Contract analysis

Section 1.1 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Section 1.1 shall have the meanings ascribed to them elsewhere in this Agreement. (a) "Agreement" means this Permanent Easement Agreement, including all Exhibits attached hereto and incorporated herein by this reference, as the same may be amended, modified,

Section 2.1 Grant. For and in consideration of the Compensation and other good and valuable consideration described herein, Grantor hereby grants, conveys, and warrants to Grantee, and Grantee's successors and assigns, a permanent, non-exclusive easement over, under, across, and through the PS-1 Easement Area and the PS-2 Easement Area for the Permitted Purpose (collectively, the "Easement"). The Easement shall be pe

Section 2.2 Easement Description. The Easement encompasses the following areas: (a) PS-1 Easement Area: Approximately two and three-tenths (2.3) acres of Whatcom County Tax Parcel No. 380219-401200, as more particularly described by the metes-and-bounds legal description set forth in Exhibit A-1, attached hereto and incorporated herein by this reference, and as depicted on the easement plat set forth in Exhibit B-1,

Section 2.3 Appurtenant Rights. In addition to the rights expressly granted in Section 2.1, the Easement includes the following appurtenant rights: (a) Ingress and Egress. Grantee and its officers, employees, agents, contractors, subcontractors, consultants, and invitees shall have the right of ingress and egress over and across Grantor's Property to and from each Easement Area via existing roadways, access points, d

Section 3.1 Permitted Purpose. The Easement is granted exclusively for the following purposes (collectively, the "Permitted Purpose"): (a) The design, engineering, construction, installation, testing, and commissioning of Pump Station No. 1 and Pump Station No. 2 and all associated Facilities within the Easement Area, including but not limited to pump station buildings, wet wells, dry wells, valve vaults, junction st

Section 3.2 Limitations on Use. Grantee's use of the Easement Area shall be subject to the following limitations: (a) Grantee shall not use the Easement Area for any purpose other than the Permitted Purpose without Grantor's prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed if the proposed use is consistent with and ancillary to the Project. (b) Grantee shall not store,

Section 4.1 Easement Compensation. In consideration of the permanent easements granted by Grantor to Grantee hereunder, Grantee shall pay to Grantor total compensation in the amount of Six Hundred Fifteen Thousand Dollars ($615,000) (the "Compensation"), allocated as follows: The Compensation was determined on the basis of the independent Appraisal prepared by Jocelyn Trueblood, MAI, of Northwind Valuation Group LLC,

Section 4.2 Payment Terms. Full payment of the Compensation shall be made by wire transfer of immediately available funds or by certified check to Grantor, or to such escrow agent as Grantor may designate in writing, at the closing of this Agreement. In no event shall payment be made later than ten (10) business days after the recording of this Agreement with the Whatcom County Auditor. Grantee shall provide Grantor

Section 4.3 Tax Reporting. Each Party shall be responsible for its own tax reporting obligations arising from or related to this transaction. For purposes of tax reporting: (a) Grantor's Employer Identification Number (EIN) is 91-3487562. (b) Grantee's Employer Identification Number (EIN) is 91-2034781. The Parties acknowledge that the tax treatment of the Compensation may vary depending on each Party's individual ci

ARTICLE 5 RESERVATION OF GRANTOR'S RIGHTS

Section 5.1 Agricultural Use. Grantor reserves and retains all right, title, and interest in and to Grantor's Property not expressly granted to Grantee hereunder, including without limitation the right to continue agricultural use of all portions of Grantor's Property located outside the Easement Area. Grantor retains the unrestricted right to farm, cultivate, irrigate, fertilize, harvest crops on, and otherwise use

Section 5.2 Use Within Easement Area. Grantor's use of the Easement Area shall be subject to the following conditions: (a) Grantor shall not construct or place any permanent structures, buildings, foundations, or improvements within the Easement Area without Grantee's prior written consent, which consent may be withheld in Grantee's sole and absolute discretion if such construction or placement would interfere with o

Section 5.3 Retained Rights of Access. Grantor retains the right of passage over and across the Easement Area to access adjoining portions of Grantor's Property, provided that such access does not interfere with Grantee's construction activities, operations, or maintenance of the Facilities. Grantor shall exercise such right of passage in a manner that does not damage or obstruct the Facilities or any access roads or

ARTICLE 6 REPRESENTATIONS AND WARRANTIES

Section 6.1 Grantor's Representations and Warranties. Grantor hereby represents and warrants to Grantee as of the Effective Date as follows: (a) Organization and Good Standing. Grantor is a Washington limited liability company duly organized, validly existing, and in good standing under the laws of the State of Washington. Grantor's Certificate of Formation is on file with the Washington Secretary of State, and Grant

Section 6.2 Grantee's Representations and Warranties. Grantee hereby represents and warrants to Grantor as of the Effective Date as follows: (a) Organization and Authority. Grantee is a Washington State governmental instrumentality duly created and existing pursuant to Chapter 43.99N of the Revised Code of Washington, with full power and authority under applicable law to acquire real property interests, including eas

ARTICLE 7 CONSTRUCTION AND OPERATIONS

Section 7.1 Construction Activities. Grantee shall perform, or cause to be performed, all construction activities within the Easement Area in a good and workmanlike manner and in compliance with all applicable federal, state, and local laws, regulations, codes, ordinances, and permit conditions. Grantee shall employ qualified contractors and shall require that all construction work be performed in accordance with app

Section 7.2 Design Standards. Pump Station No. 1 and Pump Station No. 2 have been designed with finished floor elevations at sixty-five feet (65.0 ft) NAVD88, providing two and one-half feet (2.5 ft) of freeboard above the Federal Emergency Management Agency ("FEMA") Zone AE Base Flood Elevation of sixty-two and one-half feet (62.5 ft) NAVD88 as depicted on the effective Flood Insurance Rate Map for Whatcom County. A

Section 7.3 Access During Construction. Grantee and its contractors, subcontractors, and agents shall access the Easement Area via designated access routes agreed upon by the Parties, or if no agreement is reached, via existing public roads and established access points, in order to minimize impact on Grantor's agricultural lands, crops, and farming operations. Grantee shall be responsible for repairing or compensati

Section 7.4 Environmental Compliance. Grantee shall comply with all environmental laws, regulations, and permit conditions applicable to the construction and operation of the Facilities, including without limitation the following permits and approvals, which Grantee shall obtain and maintain at Grantee's sole cost and expense: (a) State Environmental Policy Act ("SEPA") Mitigated Determination of Non-Significance, as

Section 7.5 Operations and Maintenance. Following completion of construction and commissioning of the Facilities, Grantee shall operate and maintain the Facilities at Grantee's sole cost and expense. Grantee shall keep the Facilities in good working order and repair and shall operate the Facilities in compliance with all applicable laws, regulations, and permit conditions. Grantee shall provide Grantor with reasonabl

ARTICLE 8 RESTORATION AND CROP DAMAGE

Section 8.1 Crop Damage Compensation. Grantee shall compensate Grantor for any damage to crops, fencing, drainage tile, irrigation systems, or other agricultural improvements located on Grantor's Property outside the Easement Area that results from Grantee's exercise of rights under this Agreement, including damage caused by construction activities, maintenance operations, or access by Grantee's contractors and agent

Section 8.2 Restoration Obligations. Upon completion of construction within the Easement Area, and after any subsequent maintenance, repair, replacement, or reconstruction activities, Grantee shall restore the surface of Grantor's Property located outside the Easement Area to as near its preconstruction condition as is reasonably practicable (the "Restoration Standards"). Restoration shall include, without limitation

Section 9.1 Grantee's Indemnification of Grantor. To the fullest extent permitted by applicable law, Grantee shall indemnify, defend, and hold harmless Grantor and its members, managers, officers, agents, employees, successors, heirs, and assigns (collectively, the "Grantor Indemnitees") from and against any and all claims, demands, suits, actions, judgments, losses, damages, liabilities, penalties, fines, costs, and

Section 9.2 Grantor's Indemnification of Grantee. Grantor shall indemnify, defend, and hold harmless Grantee and its officers, directors, employees, agents, and representatives (collectively, the "Grantee Indemnitees") from and against any and all claims, demands, suits, actions, judgments, losses, damages, liabilities, penalties, fines, costs, and expenses (including reasonable attorneys' fees and costs of litigatio

Section 9.3 Sovereign Immunity. Nothing in this Agreement shall be construed as a waiver of Grantee's sovereign immunity, governmental immunity, or other immunities, privileges, or defenses available to Grantee as a governmental instrumentality under the laws of the State of Washington, except as expressly provided by applicable statute. The indemnification obligations of Grantee set forth in this Article 9 are subje

Section 10.1 Grantee's Insurance. Grantee shall maintain, or shall cause its contractors and subcontractors to maintain, during construction of the Facilities and at all times during the operation and maintenance of the Facilities, the following insurance coverages: (a) Commercial General Liability Insurance. Commercial general liability insurance, including premises/operations liability, products/completed operation

Section 10.2 Grantor as Additional Insured. Grantor shall be named as an additional insured on the commercial general liability insurance policy required under Section 10.1(a) during the period of active construction of the Facilities within the Easement Area. Such additional insured coverage shall be primary and non-contributory with respect to any insurance or self-insurance maintained by Grantor.

Section 10.3 Evidence of Insurance. Upon Grantor's written request, Grantee shall provide Grantor with certificates of insurance evidencing the coverages required under this Article 10, together with copies of applicable endorsements, including the additional insured endorsement required by Section 10.2. Grantee shall provide at least thirty (30) days' advance written notice to Grantor of any cancellation, non-renewa

ARTICLE 11 TITLE AND RECORDING

Section 11.1 Warranty of Title. Grantor covenants and warrants that Grantor has good, clear, and marketable fee simple title to Grantor's Property, including the Easement Area, free and clear of all liens, encumbrances, and adverse claims, except for those encumbrances, easements, restrictions, and other matters of record disclosed in the title commitment issued by Cascade Basin Title Company, and that Grantor has fu

Section 11.2 Recording. This Agreement shall be recorded in the official records of the Office of the Whatcom County Auditor at Grantee's sole cost and expense, promptly following execution by both Parties. The recorded Agreement shall constitute constructive notice to all persons of the rights granted herein and of the existence of the Easement. Grantee shall be responsible for the payment of all recording fees, rea

Section 11.3 Title Insurance. Grantee may, at Grantee's option and sole cost and expense, obtain a policy of title insurance from Cascade Basin Title Company, or such other title insurance company as Grantee may select, insuring Grantee's easement interest in the Easement Area. Grantor shall cooperate reasonably with Grantee and with the title insurance company in connection with the issuance of such title insurance

Section 11.4 Subordination. Grantor shall use commercially reasonable efforts to obtain subordination agreements from any existing mortgagees, lienholders, or other parties holding encumbrances of record on the Easement Area, to the extent required by Grantee's title insurance company, subordinating such mortgages, liens, or encumbrances to the Easement granted hereunder. The form of subordination agreement is attach

ARTICLE 12 DEFAULT AND REMEDIES

Section 12.1 Default. A Party shall be in default under this Agreement if such Party fails to perform any material obligation under this Agreement and does not cure such failure within thirty (30) days after receipt of written notice of default from the non-defaulting Party specifying in reasonable detail the nature of the default and the actions required to cure such default. Notwithstanding the foregoing, if the na

Section 12.2 Remedies. Upon the occurrence of a default that remains uncured following the expiration of the applicable cure period, the non-defaulting Party may pursue any remedy available at law or in equity, including without limitation specific performance, injunctive relief, damages, and declaratory relief. The Parties acknowledge that the easement rights granted hereunder are unique and that a breach of this Ag

Section 12.3 Attorneys' Fees. In any action, proceeding, or arbitration to enforce or interpret this Agreement or any provision hereof, the substantially prevailing Party shall be entitled to recover from the other Party its reasonable attorneys' fees, costs, and expenses, including expert witness fees, incurred in connection with such action, proceeding, or arbitration, and in any appeal therefrom.

Section 13.1 Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Washington, without regard to its conflicts of law principles.

Section 13.2 Venue. Any action, suit, or proceeding arising out of or relating to this Agreement shall be brought exclusively in the Superior Court of Whatcom County, Washington, or, if federal jurisdiction exists, in the United States District Court for the Western District of Washington. Each Party hereby consents to the personal jurisdiction of such courts and waives any objection to venue in such courts.

Section 13.3 Notices. All notices, requests, demands, consents, and other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given and received (i) when personally delivered, (ii) one (1) business day after deposit with a nationally recognized overnight courier service (such as Severin Partners LLC, Halcyon Partners LLC, or Tarrant & Co.), prepaid, or (iii) three (3

Section 13.4 Entire Agreement. This Agreement, including all Exhibits attached hereto and incorporated herein by this reference (Exhibits A-1, A-2, B-1, B-2, C, and D), constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, representations, agreements, understandings, and commitments, whether written or ora

Section 13.5 Amendment. This Agreement may not be amended, modified, supplemented, or otherwise changed except by a written instrument duly executed by both Parties (or their respective successors or assigns) and recorded with the Whatcom County Auditor. No oral amendment or modification shall be effective.

Section 13.6 Assignment. (a) Grantee may assign, transfer, or convey its interest in the Easement, or any portion thereof, to any successor governmental entity, public agency, or public utility without the prior written consent of Grantor, provided that the assignee expressly assumes in writing all of Grantee's obligations under this Agreement. Grantee shall provide Grantor with written notice of any such assignment

Section 13.7 Severability. If any provision of this Agreement, or the application thereof to any person or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect the validity, legality, or enforceability of any other provision of this Agreement, and the remaining provisions shall continue in full force and

Section 13.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Execution and delivery of this Agreement by facsimile or electronic transmission (including PDF) shall be deemed to be, and shall have the same legal effect as, execution and delivery of an original signed copy.

Section 13.9 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors, heirs, personal representatives, and assigns. The Easement and the obligations and covenants contained herein shall run with the land as covenants appurtenant and shall be binding upon all persons hereafter acquiring any right, title, or interest in Grantor's Property.

Section 13.10 No Third-Party Beneficiaries. Except as otherwise expressly provided herein, this Agreement is entered into solely for the benefit of the Parties and their respective successors and assigns, and nothing in this Agreement shall be construed to create any right, claim, or cause of action in favor of any third party, nor shall any third party be deemed a beneficiary of this Agreement.

Section 13.11 Waiver. No waiver of any breach or default under this Agreement shall constitute a waiver of any other or subsequent breach or default. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the Party against whom enforcement of the waiver is sought. The failure of either Party to enforce any right or remedy under this Agreement shall not constitute a waiver

Section 13.12 Condemnation Authority Preserved. Nothing in this Agreement shall be construed to limit, restrict, or waive Grantee's authority to exercise its powers of eminent domain and condemnation under Chapter 43.99N RCW, or under any other applicable provision of law, with respect to any other property interest, whether on Grantor's Property or otherwise, that may be necessary or desirable for the Project or any