Note: This on-line version of the settlement agreement was converted from a paper version by scanning, optical character recognition, and manual proofreading. The original document should be considered the authoritative statement of the terms and conditions of the settlement agreement.

SETTLEMENT AGREEMENT AND COVENANTS RUNNING WITH THE LAND

WHEREAS, the parties have been involved in a dispute regarding the future development of the property and the interpretation of the Seattle Land Use Code regarding such future development, and

WHEREAS, BMI, through its Battelle Seattle Research Center ("BSRC") , has sought judicial review of a City Hearings Examiner's decision interpreting the Land Use Code in King County Cause No. 88-2-19786-5 in which the city and BN are respondents, and

WHEREAS, all parties now desire to settle their differences, and, in particular, establish certainty regarding the zoning status and certain elements of the future development plan for the property in a binding, amicable manner without the need for further judicial or administrative litigation,

IN CONSIDERATION of the mutual covenants, promises and conditions contained in this Settlement Agreement and Covenants Running with the Land, BMI, BN, LCC and the City agree as follows:

1. USE EXPANSION.

1.1 General Use Restrictions. BN and LCC agree that BMI and its successors, subject to the terms and conditions of this Agreement, may continue to operate and expand as an Institute for Advanced Study, including the current use of the Property for conferences, seminars, and as a research center with ancillary lodging. This is intended to recognize that the existing uses may continue and expand on this Site, subject to the terms of this Agreement, and shall not be a precedent for other Institutes for Advanced Study. BMI agrees that it will not apply for a rezone for the Property to change the currently applicable Single Family Zoning, nor will it support such an application by others, except BMI may sign an application by others as owner of the Property if required by the city. BMI may enter into a lease, sale or analogous arrangements with others for use of the Property only as long as the Property is exclusively used for the operation of an Institute for Advanced Study or only so long as such others take the property subject to the Single Family zoning now or hereafter existing on the Property. This Agreement shall not restrict a subsequent purchaser or contingent purchaser from petitioning the City for a future change in zoning designation of the Property, but absent any such change in zoning, use of the Property shall in all cases be for single family uses under the City's Land Use Code or as an Institute for Advanced Study under the terms of this Agreement. Notwithstanding any of the foregoing, BMI shall not lease, sell or place the property in the control of a designated Major Institution under the City of Seattle Land Use code.

1.2 Use Expansion. BN, LCC and BMI agree that further expansion of office and lodging uses consistent with use of the property as an Institute for Advanced study may occur consistent with the terms of this Agreement.

BMI agrees that it may expand conference center uses only a maximum of twenty five percent (25%) under the alternate formula below which results in the least total building footprint being created for a particular expansion. Using a baseline conference room square footage of four thousand fifty two (4,052) square feet, the maximum additional conference room space shall be one thousand thirteen (1,013) square feet. Using a baseline conference center usage building footprint of fourteen thousand nine hundred ninety three (14,993) square feet, the maximum additional building footprint devoted to conference center usage shall be three thousand seven hundred forty eight (3,748) square feet. Exhibit B identifies the current conference room square footages and location and the current buildings and footprint area devoted to conference center usage.

2. HEIGHT. In general, the maximum height of any structure or other improvement on the property shall not exceed two stories and thirty feet (30'). By definition, the maximum height shall be the highest point of any structure as measured from the average of the highest point and the lowest point of the pre- construction grade, Notwithstanding the foregoing, the ridge of a pitched roof may extend up to five feet (5') above the thirty foot (30') height limit. All parts of the roof above the height limit must be pitched at a rate of not less than three to twelve (3:12). No portion of a shed roof shall be permitted to extend beyond the thirty foot (30') height limit under this provision.

In addition, any structure located within 130 feet of the south boundary of the site shall be limited to a maximum height of two stories or twenty five feet (25'). In this area the ridge of a pitched roof may extend up to five feet (5') above the twenty five foot height limit. All parts of the roof above the height limit must be pitched at a rate of not less than three to twelve (3:12). No portion of a shed roof shall be permitted to extend beyond the twenty five foot (25') height limit under this provision. In this portion of the site, no portion of any structure shall extend more than thirty feet (30') above the sixteen foot (16') topographic contour existing on the internal roadway passing through this portion of the site.

3. LOT COVERAGE. The maximum lot coverage of all improvements and structures on the site (not including surface parking areas, landscaping and access roads and pathways) shall be a maximum of twenty percent (20%) of the site area. For purposes of this Agreement, the parties agree that the site area is 17.82 acres or 776,239 square feet. Therefore, the maximum lot coverage allowable under this Agreement is 155,248 square feet.

