HomeMy WebLinkAbout5683 RESOLUTION NO. 5683
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
AUBURN, WASHINGTON, AUTHORIZING THE MAYOR TO
ENTER INTO A LEASE AGREEMENT WITH S50 HANGARS,
LLC AT THE AUBURN MUNICIPAL AIRPORT
WHEREAS, the Auburn Municipal Airport (the "Airport") has commercial office.and
hangar space available for lease to private aeronautical-related business; and
WHEREAS, S50 Hangars, LLC is a commercial business interested in leasing office and
hangar space on the Airport property for aeronautical business purposes; and
WHEREAS,the Airport,Airport customers and the public would benefit from having S50
Hangars, LLC located on the Airport.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, RESOLVES as follows:
Section 1. The Auburn City Council authorizes the Mayor to enter into a commercial
lease agreement with S50 Hangars, LLC in substantial conformity with the terms and conditions
of the lease agreement attached as "Exhibit A."
Section 2. The Mayor is authorized to implement those administrative procedures
and/or execute minor amendments necessary to carry out the directives of this Resolution.
Resolution No. 5683
9/13/2022
Page 1 of 2 Rev.2020
Section 3. This Resolution will take effect and be in full force on passage and
signatures.
Dated and Signed this 17th day of October, 2022.
CITY OF AUBURN
ANCY
AIiKUS, MAYOR
ATTEST: APPROVED AS TO FORM:
D\).S.i• UAltreL, agigie ___
Shawn Campbell, MMC, City Clerk Kendra Comeau, City Attorney
Resolution No. 5683
9/13/2022
Page 2 of 2 Rev.2020
AIRPORT LEASE AGREEMENT BETWEEN THE CITY OF AUBURN AND
S50 HANGARS, LLC
•
•
THIS LEASE AGREEMENT(the"Lease") is entered into this October 19 ,2022
(the "Lease Date"), by and between the City of Auburn, a Washington municipal corporation •
("Landlord," or "City") and S50 Hangars, LLC, a Washington Limited Liability Company (the
"Tenant").
RECITALS:
1.The City owns and operates The Auburn Municipal Airport(Airport)which has space available
for lease. RCW 14.08.120(1)(d)authorizes the City to lease Airport property; and
2. The Tenant desires to lease that commercial tenant space on the Airport defined in Article 1.1
below and depicted in Exhibit A,attached; and
3.The City desires to lease to Tenant that commercial tenant space to Tenant based on those terms
defined in this lease agreement(Lease); and
4. The Auburn City Council approved the terms of this lease through its enactment of Resolution
5683
NOW, THEREFORE, in consideration of their mutual promises set out in this Lease, S50 Hangars,
LLC and The City of Auburn agree as follows:
ARTICLE 1:
PREMISES LEASED
1.1) For and in consideration of the rent and faithful performance by Tenant of the terms and
conditions and the mutual covenants hereof, Landlord agrees lease to Tenant, and Tenant agrees
lease from Landlord, the commercial office and shop space located at 2131 E St. NE (the
"Premises")in"J"Row Hangar(the"Building")of the Auburn Municipal Airport(the"Airport"),
the location of which being generally depicted in Exhibit A. The Premises is situated in the City
of Auburn, County of King, State of Washington.
1.2) Tenant 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, expressed or implied, either oral or written, made by Landlord or any
employee, agent, or representative of Landlord with respect to the physical condition of the
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Resolution 5683
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Premises. By execution of this lease, Tenant has inspected the Premises and has determined that
the Premises is satisfactory for the purposes of its intended uses, which uses are described in
Article 4 below and permitted under this lease. Tenant acknowledges and agrees that neither
Landlord nor Landlord's employees,agents,representatives or otherwise have made,and does not
make any representations or warranties of any kind or character whatsoever,whether expressed or
implied, with respect to the habitability, leaseability or suitability for commercial purposes,
merchantability,or fitness for a particular purpose of the Premises.Landlord makes no warranties
to the presence or absence of any hazardous substances or wastes as defined by RCW 70A.300.010.
Landlord does represent that, to the best of the Landlord's knowledge, without duty of inquiry,
there are no hazardous wastes or substances on, in or under the Premises.
1.3) Notwithstanding Article 6.1 herein and Exhibit B,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.
ARTICLE 2:
TERM
2.1) Initial Term. The initial term of this Lease shall be for Sixty(60) months beginning on_
October 21, 2022 (the"Commencement Date"),and terminating at midnight on last
calendar day of the sixtieth month (the"Expiration Date"), unless sooner terminated pursuant to
any provision of this Lease (the "Initial Term"). If Landlord, for any reason whatsoever, cannot
deliver possession of the Premises to Tenant on the Commencement Date, Landlord 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 Tenant but the Expiration
Date shall not be adjusted.
2.2) Extended Term. Provided that Tenant faithfully performs all of the terms and conditions
of this Lease, City grants to Tenant the option to extend the Initial Term for three (3) additional
Sixty(60)month terms("Extended Term(s)").The Extended Terms must commence immediately
following the conclusion of the Initial Term or any subsequent Extended Terms without
interruption or a delay.The Extended Terms shall be exercisable only by written notice("Exercise
Notice"),which Tenant must deliver to the Landlord in accordance with Article 12 below,no more
than six(6), or less than four(4) calendar months prior to the end of the then existing Term.
Unless specifically cited otherwise, for the purposes of this Lease, the Initial and the Extended
Term (as it may be exercised) may both be independently, collectively, and interchangeably
referred to as the"Term".
2.3) Default Rights Personal. Notwithstanding anything in the foregoing to the contrary, at
City's option, and in addition to all of City's remedies under this Lease, at law or in equity, the
Extended Term shall not be deemed properly exercised if, as of the date Tenant delivers the
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Resolution 5683 Page 2 of 28
•
Exercise Notice, Tenant has previously been in default under the Lease beyond all applicable
notice and cure periods. In addition, each Extended Term is personal to the original Tenant and
may not be assigned or exercised,voluntarily or involuntarily, by or to, any person or entity other
than the original Tenant, or a related party of the Tenant, hereafter defined as another entity in
which the majority shareholder of the Tenant has a 51% or greater ownership in said entity
(hereafter"Related Tenant"), and shall only be available to and exercisable by the original Tenant
or Related Tenant when the original Tenant or Related Tenant is in actual and physical possession
of the Premises.
ARTICLE 3:
RENT AND LEASEHOLD TAX
3.1) Rent. Tenant shall pay to the City of Auburn a monthly "Base Rent" reflective of the
following schedule(Base Rent Schedule).
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._,—I:s•�,,..... ...r.,-•''.::'?:`s-:.r. ..,. _=.:y;}�ci,4i``i�•�7 ,. .,,..._..... ......... .... .... 3,..15^:'4:=i, .-. .-. .... .
