and executed by and between the City of Seattle and Triad Civic Center LLC, the following capitalized terms shall have the meanings given in this Appendix 1, which is attached to, is a part of, and fully incorporated into the terms and conditions of the Agreement:

1. Applicable Law means any constitution, statute, ordinance, regulation, rule, resolution, judicial decision, directions, rules, administrative order, Environmental Law or other requirement of any federal, state, county, municipal or other governmental agency or authority having jurisdiction over the parties or the Property, or both, including, without limitation, City of Seattle ordinances, the Revised Code of Washington, the Washington Administrative Code, United States Code, the Code of Federal Regulations, any regulation or order of a quasi official entity or body (e.g. board of fire examiners or public utilities); building and land use codes, and all rules, and regulations arising under Title III of the Americans With Disabilities Act (the "ADA") and the regulations issued thereunder by the United States Department of Justice concerning accessibility of places of public accommodation and commercial facilities.

2. Business Days means any calendar day other than Saturday, Sunday or any holiday officially observed by the City on which the business offices of the City are closed for the conduct of normal business.

3. Civic Square Account means one or more accounts maintained by the City for funds to the used in the operation, maintenance and repair of the Civic Elements in compliance with its obligations under this Agreement, the REA and the Master Lease.

4. Designated Representative means one or more consultants designated by City from time to time in writing to Triad, for the purpose of acting on behalf of the City with respect to the Project. The initial Designated Representative shall be The Staubach Company.

5. Development Schedule means the schedule for development and construction as set forth on Exhibit B to this Agreement, as revised from time to time in accordance with this Agreement.

6. Drawings means all graphic and pictorial documents depicting the design, location and dimensions of the elements of the Project and/or Civic Elements, including, without limitation, any itemization of furniture, fixtures, equipment and furnishings to be installed and all plans, elevations, sections, details, schedules and diagrams for the Project and/or Civic Elements.

7. Effective Date means the date upon which the Agreement has been fully executed by City and Triad.

8. Environmental Law means, as amended from time to time, the Federal Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., Federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., Federal Hazardous Materials Transportation Control Act, 42 U.S.C. Section 1801 et seq., Federal Clean Air Act, 42 U.S.C. Section 7401 et seq., Federal Water Pollution Control Act, Federal Water Act of 1977, 93 U.S.C. Section 1251 et seq., Federal Insecticide, Fungicide and Rodenticide Act, Federal Pesticide Act of 1978, 7 U.S.C. Section 136 et seq., Federal Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., Federal Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., Washington Water Pollution Control Act, RCW Chapter 90.48, Washington Clean Air Act, RCW Chapter 70.94, Washington Solid Waste Management Recovery and Recycling Act, RCW Chapter 70.95, Washington Hazardous Waste Management Act, RCW Chapter 70.105, Washington Hazardous Waste Fees Act, RCW Chapter 70.95E, Washington Model Toxics Control Act, RCW Chapter 70.105D, Washington Nuclear Energy and Radiation Act, RCW Chapter 70.98, Washington Radioactive Waste Storage and Transportation Act of 1980, RCW Chapter 70.99, Washington Underground Petroleum Storage Tanks Act, RCW Chapter 70.148, or any other local, state or federal laws, rules, ordinances, regulations and orders now or hereafter enacted relating to (a) environmental protection, (b) the use, storage, generation, production, treatment, emission, discharge, remediation, removal or disposal of Hazardous Substances or (c) any other environmental matter.

9. Hazardous Substance means any industrial waste, toxic waste or byproduct, chemical contaminant or other substance regulated or classified by Law or Environmental Law as hazardous, toxic or lethal to persons or property.

10. Improvements means all improvements constructed or installed on the Property.

11. Legal Requirements means (i) the obligations imposed by any Applicable Law; (ii) Triad's presently or subsequently effective entity documents; and (iii) all material contracts (written or oral) of any nature that relate to the Property and to which Triad may be bound, including without limitation any easement, covenant, agreement granting a right to use all or any portion of the Property and any condominium declarations, by-laws and condominium association laws, rules and regulations.

12. Metro means the King County (Washington) Department of Metropolitan Services.

13. Metro Easement means that certain Transit Way Station Entrance Easement and Construction Agreement by and between King County Department of Metropolitan Services and the City of Seattle dated as of May 27, 1994, recorded under King County, Washington recording no. 9508310887, as amended from time to time.

14. MUP means a Master Use Permit as defined by the ordinances of the City of Seattle.

15. Party means either Triad or the City, or any of their respective successors and assigns that become bound under the terms of this Agreement. Collectively, these entities may be referred to as the "Parties."

16. Tenant Improvements means any improvements to the interior of the Civic Square Retail Space beyond the Building Shell.

17. Unavoidable Delay means, events which delay or prevent either Party from performing their obligations under this Agreement and which are beyond the reasonable control of, and without the fault of the Party requesting relief. An event of Unavoidable Delay shall excuse performance of the affected Party, provided that Party provides prompt notice of the event of Unavoidable Delay to the other Party, and continually makes all reasonable attempts to mitigate any impacts due to Unavoidable Delay.

17.1. On-site strikes that are not part of labor disputes general to the area are specifically excluded as a basis of an Unavoidable Delay excuse of performance by Triad.

17.2. Events that will be considered Unavoidable Delay events under this Agreement include, but are not necessarily limited to:

A. fire and explosion,

B. strikes which are not on the Property or which are on the Property but part of a labor dispute general to the area,

C. epidemic,

D. cyclone, abnormally severe weather, lightning, flood,

E. earthquake, hurricane, natural disaster,

F. by reason of war, declared or undeclared, revolution, riots, acts of public enemies, blockade or embargo,

G. offsite events causing disruption of service from any utilities,

H. criminal acts of third parties,

I. by reason of the presence upon the Property of any item or condition which is of archeological significance;

J. an order of court or a governmental body, not caused by the claiming Party, which directs that the work on the Project be stopped, in whole or in part, and

L. loss or damage to equipment while in transit to Triad or General Contractor;

provided, however, that the foregoing events were without the fault of and beyond the control of the Party claiming the occurrence of an event of Unavoidable Delay. Unavoidable Delay means any of the above events if such event in fact materially interferes with the performance of the obligations of Triad or City (except payment) pursuant to this Agreement. A Party claiming Unavoidable Delay shall give notice thereof to the other Party; shall make reasonable attempts to remedy the cause or causes constituting the Unavoidable Delay, keeping the other Party reasonably informed; and shall comply with all of the requirements of subsection (iv) below. Such Notice shall be given as promptly as possible but in no event later than seven (7) days after becoming (or when a Party claiming Unavoidable Delay reasonably should have become) aware of such occurrence or event.

17.3. An Unavoidable Delay event includes the failure of the General Contractor to complete obligations of Triad under this Agreement in a timely manner if such failure is itself due to an Unavoidable Delay event as defined in this Appendix Section 23. Abnormally severe weather conditions are defined as only conditions which are at the Property and are shown to be conditions which are more severe than any event in the most recent ten (10) year historical profile of U.S. Meteorological Society weather data from the nearest reporting station to the Land.

17.4. If either Party, because of an Unavoidable Delay event, is rendered wholly or partly unable to perform any of its obligations under this Agreement (other than an obligation to pay sums when due), that Party shall be excused from whatever performance is affected by the Unavoidable Delay event to the extent so affected. Time extensions will be granted to the extent of the delay actually

caused, provided that:

i) as a condition of Unavoidable Delay the non-performing Party must provide written notice, no later than seven (7) days after the beginning of the Unavoidable Delay event and delineate its effect on that Party's performance including its specific effect on critical activities and when (date and time) the non-performing Party is anticipating that it will be able to resume performance; and,

ii) an Unavoidable Delay event shall not entitle Triad to an extension of the Substantial Completion Date unless such event delays an item on the critical path so as to delay Triad's achievement of Substantial Completion; and

iii) the period of non-performance shall be of no greater scope and of no longer duration than is required by the Unavoidable Delay event; and

iv) unless otherwise agreed to by City, in writing, the nonperforming Party shall continue to prosecute the Project in good faith and with due diligence and use all reasonable efforts to limit delays caused by such Unavoidable Delay event; and

v) when the non-performing Party is able to resume performance of its obligations under this Agreement, that Party shall give the other Party written notice to that effect; and

vi) it is the duty of the claiming Party to prove all the elements of Unavoidable Delay including (a) specific action taken to work around or mitigate the impact, (b) specific event dates, durations and logic to support the claim and (c) specific cause for the claim of Unavoidable Delay as set forth in this Appendix Section 23 and to provide written documentation of such proof to the other Party as soon as reasonably possible. City shall have the right to analyze and Triad shall, upon City's request provide, (1) the most recent Triad's project schedule prepared prior to the Unavoidable Delay event (the "Old Project Schedule"), (2) Triad's data sufficient to support the Old Project Schedule, (3) the revised Triad's project schedule prepared after such Unavoidable Delay event (the "New Project Schedule"), (4) Triad's data sufficient to support the New Project Schedule and (5) information concerning all changes, events and occurrences affecting the Triad's project schedule from the date of the Old Project Schedule through the date of the New Project Schedule. A Party is not required to grant or deny a request for Unavoidable Delay until such documentation has been supplied.

18. Rentable Area and Rentable Square Feet and similar terms shall mean usable area as determined in accordance with the American National Standard Method of measuring floor space in office buildings/mixed use buildings as published by the Building Owners and Managers Association International dated June 7, 1996 ("BOMA").

SCHEDULE 3.1.1

Design Team

"Design Team:"

Project Design Architect: Foster + Partners Architects

Collaborating Local Architect: GGLO

Landscape and Open Space Designer: Atelier Dreiseitl

SCHEDULE 3.1.2

List of Approved Contractors and Engineers

General Contractor Skanska, Turner, Mortensen, HS Wright, Lease Crutcher Lewis

Structure ABI, Conco, SAK, McClone, Skanska

Envelop ANG, Walters Wolf, Enclose, Harmon, Permasalista

Mechanical McDonald Miller, McKinstry, University, Hemanson [dry side only]

Plumbing Auburn Mech, McDonald Miller, McKinstry, University

Electrical Valley, Cochrane, Sasco, Veca

Fire Sprinkler Patriot, McKinstry, Reliance, Western States

Elevator TKE, Otis, Schindler

Str. Engineer ABKJ, MKA, KPFF, CKC, CPL, ARUP

Civil Engineer CPL, MKA, KPFF, BRH

SCHEDULE 5.17

List of Items to be Covered by Third Party Warranties

1. HVAC systems and equipment

2. Project water features and equipment associated therewith

3. Elevators, escalators and other vertical transportation equipment

EXHIBIT A

TO SEATTLE CIVIC SQUARE PROJECT AGREEMENT

Legal Description of Property

EXHIBIT B

TO SEATTLE CIVIC SQUARE PROJECT AGREEMENT

Development Schedule

June 26, 2007 Early Design Guidance Meeting I

August 28, 2007 Early Design Guidance Meeting II

August 28, 2007 First Cost Estimate for Civic Elements

November 13, 2007 Early Design Guidance Meeting III

November 30, 2007 Second Cost Estimate for Civic Elements

April 15, 2008 MUP Application Submittal

April 15, 2008 SEPA Submittal

June 1, 2008 Third Cost Estimate for Civic Elements

October 15, 2008 Building Permit Submittal (assuming timely issuance

of MUP and no MUP appeals)

June 30, 2009 GMP for Civic Elements and Final Cost Estimate for Civic Elements

15 Working Days Following Permit Issuance for Construction Commencement (excavation and shoring)

32 Months Following Commencement of Construction for Substantial Completion (34 months if Garage includes a P-7 and P-8 parking level)

EXHIBIT C TO SEATTLE CIVIC SQUARE PROJECT AGREEMENT

Conceptual Design Documents

The Conceptual Design Documents shall be the designs (including narrative) set forth in the Seattle Civic Square Response to EDG-2 Comments dated November 2007, and prepared by Triad, Foster & Partners, Atelier Dreiseitl, GGLO and Arup, copies of which have been initialed by Triad and the City.

Civic Center Square. Response to EDG-2 Comments.

(This document is presented in three parts as PDF files, which require Adobe Acrobat or equivalent program to view.)

Part 1 (5 MB PDF file) Part 2 (5.5 MB PDF file) Part 3 (3.8 MB PDF file)

EXHIBIT D TO SEATTLE CIVIC SQUARE PROJECT AGREEMENT

TRI-PARTY/SUBORDINATION AGREEMENT

I. Parties:

Construction Lender ("Lender"), Triad Civic Center LLC ("Triad") and City of Seattle ("City")

II. Subordination

City agrees to subordinate rights under Purchase Agreement and Project Agreement to lien of Lender's deed of trust and other security agreements.

III. Lender's Undertakings

A. Provide notice of defaults by Triad to City

B. Allow City to cure defaults and purchase loan if Triad defaults and Lender commences to exercise judicial or non-judicial foreclosure proceedings

C. Release Civic Square from lien of mortgage upon completion of support/garage structure if City properly issues Acceleration Notice

D. Accept REA upon conveyance of Civic Square to City

IV. City's Undertakings

A. Provide notice to Lender of defaults by Triad

B. Allow Lender right to cure defaults by Triad, including extension of time necessary to obtain possession if possession is required to cure the default

C. Allow Lender (or successor in interest by purchase at foreclosure sale or by deed in lieu) right to assume Triad's rights and obligations under Project Agreement following default by Triad

D. Consent to assignment of Project Agreement to Lender by Triad

V. Miscellaneous

A. Normal and customary provisions for notices, applicable law, etc.

B. Agreement recorded

Tri-Party Agreement

EXHIBIT E

TO SEATTLE CIVIC SQUARE PROJECT AGREEMENT

Memorandum of Rights

This document will not be completed until after this legislation is passed by the Council and approved by the Mayor.

EXHIBIT F TO SEATTLE CIVIC SQUARE PROJECT AGREEMENT

Reciprocal Easement Agreement

RECIPROCAL EASEMENT AGREEMENT OUTLINE

(Triad Civic Square)

I. DEFINITIONS

A. "City" means City of Seattle, a first-class charter city of the State of Washington.

B. "Civic Square" means the air space parcel defined in the Project Agreement to be owned by the City or its designee.

C. "Civic Square Retail Space" means the retail space within the Civic Square.

D. "Common Areas" shall mean the areas within the Civic Square accessible for pedestrian passage that are open to the public.

E. "Project Agreement" means that certain Seattle Civic Square Project Agreement between the City and Triad, which this outline is attached to as an exhibit and made a part of.

F. "REA" means that certain Reciprocal Easement Agreement to be entered into between the City and Triad based on the terms set forth in this outline.

G. "Triad" means Triad Civic Center LLC, a Washington limited liability company.

H. "Triad Property" means the Tower and Garage as both are defined in the Project Agreement.

I. "Master Lease" means that certain Master Lease by and between City, as landlord, and Triad, as tenant, for the premises constituting the Civic Square Retail Space.

J. "Purchase and Sale Agreement" means that certain Purchase and Sale Agreement pursuant to which City has agreed to sell, and Triad has agreed to purchase, the real property described therein which is formerly known as Public Safety Building located in Seattle, King County, Washington.

II. EASEMENTS CREATED BY THE REA.

A. Ingress/Egress.

1. A non-exclusive easement in favor of the owner of the Triad Property for ingress and egress over the Common Areas of the Civic Square for the passage of pedestrians to and from the Triad Property.

Use of the easement shall be permitted at all times the Common Areas are open to the public. The City may restrict use of the easement from time to time in those portions of the Common Areas that are being used for events or gatherings for which attendance is restricted. The easement shall also include the use of the escalators within the Civic Square Retail Space. The City will permit pedestrian access through the Civic Square Retail Space using the escalators from 6:00 a.m. until 7:00 p.m. on all non-holiday weekdays. Except during times of routine maintenance and/or repair, the City will cause the escalators to be in operation during such times.

2. A non-exclusive easement in favor of the owner of the Civic Square for ingress and egress through the breezeway located on the Triad Property at the base of the Tower for the passage of pedestrians. The use of the easement shall be permitted at all times the Civic Square is open to the public. Triad shall have the right to close off access to and through the breezeway if determined necessary in its reasonable discretion for purposes of security or for special events.

3. A non-exclusive easement in favor of the owner of the Civic Square for ingress and egress to and the use of the Garage elevators located on the Triad Property for the passage of pedestrians to the elevators providing access to the public portions of the Garage. The use of the easement shall be permitted at all times the Garage is open for public parking. Except during times of routine maintenance and/or repair, Triad will cause the Garage elevators to be in operation during such times. However, Triad shall have the right to close access to the Garage elevators from time to time if determined necessary in Triad's reasonable discretion for purposes of security.

B. Utilities.

Triad and the City shall grant to each other reciprocal, nonexclusive easements to install and maintain, or cause to be installed and maintained, utility lines below the surface of the Civic Square and in and through the Garage. Such utility services are expected to include water, sewer, storm drainage, steam, electricity, telecommunications, data transmission, gas and similar services. The precise utility easements shall be determined upon completion of construction. Utility services for the Civic Square are expected to be independent of the utility services for the Garage and Tower, but may enter the Civic Square through the Garage, and may share certain systems upon entry into the property (such as a single power transformer etc). The utility easements will permit the City to install new or additional utilities for the benefit of the Civic Square through the Garage, and/or to relocate existing utilities, provided (1) the cost of adding new utilities or relocating existing utilities shall be at the sole cost of the City, and (2) the location of such utilities within the Garage shall be subject to the approval of Triad (such that the installation and/or relocation of such utilities do not interfere with the use of the Garage). Utility easements shall include the right to maintain and repair the installed utility system, provided that all routine maintenance and repair shall be scheduled and undertaken to the extent feasible so as not to interfere with the use and operation of the burdened property.

To the extent the overall project shares certain utility systems (such as a combined storm drainage and collection system, or a fire suppression water loop), the reciprocal utility easements for such shared utility systems shall include (1) the obligation of each party to operate and maintain its property so as to not damage or interfere with the use of such shared utility system; (2) the obligation of Triad to undertake on behalf of all owners the routine maintenance and repair such shared utility systems; and (3) the obligation of the City to reimburse Triad for the City's prorata share of the costs of such maintenance and repair (and provided Triad or the City, as applicable, shall be solely responsible for the costs of maintenance or repair caused by its mis-use of or damage to such shared utility systems). The City's prorata share of the costs of maintenance for shared utilities shall be determined on a utility-byutility basis based upon the anticipated use (i.e., the costs to maintain the shared storm drainage and collection system will be shared based upon the surface area of the Project and the Civic Square drainage by such utility).

The storm water system serving the project as a whole is expected to include features for the recycling and reuse of available water, and the reciprocal easements shall include the rights for such water to be used and circulated throughout the project.

C. Structural Support.

Triad shall grant to the owner of the Civic Square an easement through the Garage for structural support for the Civic Square. The easement will include an obligation for the owner of the Garage to exercise all reasonable efforts to maintain the structural integrity of the Garage to provide such support. Triad will also maintain full replacement cost insurance (excluding earthquake and terrorism coverage) for the structural elements of the Garage (with a portion of the costs of such insurance to be passed through to the City as an operating expense of the Civic Square). In the event of damage to the structural support for the Civic Square, such insurance proceeds shall, at the request of the City, be made available to repair the structural support elements.