4. SETBACKS. All setbacks shall he measured from the current boundary lines of the Battelle site.

4.1 Buildings and Other Improvements. No building structure or other improvement (with the exception of surface parking areas, landscaping and access roads and pathways) shall intrude within the setback lines on the site, as shown on the attached binding site plan (incorporated herein as Exhibit C) and as further described below.

a. West Boundary. A minimum setback of twenty five feet (25') shall be maintained from the west boundary line of the property.

b. East Boundary. A minimum setback of ninety five feet (95') shall be maintained from the east boundary line of the property.

c. North Boundary. A minimum setback of ninety three feet (93') shall be maintained along the easterly three hundred thirty four and fifty six hundredths feet (334.56') adjacent to the area north of the site presently zoned Single Family.

A minimum setback of twenty five feet (25') shall be maintained along the westerly five hundred sixty eight and twenty four hundredths feet (568.24') of the north boundary adjacent to the area north of the site presently zoned Multifamily and Commercial.

d. South Boundary. A minimum setback of one hundred thirty feet (130') shall be maintained along the easterly five hundred forty four feet (544') of the south boundary. A minimum setback of thirty feet (30') shall be maintained along the westerly two hundred ninety six feet (296') of the south boundary (the approximate intersection of the twenty foot (20') topographic contour with the thirty foot (30') setback line just west of the existing entry roadway). A variable minimum setback line shall be maintained within a line running northeasterly connecting the easternmost point of the thirty foot (30') setback line with the westernmost point of the one hundred thirty foot (130') setback line.

e. Utility Vaults Within Setbacks. The utility vault to be placed by U.S. West adjacent to the 40th Avenue N.E. right of way shall be completely screened by landscaping with maintenance access provided from the south or west. Utility vaults shall not be placed within the grassy area an the south side of the property subject to the 130 foot setback limitation.

4.2 Parking Areas. No parking area established on the site in the future shall be constructed outside the minimum parking setback lines identified on Exhibits C and C.1 and as further described below.

a. West Boundary. A minimum setback of ten feet (10') shall be maintained along the west boundary line of the property.

b. East Boundary. Minimum setbacks of twenty feet (20') and thirty five feet (35') shall be maintained along the east boundary of the site consistent with the parking layout contained on Exhibit C.1.

c. North Boundary. A minimum setback of fifty feet (50') Shall be maintained along the easterly three hundred thirty four and fifty six hundredths feet (334.56) of the north boundary line (adjacent to the area presently zoned Single Family north of the site); however, any existing parking area within this setback (but not within forty-three feet (43') of the north boundary line) may be maintained, but not expanded.

A minimum setback of ten feet (10') shall be maintained along the westerly five hundred-sixty eight and twenty four hundredths feet (568.24') of the north boundary line (adjacent to the area presently zoned Multifamily and Commercial north of the site).

d. South Boundary. A minimum setback of one hundred thirty feet (130') shall be maintained along the easterly five hundred forty four feet (544') of the south boundary line. A minimum setback of twenty feet (20') shall be maintained along the westerly two hundred ninety six feet (296') of the south boundary line. A variable minimum setback shall be maintained within a line running northeasterly and connecting the easternmost point on the twenty foot (20') minimum setback line with the westernmost point on the one hundred thirty foot minimum setback line as shown on Exhibit C. No parking located within the area of setback less than one hundred thirty feet (130') shall be constructed above the sixteen foot (16') contour elevation.

5. ADDITIONAL PARKING. It is agreed and acknowledged that there are currently two hundred thirty three (233) total parking stalls on the site. These consist of one hundred forty four striped stalls and eighty nine (89) overflow parking stalls located along internal roadways. BMI BN and LCC agree that BMI shall provide additional parking for future expansions on the following basis:

5.1 Office Space. BMI agrees to provide additional parking at a ratio of three and one half (3.5) stalls per thousand square feet of additional office space constructed.

5.2 Conference Space. BMI agrees that parking shall be provided for additional conference center space on a variable ratio based upon either the amount of actual conference room space, or upon the amount of additional building footprint to be constructed to house and support conference center activities. Parking shall be provided at a ratio of ten (10) stalls per thousand square feet of additional building footprint constructed to house and support conference center activities or at a ratio of thirty seven (37) stalls per thousand square feet of actual conference rooms to be constructed. The ratio which results in the larger number of parking stalls being required for a particular project shall be used.

5.3 Lodging and Apartment Space. BMI, BN and LCC agree that no additional parking shall be required under this Agreement for the construction of additional. lodging rooms and apartment space. BMI further covenants and agrees that during the term of this agreement all lodging rooms and apartment space shall be used solely by guests or employees of BMI who are using office spaces at BMI or who are attending a conference on the site.

