HomeMy WebLinkAboutAFC I Lease - RES 3476RESOLUTION NO 3 4 7 6
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
AUBURN WASHINGTON REPLACING RESOLUTION NO 3420
TO CLARIFY THE AUTHORIZING LEASE BETWEEN AUBURN
AND N W HANGARS LLC FOR 12 273 SQUARE FEET OF
LAND AT AUBURN MUNICIPAL AIRPORT
WHEREAS the City of Auburn passed Resolution No 3420 on February
19 2002 and
Whereas the Lessee N W Hangars L L C has reconfigured the
intentional operation of the lease consistent with the attached lease document
and
WHEREAS NW Hangars LLC will construct aircraft hangars to be sold
as condominium units and
WHEREAS the City of Auburn Airport Master Plan has earmarked
expanding the building of hangers at the Auburn Municipal Airport
NOW THEREFORE THE CITY COUNCIL OF THE CITY OF AUBURN
WASHINGTON DO ORDAIN as follows
Section 1 The Mayor of the City of Auburn is herewith authorized to
execute a ground lease between the City of Auburn and N W Hangars LLC A
copy of said ground lease is attached hereto as Exhibit A and incorporated
herein by this reference which lease replaces the lease authorized by Resolution
No 3420
Section 2 This Resolution shall be effective upon passage and signature
hereon
Resolution 3476
May 30 2002
Page I
Dated and Signed this day of June 2002
ATTEST
t
Danielle E
City Clerk
niel B Heid
City Attorney
Resolution 3476
May 30 2002
Page 2
CITY OF AUBURN
G
PETER B LEWIS
MAYOR
LEASE AGREEMENT
BETWEEN
City of Auburn
and
NW Hangars LLC
1819 S Central Ave
Suite 141
Kent WA 98032
Dated
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 1
CITY OF AUBURN
ArnPORTHANGARLANDLEASEAGREEMENT
THIS LEASE AGREEMENT hereinafter referred to as this Lease is made as of
2002 by and between the City of Auburn a Washington municipal corporation
ereinafter referred to as Lessor and NW Hangars LLC hereinafter referred to as Lessee
WIT N E SSE T H
In consideration of their mutual covenants agreements and undertakings hereinafter
contained the parties hereto do mutually agree to that which is hereinafter set forth upon and
subject to the following terms conditions covenants and provisions
1 PROPERTY SUBJECT TO THIS LEASE AGREEMENT
a For and in consideration of the rent and faithful performance by Lessee of the
terms and conditions and the mutual covenants hereof Lessor does hereby lease to Lessee and
Lessee does hereby lease from Lessor the property legally described on Exhibit A I hereinafter
referred to as the Premises which Premises consist of approximately 12 273 Twelve
Thousand Two Hundred Seventy square feet of Land as depicted on the Site Plan attached
hereto as Exhibit A 2 Exhibit A I and Exhibit A 2 are hereby incorporated into this Lease by
this reference The Premises are situated in the County of King State of Washington and are
located at the Auburn Airport the Airport
b Lessor represents and warrants that to the best of the City s knowledge without
duty of inquiry there are no hazardous wastes or materials on in or under the Premises
c LESSEE ACKNOWLEDGES AND AGREES THAT IT IS RELYING SOLELY
ON ITS INSPECTION AND INVESTIGATION OF THE PREMISES AND ACCEPTS THE
PROPERTY AS IS WHERE IS IN ITS PRESENT CONDITION WITH NO WARRANTIES
OF ANY KIND EXPRESS OR IMPLIED EITHER ORAL OR WRITTEN MADE BY
LESSOR OR ANY EMPLOYEE AGENT OR REPRESENTATNE OF LESSOR WITH
RESPECT TO THE PHYSICAL CONDITION OF THE PREMISES LESSEE SHALL HAVE
DETERMINED TO ITS SATISFACTION UPON ITS EXECUTION HEREOF THAT THE
PREMISES CAN BE USED FOR THE PURPOSES IT INTENDS AND WHICH ARE
PERMITTED UNDER THIS LEASE LESSEE ACKNOWLEDGES AND AGREES THAT
NEITHER LESSOR NOR LESSOR S AGENT HAD MADE AND DOES NOT MAKE ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER
WHATSOEVER WHETHER EXPRESS OR IMPLIED WITH RESPECT TO THE
HABITABILITY LEAS ABILITY OR SUITABILITY FOR COMMERCIAL PURPOSES
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PREMISES OR THE PRESENCE OR ABSENCE OF ANY HAZARDOUS SUBSTANCES
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 2
WASTES OR MATERIALS AS DEFINED BY STATE FEDERAL OR LOCAL LAW ALL
OF WHICH WARRANTIES LESSOR HEREBY EXPRESSLY DISCLAIMS
2 TERM
The term of this Lease shall be for fifty 50 years beginning on the date of mutual
execution hereof hereinafter referred to as the Commencement Date and ending at midnight
on the day prior to the fiftieth 50th anniversary of the Commencement Date unless sooner
terminated pursuant to any provision of this Lease the Term If Lessor for any reason
whatsoever cannot deliver possession of the Premises to Lessee on the Commencement Date
Lessor shall not be subject to any liability nor shall the validity of the Lease be affected
provided the Term of this Lease shall commence on the date possession is actually tendered to
Lessee but the Expiration Date shall not be adjusted
2 A MARKET ANALYSIS PERIOD
Lessee shall have a period of ninety 90 days from the date of mutual execution of this
Lease to perform an analysis of the market for its intended use of the Premises the Market
Analysis Period If Lessee determines in its absolute and sole discretion that it is not satisfied
with the market Lessee may terminate this Lease by delivering written notice to Lessor on or
before the end of the Market Analysis Period of its election to terminate the Lease due to market
conditions If Lessee timely notifies Lessor of its election to terminate this Lease as provided
herein the Lease shall terminate as ofthe date of Lessor s receipt of Lessee s notice the Security
Deposit shall be refunded to Lessee and the parties shall have no further obligations under this
Lease provided however that the IndemnificationHold Harmless provisions of Section 10 of
this Lease and the Costs and Attorneys Fees provisions of Section 23 of this Lease shall survive
any such termination
3 PURPOSE
a Lessee shall use the Premises only for the construction management and
maintenance of aircraft hangar buildings for primarily the storage and maintenance of aircraft
and to conduct such other aviation related activities as are incidental and reasonably related
thereto Lessee may develop the Premises as a condominium pursuant to the provisions of
Chapter 6434 RCW the Condominium Act provided however that Lessee shall obtain
Lessor s prior written approval which approval shall not be unreasonably withheld of the
condominium declaration the Declaration and the survey map and plans the Survey Map
and Plans that are required under the Condominium Act prior to the recording of the
Declaration and the Survey Map and Plans against the Premises in the official records of King
County Lessor shall have a period of 30 days within which to review such documents following
the date upon which Lessee delivers to Lessor and to Lessor s counsel true copies of the
proposed Declaration and Survey Map and Plans Lessor s approval of such documents shall be
evidenced by a signed Consent of Lessor which Consent of Lessor shall be attached to the
Declaration It is further understood that the above activities are the only type of activities to be
conducted upon the Premises Lessee shall at all times operate on the Premises in a manner
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 3
which will assure the safe lawful and healthful use of the Premises Lessee agrees that it will
not disturb the Lessor or any other Lessee of the Lessor by making or permitting any
disturbances or any unusual noise vibration or other condition on or in the Premises All such
activities shall take place inside the hangars to be constructed
b The following uses are specifically prohibited on or from the Premises unless
Lessor expressly authorizes such uses by Lessor s prior written consent which consent may be
withheld in Lessor s sole and absolute discretion
l At no time will aircraft be fueled inside any Improvements situated on the
Premises
2 Conducting of any use business or commercial activity other than
Lessee s hangar operations and other aviation related activities as are incidental and reasonably
related thereto
3 Use of the Premises as a residence or for ovemight sleeping
4 Working on aircraft except within the legal limits allowed by FAA for
persons working on their own aircraft and
5 Servicing of aircraft by licensed aircraft mechanics unless they have a
valid City of Auburn business registration and have obtained liability insurance with policy
limits required to be maintained by Tenant elsewhere under this Lease or such lesser policy
limits as may be otherwise approved by Lessor
c No building structure or improvements of any kind shall be erected placed upon
operated or maintained on the Premises nor shall any business or operation be conducted or
carried on in violation of any ordinance law statute by law order or rule of any governmental
agency having jurisdiction thereover
d Upon mutual execution hereof Lessee may pursue construction and development
of aircraft hangar buildings and related facilities collectively the Improvements pursuant to
plans and specifications approved by Lessor and otherwise in accordance with Exhibit B
attached hereto and by this reference incorporated herewith Lessee s plans and specifications
shall include without limitation details of any right of way or taxi way entrances to be
constructed by Lessee as well as the building materials for and design of the Improvements
Lessor s approval of the plans and specifications shall not be unreasonably withheld Upon
commencement of construction of the Improvements the Improvements shall be deemed to
include and be part of the Premises for all purposes hereunder
4 RENT IMPOSITIONS LEASEHOLD EXCISE TAX
a Commencing on the earlier to occur of i issuance of a building permit for
Lessee s proposed Improvements or ii one hundred twenty 120 days after Lessee provides
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 4
written notice to Lessor that it is satisfied with the results of the Market Analysis Period as
outlined in paragraph 2A hereinabove hereafter the Rent Commencement Date Lessee shall
pay to Lessor in addition to taxes assessments and other charges required to be paid herein by
Lessee Monthly Base Rent of Four Hundred Nine and 10 100 409 10 Monthly Base
Rent Monthly Base Rent shall be payable on or before the first 1st day of each calendar