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Months With Without
Tenant Improvements (see Art.6.1) Tenant Improvements
1-12 $1,079.00/mo $1,079.00/mo
13-24 1,500.00/mo $2,000.00/mo
25-60 Subject to the Adjustments defined in Article 3.3
Beginning with the 13th month and continuing through the end of the Initial Term,Base Rent shall
be determined by the dutiful performance and completion of those Tenant Improvements identified
in Exhibit B subject to the terms and conditions outlined in Article 6.1. In addition, Tenant shall
also pay a monthly Security Fee of Ten Dollars($10.00)per door and a statutory leasehold excise
tax of 12.84%of the monthly Base Rent and Security Fee imposed by RCW Chapter 82.29A.Base
Rent, Security Fee,and Leasehold Excise Tax are collectively referred to as"Rent".Rent shall be
paid in full at the office of the Airport Manager or at such other office as may be directed in writing
by the Landlord,on the 1St calendar day of the month in advance.Rent shall be paid without notice,
demand, offset, abatement or deduction of any kind and should reference: S50 —2131 E St NE
Lease. If commencing on a date other than the first(1St) calendar day of the month then the Rent
shall be pro-rated on a 30-day per diem basis and paid in full through the end of the current month
upon commencement of the Lease.
3.2) Late Charges. Tenant hereby acknowledges that late payments of Rent or any other sums
due hereunder will cause the Landlord to incur costs not otherwise contemplated by this Lease.
Accordingly, if any installment of Rent or any other sum due from Tenant is not received by the
Landlord by the end of the tenth (10th)calendar day of the month after such amount shall be due,
then, without any requirement for notice to Tenant, Tenant shall pay the Landlord 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 Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by the Landlord in no event constitutes a waiver of Tenant's default
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Resolution 5681
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with respect to such overdue amount, nor prevent the Landlord from exercising any of the other
rights and remedies granted hereunder.In addition to the late charges provided for in this Article,
in the event any payments hereunder are not paid within thirty(30)days of when due, interest shall
accrue on Rent, or any other sums due hereunder, at the rate of one and one-half percent 1.5%per
month from the date due until paid.
3.3) Adjustments. Beginning with the first adjustment on January 1, following the 25t1'
month and annually thereafter, the Base Rent shall be adjusted based upon a multiplier equal to
the change in the Consumer Price Index("CPI") for the Seattle-Tacoma-Bellevue area measured
from August to August. Annual adjustments shall be computed as follows:
(Percentage change in CPI-W August/August)x(current Base Rent)=(Adjusted Base Rent)
A negative adjustment in the CPI will not constitute a reduction in the Base Rent,rather the amount
of Base Rent from the previous year shall remain in effect. Should the Consumer Price Index cease
to exist then the City and Tenant agree to utilize a different index that measures substantially the
same function.
3.4) Option Terms.The Base Rent payable by Tenant, plus any additional agreed to terms
during the applicable Extended Term (the "Option Terms") shall be negotiated by the Parties in
the following manner:
1) Within 14 calendar days following the City's receipt of an Article 2.2 Exercise Notice from the
Tenant, the City shall propose Option Terms to Tenant for the first calendar year of the coming
Extended Term (the "Option Terms Proposal"). The City agrees that at no such time shall the
computation of the Base Rent during any Option Terms Proposal monetarily exceed the then-
prevailing monthly amount subject to Article 5.1 Holdover.
2) Tenant shall then have 14 calendar days following receipt of the City's Option Terms Proposal
to either accept the Proposal or offer a counter proposal (the "Tenants response Notice to City's
Option Terms Proposal").
3) Each Party shall continue to diligently negotiate the Option Terms until an agreement on the
Option Terms is reached,provided that any Base Rent negotiated as part of the Option Terms must
be at least equal to the then-current Base Rent. As used in this paragraph, "Diligently Negotiate"
means providing responses and/or counter proposals to the other Party within 14 calendar days of
receiving the latest Option Terms Proposal.
4) If the Parties cannot agree upon Option Terms by 30 calendar days before the current Lease
term's Expiration Date,then Article 3.5 below shall apply.
3.5) Arbitration for Option Terms. Should the Parties not reach agreement related to the Option
Terms by that date which is 30 calendar days prior to the Expiration Date of the then current Term,
the Parties mutually agree to have the case resolved through the use of the Judicial Arbitration and
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Resolution 5683 Page 4 of 28
Mediation Services ("JAMS") located in King County, Washington. In the event that JAMS is
unable or unwilling to conduct the arbitration provided for under the terms of Article 3.4, the
Parties agree to utilize a representative of the American Arbitration Association("AAA") located
in King County, Washington. The Parties agree that arbitration shall be the exclusive remedy
hereunder, each Party expressly waives any right it may have to seek redress in any other forum,
and any decision and award of the arbitrators shall be binding upon the Parties. Each Party shall
bear its own expenses of arbitration, and the expenses of the arbitrators and of a transcript of any
arbitration proceeding shall be divided equally between the parties.
ARTICLE 4:
PERMISSIBLE USES& SUBLETTING
4.1) Permissible Uses. Tenant shall use the Premises for conducting commercial aeronautical
uses only.Tenant acknowledges and agrees that this lease is not subject to RCW 59.18. All Fixed
Base Operators (FBO's) or Maintenance and Repair Operations (MRO's) shall be subject to
Auburn City Code (ACC) 12.56, the Airport Rules & Regulations, Minimum Standards &
Development Standards found online at: https://auburnmunicipalairport.com/documents-and-
forms,attached by this reference.
4.2) Subletting.The City and the Tenant both acknowledge that the Tenant intends to sublease
a portion of the Premises to third-party subtenants(the"Subtenants").The City grants this right to
the Tenant as a Permissible Use subject to the conditions described in Article 9.5 below. Tenant
shall operate and maintain the Premises at its expense, in a manner which will assure the safe,
lawful and healthful use of the Premises. Tenant shall not allow derelict aircraft defined by ACC
12.56.385 to be stored at the Premises and shall require that any sublet portions of the Premises be
used solely for aeronautical purposes per FAA policy 81 FR 38906 and reasonable ancillary
purposes. Tenant agrees that it will not allow activities or conditions at the Premises to
unreasonably disturb the operations of the Airport or other occupants and users thereof.
ARTICLE 5:
HOLDOVER& ABANDONMENT
5.1) Holdover. If Tenant remains in possession of the Premises beyond the expiration of the
then active Lease, Tenant shall be deemed to be Holding Over the Premises and this shall be
referred to as the ("Holdover Period"). Rent during the Holdover Period("Holdover Rent") shall
be charged at an amount equal to double the then current monthly Base Rent. The Holdover Rent
shall be subject to the Security Fee and State Leasehold Excise Tax described in Article 3.1.Upon
agreement of an extension or otherwise new Lease between Tenant and Landlord, Landlord shall
pro-rate the Holdover Rent for the Holdover Period. If a new agreement cannot be reached and
active negotiations cease to exist,then this Lease shall automatically convert to a month-to-month
term with rent continuing at the Holdover Rent amount.