5.4 Location and Type of Additional Parking. BMI agrees that all additional parking required by this Agreement to accommodate an expansion of the current facility shall be provided on site, on or below grade, in marked spaces meeting requirements of City ordinances. No above grade parking structures shall be allowed.

BMI, BN and LCC agree that BMI may continue its existing practice of providing overflow parking along the edge of internal roadways. Should the City's Fire Code change and the overflow parking areas become unusable due to an expansion or action of the City, BMI shall make necessary changes onsite to accommodate the Fire code and will provide parking on site equalling the current base agreed number of two hundred thirty three (233) stalls plus any additional stalls required under this Agreement for expansion.

Should BMI provide additional parking stalls along the eastern boundary of the site, BMI shall cease using the seven (7) overflow parking stalls currently existing along the southeast entry roadway to the site which are located within the southerly building setback area.

6. VEHICULAR ACCESS LIMITATIONS AND MODIFICATIONS. Vehicular access to the site shall be limited to the existing three access points identified on Exhibit C, subject to the provisions of this section. Changes or additions to the existing vehicular access points and internal roadway widths may he made by mutual agreement of the parties or under the following circumstances;

(1) A change required to meet the City's emergency vehicle access requirements; or

(2) A change required to accommodate City Code requirements related to configuration and location of access points and driveways, where such changes in Code requirements are not within BMI's control; or

(3) A relocation of the primary southwest access road shall be allowed within the area to the west of the existing road location and the west boundary parking setback line if the existing roadway area is reestablished as a landscaped area and the reestablished roadway is no wider than the current roadway unless required under (1) or (2) above.

No access points, roadways, pathways or similar uses shall be newly established, widened or otherwise expanded in any of the parking setback areas except for the relocation of the primary southwest access road under the provisions herein above.

7. LANDSCAPE BUFFERING. BMI agrees to provide permanent landscape buffering between any new parking or structures and the boundary lines of the site concurrently with the occupancy or use of any new facilities. The landscape buffering shall be provided in a manner consistent with the landscape buffering plans attached to this Agreement as Exhibit D. The landscape plan attached as Exhibit D is acceptable in principle to BMI, BN and LCC. BMI, BN and LCC agree that within four months, BMI's and BN and LCC's landscape architects shall consult with each other and the residents abutting the east and west boundaries of the site regarding a final plan. The goal of the landscaping plan is an aesthetically pleasing setting which provides a buffer for surrounding residences with initial plantings of size to provide effective buffering. After such consultation, any unresolved dispute regarding the landscape plan shall be finally resolved by the DCLU Director. The landscape buffers shall be maintained in good condition throughout the term of this Agreement after installation.

8. RPZ FORMATION. BMI, BN AND LCC agree that they will support the formation of a Residential Parking Zone by the City located between 37th Avenue N.E. and 38th Avenue N.E. between N.E. 415t Street and N.E. 45th Street should the formation of such a parking zone be initiated or supported by LCC. BMI agrees that it will take no position with respect to the formation of RPZ's located elsewhere in the surrounding neighborhood.

9. 38th AVENUE N.E. RIGHT OF WAY. BMI covenants and agrees that it shall not petition for or support in any way the vacation or improvement of undeveloped 38th Avenue N.E. adjacent to the site.

10. WETLANDS. BMI acknowledges that there is a potential wetlands issue on the property and BMI agrees to act affirmatively to comply with all applicable local, state and federal requlations and statutes regarding wetlands.

11. LAND USE AND FUTURE CONDITIONAL USE PERMITS. BN and LCC agree to support an amendment to the City Land Use Code which allows expansion of existing Institutes for Advanced Study an sites larger than fifteen (15) acres in the single Family zone. The code amendment shall provide for expansion through an Administrative Conditional Use process. The City agrees to initiate the code amendment immediately and to process it as expeditiously as possible. BN and LCC agree not to oppose the issuance of an Administrative Conditional Use Permit for expansion of BMI or a successor Institute for Advanced Study so long as the permit application is consistent with the terms of this Agreement.

This Agreement does not waive any of the City's legislative authority or options and is intended only to facilitate resolution of the dispute between the parties. Where this Agreement is more specific or restrictive than the City's Land Use Code it is binding between BMI, BN and LCC, however, the City shall be bound only to enforce its ordinances and not the terms of this Agreement where the two may conflict or be inconsistent.