month thereafter to the City of Auburn Attn Finance Department 25 West Main Auburn WA
98001 without notice demand offset abatement or deduction of any kind On the date that
Lessee executes this Lease Lessee shall deliver to Lessor the original executed Lease cash in
the amount equal to one 1 month s Monthly Base Rent which shall be applied toward the
Monthly Base Rent due for the first month for which Monthly Base Rent is payable hereunder
the cash Security Deposit and all insurance certificates evidencing the insurance required to be
obtained by Lessee under this Lease The term rent whenever used herein refers to all amounts
required to be paid by Lessee hereunder Rent for any fractional part of a calendar month at the
commencement or expiration or termination of the term shall be a prorated amount of the rent for
a full calendar month based upon a thirty 30 day month
b
below
Monthly Base Rent shall be subject to annual increases as provided in Section 5
c Commencing on the Lease Commencement Date Lessee shall pay any and all
Impositions allocable to the Premises The term Impositions shall mean all real estate taxes to
the extent any portion of the Premises and any improvements thereon are subject to real estate
taxes water and sewer charges charges for public utilities local improvement or general or
special benefit district assessments license and permit fees or other charges which shall or may
during the Term be assessed levied charged confirmed or imposed by any public authority
upon or accrue or become due or payable out of or on account of or become a lien on the
Premises or any part thereof including without limitation all real property taxes allocable to the
Improvements or for the use or occupancy of the Premises and any tax on receipt of rents
Notwithstanding the foregoing Lessor represents and warrants to Lessee that all City of Auburn
fees related to the City s Storm Drainage System have been or shall be paid as an operating
expense of the airport and shall not be included as an Imposition under this Lease The term
Impositions shall expressly include statutory leasehold excise tax imposed by Chapter 82 29A
RCW on the taxable rent payable by Lessee hereunder but shall exclude any income tax estate
succession or inheritance taxes Either Lessee or Lessor may contest the validity or amount
including the assessed valuation upon the Premises and any exemptions applicable to any
portion thereof of any Imposition for which either is responsible in whole or in part and which
such party in good faith believes is excessive improper or invalid In such event the payment
thereof may be deferred during the pendency of such contest if diligently prosecuted but in no
event shall Lessee allow a lien for any unpaid taxes which it is contesting to attach to the
Premises Each party agrees to join at the other s request in any such contest to the extent such
joinder is prerequisite to such prosecution under statute regulation or administrative practice In
connection with a judicial or administrative challenge to any assessment Lessee may take
advantage of any stay in collection available under statute regulation or court or administrative
order or rules Nothing herein contained however shall be so construed as to allow such items
to remain unpaid for such length of time as shall permit the Premises or any part thereof to be
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 5
sold by any governmental city or municipal authority for the nonpayment of the same Within
ten 10 days after the amount of such contested item is finally determined to be due the party
liable for such Imposition shall pay the amounts so determined together with the penalties
interest and expenses associated with such contest
d It is the intent of Lessee and Lessor that the rent due hereunder shall be absolutely
net to Lessor and that Lessee shall pay all costs expenses regarding the Premises whether
specifically mentioned herein or not
5 ANNUAL PERIODIC RENT ADJUSTMENTS
a Monthly Base Rent shall be adjusted on January 1st of every year beginning
January 1 2004 during the lease term per this Section 5 Notwithstanding the foregoing
Monthly Base Rent shall be adjusted on each fifth 5th year commencing on January 1 2009 to
equal the fair market rental value of the Premises pursuant to the procedure set forth in
Section 5 d below No annual or fifth 5th year adjustment however shall reduce the amount
of Monthly Base Rent below the amount of the respective Monthly Base Rent that is being
adjusted
b Definitions The adjusted Monthly Base Rent shall be determined in accordance
with the formula set forth in Section 5 c below In applying the formula the following
definitions apply
1 Bureau means the U S Department of Labor Bureau of Labor Statistics
or any successor agency
2 Price Index means the Consumer Price Index for the month of August
for all Urban Consumers All Items Seattle Tacoma Bremerton issued from time to time by the
Bureau or any other measure hereafter employed by the Bureau in lieu of the price index that
measures the cost of living or if said Bureau should cease to issue such indices and any other
agency of the United States should perform substantially the same function then the indices
issued by such other agency
c The adjusted Monthly Base Rent shall be determined by multiplying the Monthly
Base Rent being adjusted by a multiplier equal to the change in the Price Index since the last
adjustment computed as follows
Percentage change in Price Index x current Monthly Base Rent Adjusted Monthly Base Rent
d Each five 5 years commencing on January 1 2009 the Monthly Base Rent shall
be revised based upon an appraisal establishing fair market rental value of the Premises
excluding however the rental value of any Improvements constructed by Lessee Lessor will
retain and pay the costs of an MAI appraiser The annual adjustment formula set forth in
Sections 5 b c shall not be applied each such fifth 5th year Lessor may at its discretion
utilize an appraisal completed within 12 months prior to the date of the periodic five year
adjustment Additionally this appraisal may be used by Lessor for setting rates for leases other
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 6
than this Lease In the event the Lessee disagrees with Lessor s appraisals the Lessee may at
his or her own expense retain a second appraisal Lessor and Lessee will then attempt to
negotiate a lease rate If these negotiations are unsuccessful the parties will mutually agree on
the selection of an arbitrator The costs of arbitration shall be shared The arbitrator s
determination shall be based upon the appraisals but in no event shall the new Monthly Base
Rent be lower than the Monthly Base Rent in effect at the time of arbitration The decision of
the arbitrator regarding increases shall be final
6 SECURITY DEPOSIT
Simultaneously with Lessee s execution and delivery ofthis Lease Lessee shall deliver to
Lessor as a Security Deposit for the faithful performance by Lessee of its obligations under this
Lease the amount of Four Hundred Nine and 10 100 40910 which is equal to one 1
month s worth of Monthly Base Rent payable at the initial rate set forth in Section 4 a above If
Lessee is in default hereunder Lessor may but without obligation to do so use all or any portion
of the Security Deposit to cure the default or to compensate Lessor for all damages sustained by
Lessor in connection therewith Lessee shall immediately on demand pay to Lessor a sum
equal to the portion of the Security Deposit so applied or used to replenish the amount of the
Security Deposit held to increase such deposit to the amount initially deposited with Lessor At
any time after Lessee has defaulted hereunder Lessor may require an increase in the amount of
the Security Deposit required hereunder for the then balance of the Term and Lessee shall
immediately on demand pay to Lessor such additional sums As soon as practicable after the
expiration or termination of this Lease Lessor shall return the Security Deposit to Lessee less
such amounts as are reasonably necessary as determined by Lessor to remedy Lessee s
default s hereunder or to otherwise restore the Premises to a clean and safe condition
reasonable wear and tear excepted If the cost to restore the Premises exceeds the amount of the
Security Deposit Lessee shall promptly deliver to Lessor any and all of such excess sums
Lessor shall not be required to keep the Security Deposit separate from other funds and unless
otherwise required by law Lessee shall not be entitled to interest on the Security Deposit In no
event or circumstance shall Lessee have the right to any use of the Security Deposit and
specifically Lessee may not use the Security Deposit as a credit or to otherwise offset any
payments required hereunder Lessor may elect in Lessor s sole discretion and if Lessee has
not been in material default during the first twenty four 24 months of the Term hereof to
refund the Security Deposit to Lessee at the end of the twenty fourth 24th Lease month
7 LATE CHARGES
Lessee hereby acknowledges that late payments of rent or any other sums due hereunder
will cause the Lessor to incur costs not otherwise contemplated by this Lease Accordingly if
any installment of rent or any other sum due from Lessee is not received by the Lessor within ten
10 days after such amount shall be due then without any requirement for notice to Lessee
Lessee shall pay the Lessor a late charge equal to 12 of the overdue amount The parties agree
that such late charge represents a fair and reasonable estimate of the costs the Lessor will incur
by reason of late payment by Lessee Acceptance of such late charge by the Lessor shall in no
event constitute a waiver of Lessee s default with respect to such overdue amount nor prevent
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 7
the Lessor from exercising any of the other rights and remedies granted hereunder In the event
that a late charge is payable in this Lease or otherwise whether or not collected for three 3
installments of rent in any 12 month period then rent shall automatically become due and