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5.2) Abandonment. Abandonment of the leased premises, or vacation or desertion of said
Premises for a period of thirty (30) days shall be deemed a default of this Lease and it shall be
lawful for Landlord, its attorneys or representative to re-enter into and repossess the Premises.
ARTICLE 6:
TENANT IMPROVEMENTS &MAINTENANCE
6.1) Tenant Improvements. Landlord acknowledges that as part of the Tenants contemplation
for leasing the Premises is the ability,though not a requirement,to make certain alterations to the
Premises.The Parties agree that any and all alteration(individually and collectively being defined
"Tenant Improvements") made to the Premises shall: 1) be approved in writing by the Airport
Manager,which approval may be conditioned, but not unreasonably withheld, 2)be completed at
the sole expense of the Tenant, 3)obtain all necessary permits, and 4) be done without deduction
or abatement of Rent unless otherwise agreed to in this Lease.Notwithstanding the foregoing,the
Parties agree that if Tenant completes those Tenant Improvements described in Exhibit B by the
end of the 12th month of this Lease,then the Base Rent beginning in the 13th month shall be that
described as "With Tenant Improvements" in the Base Rent Schedule depicted in Article 3.1. If
Tenant fails to complete, or elects not to do those Improvements described in Exhibit B than the
Base Rent beginning in the 13th month shall be that described as"Without Tenant Improvements"
in the Base Rent Schedule. Notwithstanding the foregoing, in the event Tenant proposes and
Completes(as defined below)an alternative alteration approved in writing by the Airport Manager,
then Tenant shall have been deemed to have met the requirements of "With Tenant
Improvements." For those Improvements described in Exhibit.B,tenant acknowledges that they
will still be responsible for; obtaining Airport Manager Approval, the sole cost and expense
associated with those Tenant Improvements, and responsible for obtaining all necessary permits.
With reference to this Article,the term"Completion"is defined as either; 1)receipt of an approved
final inspection from the governing authorities, when the Tenant Improvements require permits,
or,2)when no permit is required,the Tenant Improvements can be used for their intended purpose
and only minor items such as touch-up, adjustments, and minor replacements or installations
remain to be completed. Tenant shall also supply the Airport Manager with all construction or
working drawings, as-builts, specification sheets, warranty information, permit information,
contractor information or any other information reasonably required by the Airport Manager in a
timely manner. Tenant further acknowledges that this information is considered a reasonable
condition to obtaining Airport Manager approval and the Airport Manager may withhold their
approval until the Tenant has supplied such information.
6.2) Landlord's Responsibilities. Unless such repair, maintenance and replacement is due to
Tenant, its agents,servants or employees negligence,or such repair,maintenance and replacement
is to a Tenant installed Improvement or service, Landlord, at their own cost and expense, is
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responsible for the repair, maintenance and replacement of the Building and of the following
Premises components: facade, exterior walls (excepting the sheet rock and any other interior
finishes to inside the exterior walls as it may exist), exterior doors (man and rollup), windows,
roof, gutters, downspouts, slab foundation, interior structural walls (excepting the sheet rock and
any other finishes to the structural walls as it may exist), and all other structural components as
they may exist in, on or about the Premises. Landlord is also responsible for the repair and
maintenance of all utilities serving the Building and Premises in common. For those utilities that
solely service the Premises the Landlord is responsible for the repair, maintenance, and
replacement of those utilities up to the Tenant's"Connection Point(s)"(being defined as the point
in which delivery of Tenants said utility system connects to the shared system).If Landlord refuses
or neglects to complete repairs, either promptly or adequately, Tenant may, but shall not be
required to complete the repairs and Landlord shall pay the costs thereof.
6.3) Tenant's Responsibilities. Unless such repair, maintenance and replacement is due to
Landlord, its agents, servants or employees negligence, or when such damage is caused by any
peril included within the Landlord's property insurance coverage, Tenant, at their own cost and
expense, is responsible for the repair, maintenance and replacement of the following Premises
components: all Tenant installed Improvements or services, interior walls, interior doors, drywall
and other interior finishes of the exterior walls and other structural components,floor coverings,
drop ceilings (if any), mechanical components serving solely the Premises including but not
limited to: HVAC, plumbing, plumbing fixtures, electrical, wiring, electrical fixtures, all other
utilities,and utility facilities serving solely the Premises up to the Connection Point and any other
feature, component or finish located in, on or about the Premises and not otherwise noted for
Landlord responsibly in Article 6.2.Tenant shall further be responsible for all janitorial needs and
supplies to the Premises, which Tenant covenants to keep in a clean, sanitary, and operable
condition. If Tenant refuses or neglects to commence or complete any maintenance, repairs, or
replacement within thirty days of written notice by the Landlord, Landlord may, but shall not be
required to commence or complete the repairs and Tenant shall pay the costs of said maintenance,
repair and/or replacement thereof to Landlord plus and additional 10% for administrative and
management fees.
6.4) Natural Disaster or Act of God. In the event that the Premises is damaged due to a natural
disaster or act of God, if the cost of repairing or reconstructing the Premises 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 Landlord shall effect such repair, restoration, and
reconstruction of the Premises so damaged or destroyed to substantially their condition prior to
said damage or destruction in a timely manner. All such work shall be carried out in accordance
with plans and specifications prepared by a licensed architect or engineer if such an architect or
engineer is reasonably required given the scope and nature of the work. Tenant shall continue to
owe Landlord the rent and other monies due under this lease to the extent that the premises remains
useable to Tenant(pursuant to Article 4 of this lease) during such period of reconstruction and/or
restoration.
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6.5) If the cost of repairing, restoring, or reconstructing the Premises 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 Landlord, in its sole discretion may elect by written notice to
Tenant given within thirty (30) days after the date of the damage to terminate this Lease. If no
notice of termination is given then all obligations set forth in this Lease shall continue, including
but not limited to Rent obligations of the Tenant. In no event shall Landlord be responsible for
damage to Tenant's personal property located on or within the Premises.
6.6) Damage Due to Fire. If the Premises is damaged or destroyed by a fire that the local fire
authority determines the Tenant did not cause, Articles 6.4 and 6.5 above shall apply. If the local
Fire Authority determines that the Tenant caused such fire (by itself or through a guest, agent,
employee, or otherwise), then Tenant shall pay the cost of repair, restoration, reconstruction, or
replacement of the Premises.Repairs,reconstruction,or replacement of the Premises shall be done
in a commercially reasonable manner and with the approval of the Landlord and all obligations
under this Lease,including Rent shall remain in full force during such period of repair,restoration,
reconstruction, or replacement.
• ARTICLE 7:
ENVIRONMENTAL PROVISIONS
7.1) Tenant covenants to defend, indemnify, and hold Landlord harmless from any imposition
or attempted imposition by any person upon Landlord 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 Tenant's use of the Premises during the term of this
Lease, and without regard to when the liability is asserted.