D. Elevators.

Triad will grant to the owner of the Civic Square an exclusive easement to construct, install and maintain enclosed elevator and escalator penetrations and related equipment to operate elevators and escalators for access to and through the Civic Square. One of the elevators to be constructed as part of the Civic Square Retail Space may also provide service to the Metro tunnel and be subject to a joint use and maintenance agreement among Triad, the City and King County (Metro).

The Civic Square shall be subject to the Metro Easement (defined in the Purchase Agreement), which Metro Easement creates for the benefit of Metro an easement for use of certain portions of the Civic Square for pedestrian passage to and from the Metro transit tunnel.

E. Water Feature.

Triad shall grant to the owner of the Civic Square an easement to install and maintain underground pumps, mechanical and electrical systems and water retention vaults in the Garage for the operation of the water features to be included as part of the Civic Square. The water features may operate in part on water recycled from the storm drainage and collection system for the project. All costs to operate, maintain and repair the water feature shall be the responsibility of the owner of the Civic Square. Routine maintenance and repairs shall be undertaken at such times and in such manner as to not interfere with the operation of the Garage. Operation of the water features shall be as provided in the O&M Plan and/or Master Lease.

F. Loading Zone; Garbage Collection.

The City (subject to reasonable rules and regulations adopted from time to time by Triad) shall have a non-exclusive easement to use the loading zone and garbage collection and recycling areas located in the Garage for supplying and servicing the Civic Square. Unless otherwise agreed, the City shall be responsible for arranging for and separately paying for all garbage collection and recycling associated with the use and operation of the Civic Square (provided the City and Triad will cooperate in good faith on a recycling program applicable to the project as a whole). A portion (based upon estimated use as reasonably determined by the parties) of the costs to operate and maintain the loading zone and garbage collection and recycling area shall be paid by the City as an operating expense of the Civic Square.

G. Maintenance and Repair.

The City and Triad shall each grant to the other reciprocal access and temporary construction easements for maintenance and repair of improvements and facilities on its property (i.e. Triad shall have an easement over the Civic Square for temporary use of a portion of the Civic Square as reasonable necessary for Triad to maintain and repair the Tower and the Garage, and the City shall have an easement over the Garage and exterior areas of the Triad Property for maintenance and repair of the Civic Square). All such maintenance and repair activities shall be undertaken to the extent feasible so as not to unreasonably interfere with the use of the burdened parcels and except in emergencies shall be scheduled in advance with the owner thereof.

III. MAINTENANCE STANDARDS.

The REA shall require the City to maintain the Civic Square (including the Civic Square Retail Space) in first-class condition and consistent with the current standards of other renowned civic areas such as New York City's Rockefeller Center and San Francisco's Union Square and shall keep the Civic Square and the improvements thereon in good working order and repair. The maintenance and repair obligation shall include maintenance (and improvements if necessary) of the Civic Square Retail Space buildings and facades to keep such facilities in a first-class condition and state of repair and consistent with the standards of appearance for other first-class retail facilities. In addition, the City shall maintain the Civic Elements in accordance with the O&M Plan. The maintenance obligation of the City shall include the prompt removal of garbage and refuse from the Civic Square.

Triad shall be responsible for maintaining the exterior areas of the Tower to the same level and standard as other Class A office/residential buildings in the downtown City area (including the breezeway under the Tower).

IV. SECURITY

Triad shall have the option to provide basic security for both the Triad Property and the Civic Square. If Triad elects to provide such security, one-half of the costs to provide such security shall be passed through to the City as an operating cost of the Civic Square. Otherwise, each party shall provide security for its property consistent with prevailing standards for mixed office/residential buildings and adjacent open space and consistent with the requirements of the REA. Notwithstanding the foregoing, security for special events in the Civic Square, such as concerts or demonstrations, shall be the responsibly of the City or the sponsor of such events, in accordance with the O&M Plan.

V. HOURS OF OPERATION

Unless otherwise approved by Triad, the Civic Square shall be closed from the hours of 11:00 p.m. to 5:00 a.m. on Sunday through Thursday (excluding holidays) and 1:00 a.m. to 5:00 a.m. on Fridays, Saturdays and weekends. No overnight use of the Civic Square shall be permitted unless mutually approved by the parties.

VI. CIVIC SQUARE ACCOUNT

The REA shall establish the Civic Square Operation, Maintenance and Improvement Account (the "Civic Square Account"). The Civic Square Account need not be a separate bank account, but may be a book-entry account established and maintained by the City.

There shall be credited to the Civic Square Account (A) all net revenues generated by the City or its designee in connection with the operation and management of the Civic Square; (B) Master Lease payments made by Triad to the City under the Master Lease; (C) the Civic Square Contribution Amounts paid by Triad to the City pursuant to Article VII below; and (D) the net revenues paid to the City in connection with the operation of the Garage as provided in Article VIII below.

The City agrees that the funds in the Civic Square Account shall be used by the City exclusively for (A) the maintenance, repair and improvement to the Civic Square in accordance with the terms of the REA, and (B) for operation and activation of the Civic Square in accordance with the O&M Plan.

The City shall annually expend from the Civic Square Account, for the maintenance, repair and improvement to the Civic Square and in the operation and activation of the Civic Square, no less than the amount reasonably necessary to maintain the Civic Square in a manner consistent with a first-class mixed use center and to activate the Civic Square in a manner consistent with the O&M Plan. Such expenditures may include the establishment of reasonable reserves consistent with prudent property management practices for future operation, repair, replacements and improvements to the Civic Square and for future tenant improvements and leasing commissions for the Civic Square Retail Space, provided such reserves are re-invested in the Civic Square as reasonably necessary and/or appropriate.

VII. CIVIC SQUARE CONTRIBUTIONS

Commencing upon closing of the sale of the Civic Square to the City or its designee (the "Triad to City Closing"), and continuing thereafter during the term of the REA, Triad shall make certain payments to the City (the "Civic Square Contributions") which shall be credited to the Civic Square Account and used exclusively for the repair, maintenance and operation of the Civic Square in accordance with the provisions of Article VI above. The Civic Square Contributions shall be paid by Triad in substantially equal monthly installments at the same time and in the same manner as lease payments are due under the Master Lease.

During each of the first ten (10) years after the Triad to City Closing, the Civic Square Contributions shall, on an annual basis, equal [36,000 minus the number of rentable square feet of space in the Civic Square Retail Space] times $21.00. In the 11th year after the Triad to City Closing, the Civic Square Contributions shall be increased by the 5-year increase (from the beginning of the 6th year after the Triad to City Closing) in the Consumer Price Index for the Seattle/Everett/Tacoma area, all items, 1984=100 (the "CPI". Thereafter, the Civic Square Contributions shall be increased every five years by the 5-year increase in the CPI.

If closing under the Purchase and Sale Agreement (the "City to Triad Closing") is extended unilaterally by Triad beyond December 31, 2009, the first of the Civic Square Contributions shall be subject to a CPI increase as provided in the Purchase and Sale Agreement.

VIII. GARAGE OPERATIONS/AFTER HOURS PARKING REVENUES

A. Professional Management Services Model.

Triad intends to engage a professional parking services operator to manage the on-site parking facility in order to maximize (1) service to residents and tenants of the Triad Property and (2) activation of the Civic Square (including use for scheduled events and activities).

B. Security.

The parking facility will include lighting, closed circuit cameras and other security features integrated into the security system for the overall project.

C. Hours of Operation.

Triad will, with the assistance of professional management, establish parking hours which will include:

1. Weekdays (normal business hours)

2. Weekday Evenings (after 5:00 p.m. until closure of the Civic Square)

3. Weekends (Saturdays and Sundays)

D. Rental Schedule.

Triad will, with the assistance of professional management, establish a diversified rental schedule that promotes sustainable parking practices, customer choice and evening/weekend use in a manner that supports the activities conducted within the Civic Square. Triad will consult with the City on parking rates for evening and weekend parking.

E. Evenings/Weekend Revenues.

The City shall be entitled to the net parking revenues generated by transient evening and weekend parking. Net parking revenues shall be the gross parking revenues, less (1) taxes on such parking, and (2) an O&M charge. The O&M charge shall be $2.00 per vehicle (in 2007 dollars), increasing annually on January 1 of each year by the annual increase in the CPI. Revenues shall include any amounts paid by parties participating in any Garage validation programs. Transient evening parking shall mean parking for vehicles that enter the garage after 5:00 p.m. on a weekday and exit the garage before closure of the Civic Square. Transient weekend parking shall mean parking for vehicles that enter and exit the garage on a day of the weekend during garage hours. Transient parking shall not include (1) parking under monthly or other periodic parking passes, (2) parking assigned to residential owners/lessees (3) parking under parking arrangements with adjacent property owners/operators (i.e., hotel or adjacent office parking), or (4) overnight parking.

Evening/Weekend parking revenues to which the City will be entitled shall be paid to the City monthly by the 25th day of the month for the transient evening/weekend parking for the prior month. Payment shall be accompanied by a calculation of the amounts due and shall be subject to audit at City request (and City cost unless the audit shows a misstatement of revenues to which the City is entitled of more than five percent (5%. Parking revenues paid to the City shall be credited to the Civic Square Account to be used exclusively for the operation, maintenance, and repair of the Civic Square in accordance with the provisions of Article VI above.

F. Transportation Management Features.

Triad is committed to investigating and implementing, where feasible, innovative programs that promote and enhance sustainable transportation and parking practices, including the following:

1. Flexcar Hub

2. Electric Auto Recharging Station

3. BioDiesel Re-fueling Station

4. Bicycle Commute and Storage Center

5. Mass Transit Education and Information Center

6. Van Pool/Car Pool/Hybrid Parking

7. Cooperative Hotel/Adjacent Owner Parking

8. Pre-purchased Parking Time Discount Program

9. AVI Access System

10. Terra and Puget Sound Pass Card Discount Program

11. Large Vehicle Premium Charge

IX. NOTICE AND OPPORTUNITY TO CURE; SELF-HELP

Upon the failure of either owner to cure its default under the REA within twenty (20) days with respect to a monetary default and thirty (30) days with respect to a non-monetary default (unless such non-monetary default by its nature cannot reasonably be cured within 30 days and the defaulting owner commences such cure within such 30day period and diligently prosecutes such cure to completion), and following written notice thereof, the non-defaulting owner shall have the right to cure such default on behalf of the defaulting owner. In such event, the defaulting owner shall reimburse the non-defaulting owner upon demand for the reasonable cost to cure the default together with interest at the prime rate charged from time to time by Bank of America, N.A. (its successors or assigns), plus two percent (2%) (not to exceed the maximum rate of interest allowed by law).

Notwithstanding the foregoing, in the event of an emergency or any other event causing a material impact on the use and/or operation of the Tower or Garage, Triad may immediately cure a default by the City and be reimbursed by the City upon demand for the reasonable cost thereof together with interest as described above.

X. PROHIBITED BUILDING AREA

Triad shall not construct improvements within the airspace above the Civic Square without the City's prior written approval.

XI. SIGNAGE

The Civic Square and the Tower may include such signage as is permitted by applicable law and the Master Lease. Upon mutual approval of Triad and the City, reciprocal signage easements may be established to provide "way-finding" signage on the property as a whole for the benefit of retail tenants and to designate the locations of project features and amenities.

XII. INDEMNIFICATION

Triad shall release, indemnify, defend and hold the City harmless from and against any and all liability, loss, damage, expenses, action or claim, including costs and attorneys fees, asserted or arising out of the acts or omissions of Triad in the exercise of the rights granted in the REA, provided, however, that this provision does not purport to indemnify the City against liability for damages arising out of bodily injury to persons or damage to property to the extent caused by or resulting from the negligence of the City or its agents or employees or a breach of the REA by the City.

The City shall release, indemnify, defend and hold Triad harmless from and against any and all liability, loss, damage, expense, action or claim, including costs and attorneys' fees, asserted or arising out of the acts or omissions of the City in the exercise of the rights granted herein, provided, however, that this provision does not purport to indemnify Triad against liability for damages arising out of bodily injury to persons or damage to property to the extent caused by or resulting from the negligence of Triad or its agents or employees or a breach of the REA by Triad.

XIII. INSURANCE

Throughout the term of this Agreement, each owner shall procure and maintain general and/or comprehensive public liability and property damage insurance against claims for personal injury (including contractual liability arising under the indemnity provision described above), death, or property damage occurring upon such Owner's Parcel, with single limit coverage of not less than an aggregate of Five Million Dollars ($5,000,000) including umbrella coverage, if any. City may provide for self-insurance provided the City is self-insuring similar facilities as a customary part of its risk management activities, and provided such self-insurance shall not relieve the City of its indemnification obligations under the REA. City and Triad shall waive subrogation with respect to matters covered by the required insurance and matters which would be covered by such insurance if maintained by such party).

XIV. USE RESTRICTIONS

The Civic Square Retail Space shall be limited to retail uses not prohibited under the Master Lease. Unless otherwise mutually approved by the parties, no more than 2,500 square feet of the Civic Square Retail Space shall be used for "service retail" purposes The following uses shall be prohibited:

A. Flea market or pawn shop

B. Massage parlor (but not a full service day spa which may be permitted with mutual consent of parties)

C. Bail bondsman

D. The sale or exchange of paraphernalia for use of illicit drugs

E. The sale of pornographic materials as determined by applicable community standards (provided that this provision shall not prohibit the operation of a bookstore or video or music store which offers a broad inventory of books or videos directed toward the interest of the general public)

F. Off track betting

H. Homeless shelters, needle exchanges and food distribution programs

I. Tattoo parlor

XV. ADDITIONAL CONSTRUCTION

Triad shall have the reasonable right to review and approve any new construction in the Civic Square as well as any material change to the external appearance of the Civic Square Retail Space.

XVI. RIGHT OF FIRST REFUSAL

The City shall grant to Triad a right of first refusal to purchase the Civic Square and/or the Civic Square Retail Space in the event the City elects to sell the Civic Square or Civic Square Retail Space to a private third party in a market transaction. Transfers of the Civic Square made by the City to an entity affiliated with the City including a public development authority shall not be subject to Triad's right of first refusal.

XVII. MISCELLANEOUS PROVISIONS

The REA will also contain market standard provisions regarding mortgagee protections (including notice and cure rights), damage and destruction, condemnation, compliance with applicable laws, estoppels, and force majeure.

EXHIBIT G TO SEATTLE CIVIC SQUARE PROJECT AGREEMENT

Permitted Exceptions (Civic Square Parcel)

This document will not be completed until after this legislation is passed by the Council and approved by the Mayor.

EXHIBIT H TO SEATTLE CIVIC SQUARE PROJECT AGREEMENT

Master Lease (City to Triad)

MASTER RETAIL LEASE

BETWEEN

CITY OF SEATTLE

AS LANDLORD

AND

TRIAD CIVIC CENTER LLC

AS TENANT

FOR

CIVIC SQUARE

SEATTLE, WA

SUMMARY OF BASIC LEASE INFORMATION

This Summary (the "Summary") is hereby incorporated into and made a part of the attached Master Retail Lease (this Summary and the Master Retail Lease to be known collectively as the "Lease"). Each reference in the Lease to any term of this Summary shall have the meaning as set forth in this Summary. In the event of a conflict between the terms of this Summary and the Lease, the terms of the Lease shall prevail. Any capitalized terms used herein and not otherwise defined herein shall have the meaning as set forth in the Lease.

Date: ____________, _____ Landlord: City of Seattle, a municipal corporation

Address of Landlord: City of Seattle

Attn: Fleets and Facilities Department Director

Seattle, Washington 98102

Attention:

with a copy to:

Kirkpatrick & Lockhart Preston Gates Ellis LLP

925 Fourth Avenue, Suite 2900

Seattle, Washington 98104

Attention: Scott B. Osborne Landlord's Address for Payment: City of Seattle

Seattle, Washington 98102

Attention: Tenant:

Triad Civic Center LLC, a Washington limited liability company

Address of Tenant: 2801 Alaskan Way, Suite 107

Seattle, WA 98121-1135

Attention: Frederick W. Grimm

Phone: (206) 770-5910

With copy to:

Foster Pepper PLLC

1111 Third Avenue, Suite 3400

Seattle, WA 98101

Attention: Michael D. Kuntz

Fax No.: (206) 749-1976 Premises: Approximately _______ rentable square feet consisting of all of the Retail Area Subject to Master Lease as outlined on the plan attached to the Lease as Exhibit A. Within a reasonable period after Substantial Completion of the Tenant Improvements, either party may elect to have the Premises remeasured to determine the "rentable square footage" thereof in accordance with the Standard Method for Measuring Floor Area in Office Buildings published by the Building Owners and Managers Association (ANSI/BOMA Z65.1-1996) applicable to retail spaces in mixed-use/office buildings. Term:

(a) Term: Ten (10) Lease Years. (b) Commencement Date: ______________________ (c) Expiration Date: The last day of the calendar month in which the 10th anniversary of the Commencement Date occurs. (d) Renewal Options N/A Minimum Rent:

Months Annual Minimum Rent Monthly Installment of Minimum Rent Annual Rental Rate per Rentable Square Foot 1-120 $__________ $____________ $21.00 Percentage Rent and Breakpoint: N/A Construction:

(a) Allowance: $40/rentable square foot; approximately $__________. (b) Landlord Supervision Fee: N/A Security Deposit N/A Permitted Use: Lawful retail uses. Brokers:

(a) Tenant: None. (b) Landlord The Staubach Company Addenda and Exhibits The addenda and exhibits listed below are incorporated by reference in this Lease.