payable quarterly in advance rather than monthly notwithstanding any other provision of this
Lease to the contrary In addition to the late charges provided for in this section interest shall
accrue on rent or any other sums due hereunder at the rate of one and one half percent 1 and
12 per month from the date due until paid
8 OWNERSHIP OF IMPROVEMENTS DISPOSITION AT END OF LEASE
a During the Term of this Lease all improvements located on the Premises
including without limitation all additions alterations and improvements thereto or replacements
thereof and all appurtenant fixtures machinery and equipment installed therein shall be the
property of Lessee At the expiration or earlier termination of this Lease all improvements and
all additions alterations and improvements thereto or replacements thereof and all appurtenant
fixtures machinery and equipment installed therein shall automatically become the property of
Lessor Upon expiration or earlier termination of this Lease or upon termination of Lessee s
right to possession Lessee shall remove at its expense all personal property which may have
been placed upon the Premises by Lessee Any such property not so removed from the Premises
shall at the election of Lessor be retained by Lessor or may be removed and stored by Lessor at
Lessee s expense and Lessor shall recover any costs and expenses from the Lessee resulting
therefrom
b Upon termination of the Lease the City will determine if it wishes to lease the
hangar under then current terms and rates If such rental is approved by the City first right of
refusal shall be offered to former condominium occupants in good standing Requests should be
made to the City in writing six months prior to the termination ofthe Lease
9 INSURANCE COVERAGE
a The Lessee and any sublessee assignee or licensee of Lessee shall procure and
maintain for the duration of the Agreement insurance against claims for injuries to persons or
damage to property which may arise from or in connection with the Lessee s operation and use
of the leased Premises including Commercial general liability insurance with coverage at least
as broad as the most commonly available ISO Commercial General Liability policy CG 00 01
with limits of liability no less than One Million Dollars 1 000 000 occurrence limit One
Million Dollars 1 000 000 general aggregate limit provided however that in the event Lessee
or any sublessee assignee or licensee of Lessee uses the Premises or any aircraft kept thereon in
the operation of a business which business shall be first registered with Lessor Lessor may
require additional insurance related to such business the amount of which insurance coverage
shall be in Lessor s sole and absolute discretion and shall be obtained prior to the operation of
such business on the Premises Lessor and its agents employees and officers shall be additional
insureds
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 8
b The Lessee s insurance coverage shall be primary insurance as respects Lessor
Any insurance self insurance or insurance pool coverage maintained by Lessor shall be excess
of the Lessee s insurance and shall not contribute with it
c The Lessee s insurance shall be endorsed to state that no coverage shall be
canceled by either party except after thirty 30 days prior to written notice by certified mail
return receipt requested has been given to Lessor All policies shall expressly provide if
available that Lessor shall not be required to give notice of accidents or claims and that Lessor
shall have no liability for premiums and be written by insurance companies having a Best s
rating of A and X or equivalent which insurance companies shall otherwise be reasonably
acceptable to Lessor
d Lessee shall furnish Lessor with evidences of the insurance required to be carried
by Lessee hereunder along with copies of policies and a copy of the amendatory endorsements
including but not necessarily limited to the additional insured endorsement evidencing the
insurance requirements of the Lessee
e Policy limits shall be adjusted every five 5 years commencing on January I
2009 considering levels of inflation risk of loss premium expenses and other relevant factors
in Lessor s commercially reasonable discretion
f Lessor and Lessee hereby mutually waive their respective rights of recovery
against each other for any loss of or damage to either parties property to the extent that such
loss or damage is insured by an insurance policy required to be in effect at the time of such loss
or damage or which is actually carried by such party Each party shall obtain any special
endorsements if required by its insurer whereby the insurer waives its rights of subrogation
against the other party This provision is intended to waive fully and for the benefit of the
parties hereto any rights and or claims which might give rise to a right of subrogation in favor of
any insurance carrier
10 INDEMNIFICATIONHOLD HARMLESS
The Lessee shall defend indemnify and hold harmless Lessor its officers officials
employees and volunteers from and against any and all claims suits actions or liabilities for
injury or death of any person or for loss or damage to property which arises out of Lessee s use
ofPrernises or from the conduct of Lessee s business or from any activity work or thing done
permitted or suffered by Lessee in or about the Premises except only such injury or damage as
shall have been occasioned by the sole gross negligence or willful misconduct of Lessor Solely
for the purpose of effectuating Lessee s indemnification obligations under this Lease and not for
the benefit of any third parties including but not limited to employees of Lessee Lessee
specifically and expressly waives any immunity that may be granted it under applicable federal
state or local Worker Compensation Acts Disability Benefit Acts or other employee benefit acts
Furthermore the indemnification obligations under this Lease shall not be limited in any way by
any limitation on the amount or type of damages compensation or benefits payable to or for any
third party under Worker Compensation Acts Disability Benefit Acts or other employee benefit
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 9
acts The parties acknowledge that the foregoing prOVlSlons of this Section have been
specifically and mutually negotiated between the parties
11 DAMAGE AND DESTRUCTION REPAIR
In the event of damage to or destruction ofthe Improvements
a If the cost of repairing or reconstructing the Improvements to the condition and
form immediately prior to such damage or destruction does not exceed thirty three percent 33
of the then new replacement cost thereof then Lessee shall effect such repair and reconstruction
of the Improvements so damaged or destroyed to substantially their condition prior to said
damage or destruction All such work shall be carried out in accordance with plans and
specifications prepared by a licensed architect or architects approve by Lessor acting
reasonably if such an architect is reasonably required given the scope and nature of the work
b If the cost of repairing or reconstructing the Improvements to the condition and
form immediately prior to such damage or destruction exceeds thirty three percent 33 of the
then new replacement cost thereof then Lessee may elect by written notice to Lessor given
within sixty 60 days after the date of the damage to terminate this Lease provided that this
Lease shall not terminate unless and until Lessee has at its cost and expense restored the
Premises to grade level and removed all debris therefrom including all improvements above and
below ground as and to the extent required by Lessor by written notice provided no later than
thirty 30 days after Lessee s written election to terminate In no event shall Monthly Base
Rent or any other form of rent be abated during such period of reconstruction and or restoration
12 ASSIGNMENT AND SUBLETTING
a Except as set forth below neither this Lease nor any interest therein may be
assigned mortgaged transferred or encumbered nor shall all or any part of the Premises be
sublet each of which a Transfer without Lessor s prior written consent which shall not be
unreasonably withheld provided however that if Lessee creates a condominium on the
Premises as provided in this Lease and for so long as such condominium and the Condominium
Association as hereinafter defined are in existence the Transfer of individual condominium
units to unit owners and by unit owners or to tenants of unit owners other than Lessee shall not
require the prior written consent of Lessor If Lessee is a corporation partnership limited
liability company or any other entity any transfer of a controlling ownership or voting interest
in such entity or any transfer or attempted transfer of this Lease by merger consolidation or
liquidation shall be deemed a Transfer requiring Lessor s consent Transfers include without
limitation one or more sales or transfers by operation of law or otherwise or creation of new
stock by which an aggregate of more than fifty percent 50 of Lessee s stock or partnership
or membership interests as applicable shall be vested in a party or parties who are
nonstockholders or non partners or non members as applicable as of the date hereof provided
that the foregoing shall not apply if Lessee s stock is listed on a recognized national stock
exchange or is traded over the counter Transfers also include without limitation the
assignment sale or transfer of any development rights or special declarant rights by Lessee as
Lessor City ofAuburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 10
declarant under the Condominium Declaration if any except that in the event that Lessee
proposes to grant a security interest in development rights or special declarant rights to facilitate
construction financing of future phases of constmction Lessor s consent shall not be
unreasonably withheld As set forth in Section 12b below Lessee intends to assign this Lease
to a condominium association formed pursuant to Chapter 64 34 RCW the Condominium
Association Any assignee or subtenant including the Condominium Association each a
Transferee shall assume all of Lessee s obligations under this Lease and shall be jointly and