12. DEVELOPMENT PLAN REVIEW. BMI agrees that it will submit all plans for any new parking, new construction or addition of conference space to LCC at least sixty (60) days prior to the submission of such plans to the City for any required permits. Where city permits are not required for development covered by this Agreement, plans shall be submitted to LCC for review at least sixty days prior to any implementation of such plans. The purpose of such plan review is to allow the parties to determine consistency of such plans with this Agreement and to allow a constructive dialogue to occur regarding such plans. BMI shall allow BN and LCC a limited right of reasonable access to the outdoor portions of the site for purposes of verifying consistency of proposed modifications under this Agreement. By appointment, which shall not unreasonably be refused, BMI shall permit interior access to review proposed modifications subject to this Agreement.

13. EXPIRATION &ND AMENDMENT OF COVENANTS AND AGREEMENT. The covenants and agreements among BMI, BN and LCC may only be amended through agreement between and among them. The covenants set forth in this Agreement shall remain in effect until such time as the property is converted to uses allowed outright under the single Family zoning of the Property or at such time as the Property is no longer in a designated Single Family Zone under the Seattle Land Use Code, as it may be amended from time to time.

14. The provisions of this Agreement shall be binding and inure to the benefit and burden of LCC/BN and BMI and their respective heirs, administrators, executors, successors, and assigns. Further, all of the provisions of this Agreement shall constitute covenants running with the land described in Exhibit "A" and shall be recorded as such upon execution of this Agreement.

15. All terms of this Agreement are material.

16. BMI and the signatories on its behalf below hereby guarantee and warrant that they have authority to enter into this Agreement, and that there are no prior liens, deeds of trust, or any other prior interests on the Site which is the subject of this Agreement which would not be subject to the covenants imposed by the Agreement. LCC, BN, and the signatories on their behalf below hereby guarantee and warrant that they have authority to enter into this Agreement.

17. In enforcing the terms of this Agreement, each party agrees to act in good faith and will not unreasonably withhold consents or approvals.

18. All notices given or required to be given pursuant to this Agreement must be in writing and shall be deemed given when personally delivered or mailed by United States certified mail, return receipt requested, to each of the parties at the address set forth below its signature (or at such other address that a party shall hereafter designate by notice given in accordance with this Paragraph) . LCC/BN will provide BMI with updated separate mailing lists of mail receipt designees as needed.

19. If LCC or BN cease to exist, their rights and obligation under this Agreement shall pass to any successor entity by merger or consolidation, or to any entity formed or designated by the members of LCC or BN to succeed to the rights and obligations of LCC or BN. If no such entity exists, said rights and obligations shall expire.

20. No waiver by any party of any default in the performance of any other party of any agreement contained herein shall be construed as a waiver of any subsequent default.

21. Time is of the essence in this Aqreement.

22. This Agreement contains the entire agreement among the parties with respect to the subject matter hereof and shall not be modified or amended in any way, except in writing, signed by the parties hereto, or their successors in interest

23. This Agreement shall be governed by and construed under the laws of the State of Washington.

24. This Agreement may be executed in counterparts, each of which shall be deemed to be on an original.

25. The parties agree to execute any documents necessary or convenient to complete the transactions completed herein and to accomplish the intent of the parties.

26. The recitals are part of this Agreement.

27. This Agreement may be enforced through specific performance and injunction: while damages may be sought for breach of the Agreement, the parties specifically agree that damages are not an adequate remedy.

28. The parties agree to execute an "Agreed order" in King County Cause No. 88-2-19786-5, dismissing the action with prejudice and without costs.

29. Substituted Site Plan. A substitute Exhibit C which includes topographic contour lines and dimensions for existing access roadway widths and access roadway locations and all of the information on existing Exhibit C shall be substituted by BMI and circulated to the parties within thirty days. Any unresolved dispute regarding the final site plan shall be finally resolved by the DCLU Director.

BATTELLE MEMORIAL INSTITUTE

By: Douglas Olesen, President

STATE OF OHIO
COUNTY OF FRANKLIN

I certify that I know or have satisfactory evidence that Douglas E. Olesen is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the President of Battelle Memorial Institute to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Siqned or attested before me on 10/25/91
by TEA M. SPILKER Notary Public in and for the State Of OHIO at Columbus Ohio

TEA M. SPILKER Notary Public, STATE OF OHIO MY COMMISSION EXPIRES MARCH 15. 1992

CITY OF SEATTLE LAW DEPARTMENT

By: Patrick J. Schneider

STATE OF WASHINGTON
COUNTY OF KING

I certify that I know or have satisfactory evidence that Patrick J. Schneider is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the -------- of City of Seattle Law Department to be the free and voluntary act of such party of the uses and purposes mentioned in the instrument.