7.2) Tenant has inspected the Premises and accepts it in its present condition. Tenant shall not
cause the Premises to be contaminated in any way and in the event of contamination shall
immediately report such contamination to Landlord and shall cause any such contamination to be
remedied by that method recognized by Washington State Department of Ecology and shall
indemnify and hold Landlord harmless from all costs involved in implementing the remedy.
7.3) Any other provision of this Lease to the contrary notwithstanding, Tenant's breach of any
covenant contained in this Article 9 shall be an Event of Default empowering Landlord, 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 Tenant from the Premises forthwith, or to terminate Tenant's
right to possession only without terminating this Lease.
7.4) Tenant shall notify Landlord within twenty-four (24) hours of any release of a reportable
quantity of any hazardous substance (as defined by CERCLA, 42 U.S.C. §§9601, et. seq. and/or
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RCW 70A.305, the Washington Model Toxics Control Act), or of the receipt by Tenant 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 Tenant fails to comply with any of the
requirements of this article, Landlord may undertake, without cost or expense to Landlord, any
actions necessary to protect Landlord's interest including steps to comply with such laws.
ARTICLE 8:
INSURANCE COVERAGE,INDEMNIFICATION/HOLD HARMLESS
8.1) Insurance. This Article 8 may be met by one or more insurance policies of the Tenant, or
its Subtenants, as defined in Article 4.1, in a form satisfactory to the City. In accordance with
Chapter 1.3 of the Auburn Municipal Airport's Rules & Regulations, Minimum Standards &
Development Standards, as may be amended from time to time, a copy of which can be found at
auburnmunicipalairport.com/documents-and-forms hereby incorporated by this reference, Tenant
shall at all times have in effect the following types of minimum amounts of insurance, only as
applicable to the business to be conducted by the Tenant:
(I) Commercial General Liability insurance in the amount of$1,000,000 per occurrence
and $2,000,000 annual aggregate. Such insurance shall contain contractual liability
insurance covering applicable leases, licenses,permits,or agreements.
(II) Commercial/business automobile liability insurance for all owned, non-owned and
hired vehicles assigned to or used in performance of commercial aeronautical activities
in the amount of at least$1,000,000 each accident.If any hazardous material,as defined
by any local,state,or federal authority,is the subject,or transported,in the performance
of this contract, a policy must be endorsed with the Insurance Services Office form
CA9948 or equivalent.
(III) Special Causes of Loss Property Form covering all improvements and fixtures on the
Commercial Airport Operator's premises in an amount no less than the full replacement
cost thereof, to the extent of the Commercial Airport Operator's insurable interest in
the Premises.
(IV) If the Tenant or Subtenant has employees, worker's compensation insurance is
required by law and employer's liability insurance in the amount of$1,000,000 per
accident,$1,000,000 disease per person,$1,000,000 disease policy limit is required by
the Agreement.
(V) If applicable, Aircraft liability insurance in the amount of at least $1,000,000 per
occurrence single limit Bodily Injury and Property Damage Liability including
Passengers.
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(VI) If applicable,Hangar keeper's liability insurance in the amount of at least$1,000,000
per occurrence,or more as values or Landlord require.
(VII) If applicable, Products-completed operations liability insurance in the amount of at
least$1,000,000 per occurrence.
(VIII) If applicable, Tenant shall maintain Environmental Impairment Liability coverage for
any underground or aboveground fuel storage facility, tank, underground or
aboveground piping, ancillary equipment, containment system or structure used,
controlled, constructed, or maintained by Tenant in the amount of $1,000,000 each
incident, $2,000,000 aggregate. The policy shall cover on-site and off-site third-party
bodily injury and property damage including expenses for defense, corrective action
for storage tank releases and tank clean-up for storage tank releases.
8.2) Notwithstanding the foregoing, Tenant shall not be required to procure insurance
inapplicable to its aeronautical business operations, on behalf of the aeronautical business
operations of its approved Subtenants as defined in Article 4.1 who have been approved by the
Airport Manager subject to Article 9.5.1. Tenant will ensure that any Subtenant maintains all
insurance requirements for the duration of the Lease. In addition to the types and amounts of
insurance required in Article 8.1 above,Tenant and Subtenant shall at all times maintain such other
insurance as the Landlord may reasonably determine to be necessary for Tenant's airport activities.
8.3) All insurance shall be in a form and from an insurance company with Best's financial rating
of at least an A- (VII). All policies, whether carried by Tenant or Subtenant, except worker's
compensation policy, shall name the City and its elected or appointed officials, officers,
representatives,directors,commissioners,agents,and employees as"Additional Insured",and the
Tenant and/or Subtenant shall furnish certificates of insurances evidencing the required coverage
cited herein prior to engaging in any commercial aeronautical activities. Such certificates shall
provide for unequivocal thirty (30) day notice of cancellation or material change of any policy
limits or conditions.
8.4) The Tenant's(or Subtenants,as applicable) insurance coverage shall be primary insurance
as respects Landlord. Any insurance, self-insurance, or insurance pool coverage maintained by
Landlord shall be in excess of the Tenant's insurance and shall not contribute with it.
8.5) Indemnification/Hold Harmless. The Tenant shall defend, indemnify, and hold harmless
Landlord, 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 Tenant's use of Premises, or from the conduct of Tenant's business, or from
any activity,work or thing done,permitted,or suffered by Tenant 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 Landlord. Solely for the purpose of effectuating Tenant's indemnification
obligations under this Lease, and not for the benefit of any third parties (including but not limited
to employees of Tenant), Tenant specifically and expressly waives any immunity that may be
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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 acts.The parties acknowledge that the foregoing provisions of this
Article have been specifically and mutually negotiated between the parties.
ARTICLE 9:
ASSIGNMENT AND SUBLETTING
9.1) Assignments. Any assignment by Tenant of its Leasehold Estate in this Lease
("Assignment") to an unaffiliated third party ("Assignee") shall be subject to Landlord's prior
written approval as provided herein. For purpose of this Lease, the term "Assignment" shall
include a transfer of more than 50% interest in the Tenant entity to a non-affiliated third party.
Landlord's review and approval of an Assignment may not be unreasonably withheld,conditioned
or delayed if Tenant submits the documentation required in Article 9.2 demonstrating that the
Assignment fully satisfies the conditions set forth in Article 9.3 and subject to fees described in
Article 9.4.
9.2) Assignment Approval Process. In order to request Landlord's consent to an Assignment,
Tenant shall submit to Landlord the following items at least thirty (30)days prior to the proposed
effective date of such Assignment:
(a) Evidence that Assignee or its affiliates, members or managers have experience
owning or managing comparable types of assets, or have retained a professional management
company with experience in the management of comparable types of assets;
(b) The names of the direct owners, shareholders, members or partners that have day-
to-day management responsibility of the proposed Assignee and any other information in Tenant's
possession or control regarding the qualifications of the proposed Assignee or its direct owners,
shareholders,members or partners;
(c) An explanation of the proposed ownership of and managers to be retained by the
proposed Assignee;
(d) Pro forma financial and operating statements for Assignee and the Premises for the
twelve (12) month period from and after the effective date of the Assignment, together with
information on any financing being obtained by Assignee with respect to its acquisition of the
Premises;
(e) A copy of the proposed assignment and assumption agreement which shall provide
that the Assignee will be bound by all of the provisions,terms, covenants, and conditions of this
Lease.