severally liable with Lessee hereunder Consent of the Lessor to any Transfer shall not operate
as a waiver of the necessity for consent to any subsequent Transfer In connection with each
request for consent to a Transfer Lessee shall pay the reasonable cost of processing same
including reasonable attorneys fees upon demand of Lessor If Lessor consents to any proposed
Transfer Lessee may enter into the same but only upon the specific terms and conditions set
forth in Lessee s Request for Consent any such Transfer shall be subject to and in full
compliance with all of the terms and provisions of this Lease the consent by Lessor to any
Transfer shall not relieve Lessee of any obligation under this Lease Lessor may require the
Lessee and the Transferee to execute a Lessor s consent form and no Transfer shall be binding
on Lessor unless Lessee and the transferee shall deliver to Lessor a fully executed counterpart of
the document effecting the Transfer Individual unit owners may provide short term use of their
hangar unit on condition that the term is less than 36 months and a rental form is executed and
will acknowledge subordination to the City of Auburn ground lease herein and that a recorded
copy of this Ground Lease is attached as an exhibit The Lessee will keep a copy of all current
rental agreements for review if requested and a Notice of Occupancy Such notice will be
provided to the Airport Manager on or before the commencement of the rental term and must
include the unit number owner s name address and phone number together with the renter s
name address day phone number and emergency phone number type of aircraft and aircraft
registration number If the renter is a corporation the notice will include the names and
addresses ofthe President Secretary and Treasurer
b Notwithstanding the provisions of Section 12 a above if Lessee creates a
condominium on the Premises as provided in this Lease this Lease shall be automatically
assigned to the Condominium Association upon the recording of the deed transferring Lessee s
interest in the last condominium unit to a unit owner other than Lessee Upon the assignment of
this Lease to the Condominium Association a novation shall occur such that the Condominium
Association shall become absolutely and for all purposes substituted for the original Lessee
under this Lease and the original Lessee shall have no further liability under this Lease If for
any reason the condominium or the Condominium Association is terminated each and every
party with an interest in the Premises at the time of such termination shall be jointly and
severally liable as Lessee under this Lease and upon such termination any and all Transfers
including the Transfer of any interest in the former condominium units shall be subject to the
provisions of Section 12 a including Lessor s prior written consent which consent may be
withheld in Lessor s sole and absolute discretion
c Notwithstanding the provisions of Section 12 a above Lessee may sublet
portions of the Premises provided that i each such subtenant maintains the insurance coverage
required to be maintained by Lessee hereunder ii a copy of the documentation effecting such
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page II
sublease shall be delivered to Lessor as soon as reasonably possible after the effective date
thereof iii the subtenant shall be deemed to have agreed to comply with all of Lessee s
obligations under this Lease applicable to the sublet premises and iv each such sublease shall
be expressly subject and subordinate to the terms and conditions of this Lease
13 OFF STREET PARKING
Lessee agrees not to use any public streets rights of way taxi lanes driveways or other
properties not included in this Lease for the parking of vehicles Vehicles must be placed within
the hanger when its aircraft is removed
14 ADVERTISING AND SIGNS
No signs or other advertising matter symbols canopies or awnings shall be installed
attached to or painted on the Premises without the prior written approval of the Lessor
15 LAWS AND REGULATIONS
The Lessee agrees at its sole cost and expense to conform to comply with and abide by
all lawful rules codes ordinances requirements orders directions laws and regulations of the
United States the State of Washington and City of Auburn or agency of any of said entities
including rules and regulations of Lessor including without limitation those relating to
environmental matters now in existence or hereafter promulgated applicable to the Lessee s use
and operation of said Premises including the construction of any improvements thereon and not
to permit said Premises to be used in violation of any of said rules codes laws or regulations
Lessee shall pay all costs expenses liabilities losses damages fines penalties claims and
demands including reasonable counsel fees that may in any manner arise out of or be imposed
because of the failure of Lessee to comply with the covenants ofthis section
16 ENVIRONMENTAL PROVISIONS
a Lessee covenants to defend indemnify and hold Lessor harmless from any
impOSItIon or attempted imposition by any person upon Lessor of any obligation or cost
liability of whatever form including without limitation damages claims governmental
investigations proceedings or requirements attorney fees in investigation at trial or
administrative proceeding or on appeal witness or consultant costs or any other liability to the
extent that such liability arises from a violation or from the failure to satisfy a requirement of
any environmental or land use law or regulation proximately resulting from use of the Premises
during the term ofthis Lease and without regard to when the liability is asserted
b Lessee has inspected the Premises and accepts it in its present condition Lessee
shall not cause the premises to be contaminated in any way and in the event of contamination
shall immediately report such contamination to Lessor and shall cause any such contamination to
be remedied by that method recognized by Washington State Department of Ecology and shall
indemnify and hold Lessor harmless from all costs involved in implementing the remedy
Lessor City ofAuburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 12
c Any other provision of this Lease to the contrary notwithstanding Lessee s breach
of any covenant contained in this Section 16 shall be an Event of Default empowering Lessor in
addition to exercising any remedy available at law or in equity or otherwise pursuant to this
Lease to terminate this Lease and to evict Lessee from the Premises forthwith or to terminate
Lessee s right to possession only without terminating this Lease
d Lessee shall notify Lessor within twenty four 24 hours of any release of a
reportable quantity of any hazardous substance as that term is defined in CERCLA 42 USC
9601 et seq or the Washington Model Toxics Control Act or of the receipt by Lessee of any
notices orders or communications of any kind from any governmental entity which relate to the
existence of or potential for environmental pollution of any kind existing on or resulting from the
use of the Premises or any activity conducted thereon If Lessee fails to comply with any of the
requirements of this section Lessor may undertake without cost or expense to Lessor any
actions necessary to protect Lessor s interest including steps to comply with such laws
17 MAINTENANCE COMMIT NO WASTE
Lessee shall at all times during the term of this Lease maintain the Premises and all
improvements thereon in good condition and shall at its sole cost and expense keep the
Premises clean and in a safe and sanitary condition and shall provide all necessary repairs and
maintenance to the Premises Lessee agrees not to allow conditions of waste and refuse to exist
on the premises Lessee shall conform to and comply with all valid ordinances regulations or
laws affecting the Premises the Improvements or any other improvements on the Premises or the
use thereof Lessor shall have no obligation whatsoever to keep maintain alter remodel
improve repair decorate or paint the Improvements or any other improvements hereafter
situated upon the Premises It is the intention of the parties that Lessee and not Lessor shall have
the full responsibility and obligation for the repair and maintenance of the Improvements and
other improvements hereafter situated upon the Premises and Lessee waives to the full extent
allowed by law any right or remedy against Lessor based upon the condition of the
Improvements or any improvements hereafter situated upon the Premises or any failure by
Lessor or Lessee to repair or maintain the Improvements or any such improvements
18 ALTERATIONS AND ADDITIONS
Following completion of the initial construction of Lessee s proposed Improvements
Lessee shall not make any alterations improvements additions or utility installations in or about
the Premises collectively Alterations without first obtaining the written consent of Lessor
and where appropriate in accordance with plans and specifications approved by Lessor Any
alterations required to be made to the Premises by any applicable building health safety fire
nondiscrimination or similar law or regulation law shall be made at Lessee s sole expense
and shall be subject to the prior written consent of Lessor To the extent Lessor incurs any costs
in its examination and approval of the architectural and mechanical plans and specifications for
the Alterations which costs have not been previously reimbursed by Lessee to Lessor through
the City of Auburn s permitting process Lessee shall reimburse Lessor for any such additional
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 13
sums expended for examination and approval of such plans and specifications Lessor may
require a lien and completion bond for such construction or require the improvements be
removed at the expiration of the Term Lessor s approval of the plans specifications and
working drawings for Lessee s alterations shall create no responsibility or liability on the part of
Lessor for their completeness design sufficiency or compliance with all laws rules and