Exhibit A Site Plan depicting Premises

Exhibit B-1 Legal Description of Civic Square Parcel

Exhibit B-2 Legal Description of Tower Parcel

Exhibit C Term Certification

Exhibit D-1 Tenant Improvement Work

Exhibit D-2 Contractor Rules and Regulations

Exhibit E Rules and Regulations

Exhibit F Sign Criteria

ARTICLE 1 LEASE OF PREMISES 1

ARTICLE 2 DEFINITIONS 2

2.1 Additional Rent 2

2.2 Affiliate 2

2.3 Bankruptcy Code 2

2.4 Business Days 2

2.5 Operating Costs 2

2.6 Commencement Date 2

2.7 Civic Square Common Areas 2

2.8 Environmental Laws 3

2.9 Expiration Date 3

2.10 Hazardous Materials 3

2.11 Interest Rate 3

2.12 Landlord Related Parties 3

2.13 Laws 3

2.14 Lease Year 3

2.15 Minimum Rent 3

2.16 Mortgagee 3

2.17 Permitted Use 3

2.18 Permitted Transfer 4

2.19 Possession Date 4

2.20 Premises 4

2.21 Rent 4

2.22 State 4

2.23 Substantial Completion of Tenant Improvements 4

2.24 Sub-Tenant 5

2.25 Taxes 5

2.26 Tenant Improvements 5

2.27 Tenant Related Parties 5

2.28 Tenants' Property; Sub-Tenant's Property 5

2.29 Term 6

2.30 Transfer 6

2.31 Transferee 6

ARTICLE 3 PREMISES AND DELIVERY OF POSSESSION 6

3.1 Delivery of Possession 6

3.2 Commencement Date 6

3.3 Size of Premises 6

ARTICLE 4 RENT 6

4.1 Minimum Rent 6

4.2 Taxes Payable by Tenant 7

4.3 Place of Payment 7

4.4 Interest and Late Charges 7

ARTICLE 5 USE 7

5.1 Permitted Use 7

5.2 Compliance 8

5.3 Compliance with Law 8

5.4 Effect on Landlord's Insurance 8

5.5 Transportation Management 8

5.6 Use of Civic Square Parcel 8

ARTICLE 6 HAZARDOUS MATERIALS 9

6.1 Indemnity 9

6.2 Restriction on Hazardous Materials 9

6.3 Investigation of Contamination 9

6.4 Landlord Consent 9

ARTICLE 7 UTILITIES AND SERVICES 10

7.1 Services 10

7.2 Government Energy or Utility Controls 11

7.3 Safety and Security Devices, Services, and Programs 11

ARTICLE 8 CONDITION OF THE PREMISES 11

ARTICLE 9 REPAIRS, MAINTENANCE AND OPERATING COSTS 11

9.1 Landlord's Obligations; Payment of Operating Costs 11

9.2 Tenant's Obligations 11

9.3 Damage by Tenant 12

ARTICLE 10 ALTERATIONS AND ADDITIONS 12

10.1 Tenant's Alterations 12

10.2 Payment and Indemnification 12

10.3 Notices and Liens 13

ARTICLE 11 CERTAIN RIGHTS RESERVED BY LANDLORD 13

11.1 Name 13

11.2 Signage 14

11.3 Keys 14

11.4 Inspection and Entry 14

11.5 Renovations 14

11.6 Civic Square Common Areas 14

ARTICLE 12 RULES AND REGULATIONS 15

ARTICLE 13 TRANSFERS 15

13.1 Subleases; Other Transfers; Leasehold Mortgages; Reimbursement of Certain Costs upon Termination of Lease 15

13.2 Fees 17

13.3 Consent 17

13.4 Completion of Transfer 18

13.5 Effect of Transfer 18

13.6 Tenant Remedy for Landlord Refusal to Consent 18

ARTICLE 14 DESTRUCTION OR DAMAGE 19

14.1 Landlord Termination Rights 19

14.2 Repairs 19

14.3 Tenant's Termination Rights 19

14.4 Apportionment of Rent 20

14.5 Abatement 20

14.6 Express Agreement 20

ARTICLE 15 EMINENT DOMAIN 20

15.1 Entire Premises 20

15.2 Partial Condemnation 20

15.3 Proceeds of Award 20

15.4 Repairs 20

15.5 Takings by City of Seattle 21

ARTICLE 16 INDEMNIFICATION, WAIVER, RELEASE AND LIMITATION OF LIABILITY 21

16.1 Tenant's Indemnity 21

16.2 Assumption of Risk 21

16.3 Waiver of Subrogation 22

ARTICLE 17 INSURANCE 22

17.1 Required Coverage 22

17.2 Form of Policies 23

17.3 Evidence of Insurance 23

17.4 Independent Obligations 23

17.5 Landlord's Insurance Obligations 23

ARTICLE 18 DEFAULT 23

18.1 Tenant's Default 24

18.2 Landlord's Default 24

ARTICLE 19 LANDLORD REMEDIES AND DAMAGES 25

19.1 Remedies 25

19.2 Damages 26

19.3 Rent after Termination 27

19.4 No Termination 27

19.5 Waiver of Demand 27

19.6 Deficiency 27

19.7 Counterclaim 27

19.8 Mitigation of Damages 28

ARTICLE 20 BANKRUPTCY 29

ARTICLE 21 WAIVER OF LANDLORD'S LIEN RIGHTS 30

ARTICLE 22 HOLDING OVER 30

ARTICLE 23 SURRENDER OF PREMISES 30

ARTICLE 24 BROKERAGE FEES 31

ARTICLE 25 NOTICES 31

ARTICLE 26 SIGNAGE 31

ARTICLE 27 LENDER PROVISIONS 32

27.1 Subordination 32

27.2 Estoppel Certificates 32

27.3 Notice and Cure Rights 32

ARTICLE 28 MISCELLANEOUS 33

28.1 Changes to Civic Square Name 33

28.2 Quiet Enjoyment 33

28.3 Force Majeure 33

28.4 Accord and Satisfaction; Allocation of Payment 33

28.5 Construction 33

28.6 Confidentiality 33

28.7 Governing Law 33

28.8 Consent 33

28.9 Authority 34

28.10 Duplicate Originals; Counterparts 34

28.11 Further Assurances 34

28.12 Recording 34

28.13 Right to Lease 34

28.14 Severability 34

28.15 Survival 34

28.16 WAIVER OF TRIAL BY JURY 34

28.17 Successors and Assigns 34

28.18 Integration of Other Agreements 34

28.19 TIME OF THE ESSENCE 35

28.20 Waiver 35

28.21 No Surrender 35

28.22 Number and Gender 35

28.23 Days 35

28.24 Joint and Several Liability 35

28.25 No Third Party Beneficiaries 35

28.26 No Other Inducements 35

28.27 Rule Against Perpetuities 36

28.28 Title Insurance 36

28.29 Arbitration 36

28.30 No Discrimination 36

28.31 OFAC Compliance. 36

28.32 Radon Disclosure 37

MASTER RETAIL LEASE

THIS MASTER RETAIL LEASE (the "Lease") is made effective as of ________________________, ____ by and between THE CITY OF SEATTLE, a municipal corporation ("Landlord"), and TRIAD CIVIC CENTER LLC, a Washington limited liability company ("Tenant") with reference to the following facts and circumstances:

A. Landlord is the owner in fee simple of the real property described in Exhibit B-1 attached hereto (the "Civic Square Parcel").

B. Tenant is currently the owner in fee simple of the real property described in Exhibit B-2 attached hereto (the "Tower Parcel").

C. The Civic Square Parcel and the Tower Parcel, together with the improvements situated thereon, comprise an integrated development known as Seattle Civic Square.

D. The Premises covered by this Lease are defined on the Lease Summary and consist of all of the Retail Area Subject to Master Lease, as depicted in Exhibit A attached hereto. The Premises are situated upon the Civic Square Parcel.

E. This Lease is being entered into by and between Landlord and Tenant pursuant to the terms of that certain Seattle Civic Square Project Agreement dated _________________ (the "Project Agreement") describing a transaction in which Triad has purchased (or will purchase) from Landlord certain real property and develop upon such property an office/residential tower, underground parking garage and public plaza (the "Plaza"). As described in the Project Agreement, approximately _______ rentable square feet of retail space within the proposed development is to be under the control of Landlord and leased to Tenant pursuant to the terms of this Lease.

D. The parties desire to enter into this Lease, all on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing facts and circumstances, the mutual covenants and promises contained herein and after good and valuable consideration, the receipt and sufficiency of which are acknowledged by each of the parties, the parties hereby agree to the following:

ARTICLE1

LEASE OF PREMISES

In consideration of the Rent and the provisions of this Lease, Landlord leases to Tenant and Tenant leases from Landlord the Premises.

ARTICLE2

DEFINITIONS

As used in this Lease, the following terms shall have the following definitions:

2.1 Additional Rent

. All costs and expenses that Tenant assumes or agrees to pay to Landlord under this Lease other than Minimum Rent.

2.2 Affiliate

. An entity that is controlled by, controls, or is under common control with a party. "Control" shall mean the ownership, directly or indirectly, of at least fifty-one percent (51%) of the voting securities of, or possession of the right to vote, in the ordinary direction of its affairs, of at least fifty-one percent (51%) of the voting interest in any entity.

2.3 Bankruptcy Code

. Title 11 of the United States Code, as amended from time to time.

2.4 Business Days

. Days other than Saturdays, Sundays and Holidays. If any item must be accomplished or delivered hereunder on a day that is not a Business Day, it shall be timely to accomplish or deliver the same on the next following Business Day.

2.5 Operating Costs

. All costs in any way arising from ownership and management of the Premises and the Civic Square Parcel including the following: supplies, tools, equipment and materials used in operation, repair and maintenance; Taxes; landscaping; repair, restoration, and maintenance of the Premises and the Civic Square Parcel, including without limitation all structural components and vertical transportation systems therein; fees, charges and other costs, including consulting fees, legal fees and accounting fees; compensation (including employment taxes and fringe benefits) of all persons who perform duties in connection with the operation, maintenance, repair, or overhaul of the Premises; operation, repair, maintenance and replacement of all shared utility and other systems, including the cost to replace or retrofit as required by Laws; security; snow, ice, surface water and trash removal; maintenance and replacement of lighting; maintenance and replacement of curbs and walkways, repair to roofs and re-roofing; signage; rental expenses for personal property used in maintenance, operation or repairs; licenses, certificates, permits and inspections and the cost of contesting the validity or applicability of any governmental enactments; costs to comply with any governmentally mandated transportation system management program or similar program; any costs, expenditures, or charges (whether capitalized or not) required by any governmental or quasi-governmental authority; amortization of capital expenses; and administrative fees incurred by Landlord for supervision of such expenditures and the cost of Landlord's personnel to implement such services.

2.6 Commencement Date

. As set forth on the Lease Summary.

2.7 Civic Square Common Areas

. All areas of the Civic Square Parcel other than the Premises.

2.8 Environmental Laws

. All federal, state and local laws, ordinances, regulations, and standards regulating or controlling hazardous wastes or hazardous substances, including, without limitation the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. 9601, et seq.; the Hazardous Material Transportation Act, 49 U.S.C. 1801 et seq.; and the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.

2.9 Expiration Date

. As set forth on the Lease Summary, unless otherwise sooner terminated in accordance with the provisions of this Lease.

2.10 Hazardous Materials

. Any hazardous waste or hazardous substance as defined in any federal, state, county, municipal, or local statute, ordinance, rule, or regulation applicable to the Premises, including, without limitation, the Environmental Laws. "Hazardous Materials" shall also include asbestos or asbestos-containing materials, radon gas, petroleum or petroleum fractions, urea formaldehyde foam insulation, transformers containing levels of polychlorinated biphenyls greater than 50 parts per million, medical waste, electromagnetic fields, mold and chemicals known to cause cancer or reproductive toxicity, whether or not defined as a hazardous waste or hazardous substance in any statute, ordinance, rule or regulation.

2.11 Interest Rate

. The average prime loan rate published by the board of governors of the Federal Reserve System of the United States, as the same may change from time to time, plus four percent (4%) per annum, but not in excess of the maximum rate, if any, allowed by Law for the transaction on which interest is being calculated.

2.12 Landlord Related Parties

. Landlord, Landlord's Affiliates and the members, principals, beneficiaries, partners, trustees, shareholders, directors, officers, employees, mortgagees, investment managers, attorneys, and agents of Landlord, Landlord's Affiliates and the successors of such parties.

2.13 Laws

. All federal, state, county and local governmental and municipal laws, statutes, ordinances, rules, regulations, requirements, codes, decrees, orders, and decisions by courts and cases, when the decisions are considered binding precedent in the State, and decisions of federal courts applying the Law of the State; including but not limited to The Americans With Disabilities Act of 1990 (42 U.S.C. section 12101 et seq.) (the "ADA").

2.14 Lease Year

. The first "Lease Year" shall be the period from the Commencement Date to the last day of the twelfth (12th) full calendar month following the calendar month in which the Commencement Date occurs. Thereafter, each consecutive twelve (12) calendar month period shall constitute one (1) Lease Year. Notwithstanding anything contained herein to the contrary, if the Commencement Date occurs on the first (1st) day of a calendar month, the first Lease Year shall be twelve (12) full calendar months.

2.15 Minimum Rent

. As set forth on the Lease Summary.

2.16 Mortgagee

. The holder of any mortgage, deed to secure debt or trust deed now or hereafter in force against the Civic Square Parcel or the Tower Parcel.

2.17 Permitted Use

. As set forth on the Lease Summary.

2.18 Permitted Transfer

. A transfer in connection with (i) a sale of substantially all of the assets of Tenant as a going concern; (ii) the merger, share exchange or consolidation of Tenant with another entity; (iii) an assignment or subletting of all or a portion of the Premises to an Affiliate of Tenant or to the then-owner of either (x) the entire Tower Parcel, or (y) any condominium unit or units created in the Tower Parcel which comprises all or substantially all of the office space contained therein; (iv) any transfer of partnership, membership, stock, or other equity interests ("Interests"), as the case may be, by and among the existing holders of Interests in the Tenant as of the date of mutual execution of this Lease; and (v) any transfer of Interests so long as either or both of John Goodman and/or Fred Grimm continue to hold a Controlling Interest (as defined below) in Tenant; provided that (A) the Transferee assumes, in full, the obligations of Tenant under this Lease arising on and after the effective date of such transfer; (B) the use of the Premises remains unchanged; (C) Landlord shall have received an executed copy of all documentation reasonably requested by Landlord effecting such Transfer on or before its effective date; (D) the proposed Transfer is not a subterfuge by Tenant to avoid its obligations under this Lease; and (E) in the event of a Transfer in which Tenant is not the surviving entity, the Transferee, after such Transfer, has a financial worth materially similar to that of Tenant's financial worth as of the date prior to the effective date thereof. As used herein, a "Controlling Interest" shall mean ownership or effective control of fifty percent (50%) or more of the then-Interests in Tenant, or having the power to direct and control the decisions of the then-Tenant, even if owning less than a fifty percent (50%) Interest therein.

2.19 Possession Date

. The date on which Landlord tenders possession of the Premises to Tenant.

2.20 Premises

. The area depicted as the Retail Area Subject to Master Lease on Exhibit A attached hereto. Subject to applicable Laws and valid restrictive covenants of record and upon Tenant's consent which shall not be unreasonably withheld, Landlord reserves the right to make alterations or additions to the Premises and other buildings or structures situated upon the Civic Square Parcel; construct additional buildings or improvements in or adjacent to the Premises; to make alterations thereof or additions to the any buildings or structures situated upon the Civic Square Parcel; and to build additional stories on any building or buildings situated within the Civic Square Parcel. Landlord shall not take any action to alter or add to the Premises which results in an unreasonably interference with Tenant's use and enjoyment of the Premises.

2.21 Rent

. Minimum Rent plus Additional Rent.

2.22 State

. The State of Washington.

2.23 Substantial Completion of Tenant Improvements

. "Substantial Completion of the Tenant Improvements" shall occur upon the completion of construction of the Tenant Improvements in the Premises pursuant to the Approved Working Drawings, with the exception of any Punchlist Items and any tenant fixtures, workstations, built-in furniture, or equipment to be installed by Tenant. Substantial Completion of the Tenant Improvements shall have occurred even though minor details of construction, decoration, landscaping and mechanical adjustments remain to be completed. "Punchlist Items" shall refer to any necessary touch-up work, repairs and minor completion items that are necessary for final completion of the Tenant Improvements.

2.24 Sub-Tenant

. Any person or entity having the right to occupy a portion of the Premises pursuant to an agreement with Tenant.

2.25 Taxes

. All taxes, assessments, whether special or general, and other similar government charges levied on or attributable to the Premises or their operation, including, without limitation real property taxes or assessments levied or assessed against the Civic Square Parcel; assessments or charges levied or assessed against the Civic Square Parcel by any redevelopment agency, municipality or governmental or quasi-governmental agency, including but not limited to any assessments towards a governmental or private cost-sharing agreement for the purpose of augmenting or improving the quality of services and amenities normally provided by governmental agencies; any tax, assessment, levy, license fee or charge measured by or based, in whole or in part, by Rent received from the leasing of the Premises, or any portions thereof; general or special, ad valorem or specific, excise, capital levy, or other tax, assessment, levy, or charge directly on the Rent received under this Lease or on the rent received under any other lease for a portion of the Premises; any transfer, transaction, or similar tax, assessment, levy, or charge based directly or indirectly upon the transaction represented by this Lease or other leases of the Premises; any occupancy, use, per capita, or other tax, assessment, levy, or charge based directly or indirectly upon the use or occupancy of the Premises; interest on installments as charged by the taxing authority; and the costs and expenses of any contest or protest of Taxes including any appraisal fees and attorneys' fees. Taxes shall not include any net income, franchise, capital stock, estate or inheritance taxes imposed by the State or Federal Government or their agencies, branches, or departments, and tax penalties, interest or late charges incurred as a result of the failure to make timely payment of Taxes. Taxes for any calendar year shall only include those taxes or installments of assessments that become due and payable during said year. Landlord shall, however, bear any water or sewer capacity charges.

2.26 Tenant Improvements

. The improvements to the Premises set forth in Exhibit D-1. For purposes of this Lease, kiosks and carts used at the Premises by Landlord and originally paid for with funds from the Allowance shall also be deemed "Tenant Improvements."

2.27 Tenant Related Parties

. Tenant, its agents, contractors, subcontractors, employees, invitees, Sub-Tenants, transferees, and any other party claiming by, through or under Tenant.

2.28 Tenants' Property; Sub-Tenant's Property

. All movable partitions, business and trade fixtures, machinery, inventory, equipment, communications equipment, carts and movable kiosks not funded by the Allowance, and office equipment located in the Premises and acquired by or for the account of Tenant or Sub-Tenants (as the case may be) without expense to Landlord, that can be removed without damage to the Premises, and all furniture, furnishings, and other articles of movable personal property owned by Tenant or Sub-Tenants and located within the Premises.

2.29 Term

. As set forth on the Lease Summary, as the same may be extended from time to time.

2.30 Transfer

. An assignment, mortgage, pledge, hypothecation, encumbrance, lien or other transfer of this Lease or any interest hereunder, a transfer by operation of law, a sublease of the Premises or any part thereof, or the use of the Premises by any party other than Tenant and its employees. "Transfer" shall also include: (a) if Tenant is a partnership or limited liability company, the withdrawal or change, voluntary, involuntary or by operation of law, of a Controlling Interest or more, or transfer of a Controlling Interest or more of partnership or membership interests, within a twelve (12)-month period, or the dissolution of the partnership or company without immediate reconstitution thereof, and (b) if Tenant is a closely held corporation (i.e., whose stock is not publicly held and not traded through an exchange or over the counter), the dissolution, merger, consolidation or other reorganization of Tenant, the sale or other transfer of more than an aggregate of a Controlling Interest of Tenant (other than to immediate family members by reason of gift or death), within a twelve (12)-month period; or (c) the sale, mortgage, hypothecation or pledge of more than an aggregate of fifty percent (50%) of the value of the unencumbered assets of Tenant within a twelve (12) month period. A "Transfer" of the type described in Section 2.18 shall be a "Permitted Transfer" if all of the conditions set forth therein are satisfied.

2.31 Transferee

. Any person to whom any Transfer or Permitted Transfer is made.

ARTICLE3

PREMISES AND DELIVERY OF POSSESSION

3.1 Delivery of Possession

. Landlord shall use commercially reasonable efforts to deliver possession of Premises on or before the anticipated Possession Date.

3.2 Commencement Date

. Once the Commencement Date is fixed, within ten (10) days following request by either party, the other party will execute and deliver to the requesting party a certificate substantially in the form of Exhibit C attached hereto and made a part hereof, confirming the actual Commencement Date and noting thereon any exceptions thereto that may exist at that time.

3.3 Size of Premises

. The rentable area of the Premises will be deemed for all purposes to be as set forth on the Lease Summary, subject to remeasurement as provided for therein.