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9.3) Conditions for Landlord's Reasonable Approval of Assignment. Landlord shall not
withhold, condition, or delay its approval of any proposed Assignment once all of the following
conditions are satisfied:
(a) Any Default by Tenant under this Lease will be cured at or prior to the effective
date of the Assignment except to the extent the Event of Default is related to a specific covenant,
representation or warranty of the transferring entity such that a breach thereof cannot be cured by
an Assignee;
(b) The use and occupancy of the Premises by the Assignee will be consistent with
Article 4;
(c) Assignee or its affiliates, members or managers have experience owning and
managing comparable types of assets, or have retained a professional management company with
experience in the management of comparable types of assets;
(d) All of the documentation required under Article 9.2 has been delivered to Landlord;
(e) Assignee's pro forma financial statements, and, if necessary to financially support
Assignee's ability to meet its obligations under this Lease,any security being offered,demonstrate
that, following the Assignment,the Assignee will have the financial capacity to perform Tenant's
obligations under this Lease; and
(f) Assignee shall assume all of Tenant's obligations under this Lease from and after
the date of the Assignment.
If the foregoing conditions are not satisfied Landlord may reasonably withhold,condition or delay
its consent to an Assignment. If Landlord does not respond to a request for consent within thirty
(30) days after receiving a notice from Tenant requesting Landlord's consent to an Assignment,
Landlord shall be deemed to have given its consent. Any denial of consent must be in writing and
must contain an explanation of those conditions that failed to be met and/or other reasonable
grounds on which Landlord has denied consent. Upon consummation of an Assignment to which
Landlord has consented (or deemed to have consented), the transferring Tenant shall be released
from obligations arising under this Lease from and after the date of such Assignment and, upon
written request by the transferring Tenant, Landlord will execute and deliver commercially
reasonable documentation in recordable form confirming its consent to the Assignment and release
of the transferring Tenant as provided above.
9.4)No Waiver&Assignment Fee. Consent of the Landlord to any Assignment shall not operate
as a waiver of the necessity for consent to any subsequent Assignment. In connection with each
request for Landlord's consent to an Assignment, regardless of whether such Assignment is
approved,Tenant shall pay to the Landlord,at the time of Assignment request,the Assignment of
Lease fee noted in the most current City of Auburn Master Fee Schedule.
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9.5) Subletting. Tenant shall have the right to sublease all or any portions of the Premises (such
subleased portion,the "Subleased Space")to Subtenant(s)for use of the Premises consistent with
Article 4.2 above; provided that: (a)use by the Subtenant of the Subleased Space must be solely
for aeronautical purposes per FAA policy 81 FR 38906, and for use, storage, maintenance and
repair of active aircraft and aircraft related equipment by the owners thereof; (b) aircraft cannot be
fueled inside the Subleased Space; (c) no overnight sleeping be allowed in the Subleased Space
unless it is limited to short-term flight crew quarters for temporary use;(d)all sublease agreements
shall be subordinate to and shall have a copy of this Lease attached as reference;(e)each Subtenant
shall be subject to obtain insurance pursuant to Article 8 above if as and to the extent applicable
to such Subtenant or the Subleased Space; (f) Subtenants and their guests,customers, employees,
agents and other related parties shall not conduct business or operations in violation of any
ordinance, law, statute, order, or rule of any governmental agency having jurisdiction over the
Airport and shall abide by the most current copies of Airport Minimum Operating Standards and
the Airport Rules and Regulations, copies of which can be found at
auburnmunicipalairport.com/documents-and-forms; and, (g) a financially-redacted copy of the
mutually executed sublease shall be delivered to Landlord as soon as reasonably possible.
9.5.1) Sublease Approval. Prior to subletting Subleased Space to a Subtenant, Tenant shall first
obtain Landlord's approval of the Subtenant and the Sublease terms("Sublease Approval"),which
Landlord shall not unreasonably withhold. To obtain Landlord's approval,Tenant shall supply to
Landlord;(i)the name of the proposed Subtenant, including any Articles of Incorporation as there
may exist, the names of the owner(s), executive, and/or governing individuals; (ii)the proposed
use of the Subleased Space; (iii) a financially-redacted copy of the proposed sublease terms; and
(iv) insurance certificates of the proposed Subtenant applicable to the Subtenant's proposed
activities within the requirements of Article 8.1. If Landlord does not provide Tenant a notice
disapproving of the Subtenant and Sublease terms("Sublease Disapproval Notice")within five(5)
business days from when requesting Sublease Approval then the Sublease Approval be deemed
given.
ARTICLE 10:
UTILITIES
10.1) Tenant is responsible for establishing and maintaining direct accounts with the City of
Auburn or any other public or private utility provider for any and all utilities individually charged
direct against the Premises.With the exception of the water/sewer utility,which is included as part
of the Base Rent,the Tenant is responsible for all other utilities charged against areas beyond the
Premises by paying the Tenant's proportionate share of the utilities as determined by the Landlord
using typical proportionate share calculations. At a minimum,Tenant covenants to have accounts
established for,or pay their proportionate share for the following utilities: power,storm,trash,and
recycling.
10.2) Except to the extent caused by the gross negligence or intentional misconduct of Landlord
or its agents,employees or contractors,failure by Landlord to any extent to furnish or cause to be
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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 Landlord
with any voluntary or similar governmental or business guidelines,governmental laws,regulations
or restrictions, or any other similar causes, shall not render the Landlord liable in any respect for
damages to either person or property, for any economic loss or other consequential damages
incurred by Tenant as a result thereof,be construed as an eviction of Tenant,result in an abatement
of rent, or relieve Tenant from its obligation to perform or observe any covenant or agreement
contained in this Lease.
ARTICLE 11:
ESTOPPEL •
11.1) Estoppel Certificate. At the request of the Tenant in connection with a transfer of its
interest in this Lease, Landlord shall execute and deliver a written statement identifying it as the
Landlord under this Lease and certifying:
(I) The documents that then comprise this Lease
(Il) That this Lease is in full force and effect
(III) The then current annual amount of rent and the date through which it has been paid
(IV) The expiration date of this Lease
(V) That no amounts are then owed by Tenant to Landlord (or, if amounts are owed,
specifying the same)
(VI) To the knowledge of Landlord,there are no defaults by Tenant under this Lease or any
facts which but for the passage of time, the giving of notice or both would constitute
such a default
(VII) Remaining rights to renew the term of this lease to the extent not theretofore exercised
The party acquiring Tenant's interest in the Lease shall be entitled to rely conclusively upon such
written statement.