regulations of governmental agencies or authorities Unless Lessor requires their removal all
Alterations other than trade fixtures and movable equipment which may be made on the
Premises shall become the property of Lessor and remain upon and be surrendered with the
Premises at the expiration of the term
19 COVENANT OF QUIET ENJOYMENT
Lessor agrees that if Lessee timely pays the rent and performs the terms and provisions
hereunder Lessee shall hold and enjoy the Premises during the Term free of lawful claims by
any party acting by or through Lessor subj ect to all other terms and provisions of this Lease
20 RECORDING AND MORTGAGING
Lessee and Lessor agree to execute and record a short form or memorandum ofthis Lease
with costs of preparation and recording paid by Lessee
21 UTILITIES
a Lessee agrees to contract with the appropriate provider and pay for all public
utilities which shall be used in or charged against the Premises and to hold the Lessor harmless
from such charges Lessor shall cooperate at no charge to Lessor in the granting of easements
and rights of way in through above andor under property owned and controlled by Lessor at
the Airport and reasonably necessary for the provision of utilities to the Premises
b Except to the extent caused by the gross negligence or intentional misconduct of
Lessor or its agents employees or contractors failure by Lessor to any extent to furnish or cause
to be furnished the utilities or services described in this Lease or any cessation or interruption
thereof resulting from any cause including without limitation mechanical breakdown overhaul
or repair of equipment strikes riots acts of God shortages of labor or material compliance by
Lessor with any voluntary or similar governmental or business guidelines governmental laws
regulations or restrictions or any other similar causes shall not render the Lessor liable in any
respect for damages to either person or property for any economic loss or other consequential
damages incurred by Lessee as a result thereof be construed as an eviction of Lessee result in an
abatement of rent or relieve Lessee from its obligation to perform or observe any covenant or
agreement contained in this Lease
22 LIENS AND INSOLVENCY
Lessee shall keep the Premises free from any liens In the event Lessee becomes
insolvent voluntarily or involuntarily bankrupt or if a receiver assignee or other liquidating
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit Aa
Page 14
officer is appointed for the business of the Lessee then the Lessor may cancel this Lease at
Lessor s option
23 COSTS AND ATTORNEYS FEES
If by reason of default on the part of either party to this Lease agreement it becomes
necessary to employ an attorney to recover any payments due hereunder or to enforce any
provision of this Lease the prevailing party whether such party be the successful claimant or the
party who successfully defended against the claim of the other party shall be entitled to recover
a reasonable attorney s fee and to be reimbursed for such costs and expenses as may have been
incurred by such prevailing party
24 DEFAULT REMEDIES
a Time is of the essence of this agreement
b If i any rent or other payment due from Lessee hereunder remains unpaid for
more than ten 10 days after the date it is due ii Lessee files a voluntary petition in bankruptcy
or makes a general assignment to the benefit of or a general arrangement with creditors iii
there is an involuntary bankruptcy filed against Lessee that has not been dismissed within thirty
30 days of filing iv Lessee becomes insolvent or v a receiver trustee or liquidating officer
is appointed for Lessee s business or vi if Lessee violates or breaches any of the other
covenants agreements stipulations or conditions herein and such violation of breach shall
continue for a period of thirty 30 days after written notice of such violation or breach is sent to
Lessee then Lessor shall have the rights and remedies provided in this Section 24 in additional
to any other right or remedy available at law or equity all notice and cure periods set forth above
are in lieu of and not in addition to any notice required pursuant to applicable unlawful
detainer eviction statutes
c Upon any default under this Lease Lessor may reenter the Premises in the manner
then provided by law and remove or put out Lessee or any other persons found therein No such
reentry shall be construed as an election on Lessor s part to terminate this Lease unless a written
notice of such intention is given to Lessee
d Lessor may elect to re let the Premises or any part thereof upon such terms and
conditions including rent term and remodeling or renovation as Lessor in its sole discretion
may deem advisable To the fullest extent permitted by law the proceeds of any reletting shall
be applied first to pay Lessor all costs and expenses of such reletting including without
limitation costs and expenses incurred in retaking or repossessing the Premises removing
persons or property therefrom securing new Lessees and if Lessor maintains and operates the
Premises the costs thereof second to pay any indebtedness of Lessee to Lessor other than rent
third to the rent due and unpaid hereunder and fourth the residue if any shall be held by
Lessor and applied in payment of other or future obligations of Lessee to Lessor as the same may
become due and payable and Lessee shall not be entitled to receive any portion of such revenue
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 15
e Lessor may also elect to terminate the Lease and all rights of Lessee by giving
notice to Lessee of such election If Lessor elects to terminate the Lease Lessor shall have the
right to reenter the Premises and remove all persons and to take possession of and remove all
equipment and fixtures of Lessee in the Premises in the manner then provided by law Lessee
hereby waives all damages that may be caused by Lessor s reentering and taking possession of
the Premises or removing or storing the property thereof and Lessee shall save Lessor harmless
therefrom and no such reentry shall be considered a forcible entry If Lessor so elects to
terminate the Lease Lessor may also recover from Lessee
1 The worth at the time of the award of the unpaid rent which had been
earned at the time oftermination
II The worth at the time of the award of the amount by which the unpaid rent
which would have been earned after termination until the time of the award exceeds the amount
of rental loss that the Lessee proves could have been reasonably avoided
III The worth at the time of the award of the amount by which the unpaid rent
for the balance of the term after the time of the award exceeds the amount of rental loss that the
Lessee proves could be reasonably avoided
N Any other amount necessary to compensate the Lessor for all the
detriment proximately caused by the Lessee s failure to perform its obligations under the Lease
or which in the ordinary course of things would be likely to result therefrom and
V At Lessor s election such other amounts in addition to or in lieu of the
foregoing that may be permitted from time to time by applicable law
The worth at the time of the award of the amounts referred to in paragraphs I and II
above is computed by allowing interest at twelve percent 12 The worth at the time of the
award of the amount referred to in paragraph III above is computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the
award plus one percent 1
f Nothing in this Section 24 shall be deemed to affect Lessor s right to
indemnification for liability or liabilities arising prior to termination of this Lease for personal
injury or property damage under the indemnification provisions or other provisions of this Lease
25 PRIORITY
a This Lease shall be subordinate to any mortgage or deed of trust now existing or
hereafter placed upon the Premises created by or at the instance of Lessor and to any and all
advances to be made thereunder and to interest thereon and all modifications renewals and
replacements or extensions thereof Lessor s Mortgage and to any master lease hereafter
placed against the Premises and to all modifications extensions and amendments thereof and
thereto Lessee shall properly execute acknowledge and deliver documents which Lessor or the
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 16
holder of any Lessor s Mortgage may require within ten 10 days after delivery by Lessor to
effectuate the provisions of this Section 25 provided that such documents state that Lessee s
rights this Lease will not be terminated so long as Lessee is not in default hereunder
b Lessee shall be entitled to grant a first mortgage or first position deed of trust to
an institutional lender on its leasehold interest under this Lease provided Lessee first provides
Lessor with written notice of such proposed first mortgage or first position deed of trust Lessor
agrees to make such reasonable modifications to this Lease as may be requested by any
permitted leasehold mortgagee including without limitation the giving of notice of default by
Lessee under the Lease to any such leasehold mortgagee the giving of a second notice before the
Lease is terminated and the granting to such leasehold mortgagee of a new lease in the event
this Lease is terminated Such modifications shall be generally in conformance with the model
leasehold mortgage provisions promulgated by the American Bar Association
26 RETENTION OF AIRSPACE AND OTHER RIGHTS BY LESSOR
a Lessor retains the public and private right of flight for the passage of aircraft in
the airspace above the surface of the property hereinbefore described together with the right to
cause in said airspace such noise as may be inherent in the operation of aircraft now known or as
hereinafter used for navigation of or flight in said airspace and for use of said airspace for taking
off from landing on or operating at Auburn Municipal Airport
b Lessor reserves the right to further develop or improve the landing area of the
Airport as it sees fit regardless of the desires or view of the Lessee and without interference or
hindrance
c Lessor reserves the right but shall not be obligated to the Lessee to maintain and