ARTICLE4

RENT

Tenant agrees to pay to Landlord all Rent payable hereunder, without set-off or deduction, in lawful money of the United States of America. Tenant shall pay the Rent as follows:

4.1 Minimum Rent

. Tenant shall pay to Landlord the Minimum Rent without notice or demand except as otherwise provided herein, in installments due and payable in advance on the first day of each calendar month during the Term. In the event of any fractional calendar month, Tenant shall pay for each day in such partial month a rental equal to 1/30 of the Minimum Rent. Concurrent with the execution of this Lease, Tenant will deliver to Landlord the first month's Minimum Rent.

4.2 Taxes Payable by Tenant

. Tenant and/or Sub-Tenants shall pay (a) all Taxes levied upon, measured by, or reasonably attributable to the cost or value of Tenant's Property or Sub-Tenant's Property and (b) all Taxes levied upon any Sublease creating or transferring an interest or an estate in the Premises and the rents derived thereunder and (c) the statutory leasehold excise tax due on the Rent payable by Tenant hereunder.

4.3 Place of Payment

. All Rent shall be paid at the Landlord's Address for Payment set forth on the Lease Summary or at such other place as Landlord may designate.

4.4 Interest and Late Charges

. If Tenant fails to pay any Rent when due, after giving effect to any applicable grace periods, the unpaid amounts shall bear interest at the Interest Rate. Tenant acknowledges that the late payment of any Rent will cause Landlord to incur costs and expenses not contemplated under this Lease, including, without limitation, administrative and collection costs and processing and accounting expenses, the exact amount of which is extremely difficult to ascertain. Therefore, in addition to interest, if any such payment is not received by Landlord within five (5) days from when due, Tenant shall pay Landlord a late charge equal to three percent (3%) of such payment, plus any reasonable attorneys' fees incurred by Landlord by reason of Tenant's failure to pay Rent when due; provided that the foregoing late charges shall not be imposed with respect to the first instance of late payment in any calendar year. Landlord and Tenant agree that this late charge represents a reasonable estimate of such costs and expenses and is fair compensation to Landlord for loss resulting from Tenant's nonpayment. The late charge shall be deemed Additional Rent and the right to require it shall be in addition to all of Landlord's other rights and remedies hereunder or at law and shall not be construed as liquidated damages or as limiting Landlord's remedies in any manner. In addition, any check returned by the bank for any reason will be considered late and will be subject to all late charges, plus a Fifty Dollar ($50.00) fee. After two (2) returned checks in any twelve (12) month period, Landlord will have the right to receive payment by a cashier's check or money order. Nothing contained herein shall be construed as to compel Landlord to accept any payment of Rent in arrears or late charges should Landlord elect to apply its rights and remedies available under this Lease or at law or in equity in the event of a Default.

ARTICLE5

USE

5.1 Permitted Use

. Tenant and all Sub-Tenants may use the Premises solely for the Permitted Use as shown on the Lease Summary, and for no other purpose without Landlord's consent. No portion of the Premises may be used for any of the uses prohibited by any recorded Reciprocal Easement Agreement ("REA") to which the Civic Square Parcel is subject. No second-hand, auction, fire, distress or bankruptcy sales may be conducted at the Premises. Sub-Tenants' sales practices shall be in accord with standards and practices generally acceptable in first-class retail or public market centers. In any action brought to enforce the foregoing, Landlord shall be entitled to mandatory injunctive relief in addition to other legal and equitable damages and remedies. Tenant hereby agrees that Landlord has standing to enforce the foregoing provisions against any Sub-Tenant.

5.2 Compliance

. Tenant and all Sub-Tenants shall comply with all recorded covenants, conditions, and restrictions, including without limitation the REA, now or hereafter affecting the Civic Square Parcel. Tenant shall not do or permit anything to be done in or about the Premises that would in any way obstruct or interfere with the rights of other occupants or invitees of the Civic Square Parcel; injure, annoy or interfere with the business of any other occupants of the Premises or the Civic Square Parcel or any of their invitees; or cause, maintain, or permit any nuisance or waste at the Premises or the Civic Square Parcel.

5.3 Compliance with Law

. Tenant has been provided an opportunity to inspect the Premises to a degree sufficient to determine whether or not the same, in their condition as of the date hereof, violate any applicable Law. Tenant further acknowledges and agrees that, except as may otherwise be specifically provided in this Lease, Landlord has made no representation or warranty as to whether the Premises conform to the requirements of Law. Tenant shall be responsible for compliance of the Premises with applicable Law and shall bear all costs necessary to maintain the Premises in compliance with Law, including structural work, if any. Tenant shall also be responsible for the cost of any alterations to other portions of the Civic Square Parcel which are necessitated by any alterations to the Premises or any change in use of the Premises. Tenant shall not use, occupy or permit the Premises to be used or occupied in violation of any Law or the certificate of occupancy issued for the Premises and shall, upon notice from Landlord, immediately discontinue any use of the Premises that is declared by any governmental authority having jurisdiction to be a violation of Law or the certificate of occupancy. Should any obligation be imposed by Law, then Tenant agrees, at its sole cost and expense, to comply promptly with such obligations to the extent the same relate to the Premises or the Civic Square Parcel.

5.4 Effect on Landlord's Insurance

. Tenant shall not do or permit to be done anything that will invalidate or increase the cost of any property coverage, or other insurance policy covering the Premises, the Civic Square Parcel or any property located therein. Tenant shall promptly, upon demand, reimburse Landlord for any additional premium charged for such policy by reason of Tenant's failure to comply with the provisions of this Section.

5.5 Transportation Management

. Tenant shall comply with all present or future programs intended to manage parking, transportation or traffic in and around the Civic Square Parcel, and in connection therewith, Tenant shall take responsible action for the transportation planning and management of all employees located at the Premises by working directly with Landlord, any governmental transportation management organization or any other transportation-related committees or entities.

5.6 Use of Civic Square Parcel

. Use of the Civic Square Parcel by any Tenant Related Parties shall at all times be subject to the Rules and Regulations set forth in Exhibit E.

ARTICLE6

HAZARDOUS MATERIALS

6.1 Indemnity

. Tenant shall defend, indemnify and hold harmless all Landlord Related Parties from and against all claims, suits, demands, response costs, contribution costs, liabilities, losses, or damages (including, without limitation, reasonable attorneys' fees), directly or indirectly arising out of the existence, use generation, migration, storage, transportation, release, threatened release, or disposal of Hazardous Materials in, on, or under the Tower Parcel or the Premises or in the groundwater under the Tower Parcel or the Premises, to the extent that any of the foregoing is caused by any Tenant Related Parties. This indemnity extends to the costs incurred by any Landlord Related Party to repair, clean-up, dispose of, or remove such Hazardous Materials in order to comply with the Environmental Laws; provided that if Tenant is not otherwise in Default, Landlord shall give Tenant not less than thirty (30) days' advance notice of Landlord's intention to incur such costs.

6.2 Restriction on Hazardous Materials

. Except as specifically permitted in Section 6.4 below, Tenant shall not permit any Tenant Related Parties to use, generate, manufacture, store, transport, release, threaten release, or dispose of Hazardous Materials in, on, about or across the Premises, the Civic Square Parcel or the Tower Parcel or transport Hazardous Materials from the Premises unless Tenant shall have received Landlord's prior consent therefor, which Landlord may revoke at any time upon reasonable prior notice. Tenant Related Parties shall not cause or permit the release or disposal of Hazardous Materials from the Premises except in compliance with applicable Environmental Laws. Tenant shall promptly deliver notice to Landlord if Tenant obtains knowledge sufficient to infer that Hazardous Materials are located within any portion of the Premises that are not in compliance with applicable Environmental Laws or if any third party, including without limitation, any governmental agency, claims a significant disposal of Hazardous Materials has occurred, is being released from, or has been released from any portion of the Civic Square Parcel or the Tower Parcel.

6.3 Investigation of Contamination

. If Landlord has a good faith belief that a release of Hazardous Materials that comes within the scope of Tenant's indemnification and hold harmless obligations as set forth above has occurred, or is threatened to occur, on or about the Premises Landlord, through its appropriately qualified and licensed professional engineers, may investigate the Premises and Tenant shall permit all required access to the Premises as is necessary in order to permit Landlord's engineer to perform such investigation. If Landlord's investigation reveals that a release of Hazardous Materials has occurred, or if a release of Hazardous Materials would have occurred but for Landlord's investigation, Tenant shall promptly (i) reimburse Landlord for all costs associated with such investigation, and (ii) using duly licensed and insured contractors approved by Landlord, commence and diligently complete the removal, repair, clean-up, and detoxification of any Hazardous Materials from the Premises as may be required by applicable Environmental Laws.

6.4 Landlord Consent

. During the Term of this Lease, Tenant or any Sub-Tenant may use or sell (or may sublease or assign this Lease or any portion of the Premises to a Sub-Tenant or assignee who uses or sells) Hazardous Materials commonly found or sold in retail stores without Landlord's consent, so long as i. such substances be of the type customarily used in retail spaces and are used and maintained only in such quantities as are reasonably necessary for the Permitted Use and in strict accordance with applicable Environmental Laws and manufacturer instructions therefor; ii. such substances shall not be disposed of, released or discharged from any portion of the Tower Parcel or the Civic Square Parcel and shall be transported to and from the Premises in compliance with all applicable Environmental Laws; iii. any remaining substances shall be completely, properly and lawfully removed from the Premises upon expiration or earlier termination of this Lease or the applicable sublease; and iv. such use shall not constitute a nuisance, danger or health risk to or disrupt the business of any other occupant of the Premises or the Civic Square Parcel. If during the Term of this Lease, Tenant or any Sub-Tenant contemplates utilizing any other Hazardous Materials (or subleasing or assigning this Lease or any portion of the Premises to a SubTenant or assignee who utilizes Hazardous Materials), Tenant shall obtain the prior written consent of Landlord, such consent not to be unreasonably withheld. As a condition of granting such consent, Landlord may require that any such utilization complies with clauses i. through iv. (inclusive) above in this paragraph. If any applicable Environmental Law or other ordinance or substance removal contractor requires that any such substances be disposed of separately from ordinary trash, Tenant shall make arrangements, at Tenant's expense, for such disposal directly with a qualified and licensed disposal company at a lawful disposal site and shall ensure that such disposal occurs frequently enough to prevent unnecessary storage of such substances on the Premises. At such times as Landlord may reasonably request, Tenant shall provide Landlord with a written list identifying any Hazardous Materials then used, stored or maintained upon the Premises, the use and approximate quantity of each such material, a copy of any Material Safety Data Sheet ("MSDS") issued by the manufacturer thereof, written information concerning the removal, transportation, and disposal of the same, and such other information as Landlord may reasonably require or as may be required by Environmental Laws. Landlord, at its option, and at Landlord's expense, may cause an engineer selected by Landlord, to review (1) Sub-Tenants' operations including, without limitation, materials used, generated, stored, disposed, and manufactured in Sub-Tenants' businesses; and (2) Sub-Tenants' compliance with terms of this Section. Tenant and all Sub-Tenants shall provide the engineer with such information reasonably requested by the engineer to complete the review. The first such review may occur prior to or shortly following the commencement of the Term of this Lease. Thereafter, such review shall not occur more frequently than once each year unless cause exists for some other review schedule.

ARTICLE7

UTILITIES AND SERVICES

7.1 Services

. Tenant (or its Sub-Tenants) shall separately contract and pay for all water, sewer, gas, electricity, telephone, security and trash removal service to the Premises, provided that neither Tenant or any Sub-Tenants shall be obligated to pay for any additional security services that may be separately provided at the Civic Square Parcel by or for Landlord. If Tenant or any Sub-Tenant fails to pay the same when due, Landlord may pay the cost of providing such utilities to the Premises, and Tenant shall reimburse Landlord for such payment on demand with interest accrued at the Interest Rate from the date of payment by Landlord until reimbursed by Tenant.

7.2 Government Energy or Utility Controls

. In the event of imposition of any government controls, rules, regulations, or restrictions on the use or consumption of energy or other utilities during the Term, both Landlord and Tenant shall be bound thereby.

7.3 Safety and Security Devices, Services, and Programs

. The parties acknowledge that safety and security devices, services, and programs provided by Landlord, if any, while intended to deter crime and ensure safety, may not in given instances prevent theft or other criminal acts or ensure safety of persons or property. The risk that any safety or security device, service, or program may not be effective, or may malfunction, or be circumvented by a criminal, is assumed by Tenant with respect to Tenant and SubTenant's property and interests. Tenant agrees to cooperate in any reasonable safety or security program developed by Landlord or required by Law.

ARTICLE8

CONDITION OF THE PREMISES

Except as expressly provided in Exhibit D-1, Tenant acknowledges that Tenant is leasing the Premises on an "as is, where is" basis. Tenant's taking possession of the Premises shall be deemed conclusive evidence that, as of the date of taking possession, the Premises were in good order and satisfactory condition, except for reasonable Punchlist Items delivered in accordance with Exhibit D-1. No promise of Landlord to alter, remodel, repair, or improve the Premises and no representation, express or implied, respecting any matter or thing relating to the Premises or this Lease (including, without limitation, the condition thereof) has been made to Tenant by Landlord or its broker or sales agent, other than as may be expressly contained in this Lease. Promptly following the Possession Date, Tenant shall perform Tenant's Work to the Premises, if any, as described in Exhibit D-1.

ARTICLE9

REPAIRS, MAINTENANCE AND OPERATING COSTS

9.1 Landlord's Obligations; Payment of Operating Costs

. Landlord agrees to keep in good order the exterior roof, and exterior walls (exclusive of all glass, including plate glass, locks, hinges, doors, door hardware, and door frames) and all structural components of the Premises. Landlord shall keep all systems within the Premises and fixtures pertaining to heating, air-conditioning, water, sewer, electrical, vertical transportation, and sprinkler systems (if any) in good order and repair. Landlord shall keep the sidewalk adjoining the Premises free from rubbish, dirt, ashes, garbage and other refuse. Landlord shall have no obligation to maintain or repair any improvements situated upon the Tower Parcel. Except as otherwise provided in Section 9.2 below, Landlord shall pay all Operating Costs.

9.2 Tenant's Obligations

. Tenant shall require each of its Sub-Tenants to maintain, repair and replace that portion of the interior of the Premises leased to such Sub-Tenant as needed to keep every part thereof, in good order and repair except portions of Premises to be repaired by Landlord under the express terms of this Lease. Each Sub-Tenant shall agree that it is liable for any damage to the heating, air conditioning, water, sewer, electrical and sprinkler systems (if any) and any damages from the improper use or maintenance thereof. Tenant and/or all Sub-Tenants shall keep the interior of all leased Premises clean and shall not burn any materials or rubbish of any description upon or within the Premises. In the event Tenant or any Sub-Tenant fails to keep the Premises and other portions heretofore described in the proper condition, after written notice and a reasonable opportunity to cure, Landlord may cause the same to be done and Tenant hereby agrees to pay the expense thereof on demand as Rent. Notwithstanding Landlord's general obligation to pay Operating Costs as set forth in Section 9.1 above, Tenant and/or its Sub-Tenants shall pay for (i) all services and utilities serving the Premises as described in Section 7.1; and (ii) all Taxes described in Section 4.2 above.

9.3 Damage by Tenant

. Except for ordinary wear and tear and except as provided in Section 16.3 ("Waiver of Subrogation"), Tenant shall promptly reimburse Landlord for any costs that Landlord may incur in making repairs and alterations in and to the Premises, systems or equipment of the Premises where the need for such repairs or alterations is caused by any of the following: i. Tenant's or Sub-Tenants' use or occupancy of the Premises in a fashion that contravenes any provision of this Lease; ii. the installation, removal, use, or operation of Tenant's Property or Sub-Tenant's Property; iii. the moving of SubTenant's Property into or out of the Premises; or iv. any tortious act, omission, misuse, or negligence of any Tenant, any Sub-Tenant or any Tenant Related Parties.

ARTICLE10

ALTERATIONS AND ADDITIONS

10.1 Tenant's Alterations

. Any additions, alterations, or improvements (collectively, "Alterations") that change the fundamental character of the Premises shall require the prior consent of Landlord, which consent shall be requested by Tenant at least thirty (30) days prior to the commencement of any work. At the time Landlord grants its consent, it may condition same on, among other reasonable requirements, the requirement that such Alterations be removed at the end of the applicable Sublease Term and the subleased Premises restored to their condition as of the commencement date of the applicable Sublease. All Alterations shall be made in a good and workmanlike manner using only good grades of materials; performed by properly qualified and licensed personnel; performed so as not to cause or create any jurisdictional or other labor disputes (provided that nothing herein shall obligate the use of union labor); performed in such manner as not to unreasonably obstruct access to any portion of the Civic Square Parcel; and diligently prosecuted to completion. Notwithstanding the foregoing, Tenant shall have the right during the Term to make or allow Alterations as Tenant may reasonably deem desirable or necessary, following ten (10) days' notice to Landlord, but without Landlord's consent, provided that such work is of a nonstructural nature and does not alter the exterior surfaces of the Premises, and does not cost more than $25,000.

10.2 Payment and Indemnification

. Except for the Allowance set forth in the Lease Summary, or as provided elsewhere in this Lease, Landlord shall bear no responsibility for the costs of any work done on the Premises by or on behalf of Tenant. Tenant shall keep the Premises and the Civic Square Parcel free and clear of liens of any kind. Tenant shall indemnify, defend against, and keep Landlord free and harmless from all claims, demands, liability, loss, damage, costs, reasonable attorneys' fees, and any other expense incurred on account of claims by any person performing work or furnishing materials or supplies for Tenant or any person claiming under Tenant, including but not limited to resolution of any jurisdictional or other labor disputes.

10.3 Notices and Liens

. Tenant agrees not to suffer or permit any lien of any mechanic or materialman to be placed or filed against the Premises or the Civic Square Parcel. In case any such lien shall be filed, Tenant shall satisfy and release such lien of record within twenty (20) days (or such shorter period as may be required by any Mortgagee) after the earlier to occur of receipt of notice thereof from Landlord; or Tenant's actual knowledge or actual notice of such lien filing. If Tenant shall fail to have such lien satisfied and released of record as provided herein, Landlord may, on behalf of Tenant, without being responsible for making any investigation as to the validity of such lien and without limiting or affecting any other remedies Landlord may have, pay the same and Tenant shall reimburse Landlord on demand for such amount together with any other reasonable costs of Landlord, including, without limitation, reasonable attorneys' fees. Notwithstanding the foregoing, Tenant shall have the right to contest any such lien claim diligently and in good faith, and during such contest shall not be obligated to pay such lien claim, provided that Tenant is not in breach of any of its obligations under this Lease, and provided Tenant, at its sole costs and expense, transfers the lien from the Civic Square Parcel to a bond pursuant to RCW 60.04.161, thereby freeing the Civic Square Parcel from any claim of lien. Notwithstanding any such contest or title insurance, Tenant shall pay any such claim in full within five (5) days following the entry of an unstayed judgment or order of sale. All materialmen, contractors, artisans, mechanics, laborers and any other person now or thereafter furnishing any labor, services, materials, supplies or equipment to Tenant with respect to Premises or any portion thereof, are hereby charged with notice that they must look exclusively to Tenant to obtain payment for the same. Notice is hereby given that Landlord shall not be liable for any labor, services, materials, supplies, skill, machinery, fixtures or equipment furnished to or to be furnished to Tenant upon credit and that no mechanic's lien or any other lien for any such labor, services, materials, supplies, machinery, fixtures or equipment shall attach to or effect the state or interest of Landlord in and to the Premises or the Property, or any portion thereof. Before the actual commencement of any work for which a claim or lien may be filed, Tenant shall give Landlord notice of the intended commencement date a sufficient time before that date to enable Landlord to post notices of nonresponsibility or any other notices that Landlord deems necessary for the protection of Landlord's interest in the Premises and Landlord shall have the right to enter the Premises and post such notices at any reasonable time.

ARTICLE11

CERTAIN RIGHTS RESERVED BY LANDLORD

Landlord reserves the following rights, exercisable without liability to Tenant for damage or injury to property, person, or business; causing an actual or constructive eviction from the Premises; or disturbing Tenant's use, possession, or beneficial and quiet enjoyment of the Premises:

11.1 Name

. To change the common name or street address of the Civic Square Parcel.

11.2 Signage

. To require that all signage relating to the Premises comply with any signage requirements imposed by this Lease.

11.3 Keys

. To have passkeys to the Premises, all doors within the Premises and all doors by which the Premises are accessed.

11.4 Inspection and Entry

. Landlord may enter the Premises on reasonable prior notice to Tenant and the appropriate Sub-Tenant (except in the event of an emergency, in which case not notice shall be required), to inspect the Premises; to make repairs to the Premises; and to take all steps as may be reasonably necessary for the safety, protection, maintenance, or preservation of the Premises or Landlord's interest therein, or as may be necessary or desirable for the operation or improvement of the Premises or the Civic Square Parcel or in order to comply with Laws.

11.5 Renovations

. To renovate, improve, alter, or modify (collectively, the "Renovations") the Civic Square Parcel and any improvements situated thereon. Renovations may include, without limitation, modifying the Civic Square Parcel to comply with applicable Laws, including, without limitation, regulations relating to the physically disabled, seismic conditions, and building safety and security. In connection with such Renovations, Landlord may, among other things, erect scaffolding or other necessary structures in or around the Premises, limit or eliminate access to portions of the Premises, or perform work in or around the Premises that may create noise, dust or leave debris. Tenant hereby agrees that such Renovations and Landlord's actions in connection therewith shall in no way constitute a constructive eviction of Tenant or any Sub-Tenant nor entitle any person to any abatement of Rent. Landlord shall have no responsibility or for any reason be liable to Tenant for any direct or indirect injury to or interference with the business of Tenant or any Sub-Tenant arising from the Renovations. Upon at least ten (10) days advance written notice to Tenant, Landlord may during the Term perform Renovations to the Premises which are reasonably necessary to accommodate Renovations being performed to the Civic Square Parcel, provided such Renovations to the Premises do not unreasonably interfere with Tenant's or any Sub-Tenant's use of the Premises.

11.6 Civic Square Common Areas

. Landlord shall keep and maintain the Civic Square Common Areas (including the Plaza) in good order, condition and repair at all times at its sole cost and in accordance with any REA. Landlord shall have the right to enter into, modify and terminate easements and other agreements pertaining to the use and maintenance of the Civic Square Parcel and to close temporarily any or all portions of the Civic Square Parcel so long as, other than in cases of emergency, such closure does not unreasonably interfere with Tenant's and/or Sub-Tenant's use of the Premises.

In the exercise of the foregoing rights, Landlord shall (except in an emergency) take reasonable steps to minimize any interference with the business of Tenant and Sub-Tenants.

During the Term, Tenant and its Sub-Tenants and other licensees, invitees, customers and employees shall have the nonexclusive right to use all Civic Square Common Areas in common with Landlord, other occupants and their respective licensees, invitees, customers and employees. Without limiting the generality of the foregoing, Tenant shall have the right to the periodic use of any readerboard, "Jumbotron" sign, or similar signage installed by or for Landlord on or about the Civic Square Parcel. Tenant and its SubTenants shall have the non-exclusive right, with Landlord's reasonable prior approval, and provided such use does not impede the normal circulation of pedestrian and customer traffic, (i) to use reasonable portions of the Plaza immediately adjacent to the Premises for retail kiosks, displays and carts, and restaurant chairs, tables and customer seating, and (ii) to use the remainder of the Plaza for retail kiosks, displays and carts. Landlord shall not use, or permit the use of by anyone other than Tenant, the Plaza area for "retail" purposes, however; Landlord shall retain the exclusive right to schedule, and retain all revenues generated from, "events" in the Plaza or other Civic Square Common Areas. Except with the prior approval of Tenant, which approval shall not be unreasonably withheld, Landlord may not materially increase, decrease, alter, expand, substitute or change the number, locations and dimensions of any Civic Square Common Areas, including street access, sidewalks, and landscaping, where such action would materially interfere with access to or visibility of the Premises, reduce access to nearby parking, or otherwise unreasonably interfere with the business of Tenant or its Sub-Tenants.

At all times when at least one Sub-Tenant is open for business to the public, Landlord shall cause all elevators and escalators to be operating properly, shall ensure that access to the Civic Square Parcel and the associated parking garage is not closed or interfered with except as otherwise expressly permitted in this Lease, and shall make reasonable efforts to ensure that the water feature in the Plaza is operating (except when shut-off for repairs, maintenance, or weather-related shut-offs).

ARTICLE12

RULES AND REGULATIONS

Tenant shall comply with (and cause all Tenant Related Parties to comply with) the Rules and Regulations set forth in Exhibit E. Landlord shall not be responsible for any violation of the Rules and Regulations by other tenants or occupants of the Premises or the Civic Square Parcel. All Rules and Regulations, whether now existing or hereafter adopted by Landlord, shall be non-discriminatory in nature.

ARTICLE13

TRANSFERS

Except as provided in this Article, Tenant shall not, without the prior consent of Landlord, make any Transfer.

13.1 Subleases; Other Transfers; Leasehold Mortgages; Reimbursement of Certain Costs upon Termination of Lease

.

(a) Transfers To Sub-Tenants. Except as otherwise set forth below, Tenant shall have the unrestricted right to enter into subleases and other occupancy agreements ("Subleases") covering space within the Premises to subtenants ("Sub-Tenants"), on terms and in a form as determined by Tenant from time to time in its sole and absolute discretion. Each Sublease shall be in writing and shall expressly state that the Sub-tenant's rights thereunder are subject to the terms and conditions of this Lease. The permitted uses under each such Sublease shall not conflict with the uses permitted under this Lease.

(b) Subleases Requiring Landlord's Prior Approval. Notwithstanding the foregoing, Landlord's prior reasonable consent shall be required in accordance with the procedures set forth in subparagraph (c) below and the remainder of this Article for any proposed Sublease that: (i) demises more than 3,000 rentable square feet of space; (ii) contains a Sublease term longer than three (3) years (including for purposes of this paragraph any extension or renewal term options contained therein); (iii) contains a Sublease term (including for purposes of this paragraph any extension or renewal term options contained therein) that extends beyond the Expiration Date of this Lease; or (iv) requires as a condition to its effectiveness that Landlord execute a Recognition Agreement as defined below.

(c) Procedures for Landlord's Consent. As to any proposed Sublease for which Landlord's prior consent is required pursuant to subparagraph (b) above, the following shall apply: Tenant shall notify Landlord of the proposed Transfer by delivering a written notice (a "Transfer Notice") to Landlord setting forth the date of the proposed Transfer which shall be not less than thirty (30) or more than one hundred eighty (180) days after the date of the Transfer Notice. The Transfer Notice shall include: the proposed effective date of the Transfer and the name of the proposed Transferee; a description of the portion of the Premises to be transferred (the "Subject Space"); a copy of the Sublease, which shall include a detailed use clause; any other information reasonably requested by Landlord that will enable Landlord to determine the financial responsibility, character, and reputation of the Transferee and the nature of such Transferee's business. Landlord shall respond under Section 13.3 to any properly delivered Transfer notice within fifteen (15) days of receiving the same.

(d) Other Transfers. As to any proposed Transfer other than a Sublease or a Permitted Transfer, the following shall apply: Tenant shall deliver a Transfer Notice to Landlord at least thirty (30) days but not more than one hundred eighty (180) days prior to the proposed effective date of the Transfer. The Transfer Notice shall contain: all of the terms of the proposed Transfer and the consideration therefor, the name and address of the Transferee; current financial statements of the Transferee certified by an officer, partner or owner thereof; and any other information reasonably requested by Landlord that will enable Landlord to determine the financial responsibility, character, and reputation of the Transferee and the nature of such Transferee's business. Landlord shall respond under Section 13.3 to any properly delivered Transfer notice within fifteen (15) days of receiving the same.

(e) Recognition Agreement. Upon the request of Tenant or any Leasehold Mortgagee (described below), Landlord shall within a reasonable time (not exceeding twenty (20) days after Tenant's written request) execute, acknowledge and deliver a recognition agreement with such Leasehold Mortgagee and with any SubTenant in commercially reasonable form (a "Recognition Agreement"), confirming that, in the event of termination of this Lease for any reason (including without limitation by expiration of the Term), such Sub-Tenant shall be entitled to continued occupancy of its space in accordance with its Sublease as long as: (a) such Sublease is not terminated in accordance with its terms and (b) the Sub-Tenant agrees to attorn to Landlord under the applicable Sublease (including the

payment of all rental and other charges without offset for prepayments previously made other than rental and other charges paid not more than one month in advance) and agrees not to effect the termination of the same due to any termination of this Lease. Notwithstanding the foregoing, Landlord will not be obligated to provide a Recognition Agreement in connection with Subleases for building management purposes or to Subleases to Affiliates of Tenant at rates and terms other than those then prevailing in the market, and upon the termination or expiration of this Lease, such building management leases and leases to Affiliates of Tenant shall also terminate. In addition, no Recognition Agreement shall obligate Landlord to undertake or complete any construction obligations or provide any allowances to be provided by Tenant under any Sublease.

(f) Leasehold Mortgages. Tenant shall be entitled to grant mortgages, deeds of trust or other liens on its leasehold interests under this Lease, provided Tenant first provides Landlord with written notice of such mortgage, deed of trust or lien and the beneficiary or mortgagee thereof (each, a "Leasehold Mortgagee").

(g) Reimbursement of Certain Costs. Upon the expiration or earlier termination of this Lease for any reason other than a Default by Tenant, Landlord shall pay Tenant the unamortized portion of the following costs, to the extent the same have been actually paid by Tenant under a Sublease to which Landlord has granted its consent: (i) tenant improvement and construction allowances paid by Tenant for Alterations to any portion of the Premises subleased to Subtenants, and (ii) all brokers' fees and commissions paid by Tenant in connection with such Subleases. For purposes of this paragraph, the costs described herein shall be amortized on a straight-line basis over the term(s) of the applicable Sublease(s) and the unamortized portion of such costs shall be that portion attributable to the then remaining term of the applicable Subleases(s),

13.2 Fees

. Except as to any Transfer by Sublease or any Permitted Transfer, Tenant shall pay Landlord's reasonable review and processing fees incurred in connection with any proposed Transfer, as well as any reasonable legal fees incurred by Landlord, within thirty (30) days after written request by Landlord. The total of such fees shall not exceed $1,500 per request.

13.3 Consent

. Landlord shall respond to any Transfer Notice by either granting its consent to the proposed Transfer or setting forth the basis for Landlord's decision to withhold such consent; provided Landlord shall not withhold its consent to any Permitted Transfer and Landlord shall not unreasonably withhold or delay its consent to any proposed Transfer. It shall be reasonable under this Lease and under any applicable Law for Landlord to withhold consent to any proposed Transfer where one or more of the following apply, without limitation as to other reasonable grounds for withholding consent:

13.3.1 Neither the Transferee nor any of its principal investors or proposed asset or property manager has at least three (3) years of experience of operating the same or a similar business as described in the applicable Transfer Notice.

13.3.2 The Transferee is not a party of reasonable financial worth or financial stability in light of the responsibilities involved under the applicable Sublease on the date consent is requested, as reasonably determined by Landlord.

13.3.3 The Transfer would cause a violation of another lease of the Premises or any agreement to which Landlord is a party, or would give an occupant of the Premises a right to cancel its lease.

13.3.4 The Transfer would cause a violation of any provision under this Lease.

13.4 Completion of Transfer

. If Landlord consents to any proposed Transfer (or if the Transfer is a Permitted Transfer or is a Sublease to which Landlord's consent is not required pursuant to this Lease), Tenant may within six (6) months after Landlord's consent, enter into the approved Transfer, upon substantially the same terms and conditions as set forth in the Transfer Notice. If there are any material changes in the terms and conditions from those specified in the Transfer Notice i. such that Landlord would initially have been entitled to refuse its consent to such Transfer; or ii. that would cause the proposed Transfer to be more favorable to the Transferee than the terms set forth in the Transfer Notice, Tenant shall again submit the Transfer to Landlord for its approval.

13.5 Effect of Transfer

. If Landlord consents to a Transfer, i. no terms or conditions of this Lease shall be deemed to have been waived or modified; ii. such consent shall not be deemed consent to any further Transfer; iii. no Transfer shall be valid, and no Transferee shall take possession of the Premises, until an executed counterpart of all documentation pertaining to the Transfer has been delivered to Landlord; and iv. no Transfer shall relieve Tenant from primary liability under this Lease. The acceptance of Rent by Landlord from any party shall not be deemed to be a waiver by Landlord of any provision hereof. In the event of Default by a Transferee in the performance of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such Transferee.

13.6 Tenant Remedy for Landlord Refusal to Consent

.

(a) Complete Transfer. Notwithstanding any provision of this Lease or any applicable Laws to the contrary, Landlord and Tenant hereby expressly agree that if a court of competent jurisdiction determines that Landlord unreasonably withheld consent to a proposed Transfer of all of Tenant's interest hereunder, then Tenant's sole and exclusive remedy for such breach by Landlord shall be termination of this Lease as of the date of such court determination.

(b) Other Transfers. If a court of competent jurisdiction determines that Landlord unreasonably withheld consent to a proposed Sublease or other Transfer of less than all of Tenant's interest hereunder, then Tenant shall not be entitled to terminate this Lease but shall instead be entitled to recover monetary damages suffered by Tenant as a result of Landlord withholding consent.

ARTICLE14

DESTRUCTION OR DAMAGE

14.1 Landlord Termination Rights

. If any portion of the Premises or any portion of the Civic Square Parcel necessary for occupancy of the Premises is damaged by fire, earthquake, terrorism, act of war, act of God, the elements or other casualty, and the insurance proceeds available to Landlord are not sufficient to completely restore or repair such damage, Landlord may terminate this Lease as to such damaged portion of the Premises upon notice given to Tenant within sixty (60) days after the date of such casualty, effective as of the date of the casualty. For purposes of this paragraph, Landlord shall be deemed to have obtained property insurance on all improvements and Alterations situated on the Premises and the Civic Square Parcel satisfying the requirements of Section 17.1.2 below, whether or not it actually carries any such policy. Within 30 days after any election by Landlord to terminate this Lease pursuant to this Section, Tenant may nullify such election by agreeing to pay to Landlord the amount by which Landlord's insurance proceeds are insufficient to restore the damaged portion of the Premises.

14.2 Repairs

. If this Lease is not terminated as provided above, it shall continue in full force and effect, and Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment, and subject to all other terms of this Article, restore all damage (except for the furniture, fixtures, equipment, and other personal property required to be insured by Tenant and/or its Sub-Tenants). Such restoration shall be to substantially the same condition of such items as prior to the casualty, except for modifications (i) required by Law or (ii) to the Civic Square Parcel mutually approved by the parties. No such modifications shall materially impair access to or the visibility of the Premises and its signage. Tenant shall be responsible, at its sole cost and expense, for the repair, restoration, and replacement of Tenant's Property and Sub-Tenant's Property. Landlord shall not be liable for any loss of business, inconvenience, or annoyance arising from any repair or restoration of any portion of the Premises as a result of any damage from any casualty.

14.3 Tenant's Termination Rights

. If Landlord does not elect to terminate this Lease pursuant to Landlord's termination right as provided above, and the repairs cannot be completed within three hundred sixty five (365) days after the date of the casualty (the "Repair Period"), Tenant may elect, by the date that is the later to occur of (i) the date that is sixty (60) days after the date of the casualty, and (ii) the date that is thirty (30) days after receipt of Landlord's written election not to terminate, to terminate this Lease by notice to Landlord, effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after such notice. Tenant shall also have the right to terminate this Lease as to the damaged Premises if Landlord does not complete repairs within the Repair Period by thirty (30) days' notice to Landlord after the expiration of the Repair Period; provided however, if Landlord completes repair within such thirty (30) day period, such termination shall be nullified and this Lease shall continue in full force and effect. In addition, in the event that any portion of the Premises is destroyed or damaged to any substantial extent during the last twelve (12) months of the Term, then Tenant shall have the option to terminate this Lease in its entirety by giving notice to Landlord within thirty (30) days after such casualty, in which event this Lease shall cease and terminate as of the date of such notice.

14.4 Apportionment of Rent

. Upon any termination of this Lease pursuant to this Article, Tenant shall pay the Rent, properly apportioned up to such date of termination, and both parties hereto shall thereafter be freed and discharged of all further obligations hereunder, except as provided for in provisions of this Lease that by their terms survive the expiration or earlier termination of this Lease.

14.5 Abatement

. The Rent shall abate on an equitable basis to the extent Tenant's use of the Premises is impaired, commencing with the date of the casualty and continuing until completion of the repairs required of Landlord.

14.6 Express Agreement

. This Lease shall be considered an express agreement governing any case of damage to or destruction of the Premises by fire or other casualty; and any present or future Law that purports to govern the rights of Landlord and Tenant in such circumstances in the absence of express agreement shall have no application.

ARTICLE15

EMINENT DOMAIN

15.1 Entire Premises

. If the whole of either the Civic Square Parcel or the Tower Parcel is lawfully taken by condemnation or in any other manner for any public or quasi-public purpose, this Lease shall terminate as of the earlier of the date of the date title vests or the date possession is given, and Rent shall be prorated to such date.

15.2 Partial Condemnation

. If less than the whole of the Civic Square Parcel or the Tower Parcel is so taken, this Lease shall be unaffected by such taking, except that (i) Tenant shall have the right to terminate this Lease by notice to Landlord given within ninety (90) days after the date of such taking if twenty-five percent (25%) or more of the Tower Parcel or the Civic Square Parcel is taken; and (ii) Landlord shall have the right to terminate this Lease by notice to Tenant given within ninety (90) days after the date of such taking. If either Landlord or Tenant so elects to terminate this Lease, this Lease shall terminate on the thirtieth (30th) day after either such notice. The Rent shall be prorated to the date of termination.

15.3 Proceeds of Award

.

(a) Taking of Civic Square Parcel. In the event of any taking of the Civic Square Parcel, partial or whole, all of the proceeds of any award, judgment, or settlement payable by the condemning authority shall be the exclusive property of Landlord, and Tenant hereby assigns to Landlord all of its right, title, and interest in any award, judgment, or settlement from the condemning authority. Tenant, however, shall have the right, to the extent that Landlord's award is not reduced or prejudiced, to claim from the condemning authority (but not from Landlord) such compensation as may be recoverable by Tenant in its own right.

15.4 Repairs

. In the event of a partial taking of the Premises that does not result in a termination of this Lease, Landlord shall restore the remaining portion of the Premises as nearly as practicable to its condition prior to the condemnation or taking. Tenant shall be responsible at its sole cost and expense for the repair, restoration, and replacement of Sub-Tenant's Property.

15.5 Takings by City of Seattle

. Notwithstanding anything to the contrary elsewhere herein, in the event of any taking of any portion or interest in the Tower Parcel or the Civic Square Parcel by condemnation or in any other manner for any public or quasi-public purpose or deed in lieu thereof involving the City of Seattle in its governmental capacity, then Tenant shall be entitled to a share of any just compensation that may be awarded in connection therewith as its interest may appear.

ARTICLE16

INDEMNIFICATION, WAIVER, RELEASE

AND LIMITATION OF LIABILITY

16.1 Tenant's Indemnity

. Except for any injury or damage to persons or property on the Premises that is proximately caused by or results proximately from the gross negligence or willful misconduct of Landlord, no Landlord Related Parties shall be liable for, and Tenant will and does hereby indemnify, defend and hold harmless the Landlord Related Parties against and from all liabilities, obligations, suits, damages, penalties, claims, costs, charges and expenses, including, without limitation, reasonable attorneys' fees and other professional fees (if and to the extent permitted by Law), that may be imposed upon, incurred by, or asserted against Landlord or any of the Landlord Related Parties and arising, directly or indirectly, out of or in connection with Tenant's or its Sub-Tenants' use, occupancy or maintenance of the Premises, including, without limitation, any of the following: i. any work or thing done in, on or about the Premises or any part thereof by any Tenant Related Party; ii. any injury or damage to any person or property; iii. any failure on the part of Tenant or Sub-Tenant to perform or comply with any of the covenants, agreements, terms or conditions contained in this Lease or any sublease of the Premises; and iv. any negligent or otherwise tortious act or omission of any Tenant Related Party. At Landlord's request, Tenant shall, at Tenant's expense and by counsel selected by Landlord, defend Landlord in any action or proceeding arising from any such claim or liability and shall indemnify Landlord against all costs, reasonable attorneys' fees, expert witness fees, and any other expenses incurred in such action or proceeding. The provisions of this Section shall survive the termination of this Lease with respect to any claims or liability occurring prior to such termination.

16.2 Assumption of Risk

. Tenant agrees that no Landlord Related Parties will be liable for any loss, injury, death, or damage to persons, property, or Tenant's business resulting from i. theft; ii. act of God, public enemy, injunction, riot, strike, insurrection, war, terrorism, court order, requisition, order of governmental body or authority (other than Landlord acting in its governmental capacity), fire, explosion or falling objects; iii. business interruption or loss of use of the Premises other than that which arises from Landlord's gross negligence or intentional misconduct; iv. any diminution or shutting off of light, air or view by any structure erected on the Civic Square Parcel or any land adjacent to the Civic Square Parcel; v. mold or indoor air quality, except due to Landlord's breach of its repair and maintenance obligations under this Lease; vi. any acts or omissions of any other tenant, occupant or visitor of the Civic Square Parcel or the Tower Parcel; or vii. any cause beyond Landlord's control. In no event shall Landlord be liable for indirect, consequential, or punitive damages or for damages based on lost profits. None of the foregoing shall be considered a constructive eviction of Tenant, nor shall the same entitle Tenant to an abatement of Rent.

16.3 Waiver of Subrogation

. Anything in this Lease to the contrary notwithstanding, Landlord and Tenant each hereby waives any and all rights of recovery, claim, action or cause of action against the other for any loss or damage to any property of Landlord or Tenant, arising from any cause that would be insured against under the terms of any property insurance required to be carried hereunder; or is insured against under the terms of any property insurance actually carried, regardless of whether the same is required hereunder. For purposes of this paragraph, Landlord shall be deemed to have obtained property insurance satisfying the requirements of Section 17.1.2 below, whether or not it actually carries any such policy. The foregoing waiver shall apply regardless of the cause or origin of such claim, including but not limited to the negligence of a party, or such party's agents, officers, employees or contractors. The foregoing waiver shall not apply if it would have the effect, but only to the extent of such effect, of invalidating any insurance coverage of Landlord or Tenant. The foregoing waiver shall also apply to any deductible, as if the same were a part of the insurance recovery. The foregoing waiver shall not apply in any case where its application would void or diminish coverage under such policies of insurance. Each party shall obtain from its insurer(s) under each insurance policy it maintains a waiver of all rights of subrogation that the insurer may have against the other party and Landlord and Tenant shall each indemnify the other against any loss or expense, including reasonable attorneys' fees, resulting from the failure to obtain such waiver.

ARTICLE17

INSURANCE

17.1 Required Coverage

. Tenant shall maintain (or, in the case of each Sub-Tenant, cause each Sub-Tenant to maintain) the following coverages in the following amounts.

17.1.1 Commercial General Liability Insurance (or its equivalent) covering the insured against claims of bodily injury, personal injury and property damage arising out of Tenant's operations, assumed liabilities or use of the Premises, for limits of liability not less than Two Million and No/100 Dollars ($2,000,000.00) combined single limit per occurrence and Five Million and No/100 Dollars ($5,000,000.00) combined single limit annual aggregate.

17.1.2 Property Insurance covering all furniture, fixtures, equipment, inventory and other personal property of Tenant and Sub-Tenants, Such insurance shall be written on a "Causes of Loss Special Form" basis (or its equivalent), for no less than 90% of the full replacement cost without deduction for depreciation, and shall include coverage for vandalism, malicious mischief and sprinkler leakage. The proceeds of such insurance shall be used for the repair or replacement of the property so insured unless this Lease is terminated on account of the event of damage or destruction.

17.1.3 Business Income and Extra Expense insurance (or its equivalent) in such amounts as will reimburse Tenant for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent tenants or attributable to prevention of access to the Premises as a result of such perils, for a period of not less than twelve (12) months.

17.1.4 Statutory worker's compensation, together with employers liability coverage at limits of:

$500,000 Each Accident

$500,000 Each Employee by Disease

$500,000 Policy Limit by Disease

17.1.5 If Tenant or any Transferee engages in the sale of alcoholic beverages, Tenant or such Transferee shall carry coverage for employer's liability, host liquor liability, liquor liability and so called "Dram Shop" liability coverage with a combined single limit of not less than Three Million and No/100 Dollars ($3,000,000.00), per occurrence.

17.2 Form of Policies

. The minimum limits of policies of insurance required of Tenant under this Lease shall in no event limit the liability of Tenant under this Lease. All liability insurance shall (i) name Tenant, Landlord, and any other person, firm or corporation designated by Landlord, including, without limitation, any Mortgagee, as insureds, as their respective interests may appear; (ii) specifically cover the liability assumed by Tenant under this Lease, including, but not limited to, Tenant's indemnity obligations under this Lease; (iii) be issued by an insurance company having a rating of not less than AIX in Best's Insurance Guide or that is otherwise acceptable to Landlord and licensed to do business in the State; (iv) be primary insurance as to all claims thereunder and provide that any insurance carried by Landlord shall be excess and non-contributing with any insurance requirement of Tenant; (v) provide that said insurance shall not be canceled, expire or coverage reduced unless thirty (30) days' prior notice shall have been given to Landlord; and (vi) if Tenant has a net worth of less than Ten Million and No/100 Dollars ($10,000,000.00), have a deductible not greater than TwentyFive Thousand and No/100 Dollars ($25,000.00).

17.3 Evidence of Insurance

. Tenant shall deliver to Landlord an ACORD certificate evidencing the existence and amount of each insurance policy required hereunder on or before the Possession Date and at least thirty (30) days before the expiration dates of the applicable policies. Landlord may, from time to time, inspect or copy any insurance policies that this Lease requires Tenant to maintain. Tenant shall furnish Landlord with renewals or "binders" of each policy at least ten (10) days prior to the expiration thereof. Tenant agrees that, if Tenant does not obtain and maintain such insurance, Landlord may (but shall not be required to) after five (5) days' notice to Tenant during which time Tenant does not supply Landlord with certificates of the required insurance, procure said insurance on Tenant's behalf and charge Tenant the premiums therefor, payable upon demand. Tenant shall have the right to provide the insurance required hereunder pursuant to blanket policies obtained by Tenant, provided such blanket policies afford coverage as required by this Lease.

17.4 Independent Obligations

. Tenant acknowledges and agrees that Tenant's insurance obligations under this Lease are independent of Tenant's indemnity obligations, liabilities and duties under this Lease.

17.5 Landlord's Insurance Obligations

. Landlord shall maintain at its sole expense (or may selfinsure) any insurance required to be carried by it pursuant to the REA.

ARTICLE18

DEFAULT

18.1 Tenant's Default

. A "Default" shall mean the occurrence of any one or more of the following events:

18.1.1 Tenant's failure to pay any overdue Rent within five (5) days after written notice from Landlord.

18.1.2 Tenant fails to deliver any estoppel certificates or subordination agreements within the periods set forth in this Lease.

18.1.3 The levy of a writ of attachment or execution on this Lease or on any of property of Tenant at the Premises.

18.1.4 Tenant's general assignment for the benefit of creditors or arrangement, composition, extension, or adjustment with its creditors.

18.1.5 Tenant becomes insolvent or bankrupt or admits in writing its inability to pay its debts as they mature.

18.1.6 Proceedings for the appointment of a trustee, custodian or receiver of Tenant or for all or a part of Tenant's property are filed by or against Tenant and, if filed against Tenant involuntarily, are not dismissed within sixty (60) days of filing.

18.1.7 Proceedings in bankruptcy, or other proceedings for relief under any Law for the relief of debtors, are instituted by or against Tenant, and, if instituted against Tenant involuntarily, are not dismissed within sixty (60) days of filing.

18.1.8 Tenant fails to perform any of its obligations under the terms of any Sublease of the Premises and the same is not cured within thirty (30) days after written notice to Tenant or such additional period as is reasonably necessary to effect cure, provided that if Tenant commences cure within such thirty (30) day period and diligently pursues the same to completion, Tenant shall not be in Default.

18.1.9 Tenant's fails to perform any other covenant, condition, or agreement contained in this Lease not covered by the preceding subsections, where such failure continues for thirty (30) days after notice thereof from Landlord to Tenant, or such additional period as is reasonably necessary to effect cure, provided Tenant commences cure within such thirty (30) day period and diligently pursues the same to completion within ninety (90) days following Landlord's notice.

Any notice periods provided for under this Section shall run concurrently with any statutory notice periods and any notice given hereunder may be given simultaneously with or incorporated into any such statutory notice.

18.2 Landlord's Default

. Tenant shall promptly notify Landlord of the need for any repairs or action with respect to other matters that are Landlord's obligation under this Lease. If Landlord fails to perform any covenant, condition, or agreement contained in this Lease within thirty (30) days after receipt of notice from Tenant, or if such default cannot reasonably be cured within thirty (30) days if Landlord fails to commence action to cure such default within such thirty (30) day period, Tenant may elect one or more of the following remedies: (i) upon ten (10) days' additional written notice to Landlord (except in an emergency posing a threat of injury to persons or property when no additional notice shall be required) of its intent to so act, proceed to cure such default, and Landlord shall reimburse Tenant's reasonable expenses incurred to cure such default together with interest at the Interest Rate until paid, or (ii) pursue specific performance, or (iii) seek money damages for all loss, damage and expense arising from Landlord's breach or default, provided that in no event shall Landlord be liable for indirect, consequential or punitive damages or for damages based on lost profits, or (iv) if Landlord's default constitutes an actual or constructive eviction from all or substantially all of the Premises, terminate this Lease upon sixty (60) days' prior written notice unless Landlord commences action reasonably calculated to cure such default within such sixty (60) day period. Tenant shall not have the right to withhold, reduce or offset any amount against any payments of Rent or any other charges due and payable under this Lease unless Tenant has obtained a final, non-appealable judgment against Landlord for the amount due.

ARTICLE19

LANDLORD REMEDIES AND DAMAGES

19.1 Remedies

. In the event of a Default, then in addition to any other rights or remedies Landlord may have at law or in equity, Landlord shall have the right, at Landlord's option, without further notice or demand of any kind, to do any or all of the following without prejudice to any other remedy that Landlord may have:

19.1.1 Terminate this Lease and Tenant's right to possession of the Premises by giving notice to Tenant. Tenant shall immediately surrender the Premises to Landlord whereupon Tenant shall have no further claim to the Premises or under this Lease.

19.1.2 Continue this Lease in effect, but terminate Tenant's right to possession of the Premises and whereupon Tenant shall have no further claim to the Premises and Landlord shall have the right to collect all rent and other charges which are due or become due from Sub-Tenants.

19.1.3 Landlord may relet the Premises without thereby terminating this Lease (if the same has not been previously terminated), and Tenant shall remain liable for any and all Rent and other charges and expenses hereunder. For the purpose of reletting, Landlord is authorized to make such repairs or alterations to the Premises as may be necessary in the sole discretion of Landlord for the purpose of such reletting, and if a sufficient sum is not realized from such reletting (after payment of all costs and expenses of such repairs, alterations and the expense of such reletting (including, without limitation, reasonable attorney and brokerage fees) and the collection of rent accruing therefrom) each month to equal the Rent, then Tenant shall pay such deficiency each month upon demand therefor. Actions to collect such amounts may be brought from time to time, on one or more occasions, without the necessity of Landlord's waiting until the expiration of the Term.

19.1.4 Without any further notice or demand, Landlord may

enter upon the Premises, if necessary, without being liable for prosecution or claim for damages therefor, and do whatever Tenant is obligated to do under the terms of the Lease. Tenant agrees to reimburse Landlord on demand for any reasonable expenses which Landlord may incur in effecting compliance with Tenant's obligations under the Lease. Tenant further agrees that Landlord shall not be liable for any damages resulting to Tenant from such action, unless caused by the gross negligence or willful misconduct of Landlord, but subject to the other limitations on Landlord's liability set forth on this Lease. Notwithstanding anything herein to the contrary, Landlord will have no obligation to cure any Default of Tenant.

19.1.5 Landlord shall at all times have the right, without prior demand or notice except as required by Law, to seek any declaratory, injunctive or other equitable relief, and specifically enforce this Lease, or restrain or enjoin a violation or breach of any provision hereof, without the necessity of proving the inadequacy of any legal remedy or irreparable harm.

19.1.6 To the extent permitted by applicable Law, Landlord shall have the right, without notice to Tenant, to change or re-key all locks to entrances to the Premises, and Landlord shall have no obligation to give Tenant notice thereof or to provide Tenant with a key to the Premises.

19.1.7 The rights given to Landlord in this Article are cumulative and shall be in addition and supplemental to all other rights or remedies that Landlord may have under this Lease and under applicable Laws or in equity.

19.2 Damages

. Should Landlord elect to terminate this Lease or Tenant's right to possession under the provisions above, Landlord may recover the following damages from Tenant:

19.2.1 Past Rent. The worth at the time of the award of any unpaid Rent that had been earned at the time of termination; plus

19.2.2 Rent Prior to Award. The worth at the time of the award of the unpaid Rent that would have been earned after termination, until the time of award; plus

19.2.3 Rent After Award. The worth at the time of the award of the amount by which the unpaid Rent for the balance of the term after the time of award exceeds the amount of the rental loss that Tenant proves could have been reasonably avoided, if any; plus

19.2.4 Proximately Caused Damages. Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant's failure to perform its obligations under this Lease or that in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses (including, without limitation, reasonable attorneys' fees), incurred by Landlord in retaking possession of the Premises; maintaining the Premises after Default; preparing the Premises or any portion thereof for reletting to a new tenant, including, without limitation, any repairs or alterations, whether for the same or a different use; reletting the Premises, including but not limited to, advertising expenses, brokers' commissions and fees; and and any special concessions made to obtain a new tenant.

19.2.5 Other Damages. At Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by Law.

As used in subsections 19.2.1 and 19.2.2, the phrase "worth at the time of the award" shall be computed by adding interest on all such sums from the date when originally due at the Interest Rate. As used in subsection 19.2.3, the phrase "worth at the time of the award" shall be computed by discounting the sum in question at the Federal Reserve rate promulgated by the Federal Reserve office for the district in which the Premises are located, plus one percent (1%). For the purposes of this Section, "Rent" for each year of the unexpired Term shall be the Minimum Rent, Percentage Rent and Additional Rent payable during the preceding year, together with any other continuously accruing expenses payable during the preceding year.

19.3 Rent after Termination

. Tenant specifically acknowledges and agrees that Landlord shall have the right to continue to collect Rent after any termination (whether said termination occurs through eviction proceedings or as a result of some other early termination pursuant to this Lease) for the remainder of the Term, less any amounts collected by Landlord from the reletting of the Premises, but in no event shall Tenant be entitled to receive any excess of any such rents collected over the Rent.

19.4 No Termination

. A termination of this Lease by Landlord or the recovery of possession of the Premises by Landlord or any voluntary or other surrender of this Lease by Tenant or a mutual cancellation thereof, shall not work a merger and shall at the option of Landlord, terminate all or any existing franchises or concessions, licenses, permits, subleases, subtenancies or the like between Tenant and any third party with respect to the Premises, or may, at the option of Landlord, operate as an assignment to Landlord of Tenant's interest in same. Following a Default, Landlord shall have the right to require any Sub-Tenants to pay all sums due under their subleases directly to Landlord.

19.5 Waiver of Demand

. All demands for Rent that are not expressly required by the terms hereof, are hereby waived by Tenant.

19.6 Deficiency

. If it is necessary for Landlord to bring suit in order to collect any deficiency, Landlord shall have the right to allow such deficiencies to accumulate and to bring an action on several or all of the accrued deficiencies at one time. Any such suit shall not prejudice in any way the right of Landlord to bring a similar action for any subsequent deficiency or deficiencies.

19.7 Counterclaim

. In the event Tenant must, because of applicable court rules or statutes, interpose any counterclaim or other claim against Landlord in such proceedings, Landlord and Tenant agree that, in addition to any other lawful remedy of Landlord, upon motion of Landlord, such counterclaim or other claim asserted by Tenant shall be severed from the proceedings instituted by Landlord (and, if necessary, transferred to a court of different jurisdiction), and the proceedings instituted by Landlord may proceed to final judgment separately and apart from and without consolidation with or reference to the status of any such counterclaim or any other claim asserted by Tenant.

19.8 Mitigation of Damages

.

19.8.1 Landlord shall not be obligated to lease the Premises to a substitute tenant for a rental amount less than the greater of (a) the current fair market rental then prevailing for similar retail uses in comparable buildings in the same market area as the Premises, or (b) the rental rate payable under this Lease; nor shall Landlord be obligated to enter into a new lease under other terms and conditions that are unacceptable to Landlord.

19.8.2 Landlord shall not be obligated to enter into a lease with any substitute tenant whose use would:

(a) Disrupt the tenant mix of or place excessive parking burdens upon the Civic Square Parcel;

(b) Violate any restriction, covenant, or requirement contained in the lease of any Sub-Tenant or any other agreement to which Landlord is a party;

(c) Be incompatible with the operation of the Civic Square Parcel in the Landlord's reasonable discretion.

19.8.3 Landlord shall not be obligated to enter into a lease with any substitute tenant that does not have, in Landlord's reasonable opinion, sufficient financial resources or operating experience to operate the Premises in a first-class manner.

19.8.4 Landlord shall not be required to expend any amount of money to alter, remodel, or otherwise make the Premises suitable for use by a substitute tenant unless

(a) Tenant pays any such sum to Landlord in advance of Landlord's execution of a lease with such substitute tenant (which payment shall not be in lieu of any damages or other sums to which Landlord may be entitled as a result of Tenant's Default); or

(b) Landlord determines that any such expenditure is financially justified in connection with entering into any such lease.

19.8.5 Upon compliance with the above criteria regarding the re-letting of the Premises after a Default, Landlord shall be deemed to have fully satisfied Landlord's obligation to mitigate damages under this Lease and under any Law. Until Landlord is able to relet the Premises, Tenant must pay to Landlord, on or before the first day of each calendar month, the monthly Rent and any other charges provided in this Lease. No such reletting shall be construed as an election on the part of Landlord to terminate this Lease unless Landlord gives Tenant a notice of such intention. Notwithstanding any such reletting without termination, Landlord may at any time thereafter elect to terminate this Lease for such previous breach.

ARTICLE20

BANKRUPTCY

In the event a petition is filed by or against Tenant under the Bankruptcy Code, Tenant, as debtor and debtor in possession, and any trustee who may be appointed agree to adequately protect Landlord as follows:

20.1.1 to pay monthly in advance on the first day of each month as reasonable compensation for use and occupancy of the Premises an amount equal to all Rent due pursuant to this Lease;

20.1.2 to perform each and every obligation of Tenant under this Lease until such time as this Lease is either rejected or assumed by order of a court of competent jurisdiction;

20.1.3 to determine within one hundred twenty (120) days after the filing of such petition whether to assume or reject this Lease;

20.1.4 to give Landlord at least thirty (30) days' prior notice, unless a shorter period is agreed to in writing by the parties, of any proceeding relating to any assumption of this Lease;

20.1.5 to give at least thirty (30) days' prior notice of any vacation or abandonment of the Premises, any such vacation or abandonment to be deemed a rejection of this Lease; and

20.1.6 to do all other things to benefit to Landlord otherwise required under the Bankruptcy Code.

This Lease shall be deemed rejected in the event of the failure to comply with any of the above.

In order to provide Landlord with the assurance contemplated by the Bankruptcy Code, the following obligations must be fulfilled, in addition to any other reasonable obligations that Landlord may require, before any assumption of this Lease is effective: (i) all monetary Defaults under this Lease must be cured; (ii) all other Defaults (other than those arising solely on account of the bankruptcy filing) must be cured within fifteen (15) days after the date of assumption; (iii) all actual monetary losses incurred by Landlord (including, but not limited to, reasonable attorneys' fees) must be paid to Landlord within ten (10) days after the date of assumption; and (iv) Landlord must receive within ten (10) days after the date of assumption a security deposit in the amount of six (6) months' Minimum Rent and an advance prepayment of three (3) months' Minimum Rent.

In the event this Lease is assumed in accordance with the requirements of the Bankruptcy Code and this Lease, and is subsequently assigned, then, in addition to any other reasonable obligations that Landlord may require and in order to provide Landlord with the assurances contemplated by the Bankruptcy Code, Landlord must be provided with (a) a financial statement of the proposed assignee prepared in accordance with generally accepted accounting principles consistently applied, though on a cash basis, which reveals a net worth in an amount sufficient, in Landlord's reasonable judgment, to assure the future performance by the proposed assignee of Tenant's obligations under this Lease; or (b) a written guaranty by one or more guarantors with financial ability sufficient to assure the future performance of Tenant's obligations under this Lease, such guaranty to be in form and content satisfactory to Landlord and to cover the performance of all of Tenant's obligations under the Lease.

Neither Tenant nor any trustee who may be appointed in the event of the filing of a petition under the Bankruptcy Code shall conduct or permit the conduct of any "fire," "bankruptcy," "going out of business" or auction sale in or from the Premises.

ARTICLE21

WAIVER OF LANDLORD'S LIEN RIGHTS

In consideration of the mutual benefits arising under this Lease, Landlord hereby waives its statutory lien for rent pursuant to RCW 60.72.

ARTICLE22

HOLDING OVER

After expiration of the Term, Landlord may, at its option, serve notice upon Tenant that any continued lease of the Premises to Tenant shall be a month-to-month tenancy upon all the provisions of this Lease (except as to Term). In such event, the monthly installments of Minimum Rent shall be increased to one hundred twenty-five percent (125%) of the monthly installments of Minimum Rent in effect at the expiration of the Term. If a month-to-month tenancy is created, either party may terminate such tenancy by giving the other party at least thirty (30) days advance notice of the date of termination. The provisions of this Article shall not constitute a waiver by Landlord of any right of re-entry as otherwise available to Landlord, nor shall receipt of any Rent or any other act appearing to affirm the tenancy operate as a waiver of the right to terminate this Lease for a Default by Tenant hereof.

ARTICLE23

SURRENDER OF PREMISES

Upon the expiration or earlier termination of this Lease, Tenant shall peaceably surrender the Premises to Landlord subject to the interest of valid Transferees. All fixtures, equipment, improvements, and appurtenances attached to or built into the Premises at the commencement of or during the Term, whether or not by or at the expense of Tenant, other than Sub-Tenant's Property, shall be and remain a part of the Premises, shall be the property of Landlord, and shall not be removed by Tenant, except as otherwise required elsewhere in this Lease. Tenant shall promptly repair any damage to the Premises resulting from such removal. Sub-Tenant's Property shall be and shall remain the property of such Sub-Tenants. If Tenant abandons or surrenders the Premises or is dispossessed by process of Law or otherwise, any of Tenant's property left on the Premises shall be deemed to be abandoned, and, at Landlord's option, title shall pass to Landlord under this Lease as by a bill of sale. On the Expiration Date, Tenant shall surrender all keys, parking cards and other means of entry to the Premises, and shall inform Landlord of the combinations and access codes for any locks and safes located in the Premises.

ARTICLE24

BROKERAGE FEES

Tenant warrants and represents that it has not dealt with any real estate broker or agent in connection with this Lease. Tenant shall indemnify, defend and hold Landlord harmless from any cost, expense, or liability, (including, without limitation, costs of suits and reasonable attorneys' fees) for any compensation, commission, or fees claimed by any other real estate broker or agent in connection with the original negotiation or execution of this Lease by reason of any act of Tenant.

ARTICLE25

NOTICES

Any notice, demand, request, consent, covenant, approval or other communication to be given by one party to the other must be in writing and delivered personally; mailed by certified United States mail, postage prepaid, return receipt requested (except for statements and invoices to be given in the ordinary course hereunder, which may be sent by regular U.S. Mail); sent by nationally recognized overnight courier; or sent by telecopy and confirmed by one of the other methods set forth herein. The effective date of notice shall be for any notice delivered in person, the date of delivery; for any notice by U.S. mail, three (3) days after the date of certification thereof; for any notice by overnight courier, the next Business Day after deposit with the courier; and for any notice by telecopy, the date of confirmation of receipt, if before 5:00 p.m. at the location delivered, or the next day if after 5:00 p.m. All notices shall be delivered or addressed to the parties at their respective addresses set forth on the Lease Summary. Either party may change the address at which it desires to receive notice upon giving notice of such request to the other party in the manner provided herein. Landlord and Tenant, and their respective counsel, hereby agree that notice may be given hereunder by the parties' respective counsel, and that if any communication is to be given hereunder by Landlord's or Tenant's counsel, such counsel may communicate directly with all principals, as required to comply with the foregoing provisions.

ARTICLE26

SIGNAGE

Tenant agrees that all signage shall comply with the criteria set forth Exhibit F, attached and with all applicable state and local codes. Any damage to a building or related structure, upon installation, maintenance, or removal of such signage shall be Tenant's sole responsibility and shall be repaired to Landlord's specifications, at Tenant's sole expense. Upon termination of this Lease and if requested by Landlord, Tenant will remove all signage related to any Sub-Tenant not then in possession of the Premises and shall repair building facade and all other areas affected by such signage to a condition reasonably acceptable to Landlord.

ARTICLE27

LENDER PROVISIONS

27.1 Subordination

. This Lease is subject and subordinate to the lien of any mortgages, deeds to secure debt or trust deeds, now or hereafter in force against the Civic Square Parcel, if any, and to all renewals, extensions, modifications, consolidations and replacements thereof (collectively, "Mortgages"), and to all advances made or hereafter to be made upon the security of such Mortgages. Tenant covenants and agrees in the event any proceedings are brought for the foreclosure of any mortgage, deed to secure debt or trust deed to attorn, without any deductions or set-offs whatsoever, to the purchaser upon any such foreclosure sale (the "Purchaser") if so requested to do so by the Purchaser, and to recognize the Purchaser as the lessor under this Lease. Tenant shall, within twenty (20) days of a request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm the subordination or superiority of this Lease to any Mortgages. Notwithstanding the provisions hereof, should any Mortgagee require that this Lease be prior rather than subordinate to its Mortgage, or require that Tenant attorn to any Purchaser, then in such event, this Lease shall become prior and superior to such Mortgage, or Tenant shall so attorn, upon notice to that effect to Tenant from such Mortgagee. The aforesaid superiority of this Lease to any Mortgage shall be self-operative upon the giving of such notice and no further documentation other than such notice shall be required to effectuate such superiority or attornment. In the event Landlord or such Mortgagee desires confirmation of such superiority or attornment, Tenant shall, promptly upon request therefor by Landlord or such Mortgagee, and without charge therefor, execute a document acknowledging such priority or attornment obligation to the Mortgagee as Landlord in the event of foreclosure or deed in lieu thereof or termination of a ground lease. Tenant's subordination of its interest in this Lease and agreement to attorn to the Purchaser is conditioned on its receipt of an executed non-disturbance agreement in form reasonably acceptable to Tenant as may be requested periodically by Tenant.

27.2 Estoppel Certificates

. Within thirty (30) days after written request from either party, either party shall execute and deliver to the requesting party a written statement certifying that this Lease is unmodified and in full force and effect or is in full force and effect as modified and stating the modifications; the amount of Minimum Rent and the date to which Minimum Rent and Additional Rent have been paid in advance; the amount of any security deposit, if any; that the requesting is not in default hereunder or, if the requesting party is claimed to be in default, stating the nature of any claimed default; and such other factual matters concerning the Lease or the Premises as may be reasonably requested. Any such statement may be relied upon by a purchaser, assignee, or Mortgagee.

27.3 Notice and Cure Rights

. Tenant agrees to copy any Mortgagee whose address has been furnished to Tenant on any notice of default served by Tenant on Landlord. If Landlord fails to cure such default within the time provided for in this Lease, such Mortgagee shall have an additional thirty (30) days to cure such default; provided that, if such default cannot reasonably be cured within that thirty (30) day period, then such Mortgagee shall have such additional time to cure the default as is reasonably necessary under the circumstances.

ARTICLE28

MISCELLANEOUS

28.1 Changes to Civic Square Name

. Landlord reserves the right to change the name of the Civic Square at any time

28.2 Quiet Enjoyment

. Tenant, upon paying the Rent and performing all of its obligations under this Lease, shall peaceably and quietly enjoy the Premises, subject to the terms of this Lease.

28.3 Force Majeure

. Any prevention, delay, or stoppage of work to be performed by Landlord or Tenant that is due to strikes, labor disputes, inability to obtain labor, materials, equipment, or reasonable substitutes therefor, acts of God, governmental restrictions, regulations, or controls, judicial orders, enemy or hostile government actions, civil commotion, war, terrorism, fire, or other casualty, or other causes beyond the reasonable control of the party obligated to perform hereunder, shall excuse performance of the work by that party for a period equal to the duration of that prevention, delay, or stoppage. Nothing in this Section shall excuse or delay Tenant's obligation to pay Rent or other charges under this Lease.

28.4 Accord and Satisfaction; Allocation of Payment

. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent provided for in this Lease shall be deemed to be other than on account of the earliest due Rent; nor shall any endorsement or statement on any check or letter accompanying any check or payment as Rent be deemed an accord and satisfaction. Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of the Rent or pursue any other remedy provided for in this Lease. In connection with the foregoing, Landlord shall have the absolute right in its sole discretion to apply any payment received from Tenant to any account or other payment of Tenant then not current and due or delinquent.

28.5 Construction

. Headings at the beginning of each Article, Section and subsection are solely for the convenience of the parties only and in no way define, limit, or enlarge the scope or meaning of this Lease. Except as otherwise provided in this Lease, all exhibits referred to herein are attached hereto and are incorporated herein by this reference. This Lease shall not be construed as if either Landlord or Tenant had prepared it, but rather as if both Landlord and Tenant had prepared it.

28.6 Confidentiality

. Tenant acknowledges that the content of this Lease and any related documents are confidential information. Tenant shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than Tenant's financial, legal, and space planning consultants.

28.7 Governing Law

. This Lease shall be governed by, interpreted under, and construed and enforced in accordance with the Laws of the State of Washington.

28.8 Consent

. Unless otherwise expressly set forth herein, all consents and decisions required or permitted of either party shall not be unreasonably withheld, delayed or conditioned.

28.9 Authority

. Tenant shall, at Landlord's request, deliver a certified copy of a resolution of its board of directors, if Tenant is a corporation, or other satisfactory documentation, if Tenant is another type of entity, authorizing execution of this Lease.

28.10 Duplicate Originals; Counterparts

. This Lease may be executed in any number of duplicate originals, all of which shall be of equal legal force and effect. Additionally, this Lease may be executed in counterparts, but shall become effective only after each party has executed a counterpart hereof; all said counterparts when taken together, shall constitute the entire single agreement between the parties.

28.11 Further Assurances

. Landlord and Tenant each agree to execute any and all other documents and to take any further actions reasonably necessary to consummate the transactions contemplated hereby.

28.12 Recording

. Neither party shall record this Lease without the prior written consent of the other party. Landlord or Tenant at its own expense may record a short form or memorandum of Lease giving notice of such non-monetary terms as such party may reasonably request, in a form mutually and reasonably acceptable to the parties. If Tenant exercises such option, upon termination or expiration of the Lease, Tenant shall, at its sole expense, remove such recorded memorandum from title records.

28.13 Right to Lease

. Landlord shall not lease any portion of the Civic Square Parcel for any of the uses prohibited by the REA. Except as limited under Section 11.6 above, in all other respects, Landlord reserves the absolute right to create such other tenancies within the Civic Square Parcel as Landlord shall determine. Tenant does not rely on the fact, nor does Landlord represent, that any specific tenant or type or number of tenants shall, during the Term, occupy any space within the Civic Square Parcel.

28.14 Severability

. In the event any portion of this Lease shall be declared by a court of competent jurisdiction to be invalid, illegal or unenforceable, such portion shall be deemed severed from this Lease, and the remaining parts hereof shall remain in full force and effect, as fully as though such invalid, illegal or unenforceable portion had never been part of this Lease.

28.15 Survival

. All indemnity and other unsatisfied obligations set forth in this Lease shall survive the termination or expiration hereof.

28.16 WAIVER OF TRIAL BY JURY

. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS LEASE, OR THE TRANSACTIONS OR MATTERS RELATED HERETO OR CONTEMPLATED HEREBY.

28.17 Successors and Assigns

. This Lease shall apply to and bind the heirs, personal representatives, and permitted successors and assigns of the parties.

28.18 Integration of Other Agreements

. This Lease sets forth the entire agreement and understanding of the parties with respect to the matters set forth herein and supersedes all previous written or oral understandings, agreements, contracts, correspondence and documentation with respect thereto. Any oral representations or modifications concerning this Lease shall be of no force or effect. No provisions of this Lease may be amended or added to except by an agreement in writing signed by the parties or their respective successors in interest.

28.19 TIME OF THE ESSENCE

. TIME IS OF THE ESSENCE OF THIS LEASE AND EACH AND EVERY TERM AND PROVISION HEREOF.

28.20 Waiver

. The waiver by a party of any breach of any term, covenant, or condition of this Lease shall not be deemed a waiver of such term, covenant, or condition or of any subsequent breach of the same or any other term, covenant, or condition. No delay or omission in the exercise of any right or remedy of a party shall impair such right or remedy or be construed as a waiver of any default of the other party. Consent to or approval of any act by a party requiring consent or approval of the other party shall not be deemed to waive or render unnecessary such consent to or approval of any subsequent act. Any waiver must be in writing and shall not be a waiver of any other matter concerning the same or any other provision of this Lease.

28.21 No Surrender

. No act or conduct of Landlord, including, without limitation, the acceptance of keys to the Premises, shall constitute an acceptance of the surrender of the Premises by Tenant before the expiration of the Term. Only a written notice from Landlord to Tenant shall constitute acceptance of the surrender of the Premises and accomplish a termination of the Lease before the expiration of the Term.

28.22 Number and Gender

. As used in this Lease, the neuter includes masculine and feminine, and the singular includes the plural.

28.23 Days

. The term "days," as used herein, shall mean actual days occurring, including Saturdays, Sundays and Holidays.

28.24 Joint and Several Liability

. If Tenant consists of two (2) or more parties, each of such parties shall be liable for Tenant's obligations under this Lease, and all documents executed in connection herewith, and the liability of such parties shall be joint and several.

28.25 No Third Party Beneficiaries

. Except as otherwise provided herein, no person or entity shall be deemed to be a third party beneficiary hereof, including but not limited to any brokers, and nothing in this Lease, (either expressed or implied) is intended to confer upon any person or entity, other than Landlord and Tenant (and their respective nominees, successors and assigns), any rights, remedies, obligations or liabilities under or by reason of this Lease.

28.26 No Other Inducements

. It is expressly warranted by each of the undersigned parties that no promise or inducement has been offered except as herein set forth and that this Lease is executed without reliance upon any statement or representation of any person or party released or its representatives concerning the nature and extent of damages, costs and/or legal liability therefor.

28.27 Rule Against Perpetuities

. Notwithstanding any provision hereof to the contrary, in the event that the Commencement Date has not occurred within five (5) years of the date of the execution of this Lease by all parties hereto, then this Lease shall automatically terminate and be without further force and effect. The parties acknowledge that the terms of the foregoing sentence are included herein for the purposes of ensuring that this Lease comply with the common law Rule Against Perpetuities, and in no way is said five (5) year period intended as an estimate of the expected timing of the Commencement Date.

28.28 Title Insurance

. Tenant shall be responsible for obtaining any title insurance it desires at its sole cost and expense. Landlord, if requested, shall execute and deliver to Tenant's title company the latter's standard form of owner affidavit, at no cost to Tenant.

28.29 Arbitration

. If this Lease contains options where rental rates are expressly subject to arbitration, and the parties do not agree upon the rental rate within the stipulated time, no later than five (5) Business Days following the expiration of the stipulated time, each party shall select an arbitrator having not less than ten (10) years' actual experience in the commercial real estate brokerage business, and the arbitrators so selected shall immediately meet for the purpose of hearing and deciding the dispute and fixing the relevant rate of rent. If the two (2) arbitrators selected cannot agree on the rental rate within ten (10) Business Days after appointment (the "Initial Review Period"), but the rental rates differ by less than five percent (5%), the rental rate shall be the average of the two rates. If the rental rates differ by more than five percent (5%), no later than five (5) Business Days following the expiration of the Initial Review Period, the two arbitrators shall select a third arbitrator with qualifications similar to their own. Within ten (10) Business Days following appointment, the third arbitrator shall select one of the two rental rates promulgated by the first two arbitrators as the rental rate for this Lease. If the arbitrators cannot agree on the third arbitrator, they shall petition the presiding judge of the local State court having jurisdiction to appoint such arbitrator to act as an umpire between the arbitrators selected by Landlord and Tenant. The decision of the third arbitrator or presiding judge, as the case may be, shall be binding on both parties. Landlord and Tenant shall each be responsible to pay their respective arbitrators and will share equally the cost of the third arbitrator.

28.30 No Discrimination

. Tenant covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through Tenant, and this Lease is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, sex, religion, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, or enjoyment of the Premises, nor shall Tenant itself, or any person claiming under or through Tenant, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees in the Premises.

28.31 OFAC Compliance.

28.31.1 As used herein "Blocked Party" shall mean any party or nation that (a) is listed on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Asset Control, Department of the U.S. Treasury ("OFAC") pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) or other similar requirements contained in the rules and regulations of OFAC (the "Order") or in any enabling legislation or other Executive Orders in respect thereof (the Order and such other rules, regulations, legislation, or orders are collectively called the "Orders") or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Orders (such lists are collectively referred to as the "Lists"); or (b) has been determined by competent authority to be subject to the prohibitions contained in the Orders.

28.31.2 As a material inducement for Landlord entering into this Lease, Tenant warrants and represents that none of Tenant, any Affiliate of Tenant, any partner, or member in Tenant (collectively, a "Tenant Owner"): (a) is a Blocked Party; (b) is owned or controlled by, or is acting, directly or indirectly, for or on behalf of, any Blocked Party; or (c) has instigated, negotiated, facilitated, executed or otherwise engaged in this Lease, directly or indirectly, on behalf of any Blocked Party. Tenant shall immediately notify Landlord if any of the foregoing warranties and representations becomes untrue during the Term.

28.31.3 Tenant shall not: (a) transfer any interest in Tenant or any Tenant Owner to any Blocked Party; or (b) make a Transfer to any Blocked Party.

28.31.4 If at any time during the Term (a) Tenant or any Tenant Owner becomes a Blocked Party or is convicted, pleads nolo contendere, or is indicted, arraigned, or custodially detained on charges involving money laundering or predicate crimes to money laundering; (b) any of the representations or warranties set forth in this Section become untrue; or (c) Tenant breaches any of the covenants set forth in this Section, the same shall constitute a Default. In addition to any other remedies to which Landlord may be entitled on account of such Default, Landlord may immediately terminate this Lease and refuse to pay any Allowance or other disbursements due to Tenant under this Lease.

28.32 Radon Disclosure

. Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Additional information regarding radon and radon testing may be obtained from your county public health unit.

IN WITNESS WHEREOF the parties have executed this Lease, as of the date first-above written.

LANDLORD:

CITY OF SEATTLE, a municipal corporation

By:

Printed Name:

Title:

Date:

TENANT:

TRIAD CIVIC CENTER LLC, a Washington limited liability company

By:

Printed Name:

Title:

Date:

STATE OF )

) ss.

COUNTY OF )

I certify that I know or have satisfactory evidence that _________________________________ is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the _____________________________________________ of CITY OF SEATTLE to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Dated: ________________________

Notary Public

Print Name

My commission expires

(Use this space for notarial stamp/seal)

STATE OF )

) ss.

COUNTY OF )

I certify that I know or have satisfactory evidence that _________________________________ is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the __________________________ of TRIAD CIVIC CENTER LLC, a Washington limited liability company to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Dated: ________________________

Notary Public

Print Name

My commission expires

(Use this space for notarial stamp/seal)

EXHIBIT A--SITE PLAN

(This Exhibit will be consistent with the Civic Square site plan depicted in Exhibit C of the Seattle Civic Square Project Agreement (Attachment 2 to the Ordinance)

EXHIBIT B-1

LEGAL DESCRIPTION OF CIVIC SQUARE PARCEL

(This Exhibit will be consistent with the Civic Square site plan depicted in Exhibit C of the Seattle Civic Square Project Agreement (Attachment 2 to the Ordinance)

EXHIBIT B-2

LEGAL DESCRIPTION OF TOWER PARCEL

(This Exhibit will be consistent with the Tower site plan depicted in Exhibit C of the Seattle Civic Square Project Agreement (Attachment 2 to the Ordinance)

EXHIBIT C

TERM CERTIFICATION

The undersigned, as Tenant and Landlord, under that certain Master Retail Lease dated ______________________ (the "Lease") with the City of Seattle, as Landlord, hereby agree as follows:

1. That Tenant has entered into occupancy of the Premises described in the Lease.

2. That the Commencement Date of the Lease is: __________________________. The Lease expires on __________________________.

EXECUTED this ________ day of ___________________________, 20___.

TENANT:

TRIAD CIVIC CENTER LLC, a Washington limited liability company

By:

Name:

Its:

EXHIBIT D-1 TENANT IMPROVEMENT WORK

1. Preparation of Working Drawings.

(a) Landlord and Tenant have established specifications to be used in the construction of the Tenant Improvements (the "Specifications"). The quality of Tenant Improvements shall be equal to or of greater quality than the quality of the Specifications.

(b) Tenant shall retain an architect/space planner reasonably approved by Landlord ("Architect") to prepare the construction drawings for the Tenant Improvements. The plans and drawings to be prepared by Architect and the Engineer hereunder shall be known collectively as the "Working Drawings." All Working Drawings shall comply with the drawing format and specifications as reasonably determined by Landlord. It shall be the responsibility of Tenant and Architect to verify, in the field, the dimensions and conditions as shown on the relevant portions of the base Premises plans.

(c) On or before the date set forth in Schedule 1 attached hereto, Tenant and Architect shall prepare the final space plan for Tenant Improvements in the Premises (collectively, "Final Space Plans"), which Final Space Plans shall include a layout and designation of all offices, rooms and other partitioning, their intended use, and equipment to be contained therein, and shall deliver the Final Space Plans to Landlord for Landlord's reasonable approval, which shall be given (or denied, with an explanation of the basis therefor) within twenty (20) days after submittal.

(d) On or before the date set forth in Schedule 1, Tenant and Architect shall complete the architectural and engineering drawings for the Premises, and the final architectural working drawings in a form that is sufficient to allow subcontractors to bid on the work and to obtain all applicable permits (collectively, "Final Working Drawings") and shall submit the same to Landlord for Landlord's reasonable approval, which shall be given (or denied, with an explanation of the basis therefor) within twenty (20) days after submittal.

(e) The Landlord must approve the Final Working Drawings ("Approved Working Drawings") prior to the commencement of the construction of the Tenant Improvements. Landlord shall not unreasonably withhold its approval of the Final Working Drawings, but may withhold such approval in the event that the proposed Final Drawings are not consistent with the architecture and aesthetics other Tenant Improvements constructed upon the Civic Square Parcel.

2. Permits.

(a) Upon receipt of Landlord's approval, Tenant shall promptly submit the Approved Working Drawings to the appropriate municipal authorities for all applicable building permits necessary for the Tenant Improvements ("Permits"), and, in connection therewith, Tenant shall coordinate with Landlord in order to allow Landlord, at its option, to take part in all phases of the permitting process. Tenant shall supply Landlord, as soon as possible, with all plan check numbers and dates of submittal. Tenant shall use commercially reasonable efforts to obtain the Permits on or before the date set forth in Schedule 1. Neither Landlord nor Landlord's consultants shall be responsible for obtaining any building permit or certificate of occupancy for the Premises and that the obtaining of the same shall be Tenant's responsibility; provided however that Landlord shall, in any event, cooperate with Tenant in executing permit applications and performing other ministerial acts reasonably necessary to enable Tenant to obtain any Permits.

3. Time Deadlines.

The parties cooperate and use good faith, efforts and all due diligence to cooperate with each other and the Architect, and the Engineers to complete all phases of the working drawings and the permitting process so that Tenant may receive the Permits as soon as possible after the execution of the Lease, and, in that regard, shall meet together on a scheduled basis to discuss Tenant's progress in connection with the same. The applicable dates for approval of items, plans and drawings in this Tenant Work Letter are set forth and further elaborated upon in Schedule 1 ("Time Deadlines"), attached hereto. The parties agree to use reasonable efforts to comply with the Time Deadlines.

4. Allowance.

Provided no uncured Default then exists, Landlord shall provide an amount equal to the Allowance to be applied toward the "Total Construction Costs" for the Tenant Improvements, which as used herein shall mean the entire costs incurred by Tenant for: constructing the Tenant Improvements, including space planning and preparation of the Approved Working Drawings, labor and materials, electrical and other utility usage during construction, permit fees, inspection fees, additional janitorial services, trash removal, general tenant signage, related taxes, bonding and insurance costs, if any, the general contractor's general conditions, fees of Tenant's construction managers, WSST, and the initial costs to acquire and install kiosks, carts, and displays. All Tenant Improvements for which the Allowance has been made available shall be deemed Landlord's property to the extent they are constructed upon (or, in the cast of any kiosks, carts or displays funded with the Allowance, used on) the Civic Square Parcel. Tenant shall not be entitled to use any portion of the Allowance for anything other than the foregoing. In no event shall Landlord be obligated to make disbursements with respect to the Tenant Improvements in an amount that exceeds the Allowance. The Allowance shall be disbursed to Tenant within twenty (20) days after receipt of Tenant's written request therefor, accompanied by a statement of values of work performed covered by the request signed by Tenant's general contractor or architect and lien waivers from Tenant's general contractor and all subcontractors and material suppliers providing more than $10,000 of labor or materials during the period covered by the reimbursement request.

Landlord shall not be required to initially disburse more than $40.00 per rentable square foot of those portions of the Premises that have been or are then being improved by Tenant. For example, if Tenant expends $80.00 per rentable square foot of Total Construction Costs on the first 7,000 rentable square feet being improved as part of the Tenant Improvements (i.e, Total Construction Costs as to such portion equal to $560,000.00), Landlord shall nevertheless be required to disburse only up to $280,000.00 toward such costs (i.e., $40.00 x 7,000 rentable square feet then being improved). If Tenant expends less than $40.00 per rentable square foot of Total Construction Costs on any particular Tenant Improvement project, Tenant shall still be entitled to apply the remainder toward future Tenant Improvement Work, so long as at no time shall Landlord be required to disburse more than $40.00 per rentable square foot of those portions of the Premises that have been or are then being improved by Tenant.

SCHEDULE 1 TO EXHIBIT D-1

TIME DEADLINES

TIME DEADLINES

Dates Actions to be performed A. ___ days after mutual Lease execution Final Space Plans to be delivered to Landlord. B. ___ days after mutual Lease execution Final Working Drawings to be delivered to Landlord. C. 14 days after Landlord's approval of Final Space Plan and Final Working Drawings Tenant to apply for Permits. D. As soon as practicable after Landlord's approval of Final Space

Plan and Final Working Drawings Tenant to obtain Permits. E. ____ days after receipt of Permits Tenant to commence Tenant Improvements. F. ____ days after commencement of Tenant Improvements, subject to delays caused by Landlord and force majeure. Tenant to complete construction and deliver certificate of occupancy to Landlord.

EXHIBIT D-2

CONTRACTOR RULES AND REGULATIONS

1. Contractor Parties will display a courteous demeanor towards tenants, customers, visitors and general public. No Contractor Parties shall remain in the Premises after work hours.

2. All Contractor Parties shall clean the job site after meals are eaten. Alcoholic beverages and drugs are not to be brought into, or consumed within the Civic Square Parcel. Personnel appearing to be under the influence of either alcoholic beverages or drugs will not be allowed on the job site.

3. Parking for all personnel must be arranged prior to commencement of work, and will be provided in designated areas only. Vehicles in unapproved areas will be subject to citation and towing without notice. Any parking charges are the sole responsibility of the Contractor Parties.

4. All materials are to be stored at the job site or in designated storage areas. No materials are to be stored in corridors or in public areas. Landlord may provide minimum secured storage for materials with prior arrangement.

5. All work areas are to be visually and materially protected from the tenants and general public. If required by Landlord, the job site shall be sealed off from the balance of the adjoining space so as to minimize the disbursement of dirt, debris and noise.

6. Radios or other excessive noise are not permitted.

7. The use of toxic materials or odor-causing liquids must be scheduled with Landlord in advance and prior notice must be given to the tenants adjacent to the job site.

8. All non-job site areas are to be kept clean and dust free. No material residue shall be tracked through corridors or public areas.

9. Contractor Parties shall ensure the job site is left clean and secure at the completion of each work day. Trash and excess materials shall (a) not remain on, in, or at the job site; (b) be disposed of in bins or by truck promptly; (c) not be staged in storage at the job site in any public or adjacent areas; and (d) shall not be disposed of in the Civic Square's trash receptacles.

EXHIBIT E

RULES AND REGULATIONS

(a) All deliveries to and from the Premises shall be done only at such times, in the areas and through the entrances designated for such purposes by Landlord;

(b) All garbage and refuse shall be kept inside the Premises in the kind of container specified by Landlord, and shall be placed outside of the Premises prepared for collection in the manner and at the times and places specified by Landlord. If Landlord shall provide or designate a service for picking up refuse and garbage, Sub-Tenants shall use same at Sub-Tenants' cost. Sub-Tenants shall pay the cost of removal of any refuse and garbage and maintain all common loading areas in a clean manner.

(c) No radio or television aerial or other device shall be erected on the roof or exterior walls of the Premises or the building in which the Premises is located without first obtaining in each instance the Landlord's consent in writing. Any aerial or device installed without such written consent shall be subject to removal at Tenant's expense without notice at any time;

(d) No loud speakers, televisions, phonographs, radios, tape players, or other devices shall be used in a manner so as to be heard or seen outside of the Premises without the prior written consent of Landlord;

(e) Sub-Tenants shall maintain air pressure in the Premises so as to keep odors from emanating from the Premises.

(f) The plumbing facilities shall not be used for any other purpose than that for which they are constructed; no foreign substance of any kind shall be thrown therein, and the expense of any breakage, stoppage, or damage resulting from a violation of this provision shall be borne by Tenant. All grease traps, if any, shall be installed and maintained in accordance with applicable requirements;

(g) Sub-Tenants shall contract for termite and pest extermination services covering the Premises as needed;

(h) Sub-Tenants shall not burn any trash or garbage of any kind in the Premises or within the Civic Square Parcel.

(i) Sub-Tenants shall store and/or stock the Premises only with such merchandise as is not inconsistent with this Lease;

(j) Sub-Tenants shall not conduct or permit any fire, bankruptcy, auction, going out of business, liquidation sale or total inventory clearance sale (whether real or fictitious) in the Premises, or utilize any unethical method of business operation;

(k) Neither Tenant nor any Sub-Tenant shall perform any act or carry on any practice which may damage, mar, or deface the Premises or any other part of the Civic Square Parcel.

(l) Neither Tenant nor any Sub-Tenant shall use any forklift truck, tow truck, or any other powered machine for handling freight except in such manner and in those areas as may be approved in advance by Landlord in writing;

(m) Neither Tenant nor any Sub-Tenant shall place a load on any floor in the interior delivery system, if any, or in the Premises, or in any area of the Civic Square Parcel, exceeding the floor load which such floor wad designed to carry;

(n) Neither Tenant nor any Sub-Tenant shall install, operate or maintain in the Premises any electrical equipment which does not bear underwriter's approval, or which would overload the electrical system (or any part) beyond its capacity for proper and safe operations;

(o) Neither Tenant nor any Sub-Tenant shall suffer, allow or

permit any vibration, noise, light, odor or other effect to emanate from the Premises, or from any machine or other installation therein, or otherwise suffer, allow or permit the same to constitute a nuisance or otherwise interfere with the safety, comfort and convenience of Landlord, or any of the other occupants of the Tower Parcel or the Civic Square Parcel or the customers, agents, or invitees or either parcel. Upon notice by Landlord to Tenant that any of the aforesaid is occurring, Tenant agrees to forthwith remove or control the same;

(p) Sub-Tenants' employees and agents shall not solicit in the parking areas serving the Civic Square Parcel.

EXHIBIT F SIGN CRITERIA

I. GENERAL

A. All Tenant and Sub-Tenant signage (with the exception of signs located wholly within the Premises) including anything on the outside of storefronts or the inside of windows and on the outside of loading doors, shall be governed by this Exhibit.

B. The following must be delivered to Landlord prior to fabrication and installation:

1. A drawing of the sign detailing the following:

(a) Size and style of the following:

(i) sign structure support;

(ii) lettering; and

(iii) logo, artwork, graphics, etc.

(b) Materials and colors.

(c) All dimensions.

(d) Illumination details and specifications (including electrical load requirements).

2. Plan and elevation sketches illustrating the exact locations proposed for the sign.

C. Landlord will not unreasonably object to any proposed signage.

D. Landlord may request changes or alterations to the signage as permitted by the Lease.

E. All signage shall be illuminated, and both the installation and maintenance shall be at Sub-Tenant's sole responsibility and expense.

F. Switches to sign illumination shall be photoelectric or timers, shall be set to illuminate each day at dusk.

G. Landlord shall bear no responsibility, financial or otherwise, for the following, relative to signs:

1. Meeting all applicable regulatory, approval, code, and permit requirements. etc.

2. Proper installation, operation, maintenance, and repair of Tenant's sign(s).

3. Damage to any building or other improvement situated upon the Tower Parcel or the Civic Square Parcel, and Tenant shall hold Landlord harmless from and against any property damage or personal injury that might be occasioned by the installation, operation or removal of Sub-Tenants' sign(s).

H. Failure to Maintain: In the event Tenant is notified of disrepair or improper illumination of any signs, Tenant shall correct such disrepair within ten (10) days of written notice from Landlord. Should Tenant fail to correct such disrepair within the aforesaid time period, Landlord will correct such disrepair at Tenant's expense based upon Landlord's actual cost plus interest accrued at the Interest Rate.

II. PERMANENT STORE IDENTITY SIGNS

A. Sidewalk Signs:

1. Each Sub-Tenant may have (1) sidewalk sign conforming to this section.

2. Sidewalk signs shall be "blade-type" two sided signs hung from the sidewalk overhang perpendicular to the storefront and centered on Sub-Tenant's front entrance.

3. Size of sidewalk signs shall be uniform in length, height and lettering. Sidewalk signs shall be suspended six inches (6") from overhang ceiling.

III. SPECIFICALLY NOT PERMITTED

A. Unless expressly approved by Landlord prior to installation, the following will specifically not be permitted on the exterior of the building or outside the storefront:

1. Any flat, painted permanent sign.

2. Any flashing action, moving action, or audible action sign parts.

3. Permanent signs not mounted to the fascia or overhang in front of the Premises.

4. Listing of products, unless part of name or logotype.

5. Neon signs.

IV. EXCEPTIONS

A. Landlord, at Landlord's sole discretion, may grant temporary and/or permanent exceptions to these sign criteria. Any such exception shall only be in writing and in response to written requests for same, fully documenting the reasons for same, and illustrated with detailed plans and elevations.