ARTICLE 12:
NOTICES
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Any notice, consent, approval or other communication given by either party to the other relating
to this Lease shall be in writing, and shall be delivered in person, sent by certified mail,-return
receipt requested,sent by reputable overnight courier,or sent by other approved forms of electronic
communication(with evidence of such transmission received)to such other party at the respective
addresses set forth below (or at such other address as may be designated from time to time by
written notice given in the manner provided herein). Such notice shall, if hand delivered or
personally served, be effective immediately upon receipt. If sent by certified mail, return receipt
requested, such notice shall be deemed given on the third business day following deposit in the
United States mail, postage prepaid and properly addressed; if delivered by overnight courier,
notice shall be deemed effective on the first business day following deposit with such courier;and
if delivered by electronic communication, notice shall be deemed effective when sent.
The notice addresses of the parties are as follows:
To the City: Real Estate Division
Attn: Josh Arndt/Real Estate Manager
25 West Main St.
Auburn, WA 98001
253.931.3000
Jarndt@auburnwa.gov
With Copies to: Airport Management
Attn:Tim Mensonides/Airport Manager
2143 E Street NE
Auburn, WA 98002
253.333.6821
Tmensonides@auburnwa.gov
To the Tenant: S50 Hangars,LLC '
Attn: Douglas Wilson/Managing Member
2131 EStNE,
Auburn, WA 98002
206.291.6335
Douglas.Wilson@FB0Partners.com
ARTICLE 13:
INSPECTION,ACCESS AND POSTED NOTICES
Landlord and any of its agents shall at any time upon seventy-two (72) hours advance written
notice to Tenant,have the right to go upon and inspect the Premises provided,however,that in the
event the Landlord determines, in its sole and absolute discretion, that an emergency situation
exists on or adjacent to the Premises, no advance notice to Tenant is required and Landlord may
immediately go upon and inspect the Premises. Landlord shall have the right to serve, or to post
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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.,Landlord shall not be liable in any manner for any inconvenience, disturbance, loss of
business, or other damages arising out of Landlord's entry on the Premises as provided in this
Article except for such damage that is caused directly by, or through the gross negligence of,
Landlord,their employees,agents, or representatives.
ARTICLE 14:
DEFAULT AND REMEDIES
14.1) Events of Default. Tenant will be in default("Default")under this Lease if;
(a) any amount of Rent or other sums payable by Tenant to Landlord under this Lease
remains unpaid for more than thirty (30)days after the date it is due;
(b) Tenant files a voluntary petition in bankruptcy or makes a general assignment to the
benefit of, or a general arrangement with, creditors;
(c) there is an involuntary bankruptcy filed against Tenant that has not been dismissed
within sixty(60) days of filing;
(d)Tenant is adjudicated insolvent, or admits, in writing, its inability to pay its obligations
in the ordinary course as they come due;
(e) a receiver,trustee, or liquidating officer is appointed for Tenant's business;
(f) if Tenant violates or breaches any of the other covenants, agreements, stipulations, or
conditions described in the Agreement;
(g)Tenant Transfer's any portions or interest in this Lease without obtaining prior consent
of the Landlord or paying the appropriate transfer fees described in Article 9;
(h) Tenant fails to Complete any of the Tenant Improvements within 12 months after
beginning alterations to the Premises.
(i)Tenant fails to comply with the Tenant Improvement process described in Article 6.1.
14.2) Cure of Default. Upon an Event of Default in 14.1, Landlord shall send Tenant written
notice of the violation. Upon receipt of such notice,Tenant shall have thirty(30)days to cure the
violation. Any violation that continues beyond this 30 day period shall be grounds for Landlord's
termination of this Lease. Tenant shall have no ability to cure a 3rd(or subsequent)distinct Event
of Default occurring within a 12 month period.
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14.3) Termination after Default. Landlord shall not elect to terminate the Lease as a result of any
Default described above without first providing Tenant with written notice of Landlord's intent to
terminate the Lease("Termination Notice");provided that any such termination shall be subject to
Landlord compliance with the provisions of Article 14.2. Subject to the preceding sentence and
the provisions of Article 14.2,Landlord shall have the rights and remedies provided in this Article
14, in addition to any other right or remedy available by 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).
14.4) Upon Termination of this Lease, Landlord may reenter the Premises in the manner then
provided by law, and remove or put out Tenant or any other persons or subtenants found therein.
No such reentry shall be construed as an election on Landlord's part to terminate this Lease unless
a written notice of such intention is given to Tenant.
14.5) Upon termination of the Lease as a result of Tenant's Default,the Landlord may elect to re-
let the Premises or any part thereof upon such terms and conditions, including rent, term and
remodeling or renovation, as Landlord in its sole discretion may deem necessary. Landlord shall
also have the right to cause any of Tenant's Subtenants, if any should exist, to direct all future
sublease rent payments directly to Landlord until such time as Tenants default has been cured.To
the fullest extent permitted by law, the proceeds of any reletting or payments made directly to
Landlord by any of Tenant's Subtenants shall be applied: first, to pay Landlord 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 Tenants,and,
if Landlord maintains and operates the Premises, the costs thereof); second, to pay any
indebtedness of Tenant to Landlord other than rent; third, to the rent due and unpaid hereunder;
and fourth, the remainder, if any, shall be held by Landlord and applied in payment of other or
future obligations of Tenant to Landlord as the same may become due and payable, and Tenant
shall not be entitled to receive any portion of such revenue.
14.6) If Landlord terminates this Lease as provided in this Article,Landlord shall have the right
to reenter the Premises and remove all persons,and to take possession of and remove all equipment
and trade fixtures of Tenant in the Premises, in the manner then provided by law. Tenant waives
all claims associated with Landlord's exercising this right, and shall hold Landlord harmless
therefrom. No such reentry shall be considered a forcible entry.If Landlord elects to terminate the
Lease,Landlord may also recover from Tenant:
(I) Any earned but unpaid rent under this Lease owing to Landlord at the time of
termination;
(II) The amount of rent Landlord would receive under this Lease for a period of 24
months following the date of Termination inclusive of any Security Fees and
Leasehold Excise Tax described in Article 3.1 and Adjustments in Article 3.3 above
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(the parties specifically negotiate and agree that this provision is intended as a
liquidated damages clause,and not as a penalty).
•
(III) Any other amount necessary to compensate the Landlord for any damages caused
by the Tenant's failure to perform its obligations under the Lease or which in the
ordinary course of things would be likely to result therefrom; provided that
damages associated with loss of Rent payable hereunder shall be limited to amounts
measured in 14.6(II) above; and
(IV) At Landlord'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;provided that damages
associated with loss of rent payable hereunder shall be limited to amounts measured
in 14.6(I1)above.
14.7) Subleases of Tenant should any exist. If Landlord elects to terminate this Lease on account
of any Default by Tenant, as set forth in this Article 14,Landlord will have the right to terminate
any and all Subleases, consensual agreements, or arrangements for possession entered into by
Tenant and affecting the Premises, should any exist subject to the provisions outlined in Article 9
above or, Landlord may in its sole discretion, elect to succeed to Tenant's interest in such
subleases,agreements,or arrangements. In the event of Landlord's election to succeed to Tenant's
interest in any such Subleases, agreements, or arrangements,Tenant shall, as of the date of notice
by Landlord of such election, have no further right to or interest in the rent or other consideration
receivable thereunder.