keep in repair the landing area of the Airport and all publicly owned facilities of the Airport
together with the right to direct and control all activities of the Lessee in this regard
d This Lease shall be subordinate to the provisions and requirements of any existing
or future agreement between the Airport and the United States relative to the development
operation and maintenance of the Airport
e Lessee agrees to comply with the notification and review requirements covered in
Part 77 of the Federal Aviation Regulation in the event any construction is planned for the
Premises or in the event of any planned modification or alteration of any present or future
Improvements or structure situated on the Premises
f Lessee agrees that it will not erect nor permit the erection of any structure or
object nor permit the growth of any tree on the Premises to exceed the established height
contours In the event the aforesaid covenants are breached Lessor shall give written notice to
the Lessee specifying the breach If Lessee does not take action to correct the breach within ten
10 days of receipt of said notice the Lessor reserves the right to enter upon the Premises
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 17
hereunder and to remove the offending structure or object and cut the offending tree all of which
shall be at the expense of Lessee
g Lessee by accepting this Lease agrees that it will not make use of the Leased
Premises in any manner which might interfere with the landing and taking off of aircraft from
Auburn Airport or otherwise constitute ahazard In the event the aforesaid covenant is breached
Airport reserves the right to enter upon the Premises hereby leased and cause the abatement of
such interference at the expense of Lessee
h It is understood and agreed that nothing herein contained shall be construed to
grant or authorize the granting of an exclusive right within the meaning of Section 308a of the
Federal Aviation Act of 1958 49 U S C Section 1349a
i This Lease and all the provisions hereof shall be subject to whatever right of the
United States Government now has or in the future may have or acquire affecting the control
operation regulation and taking over of the Auburn Airport by the United States during the time
of the war or national emergency
j Lessor reserves the right to take any action it considers necessary to protect the
aerial approaches of the Auburn Airport against obstructions together with the right to prevent
Lessee from erecting or permitting to be erected any building or other structure on the Premises
which in the opinion of Airport or the Federal Aviation Administration would limit the
usefulness of the Auburn Airport or constitute a hazard to aircraft
k Lessee as well as Lessee s assignees and sublessees and the agents employees
and customers thereof shall have the rights of access to and use of all areas and facilities of the
Auburn Airport which are intended for the common use of all Lessees and occupants of the
Auburn Airport including but not limited to the take off and landing areas taxi areas reasonable
access thereto from the Premises and air control facilities
27 FEDERAL AVIATION ADMINISTRATION REQUIREMENTS
a Lessee agrees
1 to prevent any operation on the Premises which would produce
electromagnetic radiations of a nature which would cause interference with any existing or future
navigational aid or communication aid serving Auburn Municipal Airport or which would create
any interfering or confusing light or in any way restrict visibility at the Airport and
2 to prevent any use of the Premises which would interfere with landing or
taking offof aircraft at Auburn Municipal Airport or otherwise constitute an aviation hazard
b Lessor reserves the right during the term of this Lease or any renewal and or
extension thereof to install air navigational aids including lighting in on over under and across
Lessor City ofAuburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 18
the Premises in the exercise of any of the rights hereof Lessor agrees to give Lessee no less than
ninety 90 days written notice of its intention to install such air navigational aids
28 SECURITY
Airport shall have no obligation to provide security to the Premises If reasonably
required by Lessor Lessee shall provide adequate lighting to provide for all night illumination of
the Taxilane apron of all buildings on the Premises including aprons aircraft tiedown areas
vehicular parking lots and pedestrian walkways surrounding the Premises Lessee may but
need not employ security persons If at any time during the term of this Lease additional
security requirements are imposed on the Airport by the FAA or any other agency having
jurisdiction over Airport and such additional security requirements apply to the Premises Lessee
agrees to comply with said security requirements that affect the Premises at Lessee s sole
expense upon being notified of such requirements in writing by Airport If Airport is fined by
FAA for a security violation caused by negligence of Lessee or any of Lessee s sub Lessees
Lessee shall immediately reimburse Airport upon demand
29 INSPECTION ACCESS AND NOTICE
Lessor and any of its agents shall at any time upon four 4 weeks advance written notice
to Lessee have the right to go upon and inspect the Premises and Improvements erected or
constructed or in the course of being erected or constructed repaired added to rebuilt or
restored thereon Provided however that in the event the Lessor determines in its sole and
absolute discretion that an emergency situation exists on or adjacent to the Premises no advance
notice to Lessee is required and Lessor may immediately go upon and inspect the Premises
Provided further that Lessee agrees to allow Lessor to inspect the Premises on an annual basis at
an agreed upon date and time preferably the same date and time that any inspection by the local
fire marshal occurs Lessor shall have the right to serve or to post and to keep posted on the
Premises or on any part thereof any notice permitted by law or by this Lease any other notice
or notices that may at any time be required or permitted by law or by this Lease Airport shall
not be liable in any manner for any inconvenience disturbance loss of business or other
damages arising out of Lessor s entry on the Premises as provided in this Section except for such
damage that is caused directly by or through the gross negligence of Lessor their employees
agents or representatives
30 NON DISCRIMINATION
a Lessee for himself his heirs personal representatives successors in interest and
assigns as a part of the consideration hereof does hereby covenant and agree that in the event
facilities are constructed maintained or otherwise operated on the Premises described in this
lease agreement for a purpose for which a Department of Transportation DOT program or
activity is extended or for another purpose involving the provision of similar services or benefits
the Lessee shall maintain and operate such facilities and services in compliance with all other
requirements imposed pursuant to Title 49 Code of Federal Regulations DOT Sub title A
Office of the Secretary Part 21 Non discrimination in Federally Assisted Programs of the
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 19
Department of Transportation Effectuation of Title VI of the Civil Rights Act of 1964 and as
said Regulations may be amended
b Lessee for himself his personal representatives successors in interest and
assigns as a part of the consideration hereof does hereby covenant and agree that I no person
on the grounds of race color sex or national origin shall be excluded from participation in
denied the benefits of or be otherwise subjected to discrimination in the use of said facilities 2
that in the construction of any improvements on over or under the Premises and the furnishing
of services thereon no person on the grounds of race color sex or national origin shall be
excluded from participation in denied the benefits of or be otherwise subj ected to
discrimination and 3 that the Lessee shall use the Premises in compliance with all other
requirements imposed by or pursuant to Title 49 Code of Federal Regulations DOT Sub title A
Office of the Secretary Part 21 Non discrimination in Federally Assisted Programs of the
Department of Transportation Effectuation of Title VI of the Civil Rights Act of 1964 and as
said Regulations may be amended
c In the event of breach of any of the above non discrimination covenants Lessor
shall have the right to terminate this Lease agreement and to re enter and repossess said Premises
and the facilities thereon and hold the same as if said lease agreement has never been made or
issued This provision does not become effective until the procedures of 49 CFR Part 21 are
followed and completed including expiration of appeal rights
d Lessee shall fumish its accommodations and or services on a fair equal and not
unjustly discriminatory basis to all users thereof and it shall charge fair reasonable and not
unjustly discriminatory prices for each unit or service provided that Lessee may be allowed to
make reasonable and nondiscriminatory discounts rebates or other similar types of price
reductions to volume purchasers
e Noncompliance with Section 30 d above shall constitute a material breach
thereof and in the event of such noncompliance Lessor shall have the right to terminate this
Lease and the estate hereby created without liability therefor or at the election of the Lessor or
the United States either or both said Governments shall have the right to judicially enforce the
provisions of said Section 30 d
f Lessee agrees that it shall insert the above five subsections in any lease license
or sublease agreement by which said Lessee grants a right or privilege to any person firm or
corporation to render accommodations and or services to the public on the Premises herein
leased
g The Lessee assures that it will undertake an Affirmative Action program as
required by 14 CFR Part 152 Sub part E Sub part E to ensure that no person shall on the
grounds of race creed color national origin or sex be excluded from participating in any
