Contract analysis

Section 1.1 — Defined Terms As used in this Ground Lease, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the JV Agreement. "Applicable Law" means all federal, state, and local laws, statutes, ordinances, rules, regulations, codes, executive orders, judicial decrees, and administrative orders applica

Section 1.2 — Rules of Construction (a) Unless the context clearly requires otherwise, words importing the singular number shall include the plural number and vice versa, and words importing gender shall include all genders. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." The words "herein," "hereof," "hereunder," and words of similar import shall be

Section 2.1 — Description of Premises The Premises subject to this Ground Lease consist of approximately fourteen and seven-tenths (14.7) acres of real property located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501. The legal description of the Premises is set forth in Exhibit A attached hereto and incorporated herein by this reference, which includes a metes and bounds description and the

Section 2.2 — Lessor's Title CSIA represents and warrants to CBWTP that, as of the Commencement Date, CSIA holds fee simple title to the Premises, free and clear of all liens, encumbrances, mortgages, deeds of trust, restrictions, conditions, covenants, charges, claims, and other defects of title, except for the Permitted Exceptions set forth in Exhibit B attached hereto. CSIA further represents and warrants that it

Section 2.3 — Conveyance of Leasehold CSIA hereby leases, demises, and lets the Premises unto CBWTP, and CBWTP hereby leases the Premises from CSIA, for the Term, subject to the terms, covenants, conditions, and provisions set forth in this Ground Lease and subject to the Permitted Exceptions. This Ground Lease conveys only a leasehold interest in the Premises; fee simple title to the Premises is retained by CSIA at

Section 2.4 — No Merger The Leasehold Interest created by this Ground Lease shall not merge with the fee simple estate of CSIA in the Premises, notwithstanding (a) CSIA's fifty-five percent (55%) membership interest in CBWTP, (b) any future acquisition by CSIA of additional membership interests in CBWTP, (c) any future acquisition by CBWTP or any of its members of any interest in the fee estate, or (d) the fact that

Section 3.1 — Initial Term The Term of this Ground Lease commences on the Commencement Date, November 2, 2021, and shall expire on the date that is ninety-nine (99) years from the Commencement Date, that is, November 2, 2120, unless this Ground Lease is earlier terminated in accordance with the provisions hereof (the "Term"). There are no options to extend or renew the Term beyond the Expiration Date.

Section 3.2 — Early Termination Upon JV Termination This Ground Lease shall automatically terminate, without the necessity of any further action by either Party, upon a JV Termination, including without limitation any dissolution, winding up, or termination of CBWTP pursuant to the JV Agreement, whether resulting from (a) the exercise of default remedies under Section 8.2 of the JV Agreement, (b) a voluntary dissolut

Section 3.3 — Surrender at Expiration or Termination Upon the expiration of the Term or any earlier termination of this Ground Lease, howsoever caused, Lessee shall immediately surrender and deliver possession of the Premises and all Improvements to Lessor in the condition required under Article XII hereof. Lessee shall remove all of its personal property and trade fixtures from the Premises within ninety (90) days f

Section 4.1 — Annual Rent Lessee shall pay to Lessor annual rent in the amount of One Dollar ($1.00) (the "Rent"), payable in advance on each anniversary of the Commencement Date during the Term. The first annual Rent payment of One Dollar ($1.00) was due and payable on the Commencement Date and is hereby acknowledged by both Parties as having been paid and received in full upon the execution and delivery of this Gro

Section 4.2 — No Additional Rent Except as otherwise specifically and expressly provided in this Ground Lease, no additional rent, percentage rent, escalation rent, or other monetary consideration of any kind shall be payable by Lessee to Lessor under this Ground Lease. The Parties acknowledge and agree that the nominal Rent of One Dollar ($1.00) per annum reflects CSIA's public-purpose interest in the development an

Section 4.3 — Net Lease This Ground Lease is intended to be, and shall be construed as, an absolutely net lease. Throughout the Term, Lessee shall be responsible for and shall pay, before delinquency, all costs, expenses, taxes (to the extent applicable and not exempt), assessments, governmental charges, insurance premiums, utility charges, maintenance costs, repair costs, and all other charges, impositions, and expe

Section 5.1 — Permitted Use The Premises shall be used by Lessee solely and exclusively for the Permitted Use, which encompasses the design, construction, ownership, operation, maintenance, repair, and replacement of the Facility and related water treatment infrastructure on the Premises, and all uses incidental and ancillary thereto. The Facility is planned as a twelve million gallon-per-day (12 MGD) advanced water

Section 5.2 — Prohibited Uses Lessee shall not use the Premises for any purpose other than the Permitted Use without the prior written consent of Lessor, which consent may be granted or withheld in Lessor's sole and absolute discretion. Without limiting the generality of the foregoing, the following uses are expressly prohibited: (a) any residential use; (b) any commercial retail use; (c) any industrial manufacturing

Section 5.3 — Compliance with Laws Lessee shall, at its sole cost and expense, comply with all Applicable Laws in its use, construction, operation, and maintenance of the Premises and the Facility throughout the Term. Lessee shall obtain and maintain compliance with all applicable environmental laws, zoning ordinances, building codes, health and safety regulations, and other governmental requirements of Thurston Coun

Section 5.4 — Permits and Approvals Lessee shall be solely responsible, at its sole cost and expense, for obtaining and maintaining in full force and effect throughout the Term all permits, licenses, approvals, consents, authorizations, and governmental certifications necessary for the Construction and operation of the Facility, including without limitation: (a) the Phase II Environmental Impact Determination from th

ARTICLE VI — CONSTRUCTION AND IMPROVEMENTS

Section 6.1 — Construction of the Facility Lessee shall have the right and the obligation to design and construct the Facility on the Premises in accordance with the JV Agreement and all Applicable Laws. The Facility shall be designed and constructed to the standards and specifications contemplated by the JV Agreement, including the design parameters, performance criteria, and budget approved by the Governing Board.

Section 6.2 — Plans and Specifications Prior to the commencement of Construction, Lessee shall submit to Lessor complete and detailed plans and specifications for the Facility, including architectural, structural, mechanical, electrical, civil, and environmental engineering plans, for Lessor's review and approval. Lessor's approval shall not be unreasonably withheld, conditioned, or delayed. Lessor shall review such

Section 6.3 — Ownership of Improvements During Term All Improvements constructed, installed, or placed on the Premises by or on behalf of Lessee during the Term of this Ground Lease shall be owned by Lessee during the Term. Lessee shall have all rights, title, and interest in and to the Improvements during the Term, subject to the terms and conditions of this Ground Lease and the JV Agreement. Lessee's ownership of t

Section 6.4 — Alterations and Modifications Lessee may make alterations, modifications, additions, or improvements to the Improvements during the Term, subject to the following provisions: (a) Material Alterations. Lessee shall not make any material alteration, modification, or addition to the Improvements without the prior written consent of Lessor, which consent shall not be unreasonably withheld, conditioned, or d

Section 6.5 — Liens Lessee shall not permit any mechanic's lien, materialman's lien, construction lien, or other lien arising from Construction or any other work performed on or materials supplied to the Premises to remain on the Premises or the Improvements for a period exceeding thirty (30) days after Lessee receives notice of the filing thereof. Lessee shall promptly discharge, satisfy, or bond over any such lien

ARTICLE VII — TAXES AND ASSESSMENTS

Section 7.1 — Real Property Taxes Lessee shall pay, before delinquency, all real property taxes, general and special assessments, governmental charges, and other impositions assessed or levied against the Premises and/or the Improvements during the Term, to the extent that the Premises and/or the Improvements are subject to taxation. The Parties acknowledge that the Premises may be exempt from certain real property t

Section 7.2 — Tax Exemption Lessor shall cooperate with Lessee, at Lessee's expense, in obtaining and maintaining any available exemptions from real property taxes, ad valorem taxes, and other governmental charges for the Premises and the Facility, including without limitation any exemptions available under the laws of the State of Washington for public infrastructure, governmental property, or property used for publ

Section 7.3 — Personal Property Taxes Lessee shall be solely responsible for the payment of all taxes, assessments, and charges levied or assessed against Lessee's personal property, trade fixtures, equipment, and other tangible and intangible property located on or used in connection with the Premises, regardless of whether such property is owned, leased, or licensed by Lessee.

Section 8.1 — Lessee's Insurance Obligations Lessee shall maintain, or cause to be maintained, at Lessee's sole cost and expense, throughout the Term, the following insurance coverages, each in amounts not less than the minimum coverage amounts set forth in Exhibit C attached hereto: (a) Commercial General Liability Insurance. A policy or policies of commercial general liability insurance, on an occurrence basis, cov

Section 8.2 — Lessor as Additional Insured All liability insurance policies maintained by Lessee pursuant to this Article VIII shall name Lessor as an additional insured. All property and casualty insurance policies maintained by Lessee pursuant to this Article VIII shall name Lessor as loss payee, as its interest may appear. Each policy shall provide that the coverage afforded to Lessor shall not be affected by any

Section 8.3 — Evidence of Insurance Lessee shall provide to Lessor certificates of insurance evidencing all insurance coverages required under this Article VIII (a) on or before the Commencement Date, (b) annually thereafter on each anniversary of the Commencement Date, and (c) at any other time upon reasonable request by Lessor. Lessee shall provide complete copies of such policies to Lessor upon request. If Lessee

ARTICLE IX — MAINTENANCE AND REPAIRS

Section 9.1 — Lessee's Obligations Lessee shall, at its sole cost and expense, maintain, repair, and keep the Premises and all Improvements (including the Facility and all related infrastructure, landscaping, access roads, parking areas, and fencing) in good condition, order, and repair throughout the Term, in compliance with all Applicable Laws and in a manner consistent with the standards of a prudent operator of a

Section 9.2 — Environmental Compliance Lessee shall not cause or permit the release, discharge, emission, or disposal of any Hazardous Substances on, under, from, or about the Premises in violation of any Environmental Law. Lessee shall handle, store, use, and dispose of all Hazardous Substances used in connection with the operation of the Facility in strict compliance with all Environmental Laws and in accordance wi

ARTICLE X — ASSIGNMENT AND SUBLETTING

Section 10.1 — Restrictions on Assignment Lessee shall not assign this Ground Lease or any interest herein, or sublet all or any portion of the Premises, without the prior written consent of Lessor, which consent may be granted or withheld in Lessor's reasonable discretion. Any purported assignment or subletting without the required consent of Lessor shall be void and of no force or effect, and shall constitute an Ev

Section 10.2 — Leasehold Mortgages Subject to the prior written consent of Lessor (which consent shall not be unreasonably withheld, conditioned, or delayed), Lessee may grant a Leasehold Mortgage or security interest in its Leasehold Interest to an institutional lender as security for project financing for the Facility. The Parties acknowledge that, as of the date hereof, CBWTP intends to enter into a project financ

Section 10.3 — Leasehold Mortgagee Protections The following protections shall apply for the benefit of any approved Leasehold Mortgagee: (a) Notice of Default. Lessor shall deliver to each Leasehold Mortgagee of which Lessor has been given written notice, concurrently with delivery to Lessee, a copy of any notice of default or notice of termination given by Lessor to Lessee under this Ground Lease. No such notice sh

ARTICLE XI — DEFAULT AND REMEDIES

Section 11.1 — Lessee Events of Default Each of the following events shall constitute an "Event of Default" by Lessee under this Ground Lease: (a) Failure to Pay Rent. Lessee's failure to pay any installment of Rent or any other amount due from Lessee to Lessor under this Ground Lease when the same becomes due and payable, and such failure continues for a period of ten (10) days after written notice thereof from Less

Section 11.2 — Lessor Remedies Upon the occurrence and during the continuance of an uncured Event of Default by Lessee (after the expiration of any applicable cure period), Lessor shall have the following remedies, each of which shall be cumulative and in addition to all other remedies available to Lessor at law or in equity under the laws of the State of Washington: (a) Termination. Lessor may terminate this Ground

Section 11.3 — No Waiver The failure or delay by Lessor to exercise any right or remedy upon the occurrence of an Event of Default shall not constitute a waiver of such right or remedy or of Lessor's right to exercise such right or remedy at any subsequent time. No waiver by Lessor of any Event of Default shall be deemed a waiver of any subsequent Event of Default. All rights and remedies of Lessor under this Ground

Section 11.4 — Lessor Default If Lessor defaults in the performance of any material obligation of Lessor under this Ground Lease, Lessee shall give Lessor written notice specifying the nature of the default in reasonable detail. Lessor shall have a period of thirty (30) days after receipt of such notice within which to cure such default. If such default is of a nature that cannot reasonably be cured within such thirt

Section 12.1 — Reversion Upon Termination Upon the expiration of the Term on the Expiration Date or upon any earlier termination of this Ground Lease, howsoever caused, including without limitation early termination resulting from a JV Termination under Section 3.2 hereof: (a) The Leasehold Interest shall automatically revert to CSIA, and CSIA shall be restored to full and complete possession and enjoyment of the Pre

Section 12.2 — Condition of Premises Upon Reversion (a) Operational Facility. If the Facility has been constructed and is operational at the time of the Reversion, Lessee shall deliver the Premises and all Improvements to Lessor in good operating condition, ordinary wear and tear excepted, with all systems functioning in accordance with their design specifications and all permits and governmental approvals in good st

Section 12.3 — Coordination with JV Agreement The Parties acknowledge and agree that, upon a JV Termination, the distribution of CBWTP's assets (other than the real property interests addressed herein) shall be governed by the JV Agreement, including the distribution of cash, accounts receivable, personal property, and other assets in accordance with the members' capital accounts and the liquidation provisions of the

Section 12.4 — Survival The obligations of Lessee under this Article XII, including without limitation the obligations to deliver the Premises in the condition specified in Section 12.2, to execute and deliver documents in connection with the Reversion, and to remediate any environmental contamination, shall survive the expiration or earlier termination of this Ground Lease and shall remain in full force and effect u

ARTICLE XIII — EMINENT DOMAIN / CONDEMNATION

Section 13.1 — Total Condemnation If the entire Premises, or such a substantial portion thereof that the remainder is insufficient for the Permitted Use, are taken by the exercise of eminent domain or condemnation by any governmental authority or entity having the power of eminent domain (a "Total Taking"), this Ground Lease shall terminate as of the date of such taking (the "Date of Taking"), and the Parties' respec

Section 13.2 — Partial Condemnation If a portion of the Premises is taken by eminent domain or condemnation and the remaining portion of the Premises is sufficient, in the reasonable judgment of both Parties, for the continued operation of the Facility for the Permitted Use (a "Partial Taking"), this Ground Lease shall continue in full force and effect as to the remaining portion of the Premises, and the Rent shall n

ARTICLE XIV — DAMAGE AND DESTRUCTION

Section 14.1 — Obligation to Restore In the event of any damage to or destruction of all or any portion of the Improvements, howsoever caused (including by fire, flood, earthquake, windstorm, or other casualty), Lessee shall, subject to the provisions of this Article XIV, promptly commence and diligently pursue the restoration, repair, or rebuilding of the Improvements to substantially their condition immediately pri