14.8) Indemnification. Nothing in this Article 14 shall be deemed to affect Landlord'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.
14.9) Time is of the essence for this agreement.
ARTICLE 15:
RETENTION OF AIRSPACE
15.1) Landlord 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.
15.2) Landlord reserves the right to further develop or improve the landing area of the Auburn
Municipal Airport as it sees fit, regardless of the desires or view of the Tenant and without
interference or hindrance.
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15.3) Landlord reserves the right to maintain and keep in repair the landing area of the Auburn
Municipal,Airport and all publicly-owned facilities of the Airport,together with the right to direct
and control all activities of the Tenant in this regard.
15.4) This Lease shall be subordinate to the provisions and requirements of any existing or future
agreement between the Auburn Municipal Airport and the United States, relative to the
development, operation,and maintenance of the Airport.
15.5) Tenant agrees to comply with the notification and review requirements covered in 14
C.F.R. Part 77 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.
15.6) Tenant 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, Landlord shall give written notice to the Tenant
specifying the breach. If Tenant does not take action to correct the breach within ten (10) days of
receipt of said notice,the Landlord reserves the right to enter upon the Premises hereunder and to
remove the offending structure or object and cut the offending tree, all of which shall be at the
expense of Tenant.
15.7) Tenant, by accepting this Lease, agrees that it will not make use of the Premises in any
manner which might interfere with the landing and taking off of aircraft from Auburn Airport or
otherwise constitute a hazard. In the event the aforesaid covenant is breached, Landlord reserves
the right to enter upon the Premises hereby leased and cause the abatement of such interference at
the expense of Tenant.
15.8) Tt 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 49 U.S.C. §40103(e) and/or 49
U.S.C. §41101(c).
15.9) This Lease and all the provisions hereof shall be subject to whatever right 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.
15.10) Landlord 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 Tenant
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.
15.11) Tenant, as well as Tenant's assignees and subleases, and the agents, employees, and
customers thereof,shall have the rights of access to and use of all areas and facilities of the Auburn
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Airport which are intended for the common use of all Tenants 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.
ARTICLE 16:
FEDERAL AVIATION ADMINISTRATION
16.1) Tenant agrees:
(I) 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
(II)to prevent any use of the Premises, which would interfere with landing or taking
off of aircraft at Auburn Municipal Airport, or otherwise, constitute an aviation
hazard.
16.2) Landlord 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 the
Premises in the exercise of any of the rights hereof. Landlord agrees to give Tenant no less than
ninety(90)days'written notice of its intention to install such air navigational aids.
ARTICLE 17:
NON-DISCRIMINATION
17.1) Tenant 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 Tenant shall
maintain and operate such facilities and services in compliance with all other requirements
imposed by 49 C.F.R.Part 21 as now enacted or as hereafter amended.
17.2) Tenant for themselves, their personal representatives, successors in interest, and assigns,
as a part of the consideration hereof, does hereby covenant and agree that: 1) 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 subjected to discrimination,and 3)that the
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Tenant shall use the Premises in compliance with all other requirements imposed by 49 C.F.R.
Part 21 as now enacted or as hereafter amended.
17.3) If the tenant breaches any of the above non-discrimination covenants,Landlord 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 C.F.R. Part 21 are followed
and completed, including expiration of appeal rights.
17.4) Tenant shall furnish 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 Tenant may be allowed to make
reasonable and nondiscriminatory discounts, rebates, or other similar types of price reductions to
volume purchasers.
17.5) Noncompliance with Article 17 above shall constitute a material breach thereof and, in the
event of such noncompliance, Landlord shall have the right to terminate this Lease and the estate
hereby created without liability therefor or, at the election of the Landlord or the United States,
either or both said Governments shall have the right to judicially enforce the provisions of said
Article 17.4.
17.6) Tenant agrees that it shall insert Articles 17.1 — 17.5 in any lease, license, or sublease
agreement by which said Tenant 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.
17.7) The Tenant assures that during this tenancy it will undertake an Affirmative Action
program as required by 14 C.F.R. §§152.401-425 to ensure that no person shall on the grounds of
race, creed, color, national origin, or sex, be excluded from participating in any covered
employment activities.The Tenant 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 these
regulations. The Tenant assures that it will require that its covered suborganizations provide
assurances to the Tenant that they similarly will undertake Affirmative Action programs, and that
they will require assurances from their suborganizations, as required by these regulations, to the
same effort.
ARTICLE 18:
ATTORNEY'S FEES AND COSTS
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
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attorney's fee and to be reimbursed for such costs and expenses as may have been incurred by such
prevailing party.
ARTICLE 19:
MISCELLANEOUS
19.1 Signage. Tenant shall have the right at their sole cost and expenses to install and maintain
wall mounted,illuminated or non-illuminated signs on the Building so long as said signage; i)are
strictly for the advertisement of Tenants or Subtenants business and business services, ii) are
located on the exterior of the Premises,and iii)Tenant obtains the approval of the Airport Manager
regarding the look, size and placement of the signage. Any additional mounted or free standing
signage shall be subject to separate cost considerations and will be addressed in a separate
addendum to this Lease. All signage shall be subject to and in accordance with the ACC 18.56,
and Airport design standards, if any. No sign will be allowed that may be confusing to aircraft
pilots or automobile drivers or other traffic.
19.2) Security. Landlord shall have no obligation to provide security to the Premises. If
reasonably required by Landlord, Tenant 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.Tenant
may,but need not,employ security persons.If at any time during the term of this Lease,additional
security requirements are imposed on the Auburn Municipal Airport by the FAA or any other
agency having jurisdiction, and such additional security requirements apply to the Premises,
Tenant agrees to comply with said security requirements that affect the Premises,at Tenant's sole
expense,upon being notified of such requirements in writing by Landlord.If Landlord is fined by
FAA for a security violation caused by negligence of Tenant, or any of Tenant's sub-Tenants,
Tenant shall immediately reimburse Landlord upon demand.
19.3) No Brokers. Tenant represents and warrants to Landlord 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 Landlord
against any loss, cost, liability or expense incurred by Landlord 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 Tenant.
19.4) Regulatory Compliance. The Tenant agrees, at its sole cost and expense, to conform to,
comply with and abide by all lawful rules, codes, ordinances, requirements, orders, directions,
laws, regulations and standards of the United States,the State of Washington,and City of Auburn
or agency of any of said entities, including rules and regulations of Landlord, including without
limitation those relating to environmental matters,and regulations set forth by the Environmental
Protection Agency, now in existence or hereafter promulgated,applicable to the Tenant'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. Tenant
S50 I-Iangars,LLC/COA V2
2131 E St NE—Commercial Building Lease
Resolution 5683 Page 22 of 28
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 Tenant to comply with the covenants of this Article.
19.5) Liens & Insolvency. Tenant shall keep the Premises free from any liens. In the event
Tenant becomes insolvent,voluntarily,or involuntarily bankrupt,or if a receiver,assignee,or other
liquidating officer is appointed for the business of the Tenant, then the Landlord may cancel this
Lease at Landlord's option.
19.6) Non Waiver. Waiver by Landlord 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.
19.7) Force Majeure. Neither Party shall be held liable or responsible to the other Party or be
deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or
performing any term of this Agreement when such failure or delay is caused by or results from
causes beyond the reasonable control of the non-performing Party, including fires, floods,
earthquakes, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be
declared or not),acts of terrorism, insurrections, riots, civil commotion, strikes, lockouts or other
labor disturbances, acts of God or acts, omissions or delays in acting by any governmental
authority. The non-performing Party shall notify the other Party of such force majeure within ten
(10)days after such occurrence by giving written notice to the other Party stating the nature of the
event, its anticipated duration,and any action being taken to avoid or minimize its effect.A Force
Majeure event does not include an act of negligence or Intentional Wrongdoing by a Party. The
suspension of performance shall be of no greater scope and no longer duration than is necessary
and the non-performing Party shall use commercially reasonable efforts to remedy its inability to
perform.
19.8) 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.
19.9) Choice of Law, Integration, and Interpretation. This Lease and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the laws of the State of
Washington and venue for any action hereunder shall be in King County,Washington.This Lease,
together with any subsequent amendments or addendums, constitutes the entire agreement of the
parties and no other understandings, oral or otherwise,regarding this Lease shall exist or bind any
of the parties.All captions,headings or titles in the paragraphs or articles of this Lease are inserted
for convenience of reference only and shall not constitute a part of this Lease or act as a limitation
of the scope of the particular paragraph or articles to which they apply. Construction of this Lease
S50 Hangars,LLC/COA V2
2131 E St NE—Commercial Building Lease
Resolution 5683 Page 23 of 28
shall not be affected by any determination as to who is the drafter of this Lease,this Lease having
been drafted by mutual agreement of the parties.
19.10) Gate Cards. Tenant shall coordinate with the Airport Manager upon Commencement of
the Lease to determine and checkout the appropriate number of gate cards needed for sufficient
operations at the Airport. Tenant shall be responsible for the management of the gate cards issued
and responsible for the actions of any person that gains access using the cards and shall not make
the gate cards available to anyone not affiliated with Tenants operations. Tenant shall promptly
report any gate cards that have been lost, stolen, or not returned to the Airport Office and must
obtain replacement cards per the current fee schedule prices.Upon termination or expiration of the
Lease without any extensions thereof, Tenant shall immediately and without notice or demand
return the gate cards to the Office of the Airport Manager.
19.11) Gate Codes. Gate codes will be provided for personnel gate access onto the Airport. Gate
codes are subject to change as determined and in the sole discretion of the Landlord.Tenant shall
be notified prior to changing of the gate codes and it shall be the responsibility of the Tenant to
notify their customers and employees of said change.Tenant shall immediately notify the Landlord
and the office of the Airport Manager if the codes need to be changed to prevent access from a
customer or employee to maintain security.
19.12) Authority. 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.
19.13) Airport Rules and Regulations. Tenant, Tenant's customers, guests, representatives,
directors, officers and employees, are subject to and shall at all times abide by the Airport Rules
and Regulations as may be amended from time to time. A copy of which are located at
auburnmunicipalairport.com/documents-and-forms and are hereby incorporated by this reference.
ARTICLE 20: SIGNATURE
By signing in the space below, the TENANT ACKNOWLEDGES HAVING READ AND
UNDERSTOOD AND AGREES TO THE CONTENTS OF THIS AGREEMENT.
[Signatures on following page]
S50 Hangars,LLC/COA V2
2131 E St NE—Commercial Building Lease
Resolution 5683 Page 24 of 28
Dated and Signed this ze day of SePkr4121' ,20 Z2-.
S50 Hangars LLC,
,---- ec:2___________.
Douglas Wilson,Managing Member
STATE OF WASHINGTON ) •
)ss.
County ofYe )
The undersigned Notary Public hereby_cer-tif.:'�T- hat on thi,A�� day'of ,(,mleK,.209W
ersonall a eared befo e me 04--Cs (Fs jv- (name),
Y ppeared c
t 1� (title),to e known to be the individual(s)described in and
w o exec e L ithin instrument, and acknowle'ged that he/she signed and sealed the same as
his/her free and voluntary act and deed, for the purposes and uses therein mentioned, and on oath
stated th t he/she was duly authorized to execute said document on behalf of
,S6. l LLQ
In Witness Whereof I have hereunto set m - • ant . `ixed official seal t e day an ar first
above written.
` ► r.. Al e. .Pr' I)}
4 ANGELA ELIZABETH KLEIN
C
•+ TTo..ry r ubl and aro" State of Washington,
( Notary Public ttitt-td ', (�
state of Washington ' Residing `�
Commission#21027004 ` .r
( My Comm, Expires Sep 17, 2025 ( l� ()-da
My commission expires & .
S50 Hangars,LLC/COA V2
2131 E St NE—Commercial Building Lease
Resolution 5683 Page 25 of 28
Dated and Signed this 1 )1 day of a Ck&o ( ,20 2Z
CITY OF AUBURN: Approved as to form:
ANC, -:.: ^".CKUS, Mayor Kendra Comeau, City Attorney
STATE OF WASHINGTON )
)ss.
County of 1''(m et
The undersigned Notary Public hereby certifies:That on this day of �(: "obey ,20 74_,
personallyA appeared before me . J O ° A-S (name),
MOM Q (title),to Icnowi o be the described in and
who executed the within instrument, and acknowledged that he/she signed and:sealed the same as
his/her free and voluntary aet and deed, for the purposes and uses therein mentioned,,and on oath
stated that he/she wasduty authorized to execute said document on behalf of
In Witness Whereof I havehereunto setmy handand affixed my official seal le day and year first
above written.
/. /#Not•r-y u ublie in and.focLtixe State of Washington,
i 474 W • Olig Residing at 1 ‘IV Pt
SAH SCROLL
'ICEMEN 202199 Mycommission expires
�� - �. ~UZlP
MY _ ."SION p
u % tioi 19,21
S50 Hangars,LLC/COA V2
2131E St NE—Commercial'.Building Lease
Resolution "5683
Page 26 0128
EXHIBIT A
Premises
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S50 Hangars,LLC/COA'V2
2131 L'Si NE—Commercial.Building Lease
Resolution 56R1 Page 27 of 28.
EXHIBIT B
Tenant Improvements to be made for Base Rent reduction
(See Base Rent Table in Article 3.1)
• Remove non-load bearing walls that were framed into workspaces/storage,and return the
primary footprint to a T-hangar configuration.
• Build two (2)new 13.3'wide doors to match the existing door, inclusive of rollers and