employment activities covered in Sub part E The Lessee assures that no person shall be
excluded on these grounds from participating in or receiving the services or benefits of any
program or activity covered by this Sub part E The Lessee assures that it will require that its
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 20
covered suborganizations provide assurances to the Lessee that they similarly will undertake
Affirmative Action programs and that they will require assurances from their suborganizations
as required by Sub part E to the same effort
31 NOTICES
All notices hereunder may be hand delivered delivered by recognized national overnight
courier service or sent via U S First Class mail postage prepaid to the following addresses
LESSOR City of Auburn
25 West Main
Auburn WA 98001
LESSEE NW Hangars LLC
1819 S Central Avenue Ste 141
Kent WA 98032
Following the condominiumization of the Premises by Lessee notices due hereunder shall be
served upon any officer of the condominium association or upon its Registered Agent in the
manner provided by law
Notices given by hand delivery or by ovemight delivery as aforesaid shall be deemed
given when delivery is made or refused Notices given by U S First Class mail shall be deemed
given two 2 business days after depositing in the mail
32 MISCELLANEOUS
a No Brokers Lessee represents and warrants to Lessor that it has not engaged any
broker finder or other person who would be entitled to any commission or fees in respect of the
negotiation execution or delivery of this Lease and shall indemnify and hold harmless Lessor
against any loss cost liability or expense incurred by Lessor as a result of any claim asserted by
any such broker finder or other person on the basis of any arrangements or agreements made or
alleged to have been made by or on behalf of Lessee
b Non Waiver Waiver by Lessor of any term covenant or condition herein
contained or any breach thereof shall not be deemed to be a waiver of such term covenant or
condition or of any subsequent breach of the same or any other term covenant or condition
herein contained
c Estoooel Certificates Lessee shall from time to time upon written request of
Lessor execute acknowledge and deliver to Lessor or its designee a written statement certifying
that i this Lease is in full force and effect and has not been assigned or amended in any way
or specifying the date and terms of agreement so affecting this Lease ii this Lease represents
the entire agreement between the parties as to this leasing that all obligations under this Lease to
be performed by the Lessor have been satisfied iii on this date there are no existing claims
defenses or offsets which the Lessee has against the enforcement of this Lease by the Lessor iv
no Rent has been paid more than one month in advance and that no security has been deposited
with Lessor or if so the amount thereof and v such other items as Lessor shall reasonably
request It is intended that any such statement delivered pursuant to this Section may be relied
upon by a prospective purchaser of Lessor s interest or holder of any mortgage upon Lessor s
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 21
interest in the Premises If Lessee shall fail to respond within ten 10 days of receipt by Lessee
of a written request by Lessor as herein provided Lessee shall be deemed to have given such
certificate as above provided without modification and shall be deemed to have admitted the
accuracy of any information supplied by Lessor to a prospective purchaser or mortgagee and to
have certified that this Lease is in full force and effect that there are no uncured defaults in
Lessor s performance that the security deposit is as stated in the Lease and that not more than
one month s Rent has been paid in advance
d Force Maieure Except for the payment of Rent Additional Rent or other sums
payable by Lessee to Lessor time periods for Lessee s or Lessor s performance under any
provisions of this Lease shall be extended for periods of time during which Lessee s or Lessor s
performance is prevented due to circumstances beyond Lessee s or Lessor s control including
without limitation strikes embargoes shortages of labor or materials governmental regulations
acts of God war or other strife
e Severability If any term covenant or condition of this Lease or part thereof or
the application thereof to any person or circumstance is to any extent invalid or unenforceable
the remainder of this Lease and or the remainder of any such term covenant or condition or
the applicability of such term covenant or condition to persons or circumstances other than those
to which it is held invalid or unenforceable shall not be affected thereby and each term covenant
or condition or part thereof of this Lease shall be valid and be enforced to fullest extent
permitted by law
f Authoritv Each party hereto warrants that it has the authority to enter into this
Lease and to perform its obligations hereunder and that all necessary corporate action to
authorize this transaction has been taken and the signatories by executing this Lease warrant
that they have the authority to bind the respective parties
g Binding Upon Successors This agreement shall be binding upon and inure to the
benefit of the heirs administrators executors successors in interest and assigns of each of the
parties hereto except that there shall be no transfer of any interest to any of the parties hereto
except pursuant to the terms of this Agreement Any reference in this Agreement to a
specifically named party shall be deemed to apply to any successor heir administrator executor
or assign of such party who has acquired an interest in compliance with the terms of the
Agreement or under law
33 SIGNATURE
By signing in the space below the LESSEE ACKNOWLEDGED HAVING READ AND
UNDERSTOOD AND AGREES TO THE CONTENTS OF THIS AGREEMENT
Signatures on following page
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 22
IN WITNESS WHEREOF the parties hereto have executed this Lease
LESSOR THE CITY OF AUBURN a Washington municipal
mppmti
By
Print Name P ter B Lewis
Title N
LESSEE NW Hangars LLC
By j
Print Name yo U
Approved as to form
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 23
STATE OF WASHINGTON
ss
COUNTY OF KING
I certify that I know or have satisfactory evidence that Pc f ef 1 L e CJ S is
the person who appeared before me and said person acknowledged that said person signed this
instrument on oath stated that said person was authorized to execute the instrument and
acknowledged it as the 11tf r of the City of Auburn a Washington
municipal corporation to be the free and voluntary act of such mumclpal corporatIon for the uses
and purposes mentioned in the instrument
i11
Dated this
E DA
IvONEXp1Ivf I1oyp1 I100I
o G I
oo S V 651
t
t 10 2 ifJjOfjs
Signature of Notary
f
a fc v b 1 a J al11
Legibly Print or Stamp Name of Notary
Notary publj9 in and or he state of Washington
residing at C I C tJ
My appointment expires 2 i cJ3
STATE OF WASHINGTON
COUNTY OF j vJ V
ss
I certify that I know or have satisfactory evidence that 5OhVt J r is the person
who appeared before me and said person acknowledged that said person si ed this instrument
and acknowledged it to be said person s free and voluntary act for the uses and purposes
mentioned in the instrument
Dated this 1L
10
I A 11
D ON E o 1 I Signature of Notary1IflY0il1O
r
Il pa Yl e e b I CCct Jt
ptJ U
0J f Legibly Print or Stamp Name of Notary
C sjJotary public in and fo the state of Washington
residing at Vil W1Cfa tu
My appointment expires tf 2S o3
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 24
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Exhibit A I
Legal Description of Premises
Attach
Page 25
SOUTH HANGER LEASE
THAT PORTION OF THE NORTHWEST QUARTER OF SECTION 7
TOWNSHIP 21 NORTH RANGE 5 EAST W M DESCRIBED AS FOLLOWS
BEGINNING AT THE BRASS SURFACE MONUMENT AT THE CENTERLINE
OF E STREET NE AND 22nd STREET NE TO WHICH A BRASS SURFACE
MONUMENT ON THE CENTERLINE OF E STREET NE BEARS SOUTH
00039 35 WEST 913 86 FEET THENCE SOUTH 00039 35 WEST ALONG
SAID CENTERLINE OF E STREET NE 805 10 FEET THENCE NORTH
89022 30 WEST 243 32 FEET TO THE TRUE POINT OF BEGINNING
THENCE CONTINUING NORTH 89022 30 WEST 287 08 FEET THENCE
NORTH 00039 19 EAST 42 00 FEET THENCE SOUTH 89022 30 EAST
297 68 FEET THENCE SOUTH 00036 02 WEST ALONG THE EXTENDED
WEST WALL OF THE EXISTING HANGER BUILDING 20 37 FEET THENCE
CONTINUING ALONG SAID WEST WALL OF THE EXISTING HANGER
BUILDING SOUTH 89009 22 WEST 1077 FEET THENCE CONTINUING
ALONG SAID WEST WALL OF THE EXISTING HANGER BUILDING AND
ALONG SAID EXISTING WEST WALL OF THE EXISTING HANGER BUILDING
EXTENDED SOUTH 00 16 52 WEST 21 35 FEET TO THE TRUE POINT OF
BEGINNING
CONTAINING 12273 SQUARE FEET 0 282 ACRES MORE OR LESS
Resolution 3476
Exhibit A l
Exhibit A 2
Site Plan
Attach
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 26
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Resolution 3476IxhibitA2 W
0
Exhibit B
Construction of Improvements
I General Lessee may construct on the Premises certain new improvements which may
include aircraft hangar buildings consistent with the description in the Lease the
Improvements The term Improvements shall also mean and include any replacement
structures or improvements which may be constructed on the Premises during the term from
time to time The Improvements shall be constructed at Lessee s sole cost and expense As used
in this Lease the term Commencement of Construction shall mean the date upon which Lessee
has obtained all necessary permits and approvals for construction of the Improvements and has
begun demolition or construction activity on the Premises As used in this Lease the term
Completion Date means the date upon which a certificate of occupancy has been issued by the
City of Auburn for the Improvements permitting occupancy and use thereof by Lessee
Lessor agrees to allow Lessee the right to remove the S W wall that extends from hangar
building no 8 onto Lessee s Premises Lessee agrees to remove the wall in accordance with a
plan prepared and stamped by a licensed architectural engineer and approved by Lessor
Lessor agrees to allow Lessee to build foundation footings for the hangar buildings that extend