Signed or attested before on December 4, 1991 by Rosie Lee Hailey Notary Public in and for the State of Washington residing at Seattle

My Commission Expires: 4/25/93

CITY OF SEATTLE DEPARTMENT OF CONSTRUCTION AND LAND USE

By: Dennis McLerran, Director

STATE OF WASHINGTON
COUNTY OF KING

I certify that I know or have satisfactory evidence that Dennis McLerran is the person who appeared before me, and said person acknowledged that he signed this instrument, an oath stated that he was authorized to execute the instrument and acknowledged it as the Director of City of Seattle Department of Construction and Land Use to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Signed or attested before me on Oct 23rd 1991 by Dennis McLerran.
Marion Herth
Notary Public in and for the State of Washington, residing at Seattle
My Commission Expires 12/5/91

LAURELHURST COMMUNITY CLUB

By: Barbara Ragee, Vice President

By: Bob Bohrer, Member
Laurelhurst Community Club Negotiating committee

By: Bob Klug, Member
Laurelhurs Community Club Negotiating Committee

STATE OF WASHINGTON
COUNTY OF KING

I certify that I know or have satisfactory evidence that Barbara Ragee 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 Vice President of Laurelhurst Community Club to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

GIVEN under my hand and official seal on this 23rd day of October, 1991

Rachel Park,
Notary Public in and for the State of Washington, residing at Seattle.
My Commission Expires: 7/5/91

STATE OF WASHINGTON
COUNTY OF KING

I certify that I know or have satisfactory evidence that Bob Bohrer and Bob Klug are the persons who appeared before me, and said persons acknowledged that they signed this instrument on oath stated that they were authorized to execute the instrument and acknowledged it as members of the Laurelhurst Community Club Negotiating Committee to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

GIVEN under my hand and official seal on this 23rd day of October, 1991.

Rachel Park
Notary Public in and for the State of Washington, residing at Seattle
My Commission Expires: 7/5/91

BATTELLE NEIGHBORS

By: Bob Klug Its President

STATE OF WASHINGTON
COUNTY OF KING

I certify that I know or have satisfactory evidence that Bob Klug is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the President of Battelle Neighbors to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Given under my hand and official seal an this 23rd day October, 1991.

Rachel Park
Notary Public in and for the state of Washington, residing at Seattle
My Commission Expires: 7/5/91

Exhibits (On-line versions of the exhibits are being prepared)

Exhibit A Legal Description.

Exhibit B - Listing of current conference room square footage and location and listing of current conference center usage building footprint.

Exhibit C - Site plan with building and parking setbacks identified and buildings with current use identified.

Exhibit C.1 - Proposed parking layout with setbacks along east boundary.

Exhibit D - Landscape buffer plan.

EXHIBIT A

Beginning at the Southeast corner of Lot 4 in Block 3 of Town of Yesler, according to plat thereof recorded in Volume 2 of Plats, Page 180, Records of Said County; thence Easterly along the production of the Southerly line of said Lot 4 to an intersection with a line parallel with and 30.00 feet Easterly of, measured at right angles to, the Easterly line of 38th Avenue Northeast (formerly Wilkes Street), as shown on said plat and true point of beginning; thence Southerly along the Easterly line of a strip of land deeded to the City of Seattle by deed recorded under Recording No. 3078749, Records of Said County, following a curve to the right having a radius of 100.00 feet to an intersection with a line parallel with and 20.00 feet Easterly of, measured at right angles to, the Easterly line of said 38th Avenue Northeast; thence continuing on Easterly line of said deeded strip, Southerly along said parallel line to an intersection with the Northerly line of East 41st Street as condemned under Superior Court Cause No. 81242 as provided by Ordinance No. 26926 of the City of Seattle; thence Easterly along said Northerly line to the Westerly line of Laurelhurst, an addition to the City of Seattle, according to the plat thereof recorded in Volume 14 of Plats, Page 15, Records of said County; thence Northerly along said Westerly line to the Southerly line of North Laurelhurst Park, according to the plat thereof recorded in Volume 35 of Plats, Page 36, Records of Said County; thence South 89 degrees 31'32" West along said Southerly line 334.56 feet to the Southwest corner of said North Laurelhurst Park; thence South 0 degrees 26'03" East 29.00 feet; thence South 89 degrees 31'32" West parallel with the Southerly Iine of East 45th Street, 374.79 feet; thence North O degrees 26'03" West 22.31 feet, more or less, to a point from which the true point of beginning bears North 89 degrees 00'00" West; thence North 89 degrees 00'00" West 193.45 feet to true point of beginning.

Situate in the County of King, State of Washington.

EXHIBIT B