HomeMy WebLinkAbout4193AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
SUBJECT: Second of two Public Hearings Study Session Date:
on Amendment No. 1 for a One -Year COUNCIL MEETING Date:
Extension of Sub -Concession and Department:
Assignment of Concession Agreement with Presenter:
the Olympic Soccer & Sports Center
(OSSC), LLC Phone:
&VIrdot- tf1ri
tl7
February 8, 2017
February 13, 2017
Parks & Recreation
Jeff Elevado
(360) 473-5428
SUMMARY:
On June 27, 2014, the City entered into a Sub -concession and Assignment of Concession
Agreement ("Sub -concession") with Olympic Soccer & Sports Center, LLC ("Olympic") and Keystone
Financial Management, Inc. ("Keystone") authorizing Olympic to grant to Keystone a sub -concession
of the Concession Agreement upon certain terms and conditions whereby Keystone would acquire all
interest in the assets of Olympic in the future including the assignment of the Concession Agreement
to Keystone. The term of the Sub -concession will expire on February 28, 2017. Olympic has
requested a one (1) year extension to the Sub -concession to allow the parties to finalize financing
and the assignment of the Concession Agreement to Keystone.
Ownership of the underlying property upon which the improvements are located does not change
and will remain with the City.
The first public hearing for public comment was held on February 1, 2017.
ATTACHMENTS:
1) Amendment No. 1 to Sub -concession and Assignment of Concession Agreement; and
2) Sub -concession and Assignment of the Concession Agreement with Exhibits A & B
3) Advisory Report from Bremerton Parks Commission
FISCAL IMPACTS (Include Budgeted Amount): No Fiscal Impact.
STUDY SESSION AGENDA: o No Presentation o Full Presentation
STUDY SESSION ACTION: ❑ Consent Agenda
RECOMMENDED MOTION:
❑ General Business o Public Hearing (2 of 2)
Move to approve a One -Year Extension to the Sub -Concession and Assignment of Concession
Agreement with the Olympic Soccer & Sports Center (OSSC), LLC; and authorize the Mayor to
finalize and execute the agreement with substantially the same terms and conditions as presented.
COUNCIL ACTION: [Approve, ❑ Deny ❑ Table ❑ Continue ❑ No Action
Form Updated 01/07/15
AMENDMENT ONE TO
SUB -CONCESSION AND ASSIGNMENT
OF CONCESSION AGREEMENT
THIS AGREEMENT amends the Sub -concession and Assignment of Concession
Agreement entered into between the City of Bremerton ("City") and Olympic Soccer & Sports
Center, ,LLC ("Olympic"), to Keystone Financial Management, Inc. ("Keystone").
WHEREAS, the City granted a concession to Olympic pursuant to the "First Amended
Concession Agreement Between the City of Bremerton and Olympic Soccer & Sports Center,
LLC" executed on October 30, 2006 ("Concession Agreement") for use of the property legally
described in the Concession Agreement ("Premises") for soccer related activities; and
WHEREAS, a Memorandum of First Amended Concession Agreement recorded on
December, 13, 2006 in the records of Kitsap County under Auditor's File No. 200612130124;
and
WHEREAS, on June 27, 2014, the City entered into a Sub -concession and Assignment
of Concession Agreement ("Sub -concession") with Olympic and Keystone authorizing Olympic
to grant to Keystone a sub -concession of the Concession Agreement upon certain terms and
conditions whereby Keystone would acquire all interest in the assets of Olympic in the future
including the assignment of the Concession Agreement to Keystone; and
WHEREAS, the Sub -concession expires February 28, 2017 and Olympic and Keystone
have requested an extension of the Sub -concession in order to complete the acquisition of
Olympic by Keystone and the assignment of the Concession Agreement; and
WHEREAS, the City's consent to an extension of the Sub -concession is required: and
WHEREAS, the parties agree to extend the term of the Sub -concession one year;
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other valuable consideration received, the parties agree as follows:
A. Term Extended. Section I of the Sub -concession is hereby amended by amending
Subsection 2 to read as follows:
2. The term of the Sub -concession shall expire February 28, 2018.
B. Other Provisions. All other provisions and terms of the Sub -concession not specifically
amended herein shall remain in full force and effect.
IN WITNESS WHEREOF, this Agreement is entered into in duplicate originals on
the date fully executed below.
O MPIC SOCCER & SPORTS CENTER, LLC
Dennis Michael, Member
Date: D-1-� I n
KEYSTONE FINANC AL MA AGEMENT, INC.
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William M. Wright, Presid t
Date:
CITY OF BREMERTON
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Patty Lent, or
Date: 7- / (
STATE OF WASHINGTON
COUNTY OF KITSAP
In In the City of Bremerton, on the I �t� day of, U,V , 2017, before me, a
Notary Public in and for the above state and county, personally appeared D MICHAEL,
known to me or proved to be the person named in and who executed the foregoing instrument,
and being first duly sworn, such person acknowledged that he or she executed said instrument for
the purposes therein contained as his or her free and voluntary act and deed.
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STATE OF WASHINGTON
COUNTY OF KITSAP
In the City of Bremerton, on the day of 1017, before me, a
Notary Public in and for the above state and county, personally appeared -WILLIAM
M.WRIGHT, known to me or proved to be the person named in and who executed the foregoing
instrument, and being first duly sworn, such person ac ow -ledged that he or she executed said
instrument for the purposes therein contained as his or he `free a' d o untary _ ct and deed.
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STATE OF WASHINGTON
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In the City of Bremerton, on the \--I � day of pc , 2017, before me, a
Notary Public in and for the above state and county, personally appea ed PATTY LENT, Mayor
of the City of Bremerton, the municipal corporation that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said municipal
corporation, for the uses and purposes therein mentioned, and on oath stated that she was
authorized to execute the said instrument n behalf of said mu ' ipal corporation.
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Agreement.docx
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Contract Number: 4193
Vendor: OLYMPIC SOCCER & SPORTS CENTER LLC
Subject: Concession Agreement - Indoor Soccer Facility
Department: Parks
File Class: LEG 12-1
Begin Date: 6/20/2001
End Date: 6/19/2016
Review Date: 1/1/2016
Vault Date:
Comments: 3 successive 10 year options to renew First Amended
Agreement 10/06; Sub -Concession 4/25/14 - 2/28/17
SUB -CONCESSION AND ASSIGNMENT
OF CONCESSION AGREEMENT
'PHIS AGREEMENT authorizes the sub -concession and future assignment of the First
Amended Concession Agreement entered into between the City of Bremerton ("City") and
Olympic Soccer & Sports Center, LLC ("Olympic"), to Keystone Financial Management, Inc.
("Keystone").
WHEREAS, the City granted a concession to Olympic pursuant to the "First Amended
Concession Agreement Between the City of Bremerton and Olympic Soccer & Sports Center,
LLC" executed on October 30, 2006 ("Concession Agreement"), attached hereto as Exhibit A,
for use of the property legally described in the Concession Agreement ("Premises") for soccer
related activities; and
WHEREAS, a Memorandum of First Amended Concession Agreement was recorded on
December 6, 2006 set forth in Exhibit B; and
WHEREAS, Olympic desires to grant to Keystone, and Keystone desires to accept, a
sub -concession of the Concession Agreement ("Sub -concession") as set forth herein; and
WHEREAS, Keystone and Olympic have entered into an agreement whereby Keystone
would acquire all interest in the assets of Olympic in the future including the assignment of the
Concession Agreement to Keystone; and
WHEREAS, the City's consent to a sub -concession and future assignment of the
Concession Agreement is required to complete the acquisition by Keystone;
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other valuable consideration received, and with the intent to be legally bound, the parties agree
as follows:
I. SUB -CONCESSION
1. Olympic hereby grants a Sub -concession of the Concession Agreement and all of its
right, title, and interest thereunder to Keystone and Keystone hereby accepts such Sub -
concession. Keystone shall have all of the rights of Olympic under the Concession Agreement
except the right of assignment, and except as provided herein. For purposes of this agreement,
Keystone shall also include any wholly owned subsidiary thereof.
2. The term of the Sub -concession shall expire February 28, 2017.
3. During the term of the Sub -concession, Keystone hereby assumes and agrees to be
bound by all of Olympic's obligations under the Concession Agreement. Keystone shall perform
all the terms, covenants, and conditions of the Concession Agreement, including the payment of
rent and any other required amounts to City, after the date hereof.
4. Keystone shall indemnify and hold Olympic harmless from any and all claims,
damages, causes of actions, judgments, fees, fines, costs, expenses, and liabilities of whatever
nature, including attorney's fees, arising under the Concession Agreement, including any breach
or default in the performance of any obligation to be performed under the Concession
Agreement, or relating to the Premises in any way during the term of the Sub -concession
5. Keystone shall not assign the Concession Agreement or sublet all or any portion of the
Premises without the prior written consent of City pursuant to Section 8.7 of the Concession
Agreement.
6. Except as specifically modified herein, the Concession Agreement will continue in
full force and effect.
II. FUTURE ASSIGNMENT
1. During the term of the Sub -concession Agreement, Keystone intends to raise money
to acquire all interest in the assets of Olympic, including the assignment of the Concession
Agreement to Keystone. Any assignment of the Concession Agreement would have to be
completed by the date of termination of the sub -concession. For purposes of this assignment,
Keystone shall also include any wholly owned subsidiary thereof.
2. Upon assignment of the Concession Agreement, Keystone shall indemnify and hold
Olympic harmless from any and all claims, damages, causes of action, judgments, fees, fines,
costs, expenses and liabilities of whatever nature, including attorney's fees, arising under the
Concession Agreement, including any breach or default in the performance of any obligation to
be performed under the Concession Agreement, or relating to the Premises in any way.
3. Upon assignment of the Concession Agreement, Keystone shall be responsible to the
City for the full and faithful performance of the Concession Agreement, including, but not
limited to, the insurance provisions of Section 8.5 and indemnification provisions of Section 8.6
of the agreement.
4. Pursuant to Section 8.7 of the Concession Agreement, Olympic shall remain
responsible to the City for the full and faithful performance of the Concession Agreement upon
its assignment to Keystone.
III. CITY'S CONSENT TO SUB -CONCESSION AND FUTURE ASSIGNMENT
1. City hereby consents to the sub -concession of the Concession Agreement set forth
herein from Olympic to Keystone. The City's consent to the granting of a sub -concession does
not relieve Olympic of any of the duties and obligations of the Concession Agreement to the
City.
2. City hereby consents to the future Assignment of Concession Agreement from
Olympic to Keystone or a subsidiary thereof. Any assignment shall occur during the term of the
Sub -concession set forth above. If an assignment of the Concession Agreement from Olympic to
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Keystone is not completed by the date of termination of the sub -concession from Olympic to
Keystone as provided in this agreement, this agreement expires and Keystone shall not have any
further interest in this agreement, including, but not limited to, any sub -concession or assignment
of the premises.
3. By executing this Agreement, the City is only consenting to the Sub -concession and
future assignment of the Concession Agreement and does not assume any obligations of Olympic
or Keystone with respect to the Sub -concession or assignment.
4. As noted is Section II(4) above, the City's consent to the granting of an assignment
does not relieve Olympic of any of the duties and obligations of the Concession Agreement to
the City. Provided, however, the City shall relieve Olympic of all obligations and liabilities
under the Concession Agreement upon Keystone's acquisition of the business and Premises from
Olympic and upon approval by the City of a new concession agreement between the City and
Keystone.
IV. EFFECTIVE DATE OF SUB -CONCESSION AND ASSIGNMENT.
1. The sub -concession granted herein shall become effective upon the date this
agreement is fully executed by the parties hereto.
2. The assignment of the Concession Agreement shall become effective upon execution
of written documentation of the assignment, executed by the parties hereto. The City's execution
of such documentation by the Mayor is conditioned upon the Mayor's determination that:
a) Olympic and Keystone are in compliance with the terms and conditions of this
agreement; and
b) Olympic and Keystone are not in default of the Concession Agreement at the
time of assignment.
If the above conditions are not met, further review and approval by City Council is
required.
This Agreement shall be binding upon and shall inure to the benefit of the parties and
their respective heirs, legal representatives, successors, and assigns.
IN WITNESS WHEREOF, this Agreement is executed in duplicate originals on the date fully
executed below.
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STATE OF �[ hi n ✓�
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Public in and for the above state and county, personally a peared :j ni.5 Midael ,
known to me or proved to be the person named in and who executed the foregoing instrument,
and being first duly sworn, such person acknowledged that he or she executed said instrument for
the purposes therein contained as his or her free and voluntary act and deed.
HEIDI J. ABRAMS
NOTARY PUBLIC NOTARY 19JBLIC
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CITY OF BREMERTON
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Patty L Zt, ayor
STATE OF WASHINGTON
COUNTY OF KITSAP
In V**� on the Q�N�� day of , 2014, before me, a Notary
Public in and for the above state and county, personally appeared Patty Lent, Mayor of the City
of Bremerton, the municipal corporation that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said municipal
corporation, for the uses and purposes therein mentioned, and on oath stated that she was
authorized to execute 'd instrument on behalf of said munici corporation.
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Exhibit A
EXHIBIT A
FIRST AMENDED
CONCESSION AGREEMENT BETWEEN THE CITY OF BREMERTON
AND OLYMPIC SOCCER & SPORTS CENTER, LLC
This First Amended Concession Agreement between the City of Bremerton (CITY) and Olympic
Soccer & Sports Center, LLC (CONCESSIONAIRE) specifically amends the Concession
Agreement entered into between the parties on June 20, 2001 ("Concession Agreement")
collectively referred to hereinafter as ("Agreement")
WHEREAS, CONCESSIONAIRE desires to construct an addition to the current structure to add
a second indoor playing field to the facility, and
WHEREAS, the CITY has agreed to amend the Concession Agreement to grant additional space
to the concession for the second indoor playing field,
NOW, THEREFORE, for valuable consideration and by mutual consent of the parties, the
Concession Agreement is hereby amended and replaced in its entirety to read in full as follows:
ARTICLE 1. CONCESSION.
1.1 Concession of Premises.
1.1.1 Premises Described. CITY hereby grants a ground and use concession to
CONCESSIONAIRE for the Premises, approximately fifty thousand square feet (50,000 sq. ft.)
of land (hereinafter referred to as "Concession Area") within the confines of the Pendergast
Regional Park and legally described in Exhibit A attached hereto and incorporated by reference.
This concession is granted for the development, construction, maintenance and operation, for
profit, of an indoor athletic facility consisting a permanent structure of approximately fifty
thousand square feet (50,000 sq. ft.) ) as well as for related fixtures, appurtenances, parking and
exterior landscaping (hereinafter referred to as "Improvements"), and generally shown in the
preliminary building and site plan in Exhibit B attached hereto and incorporated by reference.
(Collectively referred to as "Premises") Premises does not include the fee ownership or leasehold
interest of the real property upon which the Premises are located.
CONCESSIONAIRE hereby agrees to the terms and conditions of this Agreement. The
PARTIES agree that upon the date of execution of this First amended Concession Agreement,
the Premises consists of permanent structure of approximately thirty thousand square feet
(30,000 sq. ft.) and related improvements, and that the CONCESSIONAIRE intends to construct
an addition of approximately twenty thousand square feet (20,000 sq. ft.) to the current structure
to add a second indoor playing field to the Premises ("Second Field"). The PARTIES further
agree that any and all current or future development and construction of Improvements on the
Premises are owned by CONCESSIONAIRE subject to any security interest of lender, if any,
and subject to the CITY's right, title and interest at the expiration or termination of this
Agreement pursuant to Article 2.4.
The common address of the Premises is 1199 Union Avenue Bremerton VVA, 98312.
1.1.2 Right of Entry. In addition to the Premises described above, the CITY grants
CONCESSIONAIRE 1) a Right of Entry for ingress and egress to and from the public right-of-
way (Union Avenue) over and upon the City parks properties and roadway to access the
Premises and 2) a 15 foot Right of Entry buffer adjacent to and abutting above described
Concession Area for maintenance and repair of the Improvements as identified in Exhibit B,
(Collectively "Rights of Entry"). CONCESSIONAIRE's use of the Rights of Entry granted
herein shall not be used in a manner inconsistent with or interfere with the CITY's use of the
property. CONCESSIONAIRE shall not install any structures or other improvements on the
Rights of Entry without the CITY's prior written approval. Such approval shall be at the CITY's
sole discretion. The Rights of Entry shall terminate upon the expiration or termination of this
Agreement.
1.2 Possession, Quiet Enjoyment & Covenants.
Except as provided in Articles 3 & 4.3 herein, the CONCESSIONAIRE shall be entitled
to exclusive possession of the Premises upon commencement of the development and
construction of the Premises as defined by Article 5.4 herein. Upon taking possession of the
Premises, and on performing all the covenants and conditions herein, the CONCESSIONAIRE
shall peaceably and quietly have, hold, and enjoy the Premises at all times during the full term of
this Agreement. Every covenant in this Agreement shall be deemed and treated to be a covenant
running with the Premises during the full term of the Agreement, and shall extend to the heirs,
legal representatives, successors, and assigns of the PARTIES. No change in CITY's ownership
of the Premises, or rights to the payments hereunder, however accomplished, shall operate to
enlarge the obligations or reduce the rights of CONCESSIONAIRE. No change in CITY's
ownership of the Premises shall be binding upon CONCESSIONAIRE for any purpose until
CONCESSIONAIRE shall have been given notice thereof.
ARTICLE 2. TERM OF AGREEMENT
2.1 Term. The term of this Agreement shall be fifteen (15) years, commencing June 20, 2001,
the EFFECTIVE DATE of this Agreement.
2.2 Option to Renew. The CITY agrees to offer the CONCESSIONAIRE three (3) successive
ten (10) year options to renew this Agreement, contingent upon
1) CONCESSIONAIRE remaining in full compliance with the terms and conditions
of this Agreement and
2) the CITY accepting the level of insurance coverage required in Article 8.5.2 for
each new ten (10) year term exercised by CONCESSIONAIRE, which acceptance will not be
unreasonably denied. Each ten (10) year option to renew shall renew automatically unless
CONCESSIONAIRE gives the CITY prior written notice of its desire not to renew or the CITY
gives CONCESSIONAIRE prior written notice of CONCESSIONAIRE's failure to be in full
compliance with the terms and conditions of this Agreement in which case the
CONCESSIONAIRE shall be given the opportunity to cure such default pursuant to Article 7.2.
The CONCESSIONAIRE may terminate this Agreement at any time with prior written notice to
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the CITY. The CITY may request a review of insurance coverage required in Article 8.5.2
pursuant to Article 3.1.2. The CITY may request CONCESSIONAIRE to cure any default and
come into full compliance with the terms and conditions of this Agreement at any time pursuant
to Article 7.2. The failure of CONCESSIONAIRE to provide prior written notice not to renew
or failure of the CITY to accept the level of insurance coverage or cure any default or request full
compliance with the terms and conditions of this Agreement shall not constitute a waiver by
either party.
2.3 Right of First Refusal. Upon the expiration of all terms of this Agreement,
CONCESSIONAIRE shall have a Right of First Refusal for a new Concession but this right shall
only extend to the right to operate a recreation facility similar in scope to the uses identified and
authorized in Article 4.1.1 of this Agreement and only if the CITY requests such use in its
solicitation for a concessionaire for the Premises. If the City desires a different use for the
Premises, then CONCESSIONAIRE shall not have a Right of First Refusal.
2.4 Improvements -Expiration or Termination of Agreement. Upon the expiration of the
term(s) of this Agreement or upon the termination of this Agreement, other than as a result of
condemnation proceedings, the then existing Improvements on the Premises will become the
property of and owned by the CITY and the CITY shall have all right, title and interest in the
same.
ARTICLE 3. CONSIDERATION
3.1. Consideration for Concession.
3.1.1 Cash and Premises Use. As consideration for the ground and use concession
granted by the CITY to the CONCESSIONAIRE by Article 1 herein, the CONCESSIONAIRE
shall provide fair and equitable compensation to the CITY in the form of cash payments and
hours of use of the Premises, subject to Article 3.1.4 of this Agreement. Premises use by the
CITY shall be governed by Article 3.3 herein. Consideration shall be established pursuant to a
formula including the square footage value of the Concession Area, parking use, outdoor lighting
costs and hours of use of the Premises by the City as set forth in Exhibit C. Based upon Exhibit
C, the CONCESSIONAIRE shall provide the CITY with an annual total of 150 hours of
Premises use and further shall pay the CITY One Thousand Dollars and No Cents ($1000.00) per
month beginning on the first full month following the month a certificate of occupancy is issued
to CONCESSIONAIRE for the Second Field. The Premises use shall be per hour per field; said
kinds of use to be determined at the sole discretion of the CITY. The monthly cash payment shall
be adjusted every year during the term(s) of this Agreement based upon the prior years'
Consumer Price Index (CPI) for all urban consumers as published by the United States
Department of Labor for Seattle -Tacoma -Bremerton, all items (1982-84-100). For purposes of
the CPI adjustment, the base shall be the June 2006 CPI index June to June every year (i.e. June
2006- June 2007). The CPI adjustment shall occur on the following January 15` of each year
during the term of this Agreement. No adjustment, whether an increase or a decrease, shall
exceed two percent (2%) annually. CONCESSIONAIRE shall make this payment to the City by
the fifteenth day of the month following the end of each month. CONCESSIONAIRE may
prepay these monthly payments on a quarterly, semi-annual or annual basis or as otherwise
approved by the CITY.
3.1.2 Re -Opener of Compensation and Insurance Coverage. At any time within
180 days prior to the beginning of each ten (10) year term or any time after the beginning of any
ten (10) year term, either party may request a re -opener of the consideration and leasehold tax set
forth in Article 3 and the insurance coverage required in Article 8.5.2. The parties acknowledge
that it is the intent to provide no more than one re -opener for each ten (10) year term, or
remaining portion thereof if notice to re -open is given after the beginning of the new term, unless
the parties mutually agree to additional re -openers. Upon such request, the parties will, in good
faith, review the consideration, leasehold tax and/or insurance coverage, and further, negotiate
and make appropriate adjustments to reflect changes in market values and use of the Premises
using as the basis the date and the consideration, leasehold taxes, insurance coverage, use of
Premises and other relevant factors which established the figures requested to be reviewed. In
the event the PARTIES cannot reach an agreement following review and negotiation, the
PARTIES agree to mediate the issues in dispute.
3.1.3 Leasehold Excise Tax. Pursuant to RCW 82.29A.020(1), concessions fall within
the definition of leasehold interest, therefore, even though this Agreement is not for a lease, it is
still subject to the leasehold tax set forth in Chapter 82.29A RCW. Accordingly,
CONCESSIONAIRE agrees to pay, in addition to other taxes and fees pursuant to Article 8.4.2,
the leasehold excise tax pursuant to Chapter 82.29A RCW. The tax will be based on the current
value of use of the property through this Agreement (concession rate value) as set forth in
Exhibit C in the amount of $21,000.00 per year. Since partial consideration to the City for this
property use consists of hours of field use at the Premises established through a formula based
upon the current hourly value of field use, no adjustments will be made for the property use or
value of field use during the term(s) of this Agreement. Therefore, for purposes of assessment
and payment of the leasehold tax only, the value of the use of the property ($21,000.00) will be
adjusted every five years during the term(s) of this Agreement based upon the prior five years'
Consumer Price Index (CPI) for all urban consumers as published by the United States
Department of Labor for Seattle -Tacoma -Bremerton, all items (1982-84-100) For purposes of
the CPI adjustment, the base shall be the June 2002 CPI index June to June every five years (ie.
June 2002- June 2007). The CPI adjustment shall occur on the following January 1st of each year
during the term of this Agreement. No adjustment, whether an increase or a decrease, shall
exceed two percent (2%) annually. In addition, CONCESSIONAIRE agrees to pay when due, the
leasehold excise tax, or any additional assessments thereto, with respect to any payment or
obligation hereunder, which is deemed by the State of Washington to be taxable rent under said
chapter and to indemnify and hold the City harmless from the same.
CONCESSIONAIRE shall pay quarterly to the City by the fifteenth day of the month
following the end of each quarter, or as otherwise required by the State of Washington, the
amount of the leasehold tax owing. CONCESSIONAIRE may prepay these quarterly payments
on a semi-annual or annual basis or as otherwise approved by the CITY.
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3.1.4 Reversion of Second Field Concession Area and Compensation. Unless
otherwise agreed to in writing, in the event, the CONCESSIONAIRE is not issued a Certificate
of Occupancy for the Second Field by December 31, 2007, the Concession Area as defined in
Article 1.1.1 shall automatically revert to the original 30,000 square foot Concession Area
defined in the Concession Agreement entered into between the parties on June 20, 2001 plus a 15
foot Right of Entry buffer adjacent to and abutting said 30,000 square feet Concession Area for
maintenance and repair of the Improvements as identified in Article 1.1.2 of this Agreement. In
addition, the consideration set forth in Article 3.1.1 of this Agreement shall revert to the original
annual compensation of 182 hours of PREMISES use as identified in Article 3.3 of the June 20,
2001 Concession Agreement and no cash payments.
3.2 Athletic Equipment/Personal Property Use. Premises use by the CITY received as
consideration for this Agreement does not include the use by the CITY of any of the
CONCESSIONAIRE's athletic equipment or other personal property. Use by the CITY of any of
the CONCESSIONAIRE's athletic equipment or other personal property will be negotiated
separately between the CITY and the CONCESSIONAIRE and is outside the scope of this
Agreement.
3.3 Timing of Premises Use by CITY. The consideration paid by the CONCESSIONAIRE in
the form of Premises use by the CITY shall commence accruing from the EFFECTIVE DATE of
this Agreement. It is mutually understood and agreed that the CITY can receive its full annual
compensation of 150 hours of Premises use at any time during the 12 month period -beginning
with the EFFECTIVE DATE of this Agreement and every 12 month period thereafter.
3.4 Premises Use by CITY.
3.4.1. Types of Use. The hours of Premises use provided by the CONCESSIONAIRE to
the CITY in consideration for this Agreement are intended to provide recreational opportunities
of a suitable and compatible nature for the residents of the CITY as part of the Parks and
Recreation programs. Such Premises use by the CITY shall be without cost to the CITY to the
extent of the 150 hours annually, pursuant to Article 3.2 herein.
3.4.2 Maintenance & Utility Costs/Clean-Up After Use. The CONCESSIONAIRE
shall be responsible for all overhead costs, including the utilities and general maintenance, of the
Premises during the use of the Premises by the CITY. The CITY agrees to clean-up the Premises
after each CITY use.
3.4.3 Damage, Claims, & Liability. The CITY shall be responsible for all damage or
claims that may arise out of the Premises use by any of the CITY's employees, agents, guests, or
invitees. The CITY, during such periods of use, shall supervise or cause the CITY's employees,
agents, guests, or invitees to be supervised. The provisions for mutual indemnity, hold harmless,
and liability insurance pursuant to Articles 8.5 & 8.6 herein apply during Premises use by the
CITY.
3.5 Scheduling Premises Use by CITY. The CITY and the CONCESSIONAIRE shall meet at
times as necessary, to determine how such Premises use hours shall be allocated to the CITY in
the upcoming quarter in accordance with the following provisions.
3.5.1 Spring and Summer Quarters. The CITY shall have the full discretion to
determine which hours of Premises use the CITY intends to use during the Spring quarter (April,
May, & June) and Summer quarter (July, August, & September) of each year. At the CITY's
discretion, the CITY has the right to schedule its full annual compensation of 150 hours of
Premises USE during the Spring and Summer quarters.
3.5.2 Fall and Winter Quarters. The CONCESSIONAIRE shall have the full discretion
to determine which hours of Premises use the CONCESSIONAIRE intends to use during the Fall
quarter (October, November, & December) and Winter quarter (January, February, & March) of
each year. The CONCESSIONAIRE has the right to schedule the CITY's remaining
compensation, if any, of Premises USE not previously scheduled by the CITY during the Spring
and Summer quarters.
3.6 CITY's Increased Premises Use. The CITY shall have the full discretion to determine
which hours of the CITY's Premises use will be accounted against the CITY's annual
compensation of 150 hours. The CITY may increase its hours of Premises use beyond its annual
compensation by paying to the CONCESSIONAIRE an hourly rate then in effect by the
CONCESSIONAIRE and with scheduling at the discretion of the CONCESSIONAIRE.
ARTICLE 4. USE & OPERATION OF PREMISES
4.1 Use of Premises
4.1.1 Indoor Athletic and Recreational Uses. The CONCESSIONAIRE will use and
occupy the Premises throughout the full term of this Agreement for the purpose of providing
indoor athletic, educational, entertainment, community activities, and recreational opportunities,
all related to the operation of an indoor recreation facility. CONCESSIONAIRE shall take
reasonable precautions in securing the Premises during the full term of this Agreement.
4.1.2 Incidental Uses. The CONCESSIONAIRE may provide concessions in the form
of food and beverage and the sale of incidental items directly related to the use of the recreation
facility including, but not limited to, gym equipment, soap, shampoo, and similar shower
supplies, and clothing related to athletic pursuits.
4.1.3 Security and Nuisance During Use. The CONCESSIONAIRE shall take
reasonable precautions in securing the Premises during the full term of this Agreement. The
CONCESSIONAIRE shall use the Premises for no unlawful purposes and shall not use or
occupy the Premises in any manner, which would constitute a public nuisance or violate State or
CITY laws.
4.2 Operating Hours. The availability of recreational opportunities for CITY residents is a
material consideration for this Agreement. Accordingly and during the full term of this
Agreement, the CONCESSIONAIRE shall continuously conduct and carry on the
CONCESSIONAIRE'S permitted uses and shall keep the Premises open for business and cause
the CONCESSIONAIRE'S business to be conducted therein during the usual business hours of
each and every business day as mutually agreed upon. This provision shall not apply if the
Premises should be closed and the business of CONCESSIONAIRE is temporarily suspended on
account of labor strikes, lockouts, or similar causes beyond the reasonable control of
CONCESSIONAIRE, or for maintenance, remodeling, repair, or renovation as approved by the
CITY in writing (including approvals of any construction schedules.) The CONCESSIONAIRE
covenants and agrees to provide sufficient personnel, and to keep the Premises adequately
stocked with merchandise, recreational equipment, fixtures, and facilities so as to conduct its
business in accordance with sound business practice. The CONCESSIONAIRE, in order to keep
its business commitments, shall be in operation in accordance with sound business practice.
4.3 Entry by CITY. CITY may enter the Premises at all times to inspect; provide services
required hereunder; post notices of CONCESSIONAIRE's noncompliance with the provisions of
this concession, all without being deemed a constructive eviction. Any person or persons who
may have an interest in the purpose of CITY's visit may accompany CITY. CITY has the right to
use any and all means that CITY deems proper to open doors and gates in an emergency in order
to obtain entry to the Premises.
4.4 Health Inspections. CONCESSIONAIRE shall not knowingly commit or willfully permit to
be committed any act or thing contrary to the rules and regulations prescribed by the local board
of health, or which shall be contrary to the laws, rules or regulations of any federal, state or
municipal authority. CONCESSIONAIRE shall allow the Bremerton-Kitsap County Health
Department to make regular and ordinary inspections of the Premises as said health department
may deem proper.
4.5 Maintenance, Repair, & Improvements
4.5.1 Maintenance. CONCESSIONAIRE shall, at its sole cost and expense, clean and
maintain the Premises, and make repairs, restorations, and replacements to the Premises,
including without limitation the heating, ventilating, air conditioning, mechanical, electrical, and
plumbing systems, structural roof, walls, and foundations, roof coverings, sprinkling and
irrigation systems, playing surfaces and the fixtures and appurtenances to the Premises as and
when needed to preserve them in "first class" condition and repair (less normal wear from use)
throughout the full term. CONCESSIONAIRE shall further keep in repair and maintain as
necessary all machinery, equipment and facilities necessary for the playing of sports and the
comfort of players. CONCESSIONAIRE shall paint the exterior of the buildings (except the
metal) with such frequency as may be required to maintain their good, clean appearance. All
such repairs, restorations, and replacements will be in quality and workmanship at least equal to
the original work or installations. If CONCESSIONAIRE fails to make such repairs, restorations,
or replacements, CITY may make them at the expense of CONCESSIONAIRE and such expense
will be paid by CONCESSIONAIRE within fifteen (15) days after delivery of a statement for
such expense.
4.5.2 Sidewalks Maintenance. At its sole cost and expense, CONCESSIONAIRE shall
maintain any sidewalks on the Premises in good and presentable condition during the full term of
this Agreement, shall be responsible for correcting any unsafe conditions, and shall be
responsible for the removal of ice and snow from the sidewalks.
4.5.3 Janitorial Services. At its sole cost and expense, CONCESSIONAIRE shall keep
the Premises clean, and shall provide sufficient janitorial services to maintain a tidy appearance
on and about the Premises. CONCESSIONAIRE shall provide landscaping maintenance
services, as applicable such that landscaping on the Premises remains healthy, attractive, and
well maintained.
4.5.4 Repair of Damage. In the event any damage or injury shall occur to the Premises
of any kind or nature whatsoever, CONCESSIONAIRE shall promptly cause said damage or
injury to be fully repaired at CONCESSIONAIRE'S own cost and expense. In the event
CONCESSIONAIRE fails to accomplish such repairs within fifteen (15) days of receipt of
written notice by the CITY, then in that event CITY may, but is not required to, enter the
Premises and accomplish such repairs and bill CONCESSIONAIRE who will pay the bill within
fifteen (15) days after delivery of a statement for such expense.
4.5.6 Improvements. The CONCESSIONAIRE shall be solely responsible for providing
adequate funding for any alterations or improvements as provided in this Agreement and such
alterations or improvements shall be made without cost to the CITY.
4.5.7 Alterations of Premises after Construction. After such time as the Premises have
been completed and accepted as defined above, the CONCESSIONAIRE shall not make any
material alteration to the Premises including any changes to the landscaping, without the CITY'S
prior written consent.
4.6 Signs. CONCESSIONAIRE may place and maintain signs upon the Premises in accordance
with applicable sign and zoning codes of the CITY.
4.7 Utilities.
4.7.1 Utility Services and Expense. The CONCESSIONAIRE will pay for all water,
gas, garbage, sewage, electricity, telephone, and other utilities and communications services used
by CONCESSIONAIRE on the Premises, whether or not such services are billed directly to
CONCESSIONAIRE. CONCESSIONAIRE will also procure, or cause to be procured, without
cost to the CITY, any and all necessary permits, licenses, or other authorizations required for the
lawful and proper installation and maintenance upon the Premises of utility appurtenances and
appliances for use in supplying such utilities and services to and upon the Premises. The CITY,
upon request of CONCESSIONAIRE, and at the sole expense and liability of the
CONCESSIONAIRE, will join with CONCESSIONAIRE in any application required for
obtaining or continuing any such services, provided that such services do not violate any other
applicable provision of this Agreement. The CITY shall not be held liable for any injury, loss, or
damage caused by or resulting from any interruption or failure of utility services due to any
cause whatsoever, except the CITY's sole negligence. CONCESSIONAIRE shall not be entitled
to any offset, reduction, or return of consideration as a result of any interruption or failure of
services.
4.7.2 Trash & Garbage. The CONCESSIONAIRE shall place all trash and garbage into
such areas and containers as are designed and intended to accommodate the trash and garbage
generated within or on the Premises. The CONCESSIONAIRE shall not allow trash and/or
garbage to accumulate such that a nuisance or health hazard results.
4.8 Parking. The CITY will be responsible to provide adequate parking to support the Premises
and its operations.
4.9 Hazardous Substances.
4.9.1 Definition. As used herein, the term "Hazardous Substance" means any hazardous,
toxic, or dangerous substance, waste, or material, which is or becomes regulated under any
federal, state, or local statute, ordinance, rule, regulation, or other law now or hereafter in affect
pertaining to environmental protection, contamination, or cleanup.
4.9.2 Information. CONCESSIONAIRE shall keep upon the Premises, in a location
accessible to CITY, on request during normal business hours, copies of all reports regarding
hazardous or toxic materials in the Premises that CONCESSIONAIRE has provided to any
governmental agency in the previous quarter. CONCESSIONAIRE shall, upon request and at
CONCESSIONAIRE'S expense, provide CITY with a copy of any such report as to which CITY
request a copy. In the event of any accident, spill, or other incident involving hazardous or toxic
matter that CONCESSIONAIRE is required to report to any governmental agency,
CONCESSIONAIRE shall immediately report the same to the CITY and supply CITY with all
information and reports with respect to the same, together with CONCESSIONAIRE'S clean-up
or remediation plan and schedule. If such clean-up or remediation plan is not acceptable to CITY
in CITY'S sole discretion, CITY may so notify CONCESSIONAIRE and, upon 48 hours prior
written notice (or without notice if so required by an emergency) may enter on the Premises to
conduct the cleanup or remediation and charge CONCESSIONAIRE the costs thereof. All
information described herein shall be provided to CITY regardless of any claim by
CONCESSIONAIRE that it is confidential or privileged, provided that the CITY shall not
publish or disclose the information to any third party except as pursuant to Chapter 42.56RCW.
4.9.3 Indemnification. CONCESSIONAIRE agrees to hold harmless, protect,
indemnify, and defend CITY from and against any damage, loss, claim, or liability,
INCLUDING Attorney's fees and costs, resulting from CONCESSIONAIRE'S use, disposal,
transportation, generation, and/or sale of any Hazardous Substances. The CITY agrees to hold
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harmless, protect, indemnify, and defend CONCESSIONAIRE from and against any damage,
loss, claim, or liability, including attorney's fees and costs, resulting from (a) Hazardous
Substances existing on the Premises as of the EFFECTIVE DATE of this Agreement; or (b)
Hazardous Substances thereafter used, disposed of, or generated on the Premises by the CITY.
These indemnities will survive the termination of this Agreement, whether by expiration of the
Term or otherwise.
4.10 Risk of Loss. All personal property of any kind or description whatsoever in the Premises
shall be at the CONCESSIONAIRE's sole risk, and CITY shall not be liable for any damage
done to, or loss of, such personal property. However, CONCESSIONAIRE is not responsible for
losses or claims of stolen property under the care and contol of the CITY during the CITY'S use
periods.
ARTICLE 5. DESIGN & CONSTRUCTION OF PREMISES
5.1 Design. The CONCESSIONAIRE shall retain a licensed architect or licensed professional
engineer, registered in the State of Washington (hereinafter referred to as the DESIGN
ENGINEER), who shall design the indoor athletic facility, the Second Field and other related
Improvements. The CITY shall have the right to approve the final design of the Improvements
and shall have a continuing right to approve the exterior color of any structure on the Premises.
CONCESSIONAIRE shall comply with the Americans with Disabilities Act of 1990 (ADA) in
the design, construction, and operation of the Premises.
5.2 Building & Site Plans. The CONCESSIONAIRE shall retain a licensed architect or licensed
professional engineer, registered in the State of Washington, to prepare building and site plans for
the Premises, which shall reference the structure, the Second Field and other related
Improvements, utilities generally, and landscape plan as applicable. The CITY shall have the
right to approve the final building and site plans.
5.3 Construction/Site Work/Fencing. The CONCESSIONAIRE shall be solely responsible for
all development and construction of the Premises and hold the CITY harmless from any and all
claims arising out of the development and construction of the Premises pursuant to Article 8.6
herein. CONCESSIONAIRE shall be responsible for the site work, all required permits and
grading. CONCESSIONAIRE shall properly barricade the work area and install signage
directing unauthorized person from entering onto the building site during any phase of
development or construction. Unless otherwise agreed fencing shall be placed around the work
area. In addition, the building site shall be kept in a clean and organized condition during
development periods. CONCESSIONAIRE shall be responsible for site security, traffic and
pedestrian warnings at the site during the development and construction phases.
5.4 Construction Deadlines. CONCESSIONAIRE shall be required to commence development
and construction of the Second Field within six months of the EFFECTIVE DATE of this
Agreement. Commencement of development and construction of the Second Field is defined as
that date upon which physical movement or grading of the soil in preparation for construction of
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any structure on the Premises. CONCESSIONAIRE shall be required to complete the
development and construction of the Premises within one year of the EFFECTIVE DATE of this
Agreement. Completion of the development and construction of the Second Field is defined as
that date upon which all final occupancy permits are obtained by the CONCESSIONAIRE.
5.5 Failure to Meet Construction Deadlines/Time of Essence. Except as provided in Article
8.15 herein, it is mutually understood and agreed that failure by the CONCESSIONAIRE to meet
the development and construction deadlines shall constitute a material breach of this Agreement
by the CONCESSIONAIRE and the CITY, at its option, can terminate this Agreement for cause
pursuant to Article 7. Time is of the essence with this Agreement.
5.6 Stormwater Drainage, Sewer, & Water Lines. The CONCESSIONAIRE will be
responsible for relocating storm drains, sewers, and water lines to the Premises, as required to
complete any development and construction of the Premises.
5.7 Development and Construction Fees & Expenses, The CONCESSIONAIRE shall be
responsible for obtaining and paying for necessary permits, fees, and expenses associated with
the development and construction of the Premises. In addition, CONCESSIONAIRE shall be
responsible for any additional costs for inspections billed to the CITY by any government
agency, including but not limited to the City of Bremerton, Kitsap County, or the State of
Washington.
5.8 Escrow Requirements To Ensure Performance of Contractors. It is mutually understood
and agreed that the CONCESSIONAIRE will, prior to the commencement of development and
construction of the Premises pursuant to Article 5.4 herein, place into escrow funds sufficient to
ensure contractor performance through completion of construction and development of the
Premises.
5.9 Not a Public Works Project. The development and construction of the Premises is not a
public works project requiring the payment of prevailing wages. CONCESSIONAIRE is the
developer and the CITY is not an owner, partner, joint venturer, nor maintains any other business
relationship with the CONCESSIONAIRE regarding the Premises other than as grantor of a
concession and user of the Premises. The CITY is not involved with, nor has any responsibilities
for, the biding, contracting or operations of the Premises and will occupy no space in the
Premises. The CONCESSIONAIRE does not deem itself required to pay prevailing wages nor
will the CONCESSIONAIRE be obligated to pay or to contract for prevailing wages or any other
standard of payment controls associated with this project. This provision is a material part of the
consideration for this Agreement. The project signage and all literature, advertising by either the
CITY or CONCESSIONAIRE shall not indicate in any manner that this is a CITY project,
contract, or other misleading statement indicating that this project is a public work project
directly or indirectly.
5.10 No Liens. Except liens and encumbrances of any lender pursuant to Article 6 herein, it is
mutually understood and agreed that the CONCESSIONAIRE shall have no authority, express or
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implied, to create or place or to allow to be created or placed any lien or encumbrance of any
kind or nature whatsoever upon, or in any manner to bind, the interest of the CITY in the
Premises or to charge the rentals payable hereunder for any claim in favor of any person dealing
with CONCESSIONAIRE, including those who may furnish materials or perform labor for any
construction or repairs, and each such claim shall affect and each such lien shall attach to, if at
all, only the right and interest granted to CONCESSIONAIRE by this Agreement. If any such
liens are filed, CITY may, without waiving its rights and remedies for breach, and without
releasing CONCESSIONAIRE from its obligations hereunder, require CONCESSIONAIRE to
post security in form and amount reasonably satisfactory to CITY or cause such liens to be
released by any means CITY deems proper, including payment in satisfaction of the claim giving
rise to the lien. CONCESSIONAIRE shall pay to CITY upon demand any sum paid by CITY to
remove the liens. Further, CONCESSIONAIRE agrees that it will save and hold the CITY
harmless from any and all loss, cost, or expenses based on or arising out of the asserted claims or
liens, except those of the lender, against this Agreement or against the right, title, and interest of
the CITY in the Premises or under the terms of this Agreement, including reasonable attorney's
fees and costs incurred by CITY in removing such liens, and in enforcing this paragraph.
Additionally, it is mutually understood and agreed that this paragraph is intended to be a
continuing provision applicable to future repairs and improvements after the initial construction
phase.
ARTICLE 6. FINANCING & SECURITY INTERESTS
6.1 Financing - No CITY Obligation. CONCESSIONAIRE shall be solely responsible for all
financing requirements for all construction, maintenance, repairs, or subsequent improvements to
the Premises. The CITY shall be under no obligation directly or indirectly to pay for any labor,
material, or improvement associated with the facility except as provided herein or mutually
agreed upon. The CONCESSIONAIRE shall, in applying and obtaining financing, inform any
lender that the CITY has no financial obligations associated with the construction, maintenance,
repairs or subsequent improvements to the Premises.
6.2 Security Interest in Premises & Agreement/Consent. The CITY consents to the grant,
transfer, pledge and assignment of any and all right, title, claim, interest of CONCESSIONAIRE
in and to this Agreement and in the Premises, and in any building facility, personal property and
fixtures in the Premises ("Collateral") to lender for financing purposes. The CITY shall
recognize lender's first priority security interest in the Collateral and the CITY hereby
subordinates any and all interest of the CITY in said Collateral to lender. CONCESSIONAIRE
acknowledges that the CITY will not grant any security interest to any lender in CITY real
property nor will the CITY allow any encumbrance of any kind or nature whatsoever upon, or in
any manner on its title to CITY real property. In the event of default by CONCESSIONAIRE to
lender, in addition to all its rights and remedies available at law and equity, lender may enforce
and/or foreclose its security interest/interests in the Collateral. CITY agrees that in connection
with any such default, and all without further consent of CITY, lender may;
a. Acquire CONCESSIONAIRE'S interest in the Collateral either by a deed in lieu of
foreclosure or actual foreclosure;
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b. Rent and/or grant a ground and use concession of the Premises subject to this Agreement
pending foreclosure of the Collateral by lender;
c. Assign, sell and/or transfer the Collateral in whole or in part to any person or entity;
d. Take possession of any or all of the Collateral, obtain right of substitution for
CONCESSIONAIRE and operate said Collateral; and/or
e. Appoint a receiver.
Any assignment or transfer under Article 6.2 is subject to Article 8.7. Lender shall have
no interest in improvements located on the Premises at the time of expiration of the term or terms
of this Agreement pursuant to Article 2, at which time, all improvements shall become the
property of the CITY.
6.3 LENDER's Reliance on Term and Renewal Options. The City acknowledges that the
CONCESSIONAIRE, in making application for financing, may be required to have an assurance
that the terms of this Agreement will extend beyond the term of the financing term. By its
signature to this Agreement, the CITY confirms its authority to provide the ten-year Agreement
term with three options to extend the ten-year Agreement for a total of forty years with the
renewal options conditioned solely upon the CONCESSIONAIRE maintaining current payments
and remaining in full compliance with the terms and conditions of this Agreement. Lender may,
but is not obligated to exercise the right to renew and extend the terms of this Agreement as set
forth herein. Additionally, the CITY acknowledges that, after any original financing
commitments by the CONCESSIONAIRE have been satisfied, these financing provisions shall
be applicable to all future advances or financing required by the CONCESSIONAIRE and used
solely for the improvements and repairs of the Premises.
6.4 Surrender of the Collateral. No surrender of Collateral or the Premises subject to this
Agreement or any other act of CONCESSIONAIRE shall be deemed to terminate this
Agreement. CITY will not terminate this Agreement voluntarily by agreement with
CONCESSIONAIRE unless lender has been previously notified in writing and has consented to
the termination in writing. This Agreement shall not be amended or modified unless lender has
been previously notified in writing and has consented to such amendment or modification in
writing.
6.5 Notice of Default and Lender's Rights.
6.5.1 Notice of Default. If CONCESSIONAIRE defaults under this Agreement or if any
event occurs which would give CITY the right to terminate, modify, amend or shorten the term
of this Agreement, CITY shall take no steps to exercise any right it may have under this
Agreement without first giving lender written notice of such default in accordance with Article
6.11 below. A copy of each and every notice of default served or sent by CITY or its agent to or
upon CONCESSIONAIRE pursuant to this Agreement shall be sent contemporaneously to
lender in accordance with Article 6.11 below. Such notice of default shall specify the event or
events of default then outstanding and the time period at the end of which the indicated action
would become effective.
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6.5.2 Termination for Monetary Default. If the notice of default given by CITY to
lender relates to a monetary default and CONCESSIONAIRE has not cured such monetary
default within 30 days after lender receives the notice and CONCESSIONAIRE'S failure to cure
results in CITY desiring to terminate this Agreement, CITY may terminate this Agreement
pursuant to Article 7 if such monetary default is not cured by either CONCESSIONAIRE or.
lender within forty-five (45) days after lender receives the notice of default.
6.5.3 Termination for Non -Monetary Default. If the notice of default given by CITY
to lender relates to a non -monetary default and CONCESSIONAIRE has not cured, or diligently
pursued curing, such non -monetary default within thirty (30) days after lender receives the
notice, CITY shall take no action to terminate this Agreement if:
a. Within sixty (60) days after CITY'S notice to lender regarding CONCESSIONAIRE'S
failure to cure (or failure to diligently pursue a cure) lender notifies CITY of its intent to
realize upon its security interest and commences realization within sixty (60) days
thereafter, and diligently pursues realization; and
b. Lender pays CITY at time of notification all monies or performances due that may be in
default up to the day lender notifies CITY of lender's intent and further pays or performs
all consideration that accrues during the period after lender so notifies CITY and
completes such other perfonnances that may be required or come due under this
Agreement.
CITY shall not terminate this Agreement because of CONCESSIONAIRE'S breach of any terms
of this Agreement relating to the solvency of CONCESSIONAIRE or the institution of any
bankruptcy, insolvency, receivership or related action by or against CONCESSIONAIRE as long
as lender cures any default under this Agreement by CONCESSIONAIRE as provided herein,
except that lender shall not be required to cure any defaults relating to solvency of
CONCESSIONAIRE.
6.6 Right to Assign. Lender shall have the right to assign its interest in the Collateral. Upon the
purchaser's, assignee's or transferee's assumption and agreement to perform and be bound by all
of the terms of this Agreement, lender shall be relieved from further liability under this
Agreement. If a lender finances the purchaser, assignee or transferee, said lender shall be subject
to all obligations as set forth in this Agreement. Any successor lender shall be bound by the
terms and conditions of this Agreement. 6.7 Disposition of Insurance
Should the Collateral suffer any loss which is covered by casualty insurance, and the
insurance proceeds are used to restore any improvements made by CONCESSIONAIRE, CITY
agrees that CONCESSIONAIRE and lender shall have the right to such proceeds so long as none
of CITY'S property, utilities or other services therein are damaged or such damages are repaired.
In the event the CITY'S land is substantially damaged and CONCESSIONAIRE'S improvements
have been repaired, CITY shall only participate in the insurance proceeds to the extent necessary
to repair and restore CITY'S land and any of CITY'S improvements on or in the ground to the
same condition the land was at the commencement of this Agreement, or in the same condition at
the time of the casualty. Other than as described herein, CITY shall have no claim to insurance
proceeds that are attributable to CONCESSIONAIRE's interest in the Collateral.
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6.7 Right to Participate in Litigation. Lender shall have the right to participate in any
litigation, arbitration or dispute directly affecting the Collateral or interest of
CONCESSIONAIRE or lender therein, including, without limitation, any suit, action, arbitration
proceeding, condemnation proceeding or insurance claim. CITY, upon instituting or receiving
notice of any such litigation, arbitration or dispute will promptly notify lender of the same.
6.8 Incorporation of Lender's Protection Provisions. Lender shall be a beneficiary of all
rights of CONCESSIONAIRE herein including but not limited to the warranty, indemnity, hold
harmless, choice of law and venue, costs and attorney's fees as provided herein.
6.9 Right to Remove Collateral. In the event lender exercises its rights under its Collateral and
realizes upon the Collateral, CITY agrees that lender is entitled to remove the Collateral,
including but not limited to building facility, furniture, movable trade fixtures and equipment,
from the Premises at any reasonable time and that the Collateral shall remain personal property
even though the trade fixtures may be affixed to or placed upon the Premises. In the event lender
so realizes on its Collateral, CITY waives any right, title, claim, lien or interest in the Collateral.
6.10 Notices. All notices, copies of notices, consents or other communications to lender given
under this Agreement to lender must be in writing and shall be effective when received. Such
communications shall be given in person to an officer of lender, addressed to lender at an address
as provided by lender.
ARTICLE 7. TERMINATION
7.1 Failure to Perform
7.1.1 Obligation to Perform. Nothing herein shall imply any duty upon CITY to do any
work, which under any provision of this concession CONCESSIONAIRE may be required to
perform, and the performance thereof by CITY shall not constitute a waiver of
CONCESSIONAIRE's default. CITY shall not in any event be liable for inconvenience,
annoyance, and disturbance in its activities in the PARK, however shall not permit a loss of
business, or other damage to CONCESSIONAIRE by reason of its actions pertaining to the
PARK.
7.1.2 Payments to Other Parties. Except as otherwise expressly provided hereunder, all
obligations of the CONCESSIONAIRE under this Agreement will be performed by
CONCESSIONAIRE at CONCESSIONAIRE's sole cost and expense. If CONCESSIONAIRE
fails to pay any sum of money owed to any party other than CITY for which
CONCESSIONAIRE is liable hereunder, or if CONCESSIONAIRE fails to perform any other
act on its part to be performed hereunder, and such failure continues for ten days after notice
thereof by CITY, CITY may, without waiving or releasing CONCESSIONAIRE from its
obligations, make any such payment or perform any such other act to be made or performed by
CONCESSIONAIRE. CONCESSIONAIRE shall pay CITY, on demand, all sums so paid by
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CITY and all necessary incidental costs, together with interest thereon at the lesser of 1'/Z percent
per month or the maximum rate permissible by law, from the date of such payment by CITY.
7.2 Default. This Agreement and the concession granted herein may be terminated for default
as follows:
7.2.1 CITY's Default. CITY will not be in default unless CITY fails to perform an
obligation within thirty (3 0) days after notice by CONCESSIONAIRE, which notice must
specify the alleged breach; provided that if the nature of CITY's obligation is such that more
than thirty (30) days are reasonably required for cure, then CITY will not be in default if CITY
commences to cure within thirty (30) days of CONCESSIONAIRE's notice and thereafter
diligently pursues completion and completes performance within a reasonable time.
7.2.2. CONCESSIONAIRE's Default. The occurrence of any one or more of the
following events constitutes a default under this Agreement by CONCESSIONAIRE: (1)
CONCESSIONAIRE shall be in default of the performance of any covenants, conditions, or
Provisions of this Agreement, other than the covenants for the payment of consideration required
by this Agreement, where such failure continues for a period of thirty (30) days after written
notice is given by CITY provided that if the nature of CONCESSIONAIRE's obligations is such
that more than thirty (30) days are reasonably required for cure, CONCESSIONAIRE will not be
in default if CONCESSIONAIRE commences to cure within thirty (30) days of CITY's notice
and thereafter diligently pursues completion and completes performance within a reasonable
time; or (2) CONCESSIONAIRE shall be adjudged bankrupt, make a general assignment for the
benefit of creditors, or take the benefit of any insolvency act, or if a permanent receiver and
trustee in bankruptcy shall be appointed for CONCESSIONAIRE's estate and such appointment
is not vacated within thirty (30) days; or (3) Premises become vacant or deserted for a period of
thirty (30) days; or (4) if this Agreement shall be assigned or the Premises concessioned by
CONCESSIONAIRE other than in accordance with the terms of this AGREEMENT and such
default is not cured within twenty (20) days after written notice to CONCESSIONAIRE; or (5)
CONCESSIONAIRE shall fail to make any payment when due, or fail to make any other
payment required hereunder when due, when that failure is not cured within thirty (30) days after
mailing of written notice thereof by CITY; or (6) CONCESSIONAIRE shall fail to comply with
the same concession term or covenant on three occasions during any 10 year term, even if such
breach is cured within the applicable cure period. The CITY's right to terminate pursuant to this
Article for failure of CONSCESSIONAIRE to cure a default is subject to the lender's right to
cure pursuant to Articles 6.5.2 and 6.5.3.
7.2.3 Default for Other Cause. This Agreement may be immediately terminated for
other cause by a party if the other party substantially fails to perform its obligations under this
Agreement, through no fault of the terminating party, and the non-performing party does not
commence correction of the failure of performance within thirty (30) days of the terminating
party's sending notice to the non-performing party.
16
7.3 Remedies Are Cumulative. Remedies under this Agreement are cumulative; the failure to
exercise on any occasion any right shall not operate to forfeit such remedy.
7.4 Destruction of Premises & Use of Insurance Proceeds. Unless otherwise mutually agreed
by the PARTIES, in the event the Premises are destroyed or injured by fire, earthquake, or other
casualty, then CONCESSIONAIRE shall proceed to rebuild and restore the Premises, or such
part thereof as may be injured as aforesaid. In the event of any loss covered by the insurance
policies described and required pursuant to Article 8.5.1 herein, unless this Agreement shall_be
terminated as provided herein, the proceeds of such insurance policies shall be used by
CONCESSIONAIRE first to rebuild and restore the Premises and replace the improvements,
fixtures, and equipment, which may be damaged or destroyed by such casualty.
7.5 Duties upon Termination. Upon termination of this Agreement, and unless otherwise
arranged, CONCESSIONAIRE shall remove from the PARK all its personal property, goods,
and effects. In the event that the CONCESSIONAIRE fails to perform this duty at termination,
the CITY may cause such removal to be made and said personal property, goods, and effects to
be stored, the cost and expense to be paid by the CONCESSIONAIRE. It is mutually understood
and agreed that the real property constituting the Premises of this Agreement is the real property
of the CITY and that all improvements to said real property shall revert to the CITY at the
termination of this Agreement.
7.6 Eminent Domain. The following rules shall govern the rights and duties of the PARTIES in
the event of interference with the possession of the Premises by CONCESSIONAIRE by right of
eminent domain or private purchase in lieu thereof.
7.6.1 Rights of Termination. If the whole of the Premises shall be taken for any public
or quasi-public use under any statute or by right of eminent domain, or by private purchase in
lieu thereof, then this Agreement shall automatically terminate as of the date that title shall be
taken. If more than twenty-five percent (25%) of the Premises shall be so taken and if the taking
renders the remainder thereof unusable for the purposes for which the Premises were
concessioned, then CITY and CONCESSIONAIRE shall each have the right to terminate this
Agreement on thirty (30) days notice to the other given within ninety (90) days after the date of
such taking. Provided, however, that if the CITY is exercising its rights of eminent domain, a fair
value shall be placed on this Agreement and the Premises with the compensation thereof
awarded solely to CONCESSIONAIRE, or lender pursuant to its security interest, if any.
7.6.2 Non-Termination. If any part of the Premises shall be so taken and this
Agreement is not terminated, then the CITY shall, at its own cost and expense, restore the
remaining portion of the Premises to the extent necessary to render it reasonably suitable for the
purposes for which it was concessioned.
7.6.3 Compensation. The compensation awarded or paid upon such a total or partial
taking of the Premises and/or this Agreement shall belong to and be apportioned between the
CITY and CONCESSIONAIRE in accordance with their respective interests as determined by a
17
court of competent jurisdiction. Additionally, CONCESSIONAIRE may prosecute any claim
directly against the condemning authority for the costs of removal of the goodwill, stock, trade
fixtures, furniture and other personal property belonging to CONCESSIONAIRE. CITY shall
have no claim to condemnation proceeds that are attributable to CONCESSIONAIRE's interest
in the Collateral, nor shall lender gave any interest in CITY's condemnation proceeds, if any.
ARTICLE 8. GENERAL CONDITIONS
8.1 Relationship of PARTIES.
8.1.1 CONCESSIONAIRE Independent Contractor Status. The PARTIES intend
that an independent relationship shall be created by this Agreement. Nothing contained herein
shall create the relationship of principal and agent or of partnership or of joint venture between
the parties hereto, and neither the method of computation of consideration nor any other
provision contained herein shall be deemed to create any relationship between the parties hereto
other than the relationship of CITY as granting a ground and use concession to the
CONCESSIONAIRE. CONCESSIONAIRE has the experience, ability, and resources to develop
and operate an indoor athletic facility and is performing independent functions and
responsibilities within its field of expertise. CONCESSIONAIRE and its personnel are
independent contractors and not employees of the CITY. No agent, employee, servant, or
representative of the CONCESSIONAIRE shall be deemed to be an employee, agent, servant or
representative of the CITY. CONCESSIONAIRE and its personnel have no authority to bind the
CITY or to control the CITY's employees. As an independent contractor, CONCESSIONAIRE
is responsible for its own management. The CITY's administration and enforcement of this
Agreement shall not be deemed an exercise of managerial control over CONCESSIONAIRE or
its personnel.
8.1.2 No Third Party Rights Created. It is mutually understood and agreed that this
Agreement is solely for the benefit of the PARTIES hereto and gives no right to any other party
except as provided by Article 6 herein.
8.1.3 No Joint Venture/Partnership. It is mutually understood and agreed that no joint
venture or partnership formed as a result of this Agreement.
8.2 Notices. Except as provided in Article 6 herein, any notice required or permitted hereunder
must be in writing and will be effective upon the earlier of personal delivery or three days after
being mailed by certified mail, return receipt requested, addressed to CONCESSIONAIRE or to
CITY at the address for that party designated herein. Either party may specify a different address
for notice purposes by written notice to the other, except that CITY may in any event use the
Premises as CONCESSIONAIRE's address for notice purposes. All notices shall be delivered to
the following addresses:
18
CITY Address
City of Bremerton
Attn: Director of Parks and Recreation
680 Lebo Boulevard
Bremerton, WA 98310
CONCESSIONAIRE Address
Olympic Soccer & Sports Center, LLC
Attn: Mr. Dennis Michael, Manager
P.O. Box 5047
Bremerton, WA 98312-0466
8.3 Reports & Information. When requested by the CITY, CONCESSIONAIRE shall furnish
periodic reports and documents on matters covered by this Agreement. The reports and
documents shall be furnished in the time and form requested. CONCESSIONAIRE shall
maintain accounting records in accordance with Generally Accepted Accounting Principles
(GAAP).
8.4 Permits, Licenses, Taxes, & Fees.
8.4.1 Permits, Licenses, & Other Documents. The CONCESSIONAIRE shall possess
a current Bremerton Business License and shall obtain all regulatory licenses and permits,
including all construction and building permits, necessary to fulfill CONCESSIONAIRE's
obligations under this Agreement at CONCESSIONAIRE's sole expense. Each party agrees to
execute such additional or other documents as may be required to fully implement the intent of
this Agreement.
8.4.2 Taxes & Fees. As an independent contractor, the CONCESSIONAIRE shall be
solely responsible for all taxes, fees and charges incurred, including but not limited to license
fees, business and occupation taxes, workers' compensation and unemployment benefits, all
federal, state, regional, county and local taxes and fees, including leasehold excise tax pursuant
Chapter 82.29A RCW, ad valorem taxes, taxes imposed on personal property, all other
assessments for improvements or benefits which are assessed on the Premises, income taxes,
property taxes, permit fees, operating fees, surcharges of any kind that apply to any and all
persons, facilities, property, income, equipment, materials, supplies or activities related to the
CONCESSIONAIRE's obligations under this Agreement. The parties acknowledge that for the
purpose of real estate taxes, the use of the Premises is limited to those uses identified in Article
4.1.1.
8.5 Insurance.
8.5.1 Fire, Earthquake, & Casualty Insurance. The CONCESSIONAIRE agrees that,
at all times during the full term of this Agreement and at its own expense, CONCESSIONAIRE
shall, at its sole cost and expense, maintain in full force and effect adequate fire, earthquake, and
other casualty coverage covering the Premises and its contents, including all personal property,
fixtures, improvements. Such policy shall include a replacement cost endorsement.
CONCESSIONAIRE will shall obtain and file with the CITY's Risk Manager a Certificate of
Insurance evidencing such coverage. All such insurance coverage shall include a ten-day
cancellation notice to CONCESSIONAIRE and the CITY. Adequacy of coverage is defined as
insurance sufficient to restore the Premises to its pre -casualty condition.
19
8.5.2 Liability Insurance. Prior to the commencement date of this Agreement,
CONCESSIONAIRE, at its own expense shall obtain and file with the CITY's Risk Manager a
Certificate of Insurance evidencing general comprehensive liability insurance coverage ("CGL")
providing coverage of at least $1,000,000 per occurrence for bodily injury and $500,000 per
occurrence for property damage. This Certificate of Insurance shall be subject to approval by the
CITY's Risk Manager as to company, terms and coverage, and said approval shall not be
unreasonably withheld. The CGL shall name the CITY as an additional insured and must fully
protect the CITY from any and all claims and risks and losses in connection with any activities
or omissions by the CONCESSIONAIRE by virtue of this Agreement. The CGL policy shall
remain in full force and effect at the CONCESSIONAIRE's sole expense for liability for
property damage or personal injury that may occur in connection with activities or omissions by
the CONCESSIONAIRE, and provide coverage for the full term of this Agreement.
CONCESSIONAIRE shall insure that the CITY's Risk Manager is given thirty -calendar days
prior written notice, by certified mail, of any cancellation, lapse, reduction or modification of
such insurance.
8.5.3 Release and Waiver of Subrogation. Any policy of insurance carried by either
CITY or CONCESSIONAIRE pursuant to any obligation under this Agreement, shall, to the
extent available, contain a waiver of subrogation clause on the part of the insurer. Such waiver
shall apply to damages to adjacent property. Notwithstanding any other provision of this
Agreement, neither CITY nor CONCESSIONAIRE shall be liable to the other party or to any
insurance company (by subrogation or otherwise) insuring the other party for any loss or damage
to any building, structure or tangible personal property of the other occurring in or about the
Premises or PARK, even though such loss or damage might have been occasioned by the
negligence of such party, its agents or employees, if such loss or damage is covered by insurance
issued by an insurance carver authorized or licensed by the Insurance Commissioner of the State
of Washington to issue lines of insurance, benefiting the party suffering such loss or damage or
was required under the terms of this Agreement to be covered by insurance by the party covering
the loss.
8.6 Hold Harmless, Indemnification, & Industrial Insurance.
8.6.1 Hold Harmless & Indemnification. Each party hereto agrees to be responsible
and assumes liability for its own wrongful or negligent acts or omissions, or those of its officers,
agents, or employees to the fullest extent required by law. Each party agrees to save, indemnify,
defend, or hold the other party harmless against all liability, loss, damages, and expenses,
including costs and attorney's fees, resulting from actions, claims and lawsuits arising or alleged
to have arisen, in whole or in part, out of or in consequence of the acts or failures to act of the
other party, its employees, its subcontractors, its agents, or its assigns, which arise in any way
out of the performance of this Agreement. In the case of negligence of both the CITY and the
CONCESSIONAIRE, any damages allowed shall be levied in proportion to the percentage of
negligence attributable to each party, and each party shall have the right to seek contribution
from the other party in proportion to the percentage of negligence attributable to the other party.
20
8.6.2 Industrial Insurance. The PARTIES have specifically negotiated
CONCESSIONAIRE's waiver of its immunity under Title 51 RCW, which is hereby waived for
purposes of CONCESSIONAIRE's indemnification and hold harmless of the CITY, including
the duty to defend. This provision shall be inapplicable to the extent such action, claim, or
lawsuit is judicially found to arise solely from the acts or failures to act of the CITY.
8.7 Successors & Assigns. The CITY and CONCESSIONAIRE each agree to be bound to the
other party in respect to all covenants, agreements, and obligations contained in this contract.
Except as provided in Article 6 herein, neither party shall assign the contract in part or as a
whole, without the written consent of the other. Except as provided in Article 6 herein, the
CONCESSIONAIRE shall not subcontract any of the Premises, services, facilities, or equipment,
or delegate any of its duties under this Agreement without the prior written approval of the
CITY. The CITY acknowledges that the CONCESSIONAIRE shall be authorized to sub -
concession areas within the Premises to food and beverage purveyors, equipment sales, and
similar supporting concessions. When requested, approval by the CITY of a subcontract or
assignment shall not be unreasonably withheld. In the event of an assignment, subcontracting, or
delegation of duties, the CONCESSIONAIRE shall remain responsible for the full and faithful
performance of this Agreement and the assignee, subcontractor, or other obligor shall also
become responsible to the CITY for the satisfactory performance of the services, facilities, or
equipment assumed. The CITY may condition approval upon the delivery by the assignee,
subcontractor, or other obligor of its covenant to the CITY to fully and faithfully complete the
requirements or responsibility undertaken under this Agreement. Notwithstanding the foregoing,
provided CONCESSIONAIRE is not in default, the CONCESSIONAIRE may assign its interest
in this Agreement without seeking CITY's consent to a parent or subsidiary. Except as otherwise
provided herein, all of the covenants, conditions, and provisions of this Agreement are binding
upon and inure to the benefit of the PARTIES and their respective heirs, personal
representatives, successors, and assigns.
8.8 Bankruptcy. Except as provided in Article 6 herein, PARTIES agree that if the
CONCESSIONAIRE is adjudged bankrupt, either voluntarily or involuntarily, then this
AGREEMENT, at the option of the CITY, may be terminated effective on the day and at the
time the bankruptcy petition is filed.
8.9 Compliance with Laws. The CONCESSIONAIRE, its officers, employees, and agents shall
comply with applicable federal, state, county, and local laws, statutes, rules, regulations, and
ordinances, in performing its obligations under this Agreement. Such compliance shall include
abiding by all applicable federal, state and local policies to ensure equal employment opportunity
based on ability and fitness to all persons regardless of race, creed, color, national origin,
religion, sex, physical handicaps or age. The CONCESSIONAIRE shall comply with applicable
laws pertaining to employment practices and employee treatment. Conditions of the Federal
Occupational Safety and Health Act of 1970 (OSHA), the Washington Industrial Safety and
Health Act of 1973 (WISHA), and standards and regulations issued under these Acts must be
complied with. The CONCESSIONAIRE agrees to indemnify and hold harmless the City from
21
all damages assessed for the CONCESSIONAIRE's failure to comply with the Acts and
Standards issued thereunder. The CONCESSIONAIRE is also responsible for meeting all
pertinent local, state and federal health and environmental regulations and, standards applying to
any operation in the performance of this Agreement.
8.10 Nondiscrimination. PARTIES shall not discriminate in employment or services to the
public on the basis of race, color, national origin, sex, religion, age, marital status, or disability,
except for employment actions based on bona fide occupational qualification.
8.11 Choice of Law & Venue. This Agreement shall be interpreted according to the laws of the
State of Washington. Any judicial action to resolve disputes arising out of this Agreement shall
be brought in Kitsap County Superior Court.
8.12 Costs & Attorneys' Fees. In any action brought to enforce any provision of this
Agreement, including actions to recover sums due or for the breach of any covenant or condition
of this Agreement, or for the restitution of the Premises to the CITY or eviction of the
CONCESSIONAIRE during the term or after expiration thereof, the substantially prevailing
party shall be entitled to recover from the other party all reasonable costs and reasonable
attorney's fees incurred, including the fees of accountants, appraisers, and other professionals, at
trial or on appeal, and without resort to suit.
8.13 Modification. This Agreement may only be modified by written instrument signed by both
PARTIES.
8.14 Change in Law/Renegotiation. The PARTIES agree that changes in federal, state or local
laws or regulations that materially modify the terms and conditions of the Agreement and result
in a detrimental change in circumstances or a material hardship for either party in performing
this Agreement may be the subject of a request by a requesting party to renegotiate this
Agreement or negotiate Agreement amendments and the responding party agrees to renegotiate
fairly with the requesting party.
8.15 Force Majeure. Provided that all other requirements of this Agreement are met, any party
shall not be deemed to be in default and shall not be liable for failure to perform under this
Agreement if that party's performance is prevented or delayed by acts of God including
landslides, lightning, forest fires, storms, floods, freezing and earthquakes, civil disturbances,
acts of the public enemy, wars, blockades, public riots, breakage, explosions, accident to
machinery, equipment or materials, unavailability of required materials, governmental restraint
or other causes, whether of the kind enumerated or otherwise, which arc not reasonably within
the control of that obligated party ("Force Majeure"). If as a result of a Force Majeure event, an
obligated party is unable wholly or partially to meet its obligations under this Agreement, it shall
give the other party promptly written notice of the Force Majeure event, describing it in
reasonable detail. The obligated party's obligations under this Agreement shall be suspended, but
only with respect to the particular component of obligations affected by the Force Majeure and
only for the period during which the Force Majeure exists.
22
8.16 Waiver. Failure to enforce any provision of this Agreement shall not be deemed a waiver
of that provision. No waiver of any right or obligation of either party hereto shall be effective
unless in writing, specifying such waiver, executed by the party against whom such waiver is
sought to be enforced. Waiver of any right or power arising out of this Agreement shall not be
deemed waiver of any other right or power.
8.17 Illegal Provisions — Severability. Should any part of this Agreement be found void,
illegal, or unenforceable, the balance of the Agreement shall remain in full force and effect.
8.18 Article Headings, Gender, & Number. Article paragraph headings are not to be construed
as binding provisions of this concession; they are for the convenience of the PARTIES only. The
masculine, feminine, singular and plural of any word or words shall be deemed to include and
refer to the gender and number appropriate in the context.
8.19 Entire Agreement. This Agreement and its Exhibits constitutes the entire agreement
between the PARTIES, and the PARTIES acknowledge that there are no other agreements,
written or oral, that have not been set forth in the text of this Agreement.
8.20 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
8.21 Recording. Following execution of this Agreement the CITY will cause a Memorandum of
Concession Agreement to be recorded with the land use records of Kitsap County, Washington.
A copy of the Memorandum of Concession Agreement is attached hereto as Exhibit D.
IN WITNESS WHEREOF, this Agreement has been entered into between the City of
Bremerton and Olympic Soccer & Sports Center, LLC as of the, 39a day of
e, r- , 2006.
OLYMPIC SOCCER & SPORTS CENTER, LLC
a Washington limited liability company
By: U --
Dennis
Dennis Michael, Manager
23
STATE OF WASHINGTON )
) ss.
COUNTY OF KITSAP )
On thikIQ4 day of �e' [jp , 2006, before me personally appeared
yL10 Nhehaeo I , to me known to be the M a n ✓ of OLYMPIC
SOCCER & SPORTS CENTER, LLC, a Washington limited liability company, that executed
the within and foregoing instrument and acknowledged the said instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein mentioned, and on
oath stated that he was authorized to execute and in fact executed said instrument on behalf of
the corporation.
WA bL-# It bALA-1Uk
Given u d!'��'-Y Hdne� official seal this�[� day of , 2006.
ox v�
(°y0Tl��,�; �� Type/Print N
Notary Public in and for the
�� :• o UBI.�G •: = State of Washington residing at� ny-r6n-
yf�•.. -27- • �p My Commission expires,�.a"7-(�7
OF oWASN�N'
CITY OF ORE -MERTON
a Washington municipal corporation
By:
Cary Bozeman, Mayor
APPROVED AS TO FORM:
�;4
Roger A. Lubovich, City Attorne
ATTEST:
Paula Jo Ston, Y;Clerk
24
STATE OF WASHINGTON)
) ss.
COUNTY OF KITSAP )
I certify that I know or have satisfactory evidence that CARY BOZEMAN is the person who
appeared before me, and acknowledged that he signed this instrument, on oath stated that he was
authorized to execute the instrument and acknowledged it as the Mayor of the CITY OF
BREMERTON to be the free and voluntary act of such party for the uses and purposes
mentioned in the instrument.
Given under d official seal this_.b day, of J , 20
P V. S
^ °s,ora Type/Print Name
�s Grp
i�. (3 O�'�R��N' Notary Public in and for the
' State of Washington residing at?�Pr41M
•,° O j3o My Commission expires 3• a'1- n:1
'327- `O
OP WAS
LIST OF E FIS
Exhibit A — Legal Description of Premises
Exhibit B — Preliminary Building and Site Plans
Exhibit C — Appraisal and Compensation Information
Exhibit D — Memorandum of Concession Agreement
RALegal\Legal\Files\Current Active Files\Olympic Soccer\Amendment No. 1 - Final.doc
25
EXHIBIT "A"
Legal Description for Soccer Concession at Pendergast Park
A portion of the Northeast quarter of the Southwest quarter, Section 21, Township 24 North,
Range 1 East, Williamette Meridian, which is more particularly described as follows:
Beginning at the East quarter corner of said Section 21; thence along the East-West
centerline of said Section 21, N 88°50'50" W 5316.00 feet to the West quarter corner of
said Section 21; thence S 65°16'01" E 2125.47 feet to an existing corner of the building for
Olympic Sports and Soccer Center, also being the True Point of Beginning; thence along
said building, N 89'18'55" E 100.42 feet; thence S 0'48'13" E 44.56 feet; thence N
89011'47" E 54.86 feet; thence S 0°49'09" E 113.85 feet; thence S 89°17'18" W 54.89
feet; thence S 0'15'19"E 52.06 feet; thence leaving said building S 0015'19" E 14.62 feet;
thence S 89°14'46" W 199.87 feet; thence N 0°46'54" W 200.00 feet; thence N 89°18'55"
E 100.00 feet to the said building for Olympic Sports and Soccer Center; thence along said
building, N 0°46'54" W 25.24 feet to the True Point of Beginning.
Together with and subject to a 15 foot maintenance and access buffer adjacent to and
abutting above described concession.
Together with ingress and egress to and from the public right of way (Union Avenue)
over and upon the City parks properties and roadway to the above described concession.
Said ingress and egress shall terminate with said concession.
Said concession area to constitute 48,829 square feet, and with said maintenance and
access buffer, 64,157 square feet.
OLYMPIC SOCCER EXPANSION
A PORTION OF SECTION 21, TOWNSHIP 24 NORTH, RANGE 1 EAST, W.M.
BREMERTON, WASHINGTON
GRADING, DRAINAGE AND SANITARY SEWER AND TESC PLAN
EXHIBIT B
OLYMPIC SOCCER EXPANSION
A PORTION OF SECTION 21, TOWNSHIP 24 NORTH, RANGE 1 EAST, W.M. TAX - PAFCEL NULGER
BREMERTON, WASHINGTON
COVER SHEET
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EXHIBIT C
Value and Compensation
A: -
June 2001 concession site area
30,000 square feet
Addition to concession site area
20,000 square feet
Total Concession Site Area
50,000 square feet
T-'-ON,C'F,
June 2001 value for 30,000 square feet
($0.138 per sq. ft. x 30,000)
$4,140.00
Determining new concession value
(1) $0.20 per sq. ft, for the June 2001 concession site
area and proposed addition (50,000 sq. ft.)
($0.20 per sq. 11. x 50,000 = $10,000-00)
(2) Add $2,000.00 for outdoor lighting and parking
(3) Add $9,000 for field use (150 hours x $60 /hr)
Total Concession Value
$21,000.00
®_N, jET
150 hours of field time valued at $60per hour = $9,000
Concession value ($21,000) minus field time ($9,000)
$12,000 per year monetary
I compensation
Return Address: Attn: City Clerk
City of Bremerton
345 6T" Street, Suite 600
Bremerton, WA 98337
AUDITOR/RECORDER'S INDEXING FORM
Document'ritle(s): 1. Memorandum of First Amended Concession Agreement
Reference Number(s) of Documents assigned or released: Amends and Replaces 200108170289
Grantor(s): 1. City of Bremerton (City)
Additional names on page of document.
Grantec(s): 1. Olympic Soccer & Sports Center, LLC (Concessionaire)
E] Additional names on page of document.
Legal Description: ptn NE 1/4 SW %a S21 T24N RIE, W.M., Kitsap County, WA
(abbreviated)
Additional legal is on page Exhibit A_ of document.
Assessor''s Property Tax Parcel/Account Number: 212501-3-005-2001
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT
This Memorandum of First Amended Concession Agreement is entered into on the date
fully executed below, by and between the City of Bremerton, a Washington municipal corporation
(hereinafter referred to as "City") and Olympic Soccer & Sports Center, LLC, a Washington
limited liability company (hereinafter referred to as "Concessionaire").
1. City and Concessionaire entered into a First Amended Concession Agreement
Between the City of Bremerton and Olympic Soccer & Sports Center, LLC (the "Agreement") on
the day of , 2006, for the purpose of constructing, operating and
maintaining an indoor athletic facility and other improvements. The First Amended Concession
Agreement amends and replaces that certain Concession Agreement recorded on August 17, 2001
in the records of Kitsap County under Auditor's File No. 200108170289 and is for a term of
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT - 1
EXHIBIT D
fifteen (15) years commencing June 1, 2001, with three (3) successive ten (10) year options to
renew as specified in the Agreement. All of the foregoing are set forth in the Agreement.
2. The property which is the subject of the Agreement is legally described in Exhibit
"A" attached hereto and incorporated by reference.
IN WITNESS WHEREOF, the parties have executed this Memorandum of First Ainended
Concession Agreement as of the day and year first above written.
CITY:
CITY OF BREMERTON
By:
Print Name: Cary Bozeman
Its: Mayor
DATE:
STATE OF WASHINGTON )
: ss.
COUNTY OF KITSAP )
CONCESSIONAIRE:
OLYMPIC SOCCER & SPOR'T'S
CENTER, LLC
By:
Print Name: Dennis Michael
Its: Manager
DATE:
I hereby certify that I know or have satisfactory evidence that Cary Bozeman is the person
who appeared before me, and said person acknowledged that he signed this instrument, on oath
stated that he is authorized to execute the instrument on behalf of the City of Bremerton as its
Mayor, and such execution to be the free and voluntary act of such party for the uses and purposes
mentioned in the foregoing instrument.
-Notary Seal Must Appear Within This Box -
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this ___ day of
.2006.
NOTARY PUBLIC, in and for the State
of Washington, residing at
My appointment expires
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT - 2
STATE OF WASHINGTON )
ss.
COUNTY OF KITSAP
I hereby certify that I know or have satisfactory evidence that Dennis Michael is the person
who appeared before me, and said person acknowledged that he signed this instrument, on oath
stated that he is authorized to execute the instrument on behalf of the Olympic Soccer & Sports
Center, LLC as its Manager, and such execution to be the free and voluntary act of such party for the
uses and purposes mentioned in the foregoing instrument.
-Notary Sea! Mus! Appear Within 77us Box -
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this day of
.2006.
NOTARY PUBLIC, in and for the State
of Washington, residing at
My appointment expires
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT- 3
Exhibit
B
EXHIBIT B
Return Address: Attn: City Clerk
City of Bremerton
3456 TH Street, Suite 600
Bremerton, WA 98337
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AUDITOR/RECORDER'S INDEXING FORM
Document Title(s): 1. Memnrandum of First Amended Concession Agreement
Reference Number(s) of Documents assigned or released: Amends and Replaces 200108170289
Grantor(s): 1. City of Bremerton (City)
EAdditional names on page of document.
Grantec(s): 1. Olympic Soccer & Sports Center, LLC (Concessionaire)
Additional names on page of document.
Legal Description: ptnNE �/4 SW �/4 S21 T24N R1E, W.M., Kitsap County, WA
(abbreviated)
Additional legal is on page Exhibit A of document.
Assessor's Property Tax Parcel/Account Number: 212501-3-005-2001
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT
This Memorandum of First Amended Concession Agreement is entered into on the date
fully executed below, by and between the City of Bremerton, a Washington municipal corporation
(hereinafter referred to as "City") and Olympic Soccer & Sports Center, LLC, a Washington
limited liability company (hereinafter referred to as "Concessionaire").
1. City and Concessionaire entered into a First Amended Concession Agreement
Between the City of Bremerton and Olympic Soccer & Sports Center, LLC (the "Agreement") on
the,` day of b ,V , 2006, for the purpose of constructing, operating and
maintaining an indoor athletic facility and other improvements. The First Amended Concession
Agreement amends and replaces that certain Concession Agreement recorded on August 17, 2001
in the records of Kitsap County under Auditor's File No. 200108170289 and is for a term of
fifteen (15) years commencing June 1, 2001, with three (3) successive ten (10) year options to
renew as specified in the Agreement. All of the foregoing are set forth in the Agreement.
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT - I
2. The property which is the subject of the Agreement is legally described in Exhibit
"A" attached hereto and incorporated by reference.
IN WITNESS WHEREOF, the parties have executed this Memorandum of First Amended
Concession Agreement as of the day and year first above written.
CITY:
CITY OF BREMERTON
By:^
Print Name: Cary Bozeman
Its: Mayorr� /
DATE: vet %. F ( ,
STATE OF WASHINGTON )
ss.
COUNTY OF KITSAP )
CONCESSIONAIRE:
OLYMPIC SOCCER & SPORTS
CENTER, LLC
11
Print Name: Dennis Michael
Its: Manager
DATE: (�,CIr �opr 3%, Z=o
I hereby certify that I know or have satisfactory evidence that Cary Bozeman is the person
who appeared before me, and said person acknowledged that he signed this instrument, on oath
stated that he is authorized to execute the instrument on behalf of the City of Bremerton as its
Mayor, and such execution to be the free and voluntary act of such party for the uses and purposes
mentioned in the foregoing instrument.
-Notary Seal Must Appear Within This Box- c(
iN WITNESS WHEREOF, I have hereunto set my hand and official seal this_" aay of
j LA )2006.
op" V. SGL 5` T,, / ' /
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MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT - 2
200612130124
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BREMERTON CITY OF 11A $35.99 Kitsap Co, WA
STATE OF WASHINGTON )
ss.
COUNTY OF KITSAP
I hereby certify that I know or have satisfactory evidence that Dennis Michael is the person
who appeared before me, and said person acknowledged that he signed this instrument, on oath
stated that he is authorized to execute the instrument on behalf of the Olympic Soccer & Sports
Center, LLC as its Manager, and such execution to be the free and voluntary act of such party for the
uses and purposes mentioned in the foregoing instrument.
-Notary Sea! Must Appear Within This Boz -
IN WITNESS WHEREOF, I have hereunto set my han d official seal this _WL day of
2006.
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BREMERTOH CITY OF I18 V5.00 KitsaR Co, OR
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT - 3
EXHIBIT "A"
Legal Description for Soccer Concession at Pendergast Park
A portion of the Northeast quarter of the Southwest quarter, Section 21, Township 24 North,
Range 1 East, Williamette Meridian, which is more particularly described as follows:
Beginning at the East quarter comer of said Section 21; thence along the East-West
centerline of said Section 21, N 88°50'50" W 5316.00 feet to the West quarter corner of
said Section 21; thence S 65°16'01" E 2125.47 feet to an existing comer of the building for
Olympic Sports and Soccer Center, also being the True Point of Beginning; thence along
said building, N 89°18'55" E 100.42 feet; thence S 0°48'13" E 44.56 feet; thence N
89*11-'47" E 54.86 feet; thence S 0°49'-09" E 113.85 feet; thence S 89°17'18" W 54.89
feet; thence S 0° 15' 19" E 52.06 feet; thence leaving said building S 0'15'19" E 14.62 feet;
thence S 89°14'46" W 199.87 feet; thence N 0°46'54" W 200.00 feet; thence N 89°18'55"
E 100.00 feet to the said building for Olympic Sports and Soccer Center; thence along said
building, N 0°46'54" W 25.24 feet to the True Point of Beginning.
Together with and subject to a 15 foot maintenance and access buffer adjacent to and
abutting above described concession.
Together with ingress and egress to and from the public right of way (Union Avenue)
over and upon the City parks properties and roadway to the above described concession.
Said ingress and egress shall terminate with said concession.
Said concession area to constitute 48,829 square feet, and with said maintenance and
access buffer, 64,157 square feet.
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Contract Number: 4193
Vendor: OLYMPIC SOCCER & SPORTS CENTER LLC
Subject: Concession - Indoor Soccer Facility
Department: Parks
File Class: LEG 12-1
Begin Date: 06/20/2001
End Date: 06/19/2016
Review Date: 01/01/2016
Vault Date:
Comments: See Agreement for compensation
3 successive 10 year options
First Amended Concession Agreement 10/06
Return Address: Attn: City Clerk
City of Bremerton
3456 T11 Street, Suite 600
Bremerton, WA 98337
200612130124
BREMER.TON CITY OF MA 11111
Pitl ;'cOO6{ O1 15P
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AUDITOR/RECORDER'S INDEXING FORM
Document Title(s): 1- M?mnrandum of First Amended Concession Agreement
Reference Number(s) of Documents assigned or released: Amends and Replaces 200108170289
Grantor(s): 1. City of Bremerton (City)
Additional names on page of document.
Grantee(s): 1. Olympic Soccer & Sports Center, LLC (Concessionaire)
E] Additional names on page of document.
Legal Description: ptnNE'/4 SW 1/4 S21 T24N RIE, W.M., Kitsap County, WA
(abbreviated)
0 Additional legal is on page Exhibit A of document.
Assessor's Property Tax Parcel/Account Number: 212501-3-005-2001
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT
This Memorandum of First Amended Concession Agreement is entered into on the date
fully executed below, by and between the City of Bremerton, a Washington municipal corporation
(hereinafter referred to as "City") and Olympic Soccer & Sports Center, LLC, a Washington
limited liability company (hereinafter referred to as "Concessionaire").
1. City and Concessionaire entered into a First Amended Concession Agreement
Between the City of Bremerton and Olympic Soccer & Sports Center, LLC (the "Agreement") on
thg,� day of b ? V , 2006, for the purpose of constructing, operating and
maintaining an indoor athletic facility and other improvements. The First Amended Concession
Agreement amends and replaces that certain Concession Agreement recorded on August 17, 2001
in the records of Kitsap County under Auditor's File No. 200108170289 and is for a term of
fifteen (1 5) years commencing June 1, 2001, with three (3) successive ten (10) year options to
renew as specified in the Agreement. All of the foregoing are set forth in the Agreement.
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT - 1
2. The property which is the subject of the Agreement is legally described in Exhibit
"A" attached hereto and incorporated by reference.
IN WITNESS WHEREOF, the parties have executed this Memorandum of First Amended
Concession Agreement as of the day and year first above written.
CITY:
CITY OF BREMERTON
By: f Y�
Print Name: Cary Bozeman
Its: Mayor
�
DATE:
STATE OF WASHINGTON )
: ss.
COUNTY OF KITSAP
CONCESSIONAIRE:
OLYMPIC SOCCER & SPORTS
CENTER, LLC
By:
Print Name: Dennis Michael
Its: Manager
DATE: CC4-C�Oef-
I hereby certify that I know or have satisfactory evidence that Cary Bozeman is the person
who appeared before me, and said person acknowledged that he signed this instrument, on oath
stated that he is authorized to execute the instrument on behalf of the City of Bremerton as its
Mayor, and such execution to be the free and voluntary act of such party for the uses and purposes
mentioned in the foregoing instrument.
-Notary Sea! Must Appear Within This Box-
IN WITNESS WHEREOF, I have hereunto set my hand and official seal thisW"day of
2006.
�P V.
°C(/ eS�5S10N E-YAj a \`may 71 1 V
C),4 4NOTARY PUBLIC, in and for the State
• � G ( of Washington, residing at 6 mrr n 10A
My appointment expires Tn `j
F OFeW
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT - 2
200612130124
Page, 2 of 4
12/13/2006 01:15P
BREMERTOH CITY OF MA V,5.00 KitsaP Co, 11A
STATE OF WASHINGTON )
ss.
COUNTY OF KITSAP
I hereby certify that I know or have satisfactory evidence that Dennis Michael is the person
who appeared before me, and said person acknowledged that he signed this instrument, on oath
stated that he is authorized to execute the instrument on behalf of the Olympic Soccer & Sports
Center, LLC as its Manager, and such execution to be the free and voluntary act of such party for the
uses and purposes mentioned in the foregoing instrument.
-Notary Seal Must Appear Within This Box -
IN WITNESS WHEREOF, I have hereunto set my han d official seal this day of
/
12006.
°. 0 TA �'c;m =� NOTARY PUBLIC, in and for the State 1- r A
>rI°
of Washington, residing at ri- W A
(., 4 il ' w MY appointment expires,? - Z:7- D 77
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NIU IIIN NIIII II I VIII II INlull III Inll IAI IIII
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT - 3
20061 21 301 24
Page :3 of 4
12/1:312006 01:15P
K:itsap Co, P
EXHIBIT "A"
Legal Description for Soccer Concession at Pendergast Park
A portion of the Northeast quarter of the Southwest quarter, Section 21, Township 24 North,
Range 1 East, Williamette Meridian, which is more particularly described as follows:
Beginning at the East quarter corner of said Section 21; thence along the East-West
centerline of said Section 21, N 88°50'50" W 5316.00 feet to the West quarter corner of
said Section 21; thence S 65°16'01" E 2125.47 feet to an existing corner of the building for
Olympic Sports and Soccer Center, also being the True Point of Beginning; thence along
said building, N 89°18'55" E 100.42 feet; thence S 0°48'13" E 44.56 feet; thence N
89011'47" E 54-86 feet; "thence S 0°49'09" E 113.85 feet; thence S 89°17'18" W 54.89
feet; thence S 0'15'19" E 52.06 feet; thence leaving said building S 0'15'19" E 14.62 feet;
thence S 89°14'46" W 199.87 feet; thence N 0°46'54" W 200.00 feet; thence N 89°18'55"
E 100.00 feet to the said building for Olympic Sports and Soccer Center; thence along said
building, N 0°46'54" W 25.24 feet to the True Point of Beginning.
Together with and subject to a 15 foot maintenance and access buffer adjacent to and
abutting above described concession.
Together with ingress and egress to and from the public right of way (Union Avenue)
over and upon the City parks properties and roadway to the above described concession.
Said ingress and egress shall terminate with said concession.
Said concession area to constitute 48,829 square feet, and with said maintenance and
access buffer, 64,157 square feet.
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FIRST AMENDED
CONCESSION AGREEMENT BETWEEN THE CITY OF BREMERTON
AND OLYMPIC SOCCER & SPORTS CENTER, LLC
This First Amended Concession Agreement between the City of Bremerton (CITY) and Olympic
Soccer & Sports Center, LLC (CONCESSIONAIRE) specifically amends the Concession
Agreement entered into between the parties on June 20, 2001 ("Concession Agreement")
collectively referred to hereinafter as ("Agreement")
WHEREAS, CONCESSIONAIRE desires to construct an addition to the current structure to add
a second indoor playing field to the facility, and
WHEREAS, the CITY has agreed to amend the Concession Agreement to grant additional space
to the concession for the second indoor playing field,
NOW, THEREFORE, for valuable consideration and by mutual consent of the parties, the
Concession Agreement is hereby amended and replaced in its entirety to read in full as follows:
ARTICLE 1. CONCESSION.
1.1 Concession of Premises.
1.1.1 Premises Described. CITY hereby grants a ground and use concession to
CONCESSIONAIRE for the Premises, approximately fifty thousand square feet (50,000 sq. ft.)
of land (hereinafter referred to as "Concession Area") within the confines of the Pendergast
Regional Park and legally described in Exhibit A attached hereto and incorporated by reference.
This concession is granted for the development, construction, maintenance and operation, for
profit, of an indoor athletic facility consisting a permanent structure of approximately fifty
thousand square feet (50,000 sq. ft.) ) as well as for related fixtures, appurtenances, parking and
exterior landscaping (hereinafter referred to as "Improvements"), and generally shown in the
preliminary building and site plan in Exhibit B attached hereto and incorporated by reference.
(Collectively referred to as "Premises") Premises does not include the fee ownership or leasehold
interest of the real property upon which the Premises are located.
CONCESSIONAIRE hereby agrees to the terms and conditions of this Agreement. The
PARTIES agree that upon the date of execution of this First amended Concession Agreement,
the Premises consists of permanent structure of approximately thirty thousand square feet
(30,000 sq. ft.) and related improvements, and that the CONCESSIONAIRE intends to construct
an addition of approximately twenty thousand square feet (20,000 sq. ft.) to the current structure
to add a second indoor playing field to the Premises ("Second Field"). The PARTIES further
agree that any and all current or future development and construction of Improvements on the
Premises are owned by CONCESSIONAIRE subject to any security interest of lender, if any,
and subject to the CITY's right, title and interest at the expiration or termination of this
Agreement pursuant to Article 2.4.
The common address of the Premises is 1199 Union Avenue Bremerton WA, 98312.
1.1.2 Right of Entry. In addition to the Premises described above, the CITY grants
CONCESSIONAIRE 1) a Right of Entry for ingress and egress to and from the public right-of-
way (Union Avenue) over and upon the City parks properties and roadway to access the
Premises and 2) a 15 foot Right of Entry buffer adjacent to and abutting above described
Concession Area for maintenance and repair of the Improvements as identified in Exhibit B,
(Collectively "Rights of Entry"). CONCESSIONAIRE's use of the Rights of Entry granted
herein shall not be used in a manner inconsistent with or interfere with the CITY's use of the
property. CONCESSIONAIRE shall not install any structures or other improvements on the
Rights of Entry without the CITY's prior written approval. Such approval shall be at the CITY's
sole discretion. The Rights of Entry shall terminate upon the expiration or termination of this
Agreement.
1.2 Possession, Quiet Enjoyment & Covenants.
Except as provided in Articles 3 & 4.3 herein, the CONCESSIONAIRE shall be entitled
to exclusive possession of the Premises upon commencement of the development and
construction of the Premises as defined by Article 5.4 herein. Upon taking possession of the
Premises, and on performing all the covenants and conditions herein, the CONCESSIONAIRE
shall peaceably and quietly have, hold, and enjoy the Premises at all times during the full term of
this Agreement. Every covenant in this Agreement shall be deemed and treated to be a covenant
running with the Premises during the full term of the Agreement, and shall extend to the heirs,
legal representatives, successors, and assigns of the PARTIES. No change in CITY's ownership
of the Premises, or rights to the payments hereunder, however accomplished, shall operate to
enlarge the obligations or reduce the rights of CONCESSIONAIRE. No change in CITY's
ownership of the Premises shall be binding upon CONCESSIONAIRE for any purpose until
CONCESSIONAIRE shall have been given notice thereof.
ARTICLE 2. TERM OF AGREEMENT
2.1 Term. The term of this Agreement shall be fifteen (15) years, commencing June 20, 2001,
the EFFECTIVE DATE of this Agreement.
2.2 Option to Renew. The CITY agrees to offer the CONCESSIONAIRE three (3) successive
ten (10) year options to renew this Agreement, contingent upon
1) . CONCESSIONAIRE remaining in full compliance with the terms and conditions
of this Agreement and
2) the CITY accepting the level of insurance coverage required in Article 8.5.2 for
each new ten (10) year term exercised by CONCESSIONAIRE, which acceptance will not be
unreasonably denied. Each ten (10) year option to renew shall renew automatically unless
CONCESSIONAIRE gives the CITY prior written notice of its desire not to renew or the CITY
gives CONCESSIONAIRE prior written notice of CONCESSIONAIRE's failure to be in full
compliance with the terms and conditions of this Agreement in which case the
CONCESSIONAIRE shall be given the opportunity to cure such default pursuant to Article 7.2.
The CONCESSIONAIRE may terminate this Agreement at any time with prior written notice to
K
the CITY. The CITY may request a review of insurance coverage required in Article 8.5.2
pursuant to Article 3.1.2. The CITY may request CONCESSIONAIRE to cure any default and
come into full compliance with the terms and conditions of this Agreement at any time pursuant
to Article 7.2. The failure of CONCESSIONAIRE to provide prior written notice not to renew
or failure of the CITY to accept the level of insurance coverage or cure any default or request full
compliance with the terms and conditions of this Agreement shall not constitute a waiver by
either party.
2.3 Right of First Refusal. Upon the expiration of all terms of this Agreement,
CONCESSIONAIRE shall have a Right of First Refusal for a new Concession but this right shall
only extend to the right to operate a recreation facility similar in scope to the uses identified and
authorized in Article 4.1.1 of this Agreement and only if the CITY requests such use in its
solicitation for a concessionaire for the Premises. If the City desires a different use for the
Premises, then CONCESSIONAIRE shall not have a Right of First Refusal.
2.4 Improvements -Expiration or Termination of Agreement. Upon the expiration of the
term(s) of this Agreement or upon the termination of this Agreement, other than as a result of
condemnation proceedings, the then existing Improvements on the Premises will become the
property of and owned by the CITY and the CITY shall have all right, title and interest in the
same.
ARTICLE 3. CONSIDERATION
3.1. Consideration for Concession.
3.1.1 Cash and Premises Use. As consideration for the ground and use concession
granted by the CITY to the CONCESSIONAIRE by Article 1 herein, the CONCESSIONAIRE
shall provide fair and equitable compensation to the CITY in the form of cash payments and
hours of use of the Premises, subject to Article 3.1.4 of this Agreement. Premises use by the
CITY shall be governed by Article 3.3 herein. Consideration shall be established pursuant to a
formula including the square footage value of the Concession Area, parking use, outdoor lighting
costs and hours of use of the Premises by the City as set forth in Exhibit C. Based upon Exhibit
C, the CONCESSIONAIRE shall provide the CITY with an annual total of 150 hours of
Premises use and further shall pay the CITY One Thousand Dollars and No Cents ($1000.00) per
month beginning on the first full month following the month a certificate of occupancy is issued
to CONCESSIONAIRE for the Second Field. The Premises use shall be per hour per field; said
kinds of use to be determined at the sole discretion of the CITY. The monthly cash payment shall
be adjusted every year during the term(s) of this Agreement based upon the prior years'
Consumer Price Index (CPI) for all urban consumers as published by the United States
Department of Labor for Seattle -Tacoma -Bremerton, all items (1982-84-100). For purposes of
the CPI adjustment, the base shall be the June 2006 CPI index June to June every year (i.e. June
2006- June 2007). The CPI adjustment shall occur on the following January 1St of each year
during the term of this Agreement. No adjustment, whether an increase or a decrease, shall
exceed two percent (2%) annually. CONCESSIONAIRE shall make this payment to the City by
3
the fifteenth day of the month following the end of each month. CONCESSIONAIRE may
prepay these monthly payments on a quarterly, semi-annual or annual basis or as otherwise
approved by the CITY.
3.1.2 Re -Opener of Compensation and Insurance Coverage. At any time within
180 days prior to the beginning of each ten (10) year term or any time after the beginning of any
ten (10) year term, either party may request a re -opener of the consideration and leasehold tax set
forth in Article 3 and the insurance coverage required in Article 8.5.2. The parties acknowledge
that it is the intent to provide no more than one re -opener for each ten (10) year term, or
remaining portion thereof if notice to re -open is given after the beginning of the new term, unless
the parties mutually agree to additional re -openers. Upon such request, the parties will, in good
faith, review the consideration, leasehold tax and/or insurance coverage, and further, negotiate
and make appropriate adjustments to reflect changes in market values and use of the Premises
using as the basis the date and the consideration, leasehold taxes, insurance coverage, use of
Premises and other relevant factors which established the figures requested to be reviewed. In
the event the PARTIES cannot reach an agreement following review and negotiation, the
PARTIES agree to mediate the issues in dispute.
3.1.3 Leasehold Excise Tax. Pursuant to RCW 82.29A.020(1), concessions fall within
the definition of leasehold interest, therefore, even though this Agreement is not for a lease, it is
still subject to the leasehold tax set forth in Chapter 82.29A RCW. Accordingly,
CONCESSIONAIRE agrees to pay, in addition to other taxes and fees pursuant to Article 8.4.2,
the leasehold excise tax pursuant to Chapter 82.29A RCW. The tax will be based on the current
value of use of the property through this Agreement (concession rate value) as set forth in
Exhibit C in the amount of $21,000.00 per year. Since partial consideration to the City for this
property use consists of hours of field use at the Premises established through a formula based
upon the current hourly value of field use, no adjustments will be made for the property use or
value of field use during the term(s) of this Agreement. Therefore, for purposes of assessment
and payment of the leasehold tax only, the value of the use of the property ($21,000.00) will be
adjusted every five years during the term(s) of this Agreement based upon the prior five years'
Consumer Price Index (CPI) for all urban consumers as published by the United States
Department of Labor for Seattle -Tacoma -Bremerton, all items (1982-84-100) For purposes of
the CPI adjustment, the base shall be the June 2002 CPI index June to June every five years (ic.
June 2002- June 2007). The CPI adjustment shall occur on the following January I" of each year
during the term of this Agreement. No adjustment, whether an increase or a decrease, shall
exceed two percent (2%) annually. In addition, CONCESSIONAIRE agrees to pay when due, the
leasehold excise tax, or any additional assessments thereto, with respect to any payment or
obligation hereunder, which is deemed by the State of Washington to be taxable rent under said
chapter and to indemnify and hold the City harmless from the same.
CONCESSIONAIRE shall pay quarterly to the City by the fifteenth day of the month
following the end of each quarter, or as otherwise required by the State of Washington, the
amount of the leasehold tax owing. CONCESSIONAIRE may prepay these quarterly payments
on a semi-annual or annual basis or as otherwise approved by the CITY.
4
3.1.4 Reversion of Second Field Concession Area and Compensation. Unless
otherwise agreed to in writing, in the event, the CONCESSIONAIRE is not issued a Certificate
of Occupancy for the Second Field by December 31, 2007, the Concession Area as defined in
Article 1.1.1 shall automatically revert to the original 30,000 square foot Concession Area
defined in the Concession Agreement entered into between the parties on June 20, 2001 plus a 15
foot Right of Entry buffer adjacent to and abutting said 30,000 square feet Concession Area for
maintenance and repair of the Improvements as identified in Article 1. 1.2 of this Agreement. In
addition, the consideration set forth in Article 3.1.1 of this Agreement shall revert to the original
annual compensation of 182 hours of PREMISES use as identified in Article 3.3 of the June 20,
2001 Concession Agreement and no cash payments.
3.2 Athletic Equipment/Personal Property Use. Premises use by the CITY received as
consideration for this Agreement does not include the use by the CITY of any of the
CONCESSIONAIRE's athletic equipment or other personal property. Use by the CITY of any of
the CONCESSIONAIRE's athletic equipment or other personal property will be negotiated
separately between the CITY and the CONCESSIONAIRE and is outside the scope of this
Agreement.
3.3 Timing of Premises Use by CITY. The consideration paid by the CONCESSIONAIRE in
the form of Premises use by the CITY shall commence accruing from the EFFECTIVE DATE of
this Agreement. It is mutually understood and agreed that the CITY can receive its full annual
compensation of 150 hours of Premises use at any time during the 12 month period -beginning
with the EFFECTIVE DATE of this Agreement and every 12 month period thereafter.
3.4 Premises Use by CITY.
3.4.1. Types of Use. The hours of Premises use provided by the CONCESSIONAIRE to
the CITY in consideration for this Agreement are intended to provide recreational opportunities
of a suitable and compatible nature for the residents of the CITY as part of the Parks and
Recreation programs. Such Premises use by the CITY shall be without cost to the CITY to the
extent of the 150 hours annually, pursuant to Article 3.2 herein.
3.4.2 Maintenance & Utility Costs/Clean-Up After Use. The CONCESSIONAIRE
shall be responsible for all overhead costs, including the utilities and general maintenance, of the
Premises during the use of the Premises by the CITY. The CITY agrees to clean-up the Premises
after each CITY use.
3.4.3 Damage, Claims, & Liability. The CITY shall be responsible for all damage or
claims that may arise out of the Premises use by any of the CITY's employees, agents, guests, or
invitees. The CITY, during such periods of use, shall supervise or cause the CITY's employees,
agents, guests, or invitees to be supervised. The provisions for mutual indemnity, hold harmless,
and liability insurance pursuant to Articles 8.5 & 8.6 herein apply during Premises use by the
CITY.
3.5 Scheduling Premises Use by CITY. The CITY and the CONCESSIONAIRE shall meet at
times as necessary, to determine how such Premises use hours shall be allocated to the CITY in
the upcoming quarter in accordance with the following provisions.
3.5.1 Spring and Summer Quarters. The CITY shall have the full discretion to
determine which hours of Premises use the CITY intends to use during the Spring quarter (April,
May, & June) and Summer quarter (July, August, & September) of each year. At the CITY's
discretion, the CITY has the right to schedule its full annual compensation of 150 hours of
Premises USE during the Spring and Summer quarters.
3.5.2 Fall and Winter Quarters. The CONCESSIONAIRE shall have the full discretion
to determine which hours of Premises use the CONCESSIONAIRE intends to use during the Fall
quarter (October, November, & December) and Winter quarter (January, February, & March) of
each year. The CONCESSIONAIRE has the right to schedule the CITY's remaining
compensation, if any, of Premises USE not previously scheduled by the CITY during the Spring
and Summer quarters.
3.6 CITY's Increased Premises Use. The CITY shall have the full discretion to determine
which hours of the CITY's Premises use will be accounted against the CITY's annual
compensation of 150 hours. The CITY may increase its hours of Premises use beyond its annual
compensation by paying to the CONCESSIONAIRE an hourly rate then in effect by the
CONCESSIONAIRE and with scheduling at the discretion of the CONCESSIONAIRE.
ARTICLE 4. USE & OPERATION OF PREMISES
4.1 Use of Premises
4.1.1 Indoor Athletic and Recreational Uses. The CONCESSIONAIRE will use and
occupy the Premises throughout the full term of this Agreement for the purpose of providing
indoor athletic, educational, entertainment, community activities, and recreational opportunities,
all related to the operation of an indoor recreation facility. CONCESSIONAIRE shall take
reasonable precautions in securing the Premises during the full term of this Agreement.
4.1.2 Incidental Uses. The CONCESSIONAIRE may provide concessions in the form
of food and beverage and the sale of incidental items directly related to the use of the recreation
facility including, but not limited to, gym equipment, soap, shampoo, and similar shower
supplies, and clothing related to athletic pursuits.
4.1.3 Security and Nuisance During Use. The CONCESSIONAIRE shall take
reasonable precautions in securing the Premises during the full term of this Agreement. The
CONCESSIONAIRE shall use the Premises for no unlawful purposes and shall not use or
occupy the Premises in any manner, which would constitute a public nuisance or violate State or
CITY laws.
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4.2 Operating Hours. The availability of recreational opportunities for CITY residents is a
material consideration for this Agreement. Accordingly and during the full term of this
Agreement, the CONCESSIONAIRE shall continuously conduct and carry on the
CONCESSIONAIRE'S permitted uses and shall keep the Premises open for business and cause
the CONCESSIONAIRE'S business to be conducted therein during the usual business hours of
each and every business day as mutually agreed upon. This provision shall not apply if the
Premises should be closed and the business of CONCESSIONAIRE is temporarily suspended on
account of labor strikes, lockouts, or similar causes beyond the reasonable control of
CONCESSIONAIRE, or for maintenance, remodeling, repair, or renovation as approved by the
CITY in writing (including approvals of any construction schedules.) The CONCESSIONAIRE
covenants and agrees to provide sufficient personnel, and to keep the Premises adequately
stocked with merchandise, recreational equipment, fixtures, and facilities so as to conduct its
business in accordance with sound business practice. The CONCESSIONAIRE, in order to keep
its business commitments, shall be in operation in accordance with sound business practice.
4.3 Entry by CITY. CITY may enter the Premises at all times to inspect; provide services
required hereunder; post notices of CONCESSIONAIRE's noncompliance with the provisions of
this concession, all without being deemed a constructive eviction. Any person or persons who
may have an interest in the purpose of CITY's visit may accompany CITY. CITY has the right to
use any and all means that CITY deems proper to open doors and gates in an emergency in order
to obtain entry to the Premises.
4.4 Health Inspections. CONCESSIONAIRE shall not knowingly commit or willfully permit to
be committed any act or thing contrary to the rules and regulations prescribed by the local board
of health, or which shall be contrary to the laws, rules or regulations of any federal, state or
municipal authority. CONCESSIONAIRE shall allow the Bremerton-Kitsap County Health
Department to make regular and ordinary inspections of the Premises as said health department
may deem proper.
4.5 Maintenance, Repair, & Improvements
4.5.1 Maintenance. CONCESSIONAIRE shall, at its sole cost and expense, clean and
maintain the Premises, and make repairs, restorations, and replacements to the Premises,
including without limitation the heating, ventilating, air conditioning, mechanical, electrical, and
plumbing systems, structural roof, walls, and foundations, roof coverings, sprinkling and
irrigation systems, playing surfaces and the fixtures and appurtenances to the Premises as and
when needed to preserve them in "first class" condition and repair (less normal wear from use)
throughout the full term. CONCESSIONAIRE shall further keep in repair and maintain as
necessary all machinery, equipment and facilities necessary for the playing of sports and the
comfort of players. CONCESSIONAIRE shall paint the exterior of the buildings (except the
metal) with such frequency as may be required to maintain their good, clean appearance. All
such repairs, restorations, and replacements will be in quality and workmanship at least equal to
the original work or installations. If CONCESSIONAIRE fails to make such repairs, restorations,
or replacements, CITY may make them at the expense of CONCESSIONAIRE and such expense
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will be paid by CONCESSIONAIRE within fifteen (15) days after delivery of a statement for
such expense.
4.5.2 Sidewalks Maintenance. At its sole cost and expense, CONCESSIONAIRE shall
maintain any sidewalks on the Premises in good and presentable condition during the full term of
this Agreement, shall be responsible for correcting any unsafe conditions, and shall be
responsible for the removal of ice and snow from the sidewalks.
4.5.3 Janitorial Services. At its sole cost and expense, CONCESSIONAIRE shall keep
the Premises clean, and shall provide sufficient janitorial services to maintain a tidy appearance
on and about the Premises. CONCESSIONAIRE shall provide landscaping maintenance
services, as applicable such that landscaping on the Premises remains healthy, attractive, and
well maintained.
4.5.4 Repair of Damage. In the event any damage or injury shall occur to the Premises
of any kind or nature whatsoever, CONCESSIONAIRE shall promptly cause said damage or
injury to be fully repaired at CONCESSIONAIRE'S own cost and expense. In the event
CONCESSIONAIRE fails to accomplish such repairs within fifteen (15) days of receipt of
written notice by the CITY, then in that event CITY may, but is not required to, enter the
Premises and accomplish such repairs and bill CONCESSIONAIRE who will pay the bill within
fifteen (15) days after delivery of a statement for such expense.
4.5.6 Improvements. The CONCESSIONAIRE shall be solely responsible for providing
adequate funding for any alterations or improvements as provided in this Agreement and such
alterations or improvements shall be made without cost to the CITY.
4.5.7 Alterations of Premises after Construction. After such time as the Premises have
been completed and accepted as defined above, the CONCESSIONAIRE shall not make any
material alteration to the Premises including any changes to the landscaping, without the CITY'S
prior written consent.
4.6 Signs. CONCESSIONAIRE may place and maintain signs upon the Premises in accordance
with applicable sign and zoning codes of the CITY.
4.7 Utilities.
4.7.1 Utility Services and Expense. The CONCESSIONAIRE will pay for all water,
gas, garbage, sewage, electricity, telephone, and other utilities and communications services used
by CONCESSIONAIRE on the Premises, whether or not such services are billed directly to
CONCESSIONAIRE. CONCESSIONAIRE will also procure, or cause to be procured, without
cost to the CITY, any and all necessary permits, licenses, or other authorizations required for the
lawful and proper installation and maintenance upon the Premises of utility appurtenances and
appliances for use in supplying such utilities and services to and upon the Premises. The CITY,
upon request of CONCESSIONAIRE, and at the sole expense and liability of the
CONCESSIONAIRE, will join with CONCESSIONAIRE in any application required for
obtaining or continuing any such services, provided that such services do not violate any other
applicable provision of this Agreement. The CITY shall not be held liable for any injury, loss, or
damage caused by or resulting from any interruption or failure of utility services due to any
cause whatsoever, except the CITY's sole negligence. CONCESSIONAIRE shall not be entitled
to any offset, reduction, or return of consideration as a result of any interruption or failure of
services.
4.7.2 Trash & Garbage. The CONCESSIONAIRE shall place all trash and garbage into
such areas and containers as are designed and intended to accommodate the trash and garbage
generated within or on the Premises. The CONCESSIONAIRE shall not allow trash and/or
garbage to accumulate such that a nuisance or health hazard results.
4.8 Parking. The CITY will be responsible to provide adequate parking to support the Premises
and its operations.
4.9 Hazardous Substances.
4.9.1 Definition. As used herein, the term "Hazardous Substance" means any hazardous,
toxic, or dangerous substance, waste, or material, which is or becomes regulated under any
federal, state, or local statute, ordinance, rule, regulation, or other law now or hereafter in affect
pertaining to environmental protection, contamination, or cleanup.
4.9.2 Information. CONCESSIONAIRE shall keep upon the Premises, in a location
accessible to CITY, on request during normal business hours, copies of all reports regarding
hazardous or toxic materials in the Premises that CONCESSIONAIRE has provided to any
governmental agency in the previous quarter. CONCESSIONAIRE shall, upon request and at
CONCESSIONAIRE'S expense, provide CITY with a copy of any such report as to which CITY
request a copy. In the event of any accident, spill, or other incident involving hazardous or toxic
matter that CONCESSIONAIRE is required to report to any governmental agency,
CONCESSIONAIRE shall immediately report the same to the CITY and supply CITY with all
information and reports with respect to the same, together with CONCESSIONAIRE'S clean-up
or remediation plan and schedule. If such clean-up or remediation plan is not acceptable to CITY
in CITY'S sole discretion, CITY may so notify CONCESSIONAIRE and, upon 48 hours prior
written notice (or without notice if so required by an emergency) may enter on the Premises to
conduct the cleanup or remediation and charge CONCESSIONAIRE the costs thereof. All
information described herein shall be provided to CITY regardless of any claim by
CONCESSIONAIRE that it is confidential or privileged, provided that the CITY shall not
publish or disclose the information to any third party except as pursuant to Chapter 42.56RCW.
4.9.3 Indemnification. CONCESSIONAIRE agrees to hold harmless, protect,
indemnify, and defend CITY from and against any damage, loss, claim, or liability,
INCLUDING Attorney's fees and costs, resulting from CONCESSIONAIRE'S use, disposal,
transportation, generation, and/or sale of any Hazardous Substances. The CITY agrees to hold
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harmless, protect, indemnify, and defend CONCESSIONAIRE from and against any damage,
loss, claim, or liability, including attorney's fees and costs, resulting from (a) Hazardous
Substances existing on the Premises as of the EFFECTIVE DATE of this Agreement; or (b)
Hazardous Substances thereafter used, disposed of, or generated on the Premises by the CITY.
These indemnities will survive the termination of this Agreement, whether by expiration of the
Term or otherwise.
4.10 Risk of Loss. All personal property of any kind or description whatsoever in the Premises
shall be at the CONCESSIONAIRE's sole risk, and CITY shall not be liable for any damage
done to, or loss of, such personal property. However, CONCESSIONAIRE is not responsible for
losses or claims of stolen property under the care and contol of the CITY during the CITY'S use
periods.
ARTICLE 5. DESIGN & CONSTRUCTION OF PREMISES
5.1 Design. The CONCESSIONAIRE shall retain a licensed architect or licensed professional
engineer, registered in the State of Washington (hereinafter referred to as the DESIGN
ENGINEER), who shall design the indoor athletic facility, the Second Field and other related
Improvements. The CITY shall have the right to approve the final design of the Improvements
and shall have a continuing right to approve the exterior color of any structure on the Premises.
CONCESSIONAIRE shall comply with the Americans with Disabilities Act of 1990 (ADA) in
the design, construction, and operation of the Premises.
5.2 Building & Site Plans. The CONCESSIONAIRE shall retain a licensed architect or licensed
professional engineer, registered in the State of Washington, to prepare building and site plans for
the Premises, which shall reference the structure, the Second Field and other related
Improvements, utilities generally, and landscape plan as applicable. The CITY shall have the
right to approve the final building and site plans.
5.3 Construction/Site Work/Fencing. The CONCESSIONAIRE shall be solely responsible for
all development and construction of the Premises and hold the CITY harmless from any and all
claims arising out of the development and construction of the Premises pursuant to Article 8.6
herein. CONCESSIONAIRE shall be responsible for the site work, all required permits and
grading. CONCESSIONAIRE shall properly barricade the work area and install signage
directing unauthorized person from entering onto the building site during any phase of
development or construction. Unless otherwise agreed fencing shall be placed around the work
area. In addition, the building site shall be kept in a clean and organized condition during
development periods. CONCESSIONAIRE shall be responsible for site security, traffic and
pedestrian warnings at the site during the development and construction phases.
5.4 Construction Deadlines. CONCESSIONAIRE shall be required to commence development
and construction of the Second Field within six months of the EFFECTIVE DATE of this
Agreement. Commencement of development and construction of the Second Field is defined as
that date upon which physical movement or grading of the soil in preparation for construction of
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any structure on the Premises. CONCESSIONAIRE shall be required to complete the
development and construction of the Premises within one year of the EFFECTIVE DATE of this
Agreement. Completion of the development and construction of the Second Field is defined as
that date upon which all final occupancy permits are obtained by the CONCESSIONAIRE.
5.5 Failure to Meet Construction Deadlines/Time of Essence. Except as provided in Article
8.15 herein, it is mutually understood and agreed that failure by the CONCESSIONAIRE to meet
the development and construction deadlines shall constitute a material breach of this Agreement
by the CONCESSIONAIRE and the CITY, at its option, can terminate this Agreement for cause
pursuant to Article 7. Time is of the essence with this Agreement.
5.6 Stormwater Drainage, Sewer, & Water Lines. The CONCESSIONAIRE will be
responsible for relocating storm drains, sewers, and water lines to the Premises, as required to
complete any development and construction of the Premises.
5.7 Development and Construction Fees & Expenses. The CONCESSIONAIRE shall be
responsible for obtaining and paying for necessary permits, fees, and expenses associated with
the development and construction of the Premises. In addition, CONCESSIONAIRE shall be
responsible for any additional costs for inspections billed to the CITY by any government
agency, including but not limited to the City of Bremerton, Kitsap County, or the State of
Washington.
5.8 Escrow Requirements To Ensure Performance of Contractors. It is mutually understood
and agreed that the CONCESSIONAIRE will, prior to the commencement of development and
construction of the Premises pursuant to Article 5.4 herein, place into escrow funds sufficient to
ensure contractor performance through completion of construction and development of the
Premises.
5.9 Not a Public Works Project. The development and construction of the Premises is not a
public works project requiring the payment of prevailing wages. CONCESSIONAIRE is the
developer and the CITY is not an owner, partner, joint venturer, nor maintains any other business
relationship with the CONCESSIONAIRE regarding the Premises other than as grantor of a
concession and user of the Premises. The CITY is not involved with, nor has any responsibilities
for, the biding, contracting or operations of the Premises and will occupy no space in the
Premises. The CONCESSIONAIRE does not deem itself required to pay prevailing wages nor
will the CONCESSIONAIRE be obligated to pay or to contract for prevailing wages or any other
standard of payment controls associated with this project. This provision is a material part of the
consideration for this Agreement. The project signage and all literature, advertising by either the
CITY or CONCESSIONAIRE shall not indicate in any manner that this is a CITY project,
contract, or other misleading statement indicating that this project is a public work project
directly or indirectly.
5.10 No Liens. Except liens and encumbrances of any lender pursuant to Article 6 herein, it is
mutually understood and agreed that the CONCESSIONAIRE shall have no authority, express or
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implied, to create or place or to allow to be created or placed any lien or encumbrance of any
kind or nature whatsoever upon, or in any manner to bind, the interest of the CITY in the
Premises or to charge the rentals payable hereunder for any claim in favor of any person dealing
with CONCESSIONAIRE, including those who may furnish materials or perform labor for any
construction or repairs, and each such claim shall affect and each such lien shall attach to, if at
all, only the right and interest granted to CONCESSIONAIRE by this Agreement. If any such
liens are filed, CITY may, without waiving its rights and remedies for breach, and without
releasing CONCESSIONAIRE from its obligations hereunder, require CONCESSIONAIRE to
post security in form and amount reasonably satisfactory to CITY or cause such liens to be
released by any means CITY deems proper, including payment in satisfaction of the claim giving
rise to the lien. CONCESSIONAIRE shall pay to CITY upon demand any sum paid by CITY to
remove the liens. Further, CONCESSIONAIRE agrees that it will save and hold the CITY
harmless from any and all loss, cost, or expenses based on or arising out of the asserted claims or
liens, except those of the lender, against this Agreement or against the right, title, and interest of
the CITY in the Premises or under the terms of this Agreement, including reasonable attorney's
fees and costs incurred by CITY in removing such liens, and in enforcing this paragraph.
Additionally, it is mutually understood and agreed that this paragraph is intended to be a
continuing provision applicable to future repairs and improvements after the initial construction
phase.
ARTICLE 6. FINANCING & SECURITY INTERESTS
6.1 Financing - No CITY Obligation. CONCESSIONAIRE shall be solely responsible for all
financing requirements for all construction, maintenance, repairs, or subsequent improvements to
the Premises. The CITY shall be under no obligation directly or indirectly to pay for any labor,
material, or improvement associated with the facility except as provided herein or mutually
agreed upon. The CONCESSIONAIRE shall, in applying and obtaining financing, inform any
lender that the CITY has no financial obligations associated with the construction, maintenance,
repairs or subsequent improvements to the Premises.
6.2 Security Interest in Premises & Agreement/Consent. The CITY consents to the grant,
transfer, pledge and assignment of any and all right, title, claim, interest of CONCESSIONAIRE
in and to this Agreement and in the Premises, and in any building facility, personal property and
fixtures in the Premises ("Collateral") to lender for financing purposes. The CITY shall
recognize lender's first priority security interest in the Collateral and the CITY hereby
subordinates any and all interest of the CITY in said Collateral to lender. CONCESSIONAIRE
acknowledges that the CITY will not grant any security interest to any lender in CITY real
property nor will the CITY allow any encumbrance of any kind or nature whatsoever upon, or in
any manner on its title to CITY real property. In the event of default by CONCESSIONAIRE to
lender, in addition to all its rights and remedies available at law and equity, lender may enforce
and/or foreclose its security interest/interests in the Collateral. CITY agrees that in connection
with any such default, and all without further consent of CITY, lender may:
a. Acquire CONCESSIONAIRE'S interest in the Collateral either by a deed in lieu of
foreclosure or actual foreclosure;
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b. Rent and/or grant a ground and use concession of the Premises subject to this Agreement
pending foreclosure of the Collateral by lender;
c. Assign, sell and/or transfer the Collateral in whole or in part to any person or entity;
d. Take possession of any or all of the Collateral, obtain right of substitution for
CONCESSIONAIRE and operate said Collateral; and/or
e. Appoint a receiver.
Any assignment or transfer under Article 6.2 is subject to Article 8.7. Lender shall have
no interest in improvements located on the Premises at the time of expiration of the term or terms
of this Agreement pursuant to Article 2, at which time, all improvements shall become the
property of the CITY.
6.3 LENDER's Reliance on Term and Renewal Options. The City acknowledges that the
CONCESSIONAIRE, in making application for financing, may be required to have an assurance
that the terms of this Agreement will extend beyond the term of the financing term. By its
signature to this Agreement, the CITY confirms its authority to provide the ten-year Agreement
term with three options to extend the ten-year Agreement for a total of forty years with the
renewal options conditioned solely upon the CONCESSIONAIRE maintaining current payments
and remaining in full compliance with the terms and conditions of this Agreement. Lender may,
but is not obligated to exercise the right to renew and extend the terms of this Agreement as set
forth herein. Additionally, the CITY acknowledges that, after any original financing
commitments by the CONCESSIONAIRE have been satisfied, these financing provisions shall
be applicable to all future advances or financing required by the CONCESSIONAIRE and used
solely for the improvements and repairs of the Premises.
6.4 Surrender of the Collateral. No surrender of Collateral or the Premises subject to this
Agreement or any other act of CONCESSIONAIRE shall be deemed to terminate this
Agreement. CITY will not terminate this Agreement voluntarily by agreement with
CONCESSIONAIRE unless lender has been previously notified in writing and has consented to
the termination in writing. This Agreement shall not be amended or modified unless lender has
been previously notified in writing and has consented to such amendment or modification in
writing.
6.5 Notice of Default and Lender's Rights.
6.5.1 Notice of Default. If CONCESSIONAIRE defaults under this Agreement or if any
event occurs which would give CITY the right to terminate, modify, amend or shorten the term
of this Agreement, CITY shall take no steps to exercise any right it may have under this
Agreement without first giving lender written notice of such default in accordance with Article
6.11 below. A copy of each and every notice of default served or sent by CITY or its agent to or
upon CONCESSIONAIRE pursuant to this Agreement shall be sent contemporaneously to
lender in accordance with Article 6.11 below. Such notice of default shall specify the event or
events of default then outstanding and the time period at the end of which the indicated action
would become effective.
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6.5.2 Termination for Monetary Default. If the notice of default given by CITY to
lender relates to a monetary default and CONCESSIONAIRE has not cured such monetary
default within 30 days after lender receives the notice and CONCESSIONAIRE'S failure to cure
results in CITY desiring to terminate this Agreement, CITY may terminate this Agreement
pursuant to Article 7 if such monetary default is not cured by either CONCESSIONAIRE or
lender within forty-five (45) days after lender receives the notice of default.
6.5.3 Termination for Non -Monetary Default. If the notice of default given by CITY
to lender relates to a non -monetary default and CONCESSIONAIRE has not cured, or diligently
pursued curing, such non -monetary default within thirty (30) days after lender receives the
notice, CITY shall take no action to terminate this Agreement if:
a. Within sixty (60) days after CITY'S notice to lender regarding CONCESSIONAIRE'S
failure to cure (or failure to diligently pursue a cure) lender notifies CITY of its intent to
realize upon its security interest and commences realization within sixty (60) days
thereafter, and diligently pursues realization; and
b. Lender pays CITY at time of notification all monies or performances due that may be in
default up to the day lender notifies CITY of lender's intent and further pays or performs
all consideration that accrues during the period after lender so notifies CITY and
completes such other performances that may be required or come due under this
Agreement.
CITY shall not terminate this Agreement because of CONCESSIONAIRE'S breach of any terms
of this Agreement relating to the solvency of CONCESSIONAIRE or the institution of any
bankruptcy, insolvency, receivership or related action by or against CONCESSIONAIRE as long
as lender cures any default under this Agreement by CONCESSIONAIRE as provided herein,
except that lender shall not be required to cure any defaults relating to solvency of
CONCESSIONAIRE.
6.6 Right to Assign. Lender shall have the right to assign its interest in the Collateral. Upon the
purchaser's, assignee's or transferee's assumption and agreement to perform and be bound by all
of the terms of this Agreement, lender shall be relieved from further liability under this
Agreement. If a lender finances the purchaser, assignee or transferee, said lender shall be subject
to all obligations as set forth in this Agreement. Any successor lender shall be bound by the
terms and conditions of this Agreement. 6.7 Disposition of Insurance
Should the Collateral suffer any loss which is covered by casualty insurance, and the
insurance proceeds are used to restore any improvements made by CONCESSIONAIRE, CITY
agrees that CONCESSIONAIRE and lender shall have the right to such proceeds so long as none
of CITY'S property, utilities or other services therein are damaged or such damages are repaired.
In the event the CITY'S land is substantially damaged and CONCESSIONAIRE'S improvements
have been repaired, CITY shall only participate in the insurance proceeds to the extent necessary
to repair and restore CITY'S land and any of CITY'S improvements on or in the ground to the
same condition the land was at the commencement of this Agreement, or in the same condition at
the time of the casualty. Other than as described herein, CITY shall have no claim to insurance
proceeds that are attributable to CONCESSIONAIRE's interest in the Collateral.
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6.7 Right to Participate in Litigation. Lender shall have the right to participate in any
litigation, arbitration or dispute directly affecting the Collateral or interest of
CONCESSIONAIRE or lender therein, including, without limitation, any suit, action, arbitration
proceeding, condemnation proceeding or insurance claim. CITY, upon instituting or receiving
notice of any such litigation, arbitration or dispute will promptly notify lender of the same.
6.8 Incorporation of Lender's Protection Provisions. Lender shall be a beneficiary of all
rights of CONCESSIONAIRE herein including but not limited to the warranty, indemnity, hold
harmless, choice of law and venue, costs and attorney's fees as provided herein.
6.9 Right to Remove Collateral. In the event lender exercises its rights under its Collateral and
realizes upon the Collateral, CITY agrees that lender is entitled to remove the Collateral,
including but not limited to building facility, furniture, movable trade fixtures and equipment,
from the Premises at any reasonable time and that the Collateral shall remain personal property
even though the trade fixtures may be affixed to or placed upon the Premises. In the event lender
so realizes on its Collateral, CITY waives any right, title, claim, lien or interest in the Collateral.
6.10 Notices. All notices, copies of notices, consents or other communications to lender given
under this Agreement to lender must be in writing and shall be effective when received. Such
communications shall be given in person to an officer of lender, addressed to lender at an address
as provided by lender.
ARTICLE 7. TERMINATION
7.1 Failure to Perform
7.1.1 Obligation to Perform. Nothing herein shall imply any duty upon CITY to do any
work, which under any provision of this concession CONCESSIONAIRE may be required to
perform, and the performance thereof by CITY shall not constitute a waiver of
CONCESSIONAIRE's default. CITY shall not in any event be liable for inconvenience,
annoyance, and disturbance in its activities in the PARK, however shall not permit a loss of
business, or other damage to CONCESSIONAIRE by reason of its actions pertaining to the
PARK.
7.1.2 Payments to Other Parties. Except as otherwise expressly provided hereunder, all
obligations of the CONCESSIONAIRE under this Agreement will be performed by
CONCESSIONAIRE at CONCESSIONAIRE's sole cost and expense. If CONCESSIONAIRE
fails to pay any sum of money owed to any party other than CITY for which
CONCESSIONAIRE is liable hereunder, or if CONCESSIONAIRE fails to perform any other
act on its part to be performed hereunder, and such failure continues for ten days after notice
thereof by CITY, CITY may, without waiving or releasing CONCESSIONAIRE from its
obligations, make any such payment or perform any such other act to be made or performed by
CONCESSIONAIRE. CONCESSIONAIRE shall pay CITY, on demand, all sums so paid by
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CITY and all necessary incidental costs, together with interest thereon at the lesser of 1% percent
per month or the maximum rate permissible by law, from the date of such payment by CITY.
7.2 Default. This Agreement and the concession granted herein may be terminated for default
as follows:
7.2.1 CITY's Default. CITY will not be in default unless CITY fails to perform an
obligation within thirty (30) days after notice by CONCESSIONAIRE, which notice must
specify the alleged breach; provided that if the nature of CITY's obligation is such that more
than thirty (30) days are reasonably required for cure, then CITY will not be in default if CITY
commences to cure within thirty (30) days of CONCESSIONAIRE's notice and thereafter
diligently pursues completion and completes performance within a reasonable time.
7.2.2. CONCESSIONAIRE's Default. The occurrence of any one or more of the
following events constitutes a default under this Agreement by CONCESSIONAIRE: (1)
CONCESSIONAIRE shall be in default of the performance of any covenants, conditions; or
provisions of this Agreement, other than the covenants for the payment of consideration required
by this Agreement, where such failure continues for a period of thirty (30) days after written
notice is given by CITY provided that if the nature of CONCESSIONAIRE's obligations is such
that more than thirty (30) days are reasonably required for cure, CONCESSIONAIRE will not be
in default if CONCESSIONAIRE commences to cure within thirty (30) days of CITY's notice
and thereafter diligently pursues completion and completes performance within a reasonable
time; or (2) CONCESSIONAIRE shall be adjudged bankrupt, make a general assignment for the
benefit of creditors, or take the benefit of any insolvency act, or if a permanent receiver and
trustee in bankruptcy shall be appointed for CONCESSIONAIRE's estate and such appointment
is not vacated within thirty (30) days; or (3) Premises become vacant or deserted for a period of
thirty (30) days; or (4) if this Agreement shall be assigned or the Premises concessioned by
CONCESSIONAIRE other than in accordance with the terms of this AGREEMENT and such
default is not cured within twenty (20) days after written notice to CONCESSIONAIRE; or (5)
CONCESSIONAIRE shall fail to make any payment when due, or fail to make any other
payment required hereunder when due, when that failure is not cured within thirty (30) days after
mailing of written notice thereof by CITY; or (6) CONCESSIONAIRE shall fail to comply with
the same concession term or covenant on three occasions during any 10 year term, even if such
breach is cured within the applicable cure period. The CITY's right to terminate pursuant to this
Article for failure of CONSCESSIONAIRE to cure a default is subject to the lender's right to
cure pursuant to Articles 6.5.2 and 6.5.3.
7.2.3 Default for Other Cause. This Agreement may be immediately terminated for
other cause by a party if the other party substantially fails to perform its obligations under this
Agreement, through no fault of the terminating party, and the non-performing party does not
commence correction of the failure of performance within thirty (30) days of the terminating
party's sending notice to the non-performing party.
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7.3 Remedies Are Cumulative. Remedies under this Agreement are cumulative; the failure to
exercise on any occasion any right shall not operate to forfeit such remedy.
7.4 Destruction of Premises & Use of Insurance Proceeds. Unless otherwise mutually agreed
by the PARTIES, in the event the Premises are destroyed or injured by fire, earthquake, or other
casualty, then CONCESSIONAIRE shall proceed to rebuild and restore the Premises, or such
part thereof as may be injured as aforesaid. In the event of any loss covered by the insurance
policies described and required pursuant to Article 8.5.1 herein, unless this Agreement shall be
terminated as provided herein, the proceeds of such insurance policies shall be used by
CONCESSIONAIRE first to rebuild and restore the Premises and replace the improvements,
fixtures, and equipment, which may be damaged or destroyed by such casualty.
7.5 Duties upon Termination. Upon termination of this Agreement, and unless otherwise
arranged, CONCESSIONAIRE shall remove from the PARK all its personal property, goods,
and effects. In the event that the CONCESSIONAIRE fails to perform this duty at termination,
the CITY may cause such removal to be made and said personal property, goods, and effects to
be stored, the cost and expense to be paid by the CONCESSIONAIRE. It is mutually understood
and agreed that the real property constituting the Premises of this Agreement is the real property
of the CITY and that all improvements to said real property shall revert to the CITY at the
termination of this Agreement.
7.6 Eminent Domain. The following rules shall govern the rights and duties of the PARTIES in
the event of interference with the possession of the Premises by CONCESSIONAIRE by right of
eminent domain or private purchase in lieu thereof.
7.6.1 Rights of Termination. If the whole of the Premises shall be taken for any public
or quasi -public use under any statute or by right of eminent domain, or by private purchase in
lieu thereof, then this Agreement shall automatically terminate as of the date that title shall be
taken. If more than twenty-five percent (25%) of the Premises shall be so taken and if the taking
renders the remainder thereof unusable for the purposes for which the Premises were
concessioned, then CITY and CONCESSIONAIRE shall each have the right to terminate this
Agreement on thirty (30) days notice to the other given within ninety (90) days after the date of
such taking. Provided, however, that if the CITY is exercising its rights of eminent domain, a fair
value shall be placed on this Agreement and the Premises with the compensation thereof
awarded solely to CONCESSIONAIRE, or lender pursuant to its security interest, if any.
7.6.2 Non -Termination. If any part of the Premises shall be so taken and this
Agreement is not terminated, then the CITY shall, at its own cost and expense, restore the
remaining portion of the Premises to the extent necessary to render it reasonably suitable for the
purposes for which it was concessioned.
7.6.3 Compensation. The compensation awarded or paid upon such a total or partial
taking of the Premises and/or this Agreement shall belong to and be apportioned between the
CITY and CONCESSIONAIRE in accordance with their respective interests as determined by a
17
court of competent jurisdiction. Additionally, CONCESSIONAIRE may prosecute any claim
directly against the condemning authority for the costs of removal of the goodwill, stock, trade
fixtures, furniture and other personal property belonging to CONCESSIONAIRE. CITY shall
have no claim to condemnation proceeds that are attributable to CONCESSIONAIRE's interest
in the Collateral, nor shall lender gave any interest in CITY's condemnation proceeds, if any.
ARTICLE 8. GENERAL CONDITIONS
8.1 Relationship of PARTIES.
8.1.1 CONCESSIONAIRE Independent Contractor Status. The PARTIES intend
that an independent relationship shall be created by this Agreement. Nothing contained herein
shall create the relationship of principal and agent or of partnership or of joint venture between
the parties hereto, and neither the method of computation of consideration nor any other
provision contained herein shall be deemed to create any relationship between the parties hereto
other than the relationship of CITY as granting a ground and use concession to the
CONCESSIONAIRE. CONCESSIONAIRE has the experience, ability, and resources to develop
and operate an indoor athletic facility and is performing independent functions and
responsibilities within its field of expertise. CONCESSIONAIRE and its personnel are
independent contractors and not employees of the CITY. No agent, employee, servant, or
representative of the CONCESSIONAIRE shall be deemed to be an employee, agent, servant or
representative of the CITY. CONCESSIONAIRE and its personnel have no authority to bind the
CITY or to control the CITY's employees. As an independent contractor, CONCESSIONAIRE
is responsible for its own management. The CITY's administration and enforcement of this
Agreement shall not be deemed an exercise of managerial control over CONCESSIONAIRE or
its personnel.
8.1.2 No Third Party Rights Created. It is mutually understood and agreed that this
Agreement is solely for the benefit of the PARTIES hereto and gives no right to any other party
except as provided by Article 6 herein.
8.1.3 No Joint Venture/Partnership. It is mutually understood and agreed that no joint
venture or partnership formed as a result of this Agreement.
8.2 Notices. Except as provided in Article 6 herein, any notice required or permitted hereunder
must be in writing and will be effective upon the earlier of personal delivery or three days after
being mailed by certified mail, return receipt requested, addressed to CONCESSIONAIRE or to
CITY at the address for that party designated herein. Either party may specify a different address
for notice purposes by written notice to the other, except that CITY may in any event use the
Premises as CONCESSIONAIRE's address for notice purposes. All notices shall be delivered to
the following addresses:
19
CITY Address
City of Bremerton
Attn: Director of Parks and Recreation
680 Lebo Boulevard
CONCESSIONAIRE Address
Olympic Soccer & Sports Center, LLC
Attn: Mr. Dennis Michael, Manager
P.O. Box 5047
Bremerton, WA 98310 Bremerton, WA 98312-0466
8.3 Reports & Information. When requested by the CITY, CONCESSIONAIRE shall furnish
periodic reports and documents on matters covered by this Agreement. The reports and
documents shall be furnished in the time and form requested. CONCESSIONAIRE shall
maintain accounting records in accordance with Generally Accepted Accounting Principles
(GAAP).
8.4 Permits, Licenses, Taxes, & Fees.
8.4.1 Permits, Licenses, & Other Documents. The CONCESSIONAIRE shall possess
a current Bremerton Business License and shall obtain all regulatory licenses and permits,
including all construction and building permits, necessary to fulfill CONCESSIONAIRE's
obligations under this Agreement at CONCESSIONAIRE's sole expense. Each party agrees to
execute such additional or other documents as may be required to fully implement the intent of
this Agreement.
8.4.2 Taxes & Fees. As an independent contractor, the CONCESSIONAIRE shall be
solely responsible for all taxes, fees and charges incurred, including but not limited to license
fees, business and occupation taxes, workers' compensation and unemployment benefits, all
federal, state, regional, county and local taxes and fees, including leasehold excise tax pursuant
Chapter 82.29A RCW, ad valorem taxes, taxes imposed on personal property, all other
assessments for improvements or benefits which are assessed on the Premises, income taxes,
property taxes, permit fees, operating fees, surcharges of any kind that apply to any and all
persons, facilities, property, income, equipment, materials, supplies or activities related to the
CONCESSIONAIRE's obligations under this Agreement. The parties acknowledge that for the
purpose of real estate taxes, the use of the Premises is limited to those uses identified in Article
4.1.1.
8.5 Insurance.
8.5.1 Fire, Earthquake, & Casualty Insurance. The CONCESSIONAIRE agrees that,
at all times during the full term of this Agreement and at its own expense, CONCESSIONAIRE
shall, at its sole cost and expense, maintain in full force and effect adequate fire, earthquake, and
other casualty coverage covering the Premises and its contents, including all personal property,
fixtures, improvements. Such policy shall include a replacement cost endorsement.
CONCESSIONAIRE will shall obtain and file with the CITY's Risk Manager a Certificate of
Insurance evidencing such coverage. All such insurance coverage shall include a ten-day
cancellation notice to CONCESSIONAIRE and the CITY. Adequacy of coverage is defined as
insurance sufficient to restore the Premises to its pre -casualty condition.
19
8.5.2 Liability Insurance. Prior to the commencement date of this Agreement,
CONCESSIONAIRE, at its own expense shall obtain and file with the CITY's Risk Manager a
Certificate of Insurance evidencing general comprehensive liability insurance coverage ("CGL")
providing coverage of at least $1,000,000 per occurrence for bodily injury and $500,000 per
occurrence for property damage. This Certificate of Insurance shall be subject to approval by the
CITY's Risk Manager as to company, terms and coverage, and said approval shall not be
unreasonably withheld. The CGL shall name the CITY as an additional insured and must fully
protect the CITY from any and all claims and risks and losses in connection with any activities
or omissions by the CONCESSIONAIRE by virtue of this Agreement. The CGL policy shall
remain in full force and effect at the CONCESSIONAIRE's sole expense for liability for
property damage or personal injury that may occur in connection with activities or omissions by
the CONCESSIONAIRE, and provide coverage for the full term of this Agreement.
CONCESSIONAIRE shall insure that the CITY's Risk Manager is given thirty -calendar days
prior written notice, by certified mail, of any cancellation, lapse, reduction or modification of
such insurance.
8.5.3 Release and Waiver of Subrogation. Any policy of insurance carried by either
CITY or CONCESSIONAIRE pursuant to any obligation under this Agreement, shall, to the
extent available, contain a waiver of subrogation clause on the part of the insurer. Such waiver
shall apply to damages to adjacent property. Notwithstanding any other provision of this
Agreement, neither CITY nor CONCESSIONAIRE shall be liable to the other party or to any
insurance company (by subrogation or otherwise) insuring the other party for any loss or damage
to any building, structure or tangible personal property of the other occurring in or about the
Premises or PARK, even though such loss or damage might have been occasioned by the
negligence of such party, its agents or employees, if such loss or damage is covered by insurance
issued by an insurance carrier authorized or licensed by the Insurance Commissioner of the State
of Washington to issue lines of insurance, benefiting the party suffering such loss or damage or
was required under the terms of this Agreement to be covered by insurance by the party covering
the loss.
8.6 Hold Harmless, Indemnification, & Industrial Insurance.
8.6.1 Hold Harmless & Indemnification. Each party hereto agrees to be responsible
and assumes liability for its own wrongful or negligent acts or omissions, or those of its officers,
agents, or employees to the fullest extent required by law. Each party agrees to save, indemnify,
defend, or hold the other party harmless against all liability, loss, damages, and expenses,
including costs and attorney's fees, resulting from actions, claims and lawsuits arising or alleged
to have arisen, in whole or in part, out of or in consequence of the acts or failures to act of the
other party, its employees, its subcontractors, its agents, or its assigns, which arise in any way
out of the performance of this Agreement. In the case of negligence of both the CITY and the
CONCESSIONAIRE, any damages allowed shall be levied in proportion to the percentage of
negligence attributable to each party, and each party shall have the right to seek contribution
from the other party in proportion to the percentage of negligence attributable to the other party.
20
8.6.2 Industrial Insurance. The PARTIES have specifically negotiated
CONCESSIONAIRE's waiver of its immunity under Title 51 RCW, which is hereby waived for
purposes of CONCESSIONAIRE's indemnification and hold harmless of the CITY, including
the duty to defend. This provision shall be inapplicable to the extent such action, claim, or
lawsuit is judicially found to arise solely from the acts or failures to act of the CITY.
8.7 Successors & Assigns. The CITY and CONCESSIONAIRE each agree to be bound to the
other party in respect to all covenants, agreements, and obligations contained in this contract.
Except as provided in Article 6 herein, neither party shall assign the contract in part or as a
whole, without the written consent of the other. Except as provided in Article 6 herein, the
CONCESSIONAIRE shall not subcontract any of the Premises, services, facilities, or equipment,
or delegate any of its duties under this Agreement without the prior written approval of the
CITY. The CITY acknowledges that the CONCESSIONAIRE shall be authorized to sub -
concession areas within the Premises to food and beverage purveyors, equipment sales, and
similar supporting concessions. When requested, approval by the CITY of a subcontract or
assignment shall not be unreasonably withheld. In the event of an assignment, subcontracting, or
delegation of duties, the CONCESSIONAIRE shall remain responsible for the full and faithful
performance of this Agreement and the assignee, subcontractor, or other obligor shall also
become responsible to the CITY for the satisfactory performance of the services, facilities, or
equipment assumed. The CITY may condition approval upon the delivery by the assignee,
subcontractor, or other obligor of its covenant to the CITY to fully and faithfully complete the
requirements or responsibility undertaken under this Agreement. Notwithstanding the foregoing,
provided CONCESSIONAIRE is not in default, the CONCESSIONAIRE may assign its interest
in this Agreement without seeking CITY's consent to a parent or subsidiary. Except as otherwise
provided herein, all of the covenants, conditions, and provisions of this Agreement are binding
upon and inure to the benefit of the PARTIES and their respective heirs, personal
representatives, successors, and assigns.
8.8 Bankruptcy. Except as provided in Article 6 herein, PARTIES agree that if the
CONCESSIONAIRE is adjudged bankrupt, either voluntarily or involuntarily, then this
AGREEMENT, at the option of the CITY, may be terminated effective on the day and at the
time the bankruptcy petition is filed.
8.9 Compliance with Laws. The CONCESSIONAIRE, its officers, employees, and agents shall
comply with applicable federal, state, county, and local laws, statutes, rules, regulations, and
ordinances, in performing its obligations under this Agreement. Such compliance shall include
abiding by all applicable federal, state and local policies to ensure equal employment opportunity
based on ability and fitness to all persons regardless of race, creed, color, national origin,
religion, sex, physical handicaps or age. The CONCESSIONAIRE shall comply with applicable
laws pertaining to employment practices and employee treatment. Conditions of the Federal
Occupational Safety and Health Act of 1970 (OSHA), the Washington Industrial Safety and
Health Act of 1973 (WISHA), and standards and regulations issued under these Acts must be
complied with. The CONCESSIONAIRE agrees to indemnify and hold harmless the City from
21
all damages assessed for the CONCESSIONAME's failure to comply with the Acts and
Standards issued thereunder. The CONCESSIONAIRE is also responsible for meeting all
pertinent local, state and federal health and environmental regulations and standards applying to
any operation in the performance of this Agreement.
8.10 Nondiscrimination. PARTIES shall not discriminate in employment or services to the
public on the basis of race, color, national origin, sex, religion, age, marital status, or disability,
except for employment actions based on bona fide occupational qualification.
8.11 Choice of Law & Venue. This Agreement shall be interpreted according to the laws of the
State of Washington. Any judicial action to resolve disputes arising out of this Agreement shall
be brought in Kitsap County Superior Court.
8.12 Costs & Attorneys' Fees. In any action brought to enforce any provision of this
Agreement, including actions to recover sums due or for the breach of any covenant or condition
of this Agreement, or for the restitution of the Premises to the CITY or eviction of the
CONCESSIONAIRE during the term or after expiration thereof, the substantially prevailing
party shall be entitled to recover from the other party all reasonable costs and reasonable
attorney's fees incurred, including the fees of accountants, appraisers, and other professionals, at
trial or on appeal, and without resort to suit.
8.13 Modification. This Agreement may only be modified by written instrument signed by both
PARTIES.
8.14 Change in Law/Renegotiation. The PARTIES agree that changes in federal, state or local
laws or regulations that materially modify the terms and conditions of the Agreement and result
in a detrimental change in circumstances or a material hardship for either party in performing
this Agreement may be the subject of a request by a requesting party to renegotiate this
Agreement or negotiate Agreement amendments and the responding party agrees to renegotiate
fairly with the requesting party.
8.15 Force Majeure. Provided that all other requirements of this Agreement are met, any party
shall not be deemed to be in default and shall not be liable for failure to perform under this
Agreement if that party's performance is prevented or delayed by acts of God including
landslides, lightning, forest fires, storms, floods, freezing and earthquakes, civil disturbances,
acts of the public enemy, wars, blockades, public riots, breakage, explosions, accident to
machinery, equipment or materials, unavailability of required materials, governmental restraint
or other causes, whether of the kind enumerated or otherwise, which are not reasonably within
the control of that obligated party ("Force Majeure"). If as a result of a Force Majeure event, an
obligated party is unable wholly or partially to meet its obligations under this Agreement, it shall
give the other party promptly written notice of the Force Majeure event, describing it in
reasonable detail. The obligated party's obligations under this Agreement shall be suspended, but
only with respect to the particular component of obligations affected by the Force Majeure and
only for the period during which the Force Majeure exists.
22
8.16 Waiver. Failure to enforce any provision of this Agreement shall not be deemed a waiver
of that provision. No waiver of any right or obligation of either party hereto shall be effective
unless in writing, specifying such waiver, executed by the party against whom such waiver is
sought to be enforced. Waiver of any right or power arising out of this Agreement shall not be
deemed waiver of any other right or power.
8.17 Illegal Provisions — Severability. Should any part of this Agreement be found void,
illegal, or unenforceable, the balance of the Agreement shall remain in full force and effect.
8.18 Article Headings, Gender, & Number. Article paragraph headings are not to be construed
as binding provisions of this concession; they are for the convenience of the PARTIES only. The
masculine, feminine, singular and plural of any word or words shall be deemed to include and
refer to the gender and number appropriate in the context.
8.19 Entire Agreement. This Agreement and its Exhibits constitutes the entire agreement
between the PARTIES, and the PARTIES acknowledge that there are no other agreements,
written or oral, that have not been set forth in the text of this Agreement.
8.20 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
8.21 Recording. Following execution of this Agreement the CITY will cause a Memorandum of
Concession Agreement to be recorded with the land use records of Kitsap County, Washington.
A copy of the Memorandum of Concession Agreement is attached hereto as Exhibit D.
IN WITNESS WHEREOF, this Agreement has been entered into between the City of
B merton and Olympic Soccer & Sports Center, LLC as of the, 3::I(A day of
eta , 2006.
OLYMPIC SOCCER & SPORTS CENTER, LLC
a Washington limited liability company
By:
Dennis Michael, Manager
23
STATE OF WASHINGTON)
) ss.
COUNTY OF KITSAP )
On thik3ftLA day of CJcy�fl [jC?� , 2006, before me personally appeared
by A to—h to me known to be the n ✓ of OLYMPIC
SOCCER & SPORTS CENTER, LLC, a Washington limited liability company, that executed
the within and foregoing instrument and acknowledged the said instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein mentioned, and on
oath stated that he was authorized to execute and in fact executed said instrument on behalf of
the corporation.
Wh bL-
Given underFm)
DALA--I Uk
official seal this day of )2006.
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\C'
CITY OF
N
a Washington municipal corporation
By: /
Cary Bozeman, Mayor
APPROVED AS TO FORM:
Type/Print Nma
Notary Public in and for the
State of Washington residing at e gjMt? r j2n Vy A
My Commission expires, 3Q -7-O7
A. Lubovich, City Attorney_----------'
Roger
ATTEST:
Paula Jo ston, C' y Clerk
24
STATE OF WASHINGTON)
) ss.
COUNTY OF KITSAP )
I certify that I know or have satisfactory evidence that CARY BOZEMAN is the person who
appeared before me, and acknowledged that he signed this instrument, on oath stated that he was
authorized to execute the instrument and acknowledged it as the Mayor of the CITY OF
BREMERTON to be the free and voluntary act of such party for the uses and purposes
mentioned in the instrument.
Given under d official seal this.3_ day of
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Notary Public in and for the
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My Commission expires 3° a-1- 0 7�j
Exhibit A – Legal Description of Premises
Exhibit B – Preliminary Building and Site Plans
Exhibit C – Appraisal and Compensation Information
Exhibit D – Memorandum of Concession Agreement
R:\Legal\Legal\Files\Current Active Files\Olympic Soccer\Amendment No. 1 - Final.doc
25
EXHIBIT "A"
Legal Description for Soccer Concession at Pendergast Park
A portion of the Northeast quarter of the Southwest quarter, Section 21, Township 24 North,
Range 1 East, Williamette Meridian, which is more particularly described as follows:
Beginning at the East quarter corner of said Section 21; thence along the East-West
centerline of said Section 21, N 88°50'50" W 5316.00 feet to the West quarter corner of
said Section 21; thence S 65°16'01" E 2125.47 feet to an existing corner of the building for
Olympic Sports and Soccer Center, also being the True Point of Beginning; thence along
said building, N 89°18'55" E 100.42 feet; thence S 0°48'13" E 44.56 feet; thence N
89°11'47" E 54.86 feet; thence S 0°49'09" E 113.85 feet; thence S 89°17'18" W 54.89
feet; thence S 0'15'19" E 52.06 feet; thence leaving said building S 0'15'19" E 14.62 feet;
thence S 89°14'46" W 199.87 feet; thence N 0°46'54" W 200.00 feet; thence N 89°18'55"
E 100.00 feet to the said building for Olympic Sports and Soccer Center; thence along said
building, N 0°46'54" W 25.24 feet to the True Point of Beginning.
Together with and subject to a 15 foot maintenance and access buffer adjacent to and
abutting above described concession.
Together with ingress and egress to and from the public right of way (Union Avenue)
over and upon the City parks properties and roadway to the above described concession.
Said ingress and egress shall terminate with said concession.
Said concession area to constitute 48,829 square feet, and with said maintenance and
access buffer, 64,157 square feet.
OLYMPIC SOCCER EXPANSION
A PORTION OF SECTION 21, TOWNSHIP 24 NORTH, RANGE 1 EAST, W.M.
BREMERTON, WASHINGTON
GRADING, DRAINAGE AND SANITARY SEWER AND TESC PLAN
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EXHIBIT B
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EXHIBIT C
Value and Compensation
June 2001 concession site area 30,000 square feet
Addition to concession site area 20,000 square feet
Total Concession Site Area 50,000 square feet
June 2001 value for 30,000 square feet $4,140.00
($0.138 per sq. ft. x 30,000)
Determining new concession value
(1) $0.20 per sq. ft. for the June 2001 concession site
area and proposed addition (50,000 sq. ft.)
($0.20 per sq. ft. x 50,000 = $10,000.00)
(2) Add $2,000.00 for outdoor lighting and parking
(3) Add $9,000 for field use (150 hours x $60 /hr)
Total Concession Value $21,000.00
150 hours of field time valued at $60 per hour = $9,000
Concession value ($21,000) minus field time ($9,000) 1 $12,000 per year monetary
Return Address: Attn: City Clerk
City of Bremerton
3456 T2 Street, Suite 600
Bremerton, WA 98337
AUDITOR/RECORDER'S INDEXING FORM
Document Title(s): 1. Memorandum of First Amended Concession Agreement
Reference Number(s) of Documents assigned or released: Amends and Replaces 200108170289
Grantor(s): 1. City of Bremerton (City)
❑ Additional names on page of document.
Grantee(s): 1. Olympic Soccer & Sports Center, LLC (Concessionaire)
Additional names on page of document.
Legal Description: ptn NE '/4 SW %4 S21 T24N RIE, W.M., Kitsap County, WA
(abbreviated)
K Additional legal is on page Exhibit A of document.
Assessor"s Property Tax Parcel/Account Number: 212501-3-005-2001
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT
This Memorandum of First Amended Concession Agreement is entered into on the date
fully executed below, by and between the City of Bremerton, a Washington municipal corporation
(hereinafter referred to as "City") and Olympic Soccer & Sports Center, LLC, a Washington
limited liability company (hereinafter referred to as "Concessionaire").
1. City and Concessionaire entered into a First Amended Concession Agreement
Between the City of Bremerton and Olympic Soccer & Sports Center, LLC (the "Agreement") on
the day of , 2006, for the purpose of constructing, operating and
maintaining an indoor athletic facility and other improvements. The First Amended Concession
Agreement amends and replaces that certain Concession Agreement recorded on August 17, 2001
in the records of Kitsap County under Auditor's File No. 200108170289 and is for a term of
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT - 1
EXHIBIT D
fifteen (15) years commencing June 1, 2001, with three (3) successive ten (10) year options to
renew as specified in the Agreement. All of the foregoing are set forth in the Agreement.
2. The property which is the subject of the Agreement is legally described in Exhibit
"A" attached hereto and incorporated by reference.
IN WITNESS WHEREOF, the parties have executed this Memorandum of First Amended
Concession Agreement as of the day and year first above written.
CITY:
CITY OF BREMERTON
By:
Print Name: Cary Bozeman
Its: Mayor
DATE:
STATE OF WASHINGTON )
ss.
COUNTY OF KITSAP
CONCESSIONAIRE:
OLYMPIC SOCCER & SPORTS
CENTER, LLC
By:
Print Name: Dennis Michael
Its: Manager
DATE:
I hereby certify that I know or have satisfactory evidence that Cary Bozeman is the person
who appeared before me, and said person acknowledged that he signed this instrument, on oath
stated that he is authorized to execute the instrument on behalf of the City of Bremerton as its
Mayor, and such execution to be the free and voluntary act of such party for the uses and purposes
mentioned in the foregoing instrument.
-Notary Seal Must Appear Within This Box -
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this day of
, 2006.
NOTARY PUBLIC, in and for the State
of Washington, residing at
My appointment expires
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT - 2
STATE OF WASHINGTON )
ss.
COUNTY OF KITSAP
I hereby certify that I know or have satisfactory evidence that Dennis Michael is the person
who appeared before me, and said person acknowledged that he signed this instrument, on oath
stated that he is authorized to execute the instrument on behalf of the Olympic Soccer & Sports
Center, LLC as its Manager, and such execution to be the free and voluntary act of such party for the
uses and purposes mentioned in the foregoing instrument.
-Notary Seal Must Appear Within This Box -
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this day of
2006.
NOTARY PUBLIC, in and for the State
of Washington, residing at
My appointment expires
MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT - 3
+------------------------------------+
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CHANGE Contract Transactions
Contract Number 4193
ndor Name OLYMPIC SOCCER & SPORTS CENTER LLC
bject INDOOR SOCCER FACILITY - CONCESSION AGREEMENT
partment PARKS
atus Code GEN
Amount
Begin Date 06/20/2001
Insurance End Date 06/19/2011
Type Amount Review Date 01/01/2011
GL $3000000.00
Insurance Total $3000000.00
Insurance Review Date 10/01/2004
Comments CERT INS EXPIRED LTR 6/14/04 2ND NOTICE
NOTIFICATION TO PEGGY 7/16/PARKS TO BE CONTACTED 9/04
+---------------------------------------------------------------+
CONCESSION AGREEMENT
BETWEEN
CITY OF BREMERTON
AND
OLYMPIC SOCCER & SPORTS CENTER, LLC
ORIGINAL
TABLE OF CONTENTS
RECITALS.........................................................................................................................
1
Article 1. GROUND AND USE CONCESSION...............................................................
2
1.1 Concession of PREMISES........................................................................................
2
1.2 Possession, Quiet Enjoyment & Covenants Real .....................................................
2
Article 2. TERM OF AGREEMENT..................................................................................
3
2.1 Term..........................................................................................................................
3
2.2 Option to Renew.......................................................................................................3
Article3. CONSIDERATION............................................................................................
3
3.1. PREMISES Use in Lieu of Cash.............................................................................
3
3.2 Athletic Equipment/Personal Property Use..............................................................
3
3.3 Timing of Consideration Payment............................................................................
4
3.4 PREMISES Use by CITY.........................................................................................
4
3.4.1. Types of Use.....................................................................................................
4
3.4.2 Maintenance & Utility Costs/Clean-Up After Use ............................................
4
3.4.3 Damage, Claims, & Liability.............................................................................
4
3.5 Scheduling PREMISES Use by CITY......................................................................
4
3.5.1 Spring and Summer Quarters.............................................................................
4
3.5.2 Fall and Winter Quarters....................................................................................
5
3.6 CITY's Increased PREMISES Use...........................................................................
5
Article 4. USE & OPERATION OF PREMISES...............................................................
5
4.1 Use of Premises.........................................................................................................
5
4. 1.1 Indoor Athletic and Recreational Uses..............................................................
5
4.1.2 Incidental Uses...................................................................................................
5
4.1.3 Security and Nuisance During Use....................................................................
5
4.2 Operating Hours........................................................................................................
5
4.3 Entry by CITY..........................................................................................................
6
4.4 Health Inspections.....................................................................................................
6
4.5 Maintenance, Repair, & Improvements....................................................................
6
4.5.1 Maintenance.......................................................................................................
6
4.5.2 Sidewalks Maintenance.....................................................................................
7
4.5.3 Janitorial Services..............................................................................................
7
4.5.4 Repair of Damage..............................................................................................
7
4.5.6 Improvements....................................................................................................
7
4.5.7 Alterations of PREMISES after Construction...................................................
7
4.6 Signs..........................................................................................................................
7
4.7 Utilities......................................................................................................................
7
4.7.1 Utility Services and Expense.............................................................................
7
4.7.2 Trash & Garbage................................................................................................
8
4.8 Parking......................................................................................................................
8
4.9 Hazardous Substances...............................................................................................
8
4.9.1 Definition...........................................................................................................
8
4.9.2 Information........................................................................................................
8
4.9.3 Indemnification..................................................................................................
9
4.10 Risk of Loss............................................................................................................
9
CONCESSION AGREEMENT 1
Article 5. DESIGN & CONSTRUCTION OF PREMISES ...............................................
9
5.1 Design.......................................................................................................................
9
5.2 Building & Site Plans/Access Easement...................................................................
9
5.3 Construction/Site Work/Fencing..............................................................................
9
5.4 Construction Deadlines...........................................................................................
10
5.5 Failure to Meet Construction Deadlines/Time of Essence .....................................
10
5.6 Stormwater Drainage, Sewer, & Water Lines ........................................................
10
5.7 Development and Construction Fees & Expenses ..................................................
10
5.8 Escrow Requirements To Ensure Performance of Contractors ..............................
10
5.9 Not a Public Works Project.....................................................................................
10
5.10 No Liens................................................................................................................
11
Article 6. FINANCING & SECURITY INTERESTS......................................................
11
6.1 Financing - No CITY Obligation............................................................................
11
6.2 Security Interest in PREMISES & Agreement/Consent.........................................
12
6.3 LENDER'S Reliance on Term and Renewal Options .............................................
12
6.4 Surrender of the Collateral......................................................................................
12
6.5 Notice of Default and Lender's Rights...................................................................
13
6.5.1 Notice of Default..............................................................................................
13
6.5.2 Termination for Monetary Default...................................................................
13
6.5.3 Termination for Non -Monetary Default..........................................................
13
6.6 Right to Assign.......................................................................................................
14
6.7 Disposition of Insurance.........................................................................................
14
6.8 Right to Participate in Litigation.............................................................................
14
6.9 Incorporation of Lender's Protection Provisions....................................................
14
6.10 Right to Remove Collateral..................................................................................
14
6.11 Notices..................................................................................................................
14
Article 7. TERMINATION...............................................................................................
15
7.1 Failure to Perform...................................................................................................
15
7. 1.1 Obligation to Perform......................................................................................
15
7.1.2 Payments to Other Parties................................................................................
15
7.2 Default.....................................................................................................................
15
7.2.1 CITY's Default................................................................................................
15
7.2.2. CONCESSIONAIRE's Default......................................................................
15
7.2.3 Default for Other Cause...................................................................................
16
7.3 Remedies Are Cumulative......................................................................................
16
7.4 Destruction of Premises & Use of Insurance Proceeds ..........................................
16
7.5 Duties upon Termination........................................................................................
16
7.6 Eminent Domain.....................................................................................................
17
7.6.1 Rights of Termination......................................................................................
17
7.6.2 Non-Termination..............................................................................................
17
7.6.3 Compensation..................................................................................................
17
Article 8. GENERAL CONDITIONS..............................................................................
18
8.1 Relationship of PARTIES.......................................................................................
18
8. 1.1 CONCESSIONAIRE Independent Contractor Status .....................................
18
8.1.2 No Third Party Rights Created........................................................................
18
8.1.3 No Joint Venture/Partnership...........................................................................
18
CONCESSION AGREEMENT ii
8.2 Notices....................................................................................................................
18
8.3 Reports & Information............................................................................................
19
8.4 Permits, Licenses, Taxes, & Fees...........................................................................
19
8.4.1 Permits, Licenses, & Other Documents...........................................................
19
8.4.2 Taxes & Fees....................................................................................................
19
8.5 Insurance.................................................................................................................
19
8.5.1 Fire, Earthquake, & Casualty Insurance..........................................................
19
8.5.2 Liability Insurance...........................................................................................
19
8.5.3 Release and Waiver of Subrogation.................................................................
20
8.6 Hold Harmless, Indemnification, & Industrial Insurance .......................................
20
8.6.1 Hold Harmless & Indemnification...................................................................
20
8.6.2 Industrial Insurance..........................................................................................
20
8.7 Successors & Assigns.............................................................................................
21
8.8 Bankruptcy..............................................................................................................
21
8.9 Compliance with Laws...........................................................................................
21
8.10 Nondiscrimination.................................................................................................
22
8.11 Choice of Law & Venue.......................................................................................
22
8.12 Costs & Attorneys' Fees.......................................................................................
22
8.13 Modification..........................................................................................................
22
8.14 Change in Law/Renegotiation...............................................................................
22
8.15 Force Majeure.......................................................................................................
22
8.16 Waiver...................................................................................................................23
8.17 Illegal Provisions - Severability............................................................................
23
8.18 Article Headings, Gender, & Number..................................................................
23
8.19 Entire Agreement..................................................................................................
23
8.20 Counterparts..........................................................................................................
23
8.21 Recording..............................................................................................................
23
Exhibit A — Legal Description of Premises
Exhibit B — Preliminary Building and Site Plans
Exhibit C — Appraisal and Compensation Information
CONCESSION AGREEMENT iii
CONCESSION AGREEMENT
THIS CONCESSION AGREEMENT ("Agreement") is entered into effective the
Jgoay of ,2001 (hereinafter referred to as the "EFFECTIVE DATE"),
by and betwe the CITY OF BREMERTON, a Washington municipal corporation
(hereinafter referred to as the "CITY"), and OLYMPIC SOCCER & SPORTS CENTER,
LLC, a Washington limited liability company (hereinafter referred to as the
"CONCESSIONAIRE"), referred to collectively as the "PARTIES."
RECITALS
WHEREAS, the CITY is owner of the property commonly described as the
Pendergast Regional Park (hereinafter referred to as the "PARK"); and
WHEREAS, the CITY owns undeveloped land within the confines of the PARK
available for development of an indoor athletic facility; and
WHEREAS, the CONCESSIONAIRE has the experience, ability, and resources
to develop and operate an indoor athletic facility; and
WHEREAS, the PARTIES intend this Agreement to be a ground and use
concession allowing the CONCESSIONAIRE to develop, construct, and operate an
indoor athletic facility, for profit, on certain undeveloped land within the confines of the
PARK and which said land will remain property of the CITY; and
WHEREAS, the PARTIES agree that no joint venture or partnership is formed as
a result of this Agreement; and
WHEREAS, the CONCESSIONAIRE will be responsible for the design and
construction of an indoor athletic facility and exterior landscaping (hereinafter
collectively referred to as the "PREMISES") on the CITY's real property, which visually
blend with the setting, which are to be constructed within the confines of the PARK, and
all improvements to the PREMISES will become property of the CITY at the termination
of this Agreement; and
WHEREAS, the CITY shall have the right to approve the final design of the
PREMISES and shall have a continuing right to approve the exterior color of any
structure on the PREMISES; and
WHEREAS, the CITY, and not the CONCESSIONAIRE, will be responsible to
provide adequate parking to support the PREMISES and its operations; and
WHEREAS, the CONCESSIONAIRE will be responsible for obtaining all
necessary financing for the development and operation of the PREMISES; and
CONCESSION AGREEMENT Page I of 25
WHEREAS, it is mutually understood by the PARTIES that any lender who
provides the CONCESSIONAIRE financing solely for the development and operation of
the PREMISES will require this Agreement as protection and security for lender
("lender") The term "lender" shall also mean the successors and assigns of the lender;
and
WHEREAS, the CITY will acknowledge and consent to lender taking a first
position security interest in this Agreement and the PREMISES, lender taking an
assignment of the right, title, claim and interest of CONCESSIONAIRE in this
Agreement, lender obtaining the right of substitution for CONCESSIONAIRE, lender
taking possession of the PREMISES, lender operating the PREMISES pursuant to the
terms of this Agreement, and/or lender selling, assigning and/or transferring
CONCESSIONAIRE'S interest in this Agreement and/or the PREMISES;
WITNESSETH:
NOW, THEREFORE, in consideration of the promises, covenants, and
provisions set forth in this Agreement, the PARTIES agree as follows:
Article 1. GROUND AND USE CONCESSION
1.1 Concession of PREMISES
CITY hereby grants a ground and use concession to CONCESSIONAIRE for the
PREMISES, approximately thirty thousand square feet (30,000 sq. ft.) of undeveloped
land within the confines of the Pendergast Regional Park for development, construction,
and operation, for profit, of an indoor athletic facility and exterior landscaping legally
described in Exhibit A attached hereto and incorporated by reference (PREMISES does
not include the fee ownership of the real property upon which the PREMISES are
located), and generally shown in the preliminary building and site plan in Exhibit B
attached hereto and incorporated by reference. CONCESSIONAIRE hereby agrees to the
terms and conditions of this Agreement. The PARTIES agree that the PREMISES are
currently undeveloped with no permanent structures, and that any and all development,
construction, and improvements of and to the PREMISES are owned by
CONCESSIONAIRE subject to any security interest of lender, if any. At the termination
of this Agreement, other than as a result of condemnation proceedings, the then existing
improvements to the PREMISES will become the property of and owned by the CITY.
The common address of the PREMISES is 1199 Union Avenue Bremerton WA, 98312.
1.2 Possession, Quiet Enjoyment & Covenants Real
Except as provided in Articles 3 & 4.3 herein, the CONCESSIONAIRE shall be
entitled to exclusive possession of the PREMISES upon commencement of the
development and construction of the PREMISES as defined by Article 5.4 herein. Upon
taking possession of the PREMISES, and on performing all the covenants and conditions
herein, the CONCESSIONAIRE shall peaceably and quietly have, hold, and enjoy the
PREMISES at all times during the full term of this Agreement. Every covenant in this
Agreement shall be deemed and treated to be a covenant running with the PREMISES
CONCESSION AGREEMENT Page 2 of 25
during the full term of the Agreement, and shall extend to the heirs, legal representatives,
successors, and assigns of the PARTIES. No change in CITY's ownership of the
PREMISES, or rights to the payments hereunder, however accomplished, shall operate to
enlarge the obligations or reduce the rights of CONCESSIONAIRE. No change in
CITY's ownership of the PREMISES shall be binding upon CONCESSIONAIRE for any
purpose until CONCESSIONAIRE shall have been given notice thereof.
Article 2. TERM OF AGREEMENT
2.1 Term
The term of this Agreement shall be 10 years, commencing upon the EFFECTIVE
DATE of this Agreement.
2.2 Option to Renew
The CITY agrees to offer the CONCESSIONAIRE three (3) successive ten (10)
year options to renew this Agreement, contingent upon CONCESSIONAIRE remaining
in full compliance with the terms and conditions of this Agreement. To execute an option
for renewal, the CONCESSIONAIRE, not more than 180 days and not less than 60 days
prior to the expiration of term, shall give written notice to the CITY that the
CONCESSIONAIRE is exercising the CONCESSIONAIRE's option for an additional
ten (10) year term. The CONCESSIONAIRE's written notice shall include a sworn
affidavit that the CONCESSIONAIRE is currently in full compliance with the terms and
conditions of this Agreement. The option will become effective upon receipt by the CITY
of CONCESSIONAIRE's written notice and sworn affidavit and no further process or
documentation will be required.
Article 3. CONSIDERATION
3.1. PREMISES Use in Lieu of Cash
As consideration for the ground and use concession granted by the CITY to the
CONCESSIONAIRE by Article 1 herein, the CONCESSIONAIRE shall provide fair and
equitable compensation to the CITY based upon an appraisal of the PREMISES at the
EFFECTIVE DATE of this Agreement conducted on behalf of the CITY by a certified
appraiser pursuant to the Appraisal and Compensation Information described in Exhibit C
attached hereto and incorporated by reference. In lieu of cash payments, the annual
compensation provided by the CONCESSIONAIRE to the CITY shall be in the form of
hours of use of the PREMISES. PREMISES use by the CITY shall be governed by
Article 3.3 herein. Based upon the appraised value of the PREMISES, the
CONCESSIONAIRE shall provide the CITY with an annual total of 182 hours of
PREMISES use; said kinds of use to be determined at the sole discretion of the CITY.
3.2 Athletic Equipment/Personal Property Use
PREMISES use by the CITY received as consideration for this Agreement does
not include the use by the CITY of any of the CONCESSIONAII2E's athletic equipment
or other personal property. Use by the CITY of any of the CONCESSIONAIRE's athletic
CONCESSION AGREEMENT Page 3 of 25
equipment or other personal property will be negotiated separately between the CITY and
the CONCESSIONAIRE and is outside the scope of this Agreement.
3.3 Timing of Consideration Payment
The consideration paid by the CONCESSIONAIRE in the form of PREMISES
use by the CITY shall commence accruing from the EFFECTIVE DATE of this
Agreement. It is mutually understood and agreed that the CITY can receive its full annual
compensation of 182 hours of PREMISES use at any time during the 12 month period
beginning with the EFFECTIVE DATE of this Agreement and every 12 month period
thereafter.
3.4 PREMISES Use by CITY
3.4.1. Types of Use
The hours of PREMISES use provided by the CONCESSIONAIRE to the CITY
in consideration for this Agreement are intended to provide recreational opportunities of a
suitable and compatible nature for the residents of the CITY as part of the Parks and
Recreation programs. Such PREMISES use by the CITY shall be without cost to the
CITY to the extent of the 182 hours annually, pursuant to Article 3.2 herein.
3.4.2 Maintenance & Utility Costs/Clean-Up After Use
The CONCESSIONAIRE shall be responsible for all overhead costs, including
the utilities and general maintenance, of the PREMISES during the use of the PREMISES
by the CITY. The CITY agrees to clean-up the PREMISES after each CITY use.
3.4.3 Damage, Claims, & Liability
The CITY shall be responsible for all damage or claims that may arise out of the
PREMISES use by any of the CITY's employees, agents, guests, or invitees. The CITY,
during such periods of use, shall supervise or cause the CITY's employees, agents,
guests, or invitees to be supervised. The provisions for mutual indemnity, hold harmless,
and liability insurance pursuant to Articles 8.5 & 8.6 herein apply during PREMISES use
by the CITY.
3.5 Scheduling PREMISES Use by CITY
The CITY and the CONCESSIONAIRE shall meet at least quarterly and other
times as necessary, to determine how such PREMISES use hours shall be allocated to the
CITY in the upcoming quarter in accordance with the following provisions.
3.5.1 Spring and Summer Quarters
The CITY shall have the full discretion to determine which hours of PREMISES
use the CITY intends to use during the Spring quarter (April, May, & June) and Summer
quarter (July, August, & September) of each year. At the CITY's discretion, the CITY
has the right to schedule its full annual compensation of 182 hours of PREMISES USE
during the Spring and Summer quarters.
CONCESSION AGREEMENT Page 4 of 25
3.5.2 Fall and Winter Quarters
The CONCESSIONAIRE shall have the full discretion to determine which hours
of PREMISES use the CONCESSIONAIRE intends to use during the Fall quarter
(October, November, & December) and Winter quarter (January, February, & March) of
each year. The CONCESSIONAIRE has the right to schedule the CITY's remaining
compensation, if any, of PREMISES USE not previously scheduled by the CITY during
the Spring and Summer quarters.
3.6 CITY's Increased PREMISES Use
The CITY shall have the full discretion to determine which hours of the CITY's
PREMISES use will be accounted against the CITY's annual compensation of 182 hours.
The CITY may increase its hours of PREMISES use beyond its annual compensation by
paying to the CONCESSIONAIRE an hourly rate then in effect by the
CONCESSIONAIRE and with scheduling at the discretion of the CONCESSIONAIRE.
Article 4. USE & OPERATION OF PREMISES
4.1 Use of Premises
4.1.1 Indoor Athletic and Recreational Uses
The CONCESSIONAIRE will use and occupy the PREMISES throughout the full
term of this Agreement for the purpose of providing indoor athletic, educational,
entertainment, community activities, and recreational opportunities, all at the
CONCESSIONAIRE'S option. CONCESSIONAIRE shall take reasonable precautions in
securing the PREMISES during the full term of this Agreement.
4.1.2 Incidental Uses
The CONCESSIONAIRE may provide concessions in the form of food and
beverage and the sale of incidental items directly related to the use of the recreation
facility including, but not limited to, gym equipment, soap, shampoo, and similar shower
supplies, and clothing related to athletic pursuits.
4.1.3 Security and Nuisance During Use
The CONCESSIONAIRE shall take reasonable precautions in securing the
PREMISES during the full term of this Agreement. The CONCESSIONAIRE shall use
the Premises for no unlawful purposes and shall not use or occupy the PREMISES in any
manner, which would constitute a public nuisance or violate State or CITY laws.
4.2 Operating Hours
The availability of recreational opportunities for CITY residents is a material
consideration for this Agreement. Accordingly and during the full term of this
Agreement, the CONCESSIONAIRE shall continuously conduct and carry on the
CONCESSIONAIRE'S permitted uses and shall keep the PREMISES open for business
and cause the CONCESSIONAIRE'S business to be conducted therein during the usual
business hours of each and every business day as mutually agreed upon. This provision
CONCESSION AGREEMENT Page 5 of 25
shall not apply if the PREMISES should be closed and the business of
CONCESSIONAIRE is temporarily suspended on account of labor strikes, lockouts, or
similar causes beyond the reasonable control of CONCESSIONAIRE, or for
maintenance, remodeling, repair, or renovation as approved by the CITY in writing
(including approvals of any construction schedules.) The CONCESSIONAIRE covenants
and agrees to provide sufficient personnel, and to keep the PREMISES adequately
stocked with merchandise, recreational equipment, fixtures, and facilities so as to conduct
its business in accordance with sound business practice. The CONCESSIONAIRE, in
order to keep its business commitments, shall be in operation in accordance with sound
business practice.
4.3 Entry by CITY
CITY may enter the PREMISES at all times to inspect; provide services required
hereunder; post notices of CONCESSIONAIRE's noncompliance with the provisions of
this concession, all without being deemed a constructive eviction. Any person or persons
who may have an interest in the purpose of CITY's visit may accompany CITY. CITY
has the right to use any and all means that CITY deems proper to open doors and gates in
an emergency in order to obtain entry to the PREMISES.
4.4 Health Inspections
CONCESSIONAIRE shall not knowingly commit or willfully permit to be
committed any act or thing contrary to the rules and regulations prescribed by the local
board of health, or which shall be contrary to the laws, rules or regulations of any federal,
state or municipal authority. CONCESSIONAIRE shall allow the Bremerton-Kitsap
County Health Department to make regular and ordinary inspections of the PREMISES
as said health department may deem proper.
4.5 Maintenance, Repair, & Improvements
4.5.1 Maintenance
CONCESSIONAIRE shall, at its sole cost and expense, clean and maintain the
PREMISES, and make repairs, restorations, and replacements to the PREMISES,
including without limitation the heating, ventilating, air conditioning, mechanical,
electrical, and plumbing systems, structural roof, walls, and foundations, roof coverings,
sprinkling and irrigation systems, playing surfaces and the fixtures and appurtenances to
the PREMISES as and when needed to preserve them in "first class" condition and repair
(less normal wear from use) throughout the full term. CONCESSIONAIRE shall further
keep in repair and maintain as necessary all machinery, equipment and facilities
necessary for the playing of sports and the comfort of players. CONCESSIONAIRE shall
paint the exterior of the buildings (except the metal) with such frequency as may be
required to maintain their good, clean appearance. All such repairs, restorations, and
replacements will be in quality and workmanship at least equal to the original work or
installations. If CONCESSIONAIRE fails to make such repairs, restorations, or
replacements, CITY may make them at the expense of CONCESSIONAIRE and such
expense will be paid by CONCESSIONAIRE within fifteen (15) days after delivery of a
statement for such expense.
CONCESSION AGREEMENT Page 6 of 25
4.5.2 Sidewalks Maintenance
At its sole cost and expense, CONCESSIONAIRE shall maintain any sidewalks
on the PREMISES in good and presentable condition during the full term of this
Agreement, shall be responsible for correcting any unsafe conditions, and shall be
responsible for the removal of ice and snow from the sidewalks.
4.5.3 Janitorial Services
At its sole cost and expense, CONCESSIONAIRE shall keep the PREMISES
clean, and shall provide sufficient janitorial services to maintain a tidy appearance on and
about the PREMISES. CONCESSIONAIRE shall provide landscaping maintenance
services such that landscaping on the PREMISES remains healthy, attractive, and well
maintained.
4.5.4 Repair of Damage
In the event any damage or injury shall occur to the PREMISES of any kind or
nature whatsoever, CONCESSIONAIRE shall promptly cause said damage or injury to
be fully repaired at CONCESSIONAIRE'S own cost and expense. In the event
CONCESSIONAIRE fails to accomplish such repairs within fifteen (15) days of receipt
of written notice by the CITY, then in that event CITY may, but is not required to, enter
the PREMISES and accomplish such repairs and bill CONCESSIONAIRE who will pay
the bill within fifteen (15) days after delivery of a statement for such expense.
4.5.6 Improvements
The CONCESSIONAIRE shall be solely responsible for providing adequate
funding for any alterations or improvements as provided in this Agreement and such
alterations or improvements shall be made without cost to the CITY.
4.5.7 Alterations of PREMISES after Construction
After such time as the PREMISES have been completed and accepted as defined
above, the CONCESSIONAIRE shall not make any material alteration to the PREMISES
including any changes to the landscaping, without the CITY'S prior written consent.
4.6 Signs
CONCESSIONAIRE may place and maintain signs upon the PREMISES in
accordance with the sign ordinance of the CITY.
4.7 Utilities
4.7 .1 Utility Services and Expense
The CONCESSIONAIRE will pay for all water, gas, garbage, sewage, electricity,
telephone, and other utilities and communications services used by CONCESSIONAIRE
on the PREMISES, whether or not such services are billed directly to
CONCESSIONAIRE. CONCESSIONAIRE will also procure, or cause to be procured,
without cost to the CITY, any and all necessary permits, licenses, or other authorizations
required for the lawful and proper installation and maintenance upon the PREMISES of
utility appurtenances and appliances for use in supplying such utilities and services to and
CONCESSION AGREEMENT Page 7 of 25
upon the Premises. The CITY, upon request of CONCESSIONAIRE, and at the sole
expense and liability of the CONCESSIONAIRE, will join with CONCESSIONAIRE in
any application required for obtaining or continuing any such services, provided that such
services do not violate any other applicable provision of this Agreement. The CITY shall
not be held liable for any injury, loss, or damage caused by or resulting from any
interruption or failure of utility services due to any cause whatsoever, except the CITY's
sole negligence. CONCESSIONAIRE shall not be entitled to any offset, reduction, or
return of consideration as a result of any interruption or failure of services.
4.7.2 Trash & Garbage
The CONCESSIONAIRE shall place all trash and garbage into such areas and
containers as are designed and intended to accommodate the trash and garbage generated
within or on the Premises. The CONCESSIONAIRE shall not allow trash and/or garbage
to accumulate such that a nuisance or health hazard results.
4.8 Parking
The CITY will be responsible to provide adequate parking to support the
PREMISES and its operations.
4.9 Hazardous Substances
4.9.1 Definition
As used herein, the term "Hazardous Substance" means any hazardous, toxic, or
dangerous substance, waste, or material, which is or becomes regulated under any
federal, state, or local statute, ordinance, rule, regulation, or other law now or hereafter in
affect pertaining to environmental protection, contamination, or cleanup.
4.9.2 Information
CONCESSIONAIRE shall keep upon the PREMISES, in a location accessible to
CITY, on request during normal business hours, copies of all reports regarding hazardous
or toxic materials in the PREMISES that CONCESSIONAIRE has provided to any
governmental agency in the previous quarter. CONCESSIONAIRE shall, upon request
and at CONCESSIONAIRE'S expense, provide CITY with a copy of any such report as
to which CITY request a copy. In the event of any accident, spill, or other incident
involving hazardous or toxic matter that CONCESSIONAIRE is required to report to any
governmental agency, CONCESSIONAIRE shall immediately report the same to the
CITY and supply CITY with all information and reports with respect to the same,
together with CONCESSIONAIRE'S clean-up or remediation plan and schedule. If such
clean-up or remediation plan is not acceptable to CITY in CITY'S sole discretion, CITY
may so notify CONCESSIONAIRE and, upon 48 hours prior written notice (or without
notice if so required by an emergency) may enter on the PREMISES to conduct the
cleanup or remediation and charge CONCESSIONAIRE the costs thereof. All
information described herein shall be provided to CITY regardless of any claim by
CONCESSIONAIRE that it is confidential or privileged, provided that the CITY shall
not publish or disclose the information to any third party except as pursuant to Chapter
42.17 RCW.
CONCESSION AGREEMENT Page 8 of 25
4.9.3 Indemnification
CONCESSIONAIRE agrees to hold harmless, protect, indemnify, and defend
CITY from and against any damage, loss, claim, or liability, INCLUDING Attorney's
fees and costs, resulting from CONCESSIONAIRE'S use, disposal, transportation,
generation, and/or sale of any Hazardous Substances. The CITY agrees to hold harmless,
protect, indemnify, and defend CONCESSIONAIRE from and against any damage, loss,
claim, or liability, including attorney's fees and costs, resulting from (a) Hazardous
Substances existing on the PREMISES as of the EFFECTIVE DATE of this Agreement;
or (b) Hazardous Substances thereafter used, disposed of, or generated on the PREMISES
by the CITY. These indemnities will survive the termination of this Agreement, whether
by expiration of the Term or otherwise.
4.10 Risk of Loss
All personal property of any kind or description whatsoever in the PREMISES
shall be at the CONCESSIONAIRE's sole risk, and CITY shall not be liable for any
damage done to, or loss of, such personal property. However, CONCESSIONAIRE is not
responsible for losses or claims of stolen property during the CITY'S use periods.
Article 5. DESIGN & CONSTRUCTION OF PREMISES
5.1 Design
The CONCESSIONAIRE shall retain a licensed architect or licensed professional
engineer, registered in the State of Washington (hereinafter referred to as the DESIGN
ENGINEER), who shall design the indoor athletic facility and exterior landscaping (the
PREMISES), which shall visually blend with the setting. The CITY shall have the right
to approve the final design of the PREMISES and shall have a continuing right to
approve the exterior color of any structure on the PREMISES. CONCESSIONAIRE shall
comply with the Americans with Disabilities Act of 1990 (ADA) in the design,
construction, and operation of the PREMISES.
5.2 Building & Site Plans/Access Easement
The CONCESSIONAIRE shall retain a licensed architect or licensed professional
engineer, registered in the State of Washington, to prepare building and site plans for the
PREMISES, which shall reference the structure, utilities generally, and landscape plan.
The CITY shall have the right to approve the final building and site plans. Upon its
approval of the final building and site plans, the CITY will grant to the
CONCESSIONAIRE an access easement from the PREMISES to the public right-of-
way. Upon being granted, the access easement shall run for the term of this Agreement
and shall be part of the PREMISES.
5.3 Construction/Site Work/Fencing
The CONCESSIONAIRE shall be solely responsible for all development and
construction of the PREMISES and hold the CITY harmless from any and all claims
arising out of the development and construction of the PREMISES pursuant to Article 8.6
herein. CONCESSIONAIRE shall be responsible for the site work, all required permits
and grading. CONCESSIONAIRE shall properly barricade the work area and install
CONCESSION AGREEMENT Page 9 of 25
signage directing unauthorized person from entering onto the building site during any
phase of development or construction. Unless otherwise agreed fencing shall be placed
around the work area. In addition, the building site shall be kept in a clean and organized
condition during development periods. CONCESSIONAIRE shall be responsible for site
security, traffic and pedestrian warnings at the site during the development and
construction phases.
5.4 Construction Deadlines
CONCESSIONAIRE shall be required to commence development and
construction of the PREMISES within six months of the EFFECTIVE DATE of this
Agreement. Commencement of development and construction of the PREMISES is
defined as that date upon which physical movement or grading of the soil in preparation
for construction of any structure on the PREMISES. CONCESSIONAIRE shall be
required to complete the development and construction of the PREMISES within one
year of the EFFECTIVE DATE of this Agreement. Completion of the development and
construction of the PREMISES is defined as that date upon which all final occupancy
permits are obtained by the CONCESSIONAIRE for all structures on the PREMISES.
5.5 Failure to Meet Construction Deadlines/Time of Essence
Except as provided in Article 8.15 herein, it is mutually understood and agreed
that failure by the CONCESSIONAIRE to meet the development and construction
deadlines shall constitute a material breach of this Agreement by the
CONCESSIONAIRE and the CITY, at its option, can terminate this Agreement for cause
pursuant to Article 7. Time is of the essence with this Agreement.
5.6 Stormwater Drainage, Sewer, & Water Lines
The CONCESSIONAIRE will be responsible for relocating storm drains, sewers,
and water lines to the PREMISES, as required to complete development and construction
of the PREMISES.
5.7 Development and Construction Fees & Expenses
The CONCESSIONAIRE shall be responsible for obtaining and paying for
necessary permits, fees, and expenses associated with the development and construction
of the PREMISES. In addition, CONCESSIONAIRE shall be responsible for any
additional costs for inspections billed to the CITY by any government agency, including
but not limited to the City of Bremerton, Kitsap County, or the State of Washington.
5.8 Escrow Requirements To Ensure Performance of Contractors
It is mutually understood and agreed that the CONCESSIONAIRE will, prior to
the commencement of development and construction of the PREMISES pursuant to
Article 5.4 herein, place into escrow funds sufficient to ensure contractor performance
through completion of construction and development of the PREMISES.
5.9 Not a Public Works Project
The development and construction of the PREMISES is not a public works
project requiring the payment of prevailing wages. CONCESSIONAIRE is the developer
CONCESSION AGREEMENT Page 10 of 25
and the CITY is not an owner, partner, joint venturer, nor maintains any other business
relationship with the CONCESSIONAIRE. The CITY is not involved with, nor has any
responsibilities for, the biding, contracting or operations of the PREMISES and will
occupy no space in the PREMISES. The CONCESSIONAIRE does not deem itself
required to pay prevailing wages nor will the CONCESSIONAIRE be obligated to pay or
to contract for prevailing wages or any other standard of payment controls associated
with this project. This provision is a material part of the consideration for this Agreement.
The project signage and all literature, advertising by either the CITY or
CONCESSIONAIRE shall not indicate in any manner that this is a CITY project,
contract, or other misleading statement indicating that this project is a public work project
directly or indirectly.
5.10 No Liens
Except liens and encumbrances of any lender pursuant to Article 6 herein, it is
mutually understood and agreed that the CONCESSIONAIRE shall have no authority,
express or implied, to create or place any lien or encumbrance of any kind or nature
whatsoever upon, or in any manner to bind, the interest of the CITY in the PREMISES or
to charge the rentals payable hereunder for any claim in favor of any person dealing with
CONCESSIONAIRE, including those who may furnish materials or perform labor for
any construction or repairs, and each such claim shall affect and each such lien shall
attach to, if at all, only the right and interest granted to CONCESSIONAIRE by this
Agreement. If any such liens are filed, CITY may, without waiving its rights and
remedies for breach, and without releasing CONCESSIONAIRE from its obligations
hereunder, require CONCESSIONAIRE to post security in form and amount reasonably
satisfactory to CITY or cause such liens to be released by any means CITY deems proper,
including payment in satisfaction of the claim giving rise to the lien.
CONCESSIONAIRE shall pay to CITY upon demand any sum paid by CITY to remove
the liens. Further, CONCESSIONAIRE agrees that it will save and hold the CITY
harmless from any and all loss, cost, or expenses based on or arising out of the asserted
claims or liens, except those of the lender, against this Agreement or against the right,
title, and interest of the CITY in the PREMISES or under the terms of this Agreement,
including reasonable attorney's fees and costs incurred by CITY in removing such liens,
and in enforcing this paragraph. Additionally, it is mutually understood and agreed that
this paragraph is intended to be a continuing provision applicable to future repairs and
improvements after the initial construction phase.
Article 6. FINANCING & SECURITY INTERESTS
6.1 Financing - No CITY Obligation
CONCESSIONAIRE shall be solely responsible for all financing requirements for
all construction, maintenance, repairs, or subsequent improvements to the PREMISES.
The CITY shall be under no obligation directly or indirectly to pay for any labor,
material, or improvement associated with the facility except as provided herein or
mutually agreed upon. The CONCESSIONAIRE shall, in applying and obtaining
financing, inform any lender that the CITY has no financial obligations associated with
the construction, maintenance, repairs or subsequent improvements to the PREMISES.
CONCESSION AGREEMENT Page 1I of 25
6.2 Security Interest in PREMISES & Agreement/Consent
The CITY consents to the grant, transfer, pledge and assignment of any and all
right, title, claim, interest of CONCESSIONAIRE in and to this Agreement and in the
PREMISES, and in any building facility, personal property and fixtures in the
PREMISES ("Collateral") to lender for financing purposes. The CITY shall recognize
lender's first priority security interest in the Collateral and the CITY hereby subordinates
any and all interest of the CITY in said Collateral to lender. CONCESSIONAIRE
acknowledges that the CITY will not grant any security interest to any lender in CITY
real property nor will the CITY allow any encumbrance of any kind or nature whatsoever
upon, or in any manner on its title to CITY real property. In the event of default by
CONCESSIONAIRE to lender, in addition to all its rights and remedies available at law
and equity, lender may enforce and/or foreclose its security interest/interests in the
Collateral. CITY agrees that in connection with any such default, and all without further
consent of CITY, lender may:
a. Acquire CONCESSIONAIRE'S interest in the Collateral either by a deed in lieu
of foreclosure or actual foreclosure;
b. Rent and/or grant a ground and use concession of the PREMISES subject to this
Agreement pending foreclosure of the Collateral by lender;
c. Assign, sell and/or transfer the Collateral in whole or in part to any person or
entity;
d. Take possession of any or all of the Collateral, obtain right of substitution for
CONCESSIONAIRE and operate said Collateral; and/or
e. Appoint a receiver.
6.3 LENDER'S Reliance on Term and Renewal Options
The City acknowledges that the CONCESSIONAIRE, in making application for
financing, may be required to have an assurance that the terms of this Agreement will
extend beyond the term of the financing term. By its signature to this Agreement, the
CITY confirms its authority to provide the ten-year Agreement term with three options to
extend the ten-year Agreement for a total of forty years with the renewal options
conditioned solely upon the CONCESSIONAIRE maintaining current payments and
remaining in full compliance with the terms and conditions of this Agreement. Lender
may, but is not obligated to exercise the right to renew and extend the terms of this
Agreement as set forth herein. Additionally, the CITY acknowledges that, after any
original financing commitments by the CONCESSIONAIRE have been satisfied, these
financing provisions shall be applicable to all future advances or financing required by
the CONCESSIONAIRE and used solely for the improvements and repairs of the
PREMISES.
6.4 Surrender of the Collateral
No surrender of Collateral or the PREMISES subject to this Agreement or any
other act of CONCESSIONAIRE shall be deemed to terminate this Agreement. CITY
will not terminate this Agreement voluntarily by agreement with CONCESSIONAIRE
unless lender has been previously notified in writing and has consented to the termination
in writing. This Agreement shall not be amended or modified unless lender has been
CONCESSION AGREEMENT Page 12 of 25
previously notified in writing and has consented to such amendment or modification in
writing.
6.5 Notice of Default and Lender's Rights
6.5.1 Notice of Default
If CONCESSIONAIRE defaults under this Agreement or if any event occurs
which would give CITY the right to terminate, modify, amend or shorten the term of this
Agreement, CITY shall take no steps to exercise any right it may have under this
Agreement without first giving lender written notice of such default in accordance with
Article 6.11 below. A copy of each and every notice of default served or sent by CITY or
its agent to or upon CONCESSIONAIRE pursuant to this Agreement shall be sent
contemporaneously to lender in accordance with Article 6.11 below. Such notice of
default shall specify the event or events of default then outstanding and the time period at
the end of which the indicated action would become effective.
6.5.2 Termination for Monetary Default
If the notice of default given by CITY to lender relates to a monetary default and
CONCESSIONAIRE has not cured such monetary default within 30 days after lender
receives the notice and CONCESSIONAIRE'S failure to cure results in CITY desiring to
terminate this Agreement, CITY may terminate this Agreement if such monetary default
is not cured by either CONCESSIONAIRE or lender within forty-five (45) days after
lender receives the notice of default.
6.5.3 Termination for Non -Monetary Default
If the notice of default given by CITY to lender relates to a non -monetary default
and CONCESSIONAIRE has not cured, or diligently pursued curing, such non -monetary
default within thirty (30) days after lender receives the notice, CITY shall take no action
to terminate this Agreement if:
a. Within sixty (60) days after CITY'S notice to lender regarding
CONCESSIONAIRE'S failure to cure (or failure to diligently pursue a cure)
lender notifies CITY of its intent to realize upon its security interest and
commences realization within sixty (60) days thereafter, and diligently pursues
realization; and
b. Lender pays CITY at time of notification all monies or performances due that
may be in default up to the day lender notifies CITY of lender's intent and further
pays or performs all consideration that accrues during the period after lender so
notifies CITY and completes such other performances that may be required or
come due under this Agreement.
CITY shall not terminate this Agreement because of CONCESSIONAIRE'S breach of
any terms of this Agreement relating to the solvency of CONCESSIONAIRE or the
institution of any bankruptcy, insolvency, receivership or related action by or against
CONCESSIONAIRE as long as lender cures any default under this Agreement by
CONCESSIONAIRE as provided herein, except that lender shall not be required to cure
any defaults relating to solvency of CONCESSIONAIRE.
CONCESSION AGREEMENT Page 13 of 25
6.6 Right to Assign
Lender shall have the right to assign its interest in the Collateral. Upon the
purchaser's, assignee's or transferee's assumption and agreement to perform and be
bound by all of the terms of this Agreement, lender shall be relieved from further liability
under this Agreement. If a lender finances the purchaser, assignee or transferee, said
lender shall be subject to all obligations as set forth in this Agreement.
6.7 Disposition of Insurance
Should the Collateral suffer any loss which is covered by casualty insurance, and
the insurance proceeds are used to restore any improvements made by
CONCESSIONAIRE, CITY agrees that CONCESSIONAIRE and lender shall have the
right to such proceeds so long as none of CITY'S property, utilities or other services
therein are damaged or such damages are repaired. In the event the CITY'S land is
substantially damaged and CONCESSIONAIRE'S improvements have been repaired,
CITY shall only participate in the insurance proceeds to the extent necessary to repair and
restore CITY'S land and any of CITY'S improvements on or in the ground to the same
condition the land was at the commencement of this Agreement, or in the same condition
at the time of the casualty. Other than as described herein, CITY shall have no claim to
insurance proceeds that are attributable to CONCESSIONAIRE's interest in the
Collateral.
6.8 Right to Participate in Litigation
Lender shall have the right to participate in any litigation, arbitration or dispute
directly affecting the Collateral or interest of CONCESSIONAIRE or lender therein,
including, without limitation, any suit, action, arbitration proceeding, condemnation
proceeding or insurance claim. CITY, upon instituting or receiving notice of any such
litigation, arbitration or dispute will promptly notify lender of the same.
6.9 Incorporation of Lender's Protection Provisions
Lender shall be a beneficiary of all rights of CONCESSIONAIRE herein
including but not limited to the warranty, indemnity, hold harmless, choice of law and
venue, costs and attorney's fees as provided herein.
6.10 Right to Remove Collateral
In the event lender exercises its rights under its Collateral and realizes upon the
Collateral, CITY agrees that lender is entitled to remove the Collateral, including but not
limited to building facility, furniture, movable trade fixtures and equipment, from the
PREMISES at any reasonable time and that the Collateral shall remain personal property
even though the trade fixtures may be affixed to or placed upon the PREMISES. In the
event lender so realizes on its Collateral, CITY waives any right, title, claim, lien or
interest in the Collateral.
6.11 Notices
All notices, copies of notices, consents or other communications to lender given
under this Agreement to lender must be in writing and shall be effective when received.
CONCESSION AGREEMENT Page 14 of 25
Such communications shall be given in person to an officer of lender, addressed to lender
at an address as provided by lender.
Article 7. TERMINATION
7.1 Failure to Perform
7.1.1 Obligation to Perform
Nothing herein shall imply any duty upon CITY to do any work, which under any
provision of this concession CONCESSIONAIRE may be required to perform, and the
performance thereof by CITY shall not constitute a waiver of CONCESSIONAIRE's
default. CITY shall not in any event be liable for inconvenience, annoyance, and
disturbance in its activities in the PARK, however shall not permit a loss of business, or
other damage to CONCESSIONAIRE by reason of its actions pertaining to the PARK.
7.1.2 Payments to Other Parties
Except as otherwise expressly provided hereunder, all obligations of the
CONCESSIONAIRE under this Agreement will be performed by CONCESSIONAIRE
at CONCESSIONAIRE's sole cost and expense. If CONCESSIONAIRE fails to pay any
sum of money owed to any party other than CITY for which CONCESSIONAIRE is
liable hereunder, or if CONCESSIONAIRE fails to perform any other act on its part to be
performed hereunder, and such failure continues for ten days after notice thereof by
CITY, CITY may, without waiving or releasing CONCESSIONAIRE from its
obligations, make any such payment or perform any such other act to be made or
performed by CONCESSIONAIRE. CONCESSIONAIRE shall pay CITY, on demand,
all sums so paid by CITY and all necessary incidental costs, together with interest
thereon at the lesser of 1'h percent per month or the maximum rate permissible by law,
from the date of such payment by CITY.
7.2 Default
7.2.1 CITY's Default
CITY will not be in default unless CITY fails to perform an obligation within
thirty (30) days after notice by CONCESSIONAIRE, which notice must specify the
alleged breach; provided that if the nature of CITY's obligation is such that more than
thirty (30) days are reasonably required for cure, then CITY will not be in default if
CITY commences to cure within thirty (30) days of CONCESSIONAIRE's notice and
thereafter diligently pursues completion and completes performance within a reasonable
time.
7.2.2. CONCESSIONAIRE's Default
The occurrence of any one or more of the following events constitutes a default
under this Agreement by CONCESSIONAIRE: (1) CONCESSIONAIRE shall be in
default of the performance of any covenants, conditions, or provisions of this Agreement,
other than the covenants for the payment of consideration required by this Agreement,
where such failure continues for a period of thirty (30) days after written notice is given
CONCESSION AGREEMENT Page 15 of 25
by CITY provided that if the nature of CONCESSIONAIRE's obligations is such that
more than thirty (30) days are reasonably required for cure, CONCESSIONAIRE will not
be in default if CONCESSIONAIRE commences to cure within thirty (30) days of
CITY's notice and thereafter diligently pursues completion and completes performance
within a reasonable time; or (2) CONCESSIONAIRE shall be adjudged a bankrupt, make
a general assignment for the benefit of creditors, or take the benefit of any insolvency act,
or if a permanent receiver and trustee in bankruptcy shall be appointed for
CONCESSIONAIRE's estate and such appointment is not vacated within thirty (30)
days; or (3) PREMISES become vacant or deserted for a period of thirty (30) days; or (4)
if this Agreement shall be assigned or the PREMISES sublet other than in accordance
with the terms of this AGREEMENT and such default is not cured within twenty (20)
days after written notice to CONCESSIONAIRE; or (5) CONCESSIONAIRE shall fail to
make any payment when due, or fail to make any other payment required hereunder
when due, when that failure is not cured within thirty (30) days after mailing of written
notice thereof by CITY; or (6) CONCESSIONAIRE shall fail to comply with the same
concession term or covenant on three occasions during the Term, even if such breach is
cured within the applicable cure period.
7.2.3 Default for Other Cause
This Agreement may be immediately terminated for other cause by a party if the
other party substantially fails to perform its obligations under this Agreement, through no
fault of the terminating party, and the non-performing party does not commence
correction of the failure of performance within thirty (30) days of the terminating party's
sending notice to the non-performing party.
7.3 Remedies Are Cumulative
Remedies under this Agreement are cumulative; the failure to exercise on any
occasion any right shall not operate to forfeit such remedy.
7.4 Destruction of Premises & Use of Insurance Proceeds
Unless otherwise mutually agreed by the PARTIES, in the event the PREMISES
are destroyed or injured by fire, earthquake, or other casualty, then CONCESSIONAIRE
shall proceed to rebuild and restore the PREMISES, or such part thereof as may be
injured as aforesaid. In the event of any loss covered by the insurance policies described
and required pursuant to Article 8.5.1 herein, unless this Agreement shall be terminated
as provided herein, the proceeds of such insurance policies shall be used by
CONCESSIONAIRE first to rebuild and restore the PREMISES and replace the
improvements, fixtures, and equipment, which may be damaged or destroyed by such
casualty.
7.5 Duties upon Termination
Upon termination of this agreement, and unless otherwise arranged,
CONCESSIONAIRE shall remove from the PARK all its personal property, goods, and
effects. In the event that the CONCESSIONAIRE fails to perform this duty at
termination, the CITY may cause such removal to be made and said personal property,
goods, and effects to be stored, the cost and expense to be paid by the
CONCESSION AGREEMENT Page 16 of 25
CONCESSIONAIRE. It is mutually understood and agreed that the real property
constituting the PREMISES of this Agreement is the real property of the CITY and that
all improvements to said real property shall revert to the CITY at the termination of this
Agreement.
7.6 Eminent Domain
The following rules shall govern the rights and duties of the PARTIES in the
event of interference with the possession of the PREMISES by CONCESSIONAIRE by
right of eminent domain or private purchase in lieu thereof.
7.6.1 Rights of Termination
If the whole of the PREMISES shall be taken for any public or quasi -public use
under any statute or by right of eminent domain, or by private purchase in lieu thereof,
then this Agreement shall automatically terminate as of the date that title shall be taken. If
more than twenty-five percent (25%) of the PREMISES shall be so taken and if the
taking renders the remainder thereof unusable for the purposes for which the PREMISES
were concessioned, then CITY and CONCESSIONAIRE shall each have the right to
terminate this Agreement on thirty (30) days notice to the other given within ninety (90)
days after the date of such taking. Provided, however, that if the CITY is exercising its
rights of eminent domain, a fair value shall be placed on this Agreement and the
PREMISES with the compensation thereof awarded solely to CONCESSIONAIRE, or
lender pursuant to its security interest, if any.
7.6.2 Non -Termination
If any part of the PREMISES shall be so taken and this Agreement is not
terminated, then the CITY shall, at its own cost and expense, restore the remaining
portion of the PREMISES to the extent necessary to render it reasonably suitable for the
purposes for which it was concessioned.
7.6.3 Compensation
The compensation awarded or paid upon such a total or partial taking of the
PREMISES and/or this Agreement shall belong to and be apportioned between the CITY
and CONCESSIONAIRE in accordance with their respective interests as determined by a
court of competent jurisdiction. Additionally, CONCESSIONAIRE may prosecute any
claim directly against the condemning authority for the costs of removal of the goodwill,
stock, trade fixtures, furniture and other personal property belonging to
CONCESSIONAIRE. CITY shall have no claim to condemnation proceeds that are
attributable to CONCESSIONAIRE's interest in the Collateral, nor shall lender gave any
interest in CITY's condemnation proceeds, if any.
CONCESSION AGREEMENT Page 17 of 25
Article 8. GENERAL CONDITIONS
8.1 Relationship of PARTIES
8.1.1 CONCESSIONAIRE Independent Contractor Status
The PARTIES intend that an independent relationship shall be created by this
Agreement. Nothing contained herein shall create the relationship of principal and agent
or of partnership or of joint venture between the parties hereto, and neither the method of
computation of consideration nor any other provision contained herein shall be deemed to
create any relationship between the parties hereto other than the relationship of CITY as
granting a ground and use concession to the CONCESSIONAIRE. CONCESSIONAIRE
has the experience, ability, and resources to develop and operate an indoor athletic
facility and is performing independent functions and responsibilities within its field of
expertise. CONCESSIONAIRE and its personnel are independent contractors and not
employees of the CITY. No agent, employee, servant, or representative of the
CONCESSIONAIRE shall be deemed to be an employee, agent, servant or representative
of the CITY. CONCESSIONAIRE and its personnel have no authority to bind the CITY
or to control the CITY's employees. As an independent contractor, CONCESSIONAIRE
is responsible for its own management. The CITY's administration and enforcement of
this Agreement shall not be deemed an exercise of managerial control over
CONCESSIONAIRE or its personnel.
8.1.2 No Third Party Rights Created
It is mutually understood and agreed that this Agreement is solely for the benefit
of the PARTIES hereto and gives no right to any other party except as provided by
Article 6 herein.
8.1.3 No Joint Venture/Partnership
It is mutually understood and agreed that no joint venture or partnership formed
as a result of this Agreement.
8.2 Notices
Except as provided in Article 6 herein, any notice required or permitted hereunder
must be in writing and will be effective upon the earlier of personal delivery or three days
after being mailed by certified mail, return receipt requested, addressed to
CONCESSIONAIRE or to CITY at the address for that party designated herein. Either
party may specify a different address for notice purposes by written notice to the other,
except that CITY may in any event use the PREMISES as CONCESSIONAIRE's
address for notice purposes. All notices shall be delivered to the following addresses:
CITY Address
City of Bremerton
Attn: Director of Parks and Recreation
680 Lebo Boulevard
Bremerton, WA 98310
CONCESSION AGREEMENT Page 18 of 25
CONCESSIONAIRE Address
Olympic Soccer & Sports Center, LLC
Attn: Mr. Dennis Michael, Manager
P.O. Box 5074
Bremerton, WA 98312-0466
8.3 Reports & Information
When requested by the CITY, CONCESSIONAIRE shall furnish periodic reports
and documents on matters covered by this Agreement. The reports and documents shall
be furnished in the time and form requested. CONCESSIONAIRE shall maintain
accounting records in accordance with Generally Accepted Accounting Principles
(GAAP).
8.4 Permits, Licenses, Taxes, & Fees
8.4.1 Permits, Licenses, & Other Documents
The CONCESSIONAIRE shall possess a current Bremerton Business License and
shall obtain all regulatory licenses and permits, including all construction and building
permits, necessary to fulfill CONCESSIONAIRE's obligations under this Agreement at
CONCESSIONAIRE's sole expense. Each party agrees to execute such additional or
other documents as may be required to fully implement the intent of this Agreement.
8.4.2 Taxes & Fees
As an independent contractor, the CONCESSIONAIRE shall be solely
responsible for all taxes, fees and charges incurred, including but not limited to license
fees, business and occupation taxes, workers' compensation and unemployment benefits,
all federal, state, regional, county and local taxes and fees, including income taxes,
property taxes, permit fees, operating fees, surcharges of any kind that apply to any and
all persons, facilities, property, income, equipment, materials, supplies or activities
related to the CONCESSIONAIRE's obligations under this Agreement.
8.5 Insurance
8.5.1 Fire, Earthquake, & Casualty Insurance
The CONCESSIONAIRE agrees that, at all times during the full term of this
Agreement and at its own expense, CONCESSIONAIRE shall, at its sole cost and
expense, maintain in full force and effect adequate fire, earthquake, and other casualty
coverage covering the PREMISES and its contents, including all personal property,
fixtures, improvements. Such policy shall include a replacement cost endorsement.
CONCESSIONAIRE will shall obtain and file with the CITY's Risk Manager a
Certificate of Insurance evidencing such coverage. All such insurance coverage shall
include a ten-day cancellation notice to CONCESSIONAIRE and the CITY. Adequacy of
coverage is defined as insurance sufficient to restore the PREMISES to its pre -casualty
condition.
8.5.2 Liability Insurance
Prior to the commencement date of this Agreement, CONCESSIONAIRE, at its
own expense shall obtain and file with the CITY's Risk Manager a Certificate of
Insurance evidencing general comprehensive liability insurance coverage ("CGL")
providing coverage of at least $1,000,000 per occurrence for bodily injury and $500,000
per occurrence for property damage. This Certificate of Insurance shall be subject to
approval by the CITY's Risk Manager as to company, terms and coverage, and said
CONCESSION AGREEMENT Page 19 of 25
approval shall not be unreasonably withheld. The CGL shall name the CITY as an
additional insured and must fully protect the CITY from any and all claims and risks and
losses in connection with any activities or omissions by the CONCESSIONAIRE by
virtue of this Agreement. The CGL policy shall remain in full force and effect at the
CONCESSIONAIRE's sole expense for liability for property damage or personal injury
that may occur in connection with activities or omissions by the CONCESSIONAIRE,
and provide coverage for the full term of this Agreement. CONCESSIONAIRE shall
insure that the CITY's Risk Manager is given thirty -calendar days prior written notice, by
certified mail, of any cancellation, lapse, reduction or modification of such insurance.
8.5.3 Release and Waiver of Subrogation
Any policy of insurance carried by either CITY or CONCESSIONAIRE pursuant
to any obligation under this Agreement, shall, to the extent available, contain a waiver of
subrogation clause on the part of the insurer. Such waiver shall apply to damages to
adjacent property. Notwithstanding any other provision of this Agreement, neither CITY
nor CONCESSIONAIRE shall be liable to the other party or to any insurance company
(by subrogation or otherwise) insuring the other party for any loss or damage to any
building, structure or tangible personal property of the other occurring in or about the
PREMISES or PARK, even though such loss or damage might have been occasioned by
the negligence of such party, its agents or employees, if such loss or damage is covered
by insurance issued by an insurance carrier authorized or licensed by the Insurance
Commissioner of the State of Washington to issue lines of insurance, benefiting the party
suffering such loss or damage or was required under the terms of this Agreement to be
covered by insurance by the party covering the loss.
8.6 Hold Harmless, Indemnification, & Industrial Insurance
8.6.1 Hold Harmless & Indemnification
Each party hereto agrees to be responsible and assumes liability for its own
wrongful or negligent acts or omissions, or those of its officers, agents, or employees to
the fullest extent required by law. Each party agrees to save, indemnify, defend, or hold
the other party harmless against all liability, loss, damages, and expenses, including costs
and attorney's fees, resulting from actions, claims and lawsuits arising or alleged to have
arisen, in whole or in part, out of or in consequence of the acts or failures to act of the
other party, its employees, its subcontractors, its agents, or its assigns, which arise in any
way out of the performance of this Agreement. In the case of negligence of both the
CITY and the CONCESSIONAIRE, any damages allowed shall be levied in proportion
to the percentage of negligence attributable to each party, and each party shall have the
right to seek contribution from the other party in proportion to the percentage of
negligence attributable to the other party.
8.6.2 Industrial Insurance
The PARTIES have specifically negotiated CONCESSIONAIRE's waiver of its
immunity under Title 51 RCW, which is hereby waived for purposes of
CONCESSIONAIRE's indemnification and hold harmless of the CITY, including the
CONCESSION AGREEMENT Page 20 of 25
duty to defend. This provision shall be inapplicable to the extent such action, claim, or
lawsuit is judicially found to arise solely from the acts or failures to act of the CITY.
8.7 Successors & Assigns
The CITY and CONCESSIONAIRE each agree to be bound to the other party in
respect to all covenants, agreements, and obligations contained in this contract. Except as
provided in Article 6 herein, neither party shall assign the contract in part or as a whole,
without the written consent of the other. Except as provided in Article 6 herein, the
CONCESSIONAIRE shall not subcontract any of the PREMISES, services, facilities, or
equipment, or delegate any of its duties under this Agreement without the prior written
approval of the CITY. The CITY acknowledges that the CONCESSIONAIRE shall be
authorized to sub -concession areas within the PREMISES to food and beverage
purveyors, equipment sales, and similar supporting concessions. When requested,
approval by the CITY of a subcontract or assignment shall not be unreasonably withheld.
In the event of an assignrnent, subcontracting, or delegation of duties, the
CONCESSIONAIRE shall remain responsible for the full and faithful performance of
this Agreement and the assignee, subcontractor, or other obligor shall also become
responsible to the CITY for the satisfactory performance of the services, facilities, or
equipment assumed. The CITY may condition approval upon the delivery by the
assignee, subcontractor, or other obligor of its covenant to the CITY to fully and
faithfully complete the requirements or responsibility undertaken under this Agreement.
Notwithstanding the foregoing, provided CONCESSIONAIRE is not in default, the
CONCESSIONAIRE may assign its interest in this Agreement without seeking CITY's
consent to a parent or subsidiary. Except as otherwise provided herein, all of the
covenants, conditions, and provisions of this Agreement are binding upon and inure to
the benefit of the PARTIES and their respective heirs, personal representatives,
successors, and assigns.
8.8 Bankruptcy
Except as provided in Article 6 herein, PARTIES agree that if the
CONCESSIONAIRE is adjudged bankrupt, either voluntarily or involuntarily, then this
AGREEMENT, at the option of the CITY, may be terminated effective on the day and at
the time the bankruptcy petition is filed.
8.9 Compliance with Laws
The CONCESSIONAIRE, its officers, employees, and agents shall comply with
applicable federal, state, county, and local laws, statutes, rules, regulations, and
ordinances, in performing its obligations under this Agreement. Such compliance shall
include abiding by all applicable federal, state and local policies to ensure equal
employment opportunity based on ability and fitness to all persons regardless of race,
creed, color, national origin, religion, sex, physical handicaps or age. The
CONCESSIONAIRE shall comply with applicable laws pertaining to employment
practices and employee treatment. Conditions of the Federal Occupational Safety and
Health Act of 1970 (OSHA), the Washington Industrial Safety and Health Act of 1973
(WISHA), and standards and regulations issued under these Acts must be complied with.
The CONCESSIONAIRE agrees to indemnify and hold harmless the City from all
CONCESSION AGREEMENT Page 21 of 25
damages assessed for the CONCESSIONAIRE'S failure to comply with the Acts and
Standards issued thereunder. The CONCESSIONAIRE is also responsible for meeting all
pertinent local, state and federal health and environmental regulations and standards
applying to any operation in the performance of this Agreement.
8.10 Nondiscrimination
PARTIES shall not discriminate in employment or services to the public on the
basis of race, color, national origin, sex, religion, age, marital status, or disability, except
for employment actions based on bona fide occupational qualification.
8.11 Choice of Law & Venue
This Agreement shall be interpreted according to the laws of the State of
Washington. Any judicial action to resolve disputes arising out of this Agreement shall be
brought in Kitsap County Superior Court.
8.12 Costs & Attorneys' Fees
hi any action brought to enforce any provision of this Agreement, including
actions to recover sums due or for the breach of any covenant or condition of this
Agreement, or for the restitution of the PREMISES to the CITY or eviction of the
CONCESSIONAIRE during the term or after expiration thereof, the substantially
prevailing party shall be entitled to recover from the other party all reasonable costs and
reasonable attorney's fees incurred, including the fees of accountants, appraisers, and
other professionals, at trial or on appeal, and without resort to suit.
8.13 Modification
This Agreement may only be modified by written instrument signed by both
PARTIES.
8.14 Change in Law/Renegotiation
The PARTIES agree that changes in federal, state or local laws or regulations that
materially modify the terms and conditions of the Agreement and result in a detrimental
change in circumstances or a material hardship for either party in performing this
Agreement may be the subject of a request by a requesting party to renegotiate this
Agreement or negotiate Agreement amendments and the responding party agrees to
renegotiate fairly with the requesting party.
8.15 Force Majeure
Provided that all other requirements of this Agreement are met, any party shall not
be deemed to be in default and shall not be liable for failure to perform under this
Agreement if that party's performance is prevented or delayed by acts of God including
landslides, lightning, forest fires, storms, floods, freezing and earthquakes, civil
disturbances, acts of the public enemy, wars, blockades, public riots, breakage,
explosions, accident to machinery, equipment or materials, unavailability of required
materials, governmental restraint or other causes, whether of the kind enumerated or
otherwise, which are not reasonably within the control of that obligated party ("Force
Majeure"). If as a result of a Force Majeure event, an obligated party is unable wholly or
CONCESSION AGREEMENT Page 22 of 25
partially to meet its obligations under this Agreement, it shall give the other party
promptly written notice of the Force Majeure event, describing it in reasonable detail.
The obligated party's obligations under this Agreement shall be suspended, but only with
respect to the particular component of obligations affected by the Force Majeure and only
for the period during which the Force Majeure exists.
8.16 Waiver
Failure to enforce any provision of this Agreement shall not be deemed a waiver
of that provision. No waiver of any right or obligation of either party hereto shall be
effective unless in writing, specifying such waiver, executed by the party against whom
such waiver is sought to be enforced. Waiver of any right or power arising out of this
Agreement shall not be deemed waiver of any other right or power.
8.17 Illegal Provisions - Severability
Should any part of this Agreement be found void, illegal, or unenforceable, the
balance of the Agreement shall remain in full force and effect.
8.18 Article Headings, Gender, & Number
Article paragraph headings are not to be construed as binding provisions of this
concession; they are for the convenience of the PARTIES only. The masculine, feminine,
singular and plural of any word or words shall be deemed to include and refer to the
gender and number appropriate in the context.
8.19 Entire Agreement
This Agreement and its Exhibits constitutes the entire agreement between the
PARTIES, and the PARTIES acknowledge that there are no other agreements, written or
oral, that have not been set forth in the text of this Agreement.
8.20 Counterparts
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one
and the same instrument.
8.21 Recording
Upon the execution of this Agreement the CITY will cause this Agreement to be
recorded with the land use records of Kitsap County, Washington.
IN WITNESS WHEREOF, this Agreement has been entered into between the
Cit of Bremerton and Olympic Soccer & Sports Center, LLC as of the ,Ra tj day of
2001.
OLYMPIC SOCCER & SPORTS CENTER, LLC
a Washin limited habili oTaA
y
By: L I
Dennis Michael, Manager
CONCESSION AGREEMENT Page 23 of 25
CITY OF BREMERTON
a Washington municipal corporation
By: �. ^9 r 4 d,/,
Lyifn S. Horton, Mayor
APPROVED S TO FORM:
Davi B. St.Pierre, Assistant City Attorney
ATTEST:
s
Kathleen McCluskey, City Clerk
LIST OF EXHIBITS
Exhibit A — Legal Description of Premises
Exhibit B — Preliminary Building and Site Plans
Exhibit C — Appraisal and Compensation Information
STATE OF WASHINGTON
ss.
COUNTY OF KITSAP
A
I certify that I know or have satisfactory evidence that LYNN S. HORTON is the person
who appeared before me, and said person acknowledged that she signed this instrument,
on oath stated that she was authorized to execute the instrument and acknowledged it as
the Mayor of the CITY OF BREMERTON to be the free and voluntary act of such party
for the uses and purposes mentioned in the instrument.
Given anr
and official seal this,jQ� day of '2001.
L.Type not eNOTARY Notary Public in and for tli /�
* State of Washington residing atL'11.,,,.��3r
rP(/BL1C My Commission expires S-/S��
CONCESSION AGREEMENT Page 24 of 25
STATE OF WASHINGTON )
) ss.
COUNTY OF KITSAP )
fH
On this /S day of V JN'E 2001, before me personally appeared
1�vN�s r r HAE L-- , to me known to be the 41,41y,4 r, ER of
OLYMPIC SOCCER & SPORTS CENTER, LLC, a Washington limited liability
company, that executed the within and foregoing instrument and acknowledged the said
instrument to be the free and voluntary act and deed of said corporation for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute and in
fact executed said instrument on behalf of the corporation.
Given under my hand and official seal this 4y5-rµday of f ,,t/E 12001.
Type/Print Name 7�4s,¢ f c r , �or✓ANrJE
Notary Public in and for the
QtSa t+ State of Washington residing at Gr G lTARBo2
ct M fission, es — —o /
CONCESSION AGREEMENT Page 25 of 25
OCHRECIED
EXHIBIT "A"
August 14, 2001
A portion of the Northeast quarter of the Southwest quarter, Section 21, Township 24 North,
Range 1 East, Wflliamette Meridian, which is more particularly described as follows:
Beginning at the East quarter corner of said Section 21, thence along the East-West
centerline of said Section 21, S 88°50'50" W 5316.00 feet to the West quarter corner of said
Section 21; thence S 64°45'41" E 2170.01 feet to the True Point of Beginning; thence, S
3058'47" W 228.87 feet; thence S 86°01'13" E 143.75 feet; thence N 3°58'47" E 228.87
feet; thence N 86001'13" W 143.75 feet to the True Point of Beginning.
Legal for Soccer Building in Pendergast Park
Page 1 of 1
EXHIBIT A
Legal Description of Premises
A portion of the Northeast quarter of the Southwest quarter, Section 21, Township 24
North, Range 1 East, Williamette Meridian, which is more particularly described as
follows:
Beginning at the East quarter comer of said Section 21, thence along the East-West
centerline of said Section 21, S 88°50'50" W 5316.00 feet to the West quarter comer of
said Section 21; thence S 64°45'41" E 2170.01 feet to the True Point of Beginning; F
thence, S 3° '47" W 228.87 feet; thence S 86001'13" E 143.75 feet; thence N 3°58'47"
228.87 feetjthence N 86°01'13" W 143.75 feet to the True Point of Beginning.
RSI
CONCESSION AGREEMENT 1 C 7 Exhibit A
I
EXHIBIT A
Legal Description of Premises
A portion of the Northeast quarter of the Southwest quarter, Section 21, Township 24
North, Range 1 East, Williamette Meridian, which is more particularly described as
follows:
Beginning at the East quarter corner of said Section 21, thence along the East-West
centerline of said Section 21, S 88°50'50" W 5316.00 feet to the West quarter comer of
said Section 21; thence S 64°4541" E 2170.01 feet to the True Point of Beginning;
thence, S 3°8'47" W 228.87 feet; thence S 86°01'13" E 143.75 feet; thence N 3°58'47" W
228.87 feet; thence N 86°01'13" W 143.75 feet to the True Point of Beginning.
CONCESSION AGREEMENT 1 � 1 Exhibit A
EXHIBIT B
Preliminary Building and Site Plan
CONCESSION AGREEMENT I I E.Ylllbit B
EXHIE
NTS
DR BY BOB ELSEN
5/13/01
22
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for Soccer Building
in Pendergast Park
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EXHIBIT C
Appraisal and Compensation Information
Background: The City of Bremerton commissioned Richards and Associates, Inc., to
conduct a Complete Appraisal of selected building sites located within the boundaries of
Pendergast Regional Park in August, 2000. The purpose of the appraisal was to estimate
the Market Value and Fair Rental Rate of the building sites. Richards and Associates
submitted the appraisal information to the City in a Summary Report format on
September 24, 2000.
Values: The Richards appraisal estimated the Fair Rental Value of the site selected by
OSSC to be $11,700 per year for 85,000 square feet, which equals $.138 per square foot
per year. The Richards appraisal also estimated the Fair Rental Value for the exclusive
use of each existing parking space to be $250 per year. A comparative market analysis
conducted by OSSC in the fall of 2000 established the fair rental value for indoor soccer
facilities to be $60 per hour,
Calculations: The City of Bremerton has agreed to provide OSSC with 30,000 square
feet of Park property to construct and operate an indoor soccer facility. The parties have
agreed that the "as -is" rental value of this property is $4,140 per year (30,000 square feet
@ $.138 per year). The parties have further agreed that a maximum of 45 parking spaces
will be required to support the indoor soccer facility's primary uses, and that due to
fluctuations in seasonal participation, OSSC will consume approximately 60% of the
available usage of each of the 45 parking spaces. The parties have agreed that the rental
value for the non-exclusive use of the 45 parking spaces is $6,750 per year (45 spaces @
$250 per year X 60%).
Conclusion: The City of Bremerton and OSSC have agreed that as of (y.,ao.n/
2001, the date of execution of the Concession Agreement, fair compensation for the Park
property and parking spaces required by OSSC is $10,890 per year; fair rental value for
the OSSC indoor soccer facility is $60 per hour; and compensation provided by OSSC to
the City of Bremerton for the Park property and required parking spaces is equivalent to
182 hours of indoor soccer facility usage per year.
CONCESSION AGREEMENT Exhibit C
Northeast
BP>N K
August 4, 2017
VIA UPS
City of Bremerton
Attn: Director' of Parks and Recreation
680 Lebo Boulevard
Bremerton, WA 98310
Re: Concession Agreement dated June 20, 2001 by and between the City of Bremerton and
Olympic Soccer & Sports Center, LLC (as amended to date, the "Agreement")
Dear Sir/Madam:
Reference is made to the above -referenced Agreement affecting the premises known and
numbered as 1199 Union Avenue W., Bremerton, Washington, all as more particularly described
in the Agreement (the "Property").
Please be advised that effective June 26, 2017, Northeast Bank (the "Bank") was
assigned the leasehold mortgage interest upon the Property previously held by HVS I LLC and is
the current holder of the loan made to Olympic Soccer & Sports Center, LLC ("Borrower")
which is secured by the Property. This interest is evidenced by (i) a Real Estate Deed of Trust
originally granted by the Borrower to Westsound Bank and recorded with the Kitsap County
(Washington) Recorder ("Recorder") on October 27, 2006 as Instrument No. 200610270258,
and (ii) an Assignment of Rents made by the Borrower to Westsound Bank and recorded with the
Recorder on December 31, 2007 as Instrument No. 200712310203A copy of the assignment of
these instruments by HVS I LLC to the Bank (which has been sent for recording with the
Recorder) is enclosed for your files with regard to the Agreement.
The Bank hereby requests that any and all notices issued with regard to the Agreement
(including in particular notices issued under Article 6 of the Agreement) be issued
contemporaneously to the Bank as lender, as contemplated by the Agreement. Please send any
and all such notices to the following address:
If via overnight mail:
Northeast Bank
200 Berkeley Street, 17th Floor
Boston, MA 02116
Attn: Legal Department
200 Berkeley Street, 17th Floor • Boston, MA 02116
Mailing Address: P.O. Box 171679 . Boston, MA 02117
www.northeastbank.com
If via U.S. Mail.-
Northeast
ail:Northeast Bank
P.O. Box 17169
Boston, MA 02117
Attn: Legal Department 5k
Please update your records accordingly and acknowledge receipt of this notice by
executing where noted below and returning the copy of this correspondence provided to
us in the self-addressed stamped envelope enclosed.
Should you have any questions or require further information please contact me
accordingly at 617-585-3210 or via email at jkrumsiek@northeastbank.com. Thank you.
Sincerely,
RTHEAST
James H. Krumsiek
Managing Director and Legal Counsel
Receipt acknowledged the _ day of August, 2017
CITY OF BREMERTON
By:
Its:
THIS INSTRUMENT PREPARED BY:
Kelly A. Peterson, Esq.
Northeast Bank
200 Berkeley Street, 17`x' Floor
Boston, MA 02116
RECORD AND RETURN TO:
Northeast Bank
P.O. Box 171679
Boston, MA 02117
Attn: K. Peterson
SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY
ASSIGNMENT OF SECURITY INSTRUMENT(S)
For Value Received, HVS I LLC (the "Assi or"), the holder of the instrument(s) described on
SCHEDULE A (the "Instrument(s "), does hereby grant, sell, assign, transfer and convey, unto
NORTHEAST BANK, a Maine chartered banking corporation with an address at 500 Canal Street,
Lewiston, Maine 04240, its successors and assigns (the "Assi nee''), without recourse, representation,
warranty or covenant, express or implied, except as provided in that certain Asset Purchase Agreement
dated June 26, 2017, by and between Assignor and Assignee, all interest of the undersigned Assignor in
and to the lien upon the following described property situated in Kitsap County, State of Washington,
having an address of i 199 Union Avenue W, Bremerton, WA, 98312-4404 and more particularly
described in EXHIBIT A attached hereto (the "Premises").
The transaction to which this assignment is a part is unrelated to the sale of any interest in the
Property owned by the obligor named in the Instrument(s). The Instrument(s) is being assigned to a new
lender in a transaction in which no new monies will be advanced by the new lender.
TO HAVE AND TO HOLD the same unto Assignee, its successor and assigns, forever, subject
only to the terms and conditions of the Instrument.
IT WITNESS WHEREOF, this assignment was executed by the undersigned Assignor on this the
30th day of June, 2017.
HVS I LLC
, �--, !: � - - �--:: ��7
y: John W. Murray
Its: Authorized Person
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA )
)ss.
COUNTY OF ORANGE )
On June 30, 2017, before me, Rebeca 0. Gonzalez, Notary Public, personally appeared John W. Murray,
who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his authorized capacity,
and that by his signature on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the
REBECA 0. GONZALEZ State of California that the foregoing paragraph is true and
Notes Public - California correct.
z orange Courcy
Z Commission a 2164620 WITNESS my hand and official seal.
M Comm. Expires Sep 12, 2020
Rebeca 0. Go alez, Notary Public
Notary Expires: 09/12/2020
SCHEDULE A
That certain Real Estate Deed of Trust granted by Olympic Soccer and Sports Center, LLC in
favor of Westbound Bank to secure the sum of $1,897,000.00, recorded with the Kitsap County
(Washington) Recorder (the "Recorder") on October 27, 2006 as Instrument #200610270258, as
assigned to 2010-1 CRE Venture, LLC pursuant to a certain assignment recorded with the
Recorder on January 20, 2011 as Instrument #201101200212, as further assigned to HVS I LLC
pursuant to a certain assignment recorded with the Recorder on January 12, 2015 as Instrument
#201501120358;and
2. That certain Assignment of Rents granted by Olympic Soccer and Sports Center, LLC in favor of
Westbound Bank, recorded with the Recorder on December 31, 2007 as Instrument
#2007123'10203, as assigned to 2010-1 CRE Venture, LLC pursuant to a certain assignment
recorded with the Recorder on January 20, 2011 as Instrument #201101200213, as further
assigned to HVS 1 LLC pursuant to a certain assignment recorded with the Recorder on January
12, 2015 as Instrument #201501120359.
EXHIBIT A
o cmvnow
PARCEL V
THAT PORTION OF THE NORTHEAST QUARTER OF 111E SOUTHWEST CR,'S[c;;ofl t,
TOWNSHIP 24 N4 CRTH. RANGE t EAST, W.M., IN KFTSAP COUNTY, WNWA�#�Iri Ti?3J,5Cl�fI�
AS FOLLOWS:
BEMNNING AT THE EAST QUARTER CORNER OF SAM SECTION 21;„.i1iVNC�'AL, !�C THE
EASY -WEST CENTERLINE OF SAID SECTION u OU'rH so -S r T �A F�Iy"i,Tt3 TME
WEST QUARTER CORNIER OF SAID SECTION 21. Yf ENCE !SOUP •45'49' EAS70.01 FEET
TO THE °T -RUE POINT OF BEGINNING; T14ENCE SOUTH 3'61M". T ?.?8. %,�'EE �; TkEN�
SOUTH 88'°01'13" SA,ST 143,75 FELT; THENCE NORtH 3'�Bi , �,
' % II.� .FEIE`T. THE
NORM88*Oi'13' WEST' 143.75 FEET TO THETRUE �Pojp OF E�wjftlwo:
PARCaL it 1
AN EASEIe1 , N T FOR ACCESS AND UTILITIES AS MO E l�I3I.4 Y E}L EIRt@EO #1NDEfi AUt1fiOR'S
FILE NO.
200108170289. `— r