beyond the Premises onto the taxiways no more that two feet Lessee agrees to replace any
taxiway asphalt disrupted by this process to the satisfaction and approval of the Lessor
2 No Fuel Facilities Lessee shall not install facilities for the purpose of fueling aircraft on
the Premises On Site Fuel Facilities as defined herein without prior written approval from
the Airport Director s Office On Site Fuel Facilities as used in this Lease shall be defined as
fuel tanks piping gauges pumps utility lines monitoring equipment computer card lock
systems and all other equipment and materials including the fuel used in said system that are
related to the storing and dispensing of fuel Approval of the installation of the On Site Fuel
Facilities shall not be granted unless all conditions deemed necessary or desirable by Lessor are
satisfied
3 No Smoking Lessee shall install and maintain No Smoking signs within each of the
Hangars on the Premises
4 Plans The Improvements shall be subject to Lessor s prior approval All architectural
engineering and other design fees shall be paid by Lessee Lessee shall use its architect
engineers and other design professionals all of whom shall comply with any applicable licensing
or governmental requirements in the state in which the Premises are situated Lessee shall
provide to Lessor all plans for any desired Improvements in form suitable for permit application
collectively the Working Drawings The Working Drawings shall include architectural
structural plumbing mechanical electrical and fire protection drawings as required Working
Drawings and all changes thereto shall be subject to Lessor s reasonable written approval If
Lessor denies its approval it shall specify the reasons for doing so in reasonable detail
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 27
5 Permits Lessee shall be solely responsible for obtaining and complying with all permits
approvals or licenses required for the construction and erection of any structure on the Premises
If Lessee fails to obtain and comply with such permits then Lessee accepts full responsibility for
any and all costs incurred by the Lessor including actual attorneys fees occasioned by Lessor
pursing Lessee s default for its failure to obtain and or comply with such permits Lessee agrees
to hold the Lessor harmless from any liability and to fully reimburse expenses of the Lessor for
Lessee s failure to obtain and or fully comply with any necessary permit
6 Funding Assurances Prior to Commencement of Construction Lessee will provide the
following to Lessor a a list of the individuals who will be purchasing seventy 70 percent
of the hangar units from Lessee and that have deposited fifty 50 percent of the purchase
price which Lessee intends to utilize for the costs of development and construction of the
Improvements and b a copy of the escrow instructions to the escrow agent holding the funds
referenced in subsection a above the Escrow Instructions which Escrow Instructions shall
be approved by Lessor prior to the Commencement of Construction such approval not to be
unreasonably withheld Lessee shall also provide Lessor with the name phone number and
address of the escrow agent holding funds for the construction purchase of the hangar units
along with the escrow number so that Lessor may confirm at any time during the course of
construction that there are sufficient funds to complete construction of the Improvements
7 Contractor In the event Lessee intends on using a general contractor for the construction
of the Improvements Lessee shall contract with an experienced qualified general contractor
Contractor that is reasonably acceptable to Lessor Lessee or its general contractor shall
complete all Improvements in a good and workmanlike manner
8 Insurance Lessee or its general contractor shall obtain and maintain in force at all times
during which construction is in progress on the Premises the following insurance coverages with
an insurance company or companies authorized to do business in the State where the Premises are
located
a Workmen s Compensation Statutory Limits for the State in which the work is to be
performed together with ALL STATES VOLUNTARY COMPENSATION AND FOREIGN
COMPENSATION coverage endorsements
b Employer s Liability Insurance with a limit of not less than 500 000 00
c Commercial General Liability at least 1 000 000 Combined Single Limit including
Personal Injury Contractual and Products Completed Operations Liability naming Lessor and Lessee
as additional insured Coverage must be primary and non contributing and include the following
i
ii
iii
iv
Premises Operations
Elevators and Hoists
Independent Contractor
Contractual Liability assumed under the construction contract
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 28
v Completed Operations Products
vi Explosion Underground and Collapse XUC Coverage
d Automobile Liability Including Owned Hired and Non owned licensed vehicles
used in connection with performance of the construction work of at least 1 000 000 per occurrence
3 000 000 general aggregate including umbrella limits Coverage must include the following
i Owned vehicles
ii Leased vehicles
iii Hired vehicles
iv Non owned vehicles
e Procure or cause contractor to procure and maintain installation floater insurance to
protect against the risk of physical damage until acceptance of the construction work
f Furnish the Lessor with certificates of insurance evidencing such coverage prior to the
commencement of the construction work All insurance shall be carried in companies reasonably
acceptable to the Lessor
g The following statement shall appear in each certificate of insurance provided Lessor
by Lessee hereunder
It is agreed that in the event of any material change in cancellation or non renewal of this policy the
Company shall endeavor to give ten 10 days prior notice to the City of Auburn Washington
h During construction of Lessee s Improvements both parties shall give prompt notice to
the other of all losses damages or injuries to any person or to property of Lessee Lessor or third
parties Lessor or Lessee shall promptly report to the other all such claims of which that party has
notice whether related to matters insured or uninsured No settlement or payment for any claim for
loss injury or damage or other matter as to which one party may have an obligation for any payment
or reimbursement shall be made by the other without the written approval of the affected party
i The carrying of any of the insurance required hereunder shall not be interpreted as
relieving the insuring party of any responsibility to the other party and the other party does not waive
any rights that it may have against the other party andor its representatives for any expense and
damage to persons and property tangible and intangible from any cause whatsoever with respect to
the insuring party s work
j Lessor and Lessee shall assist and cooperate with any insurance company in the
adjustment or litigation of all claims arising under the terms of this Section
9 No Liens Lessee shall keep the Premises free from any liens arising out of work
performed materials furnished to or obligations incurred by Lessee Lessee further covenants
and agrees that any mechanic s or materialmen s liens filed against the Premises or against the
Improvements for work claimed to have been done for or materials claimed to have been
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 29
furnished to Lessee shall be discharged by Lessee by bond or otherwise within thirty 30 days
after filing and prior to termination of this Lease at the sole cost and expense of Lessee Should
Lessee fail to discharge any lien of the nature described in this paragraph Lessor may at
Lessor s election pay such claim or post a bond or otherwise provide security to eliminate the
lien as a claim against title and the cost thereof shall be immediately due from Lessee as rent
under this Lease
10 Hold Harmless Lessee shall indemnify defend and hold harmless Lessor and the
Premises from and against all claims and liabilities arising by virtue of or relating to construction
of the Improvements and any other improvements or repairs made at any time to the Premises
including repairs restoration and rebuilding and all other activities of Lessee on or with respect
to the Premises If Lessee is required to defend any action or proceeding pursuant to this section
to which action or proceeding Lessor is made a party and Lessor reasonably believes that the
interests of Lessee and Lessor conflict or are divergent then Lessor shall also be entitled to
appear defend or otherwise take part in the matter involved at its election by counsel of its
own choosing and to the extent Lessor is indemnified under this section Lessee shall bear the
cost of Lessor s separate defense including reasonable attorneys fees
II Progress Reports From and after the Commencement of Construction and through the
Completion Date Lessee shall provide to Lessor monthly progress reports consisting of at a
minimum a the then current construction schedule prepared by the Contractor including the
expected Completion Date and b notice of any laborer s or materialmen s liens filed against
the Premises
12 As Built Drawings Survey Within thirty 30 days following the Completion Date for
any Improvements Lessee shall deliver to Lessor two 2 copies of complete as built drawings
of the Improvements or marked up construction drawings which may consist of the Plans
annotated with field notes identifying all changes made thereto in the course of construction and
a copy of the Survey Map and Plans for the Condominium prepared by a licensed surveyor
certified to Lessor and showing the location of the Improvements all easements and utilities
including underground utilities
13 Condition of Improvements Lessee assumes full responsibility for the design
construction and condition of the Improvements and any improvements constructed on the
Premises during the Lease Term and Lessee hereby fully releases Lessor from any and all
liability relating thereto
Lessor City of Auburn
Lessee N W Hangers LLC
Resolution 3476 Exhibit A
Page 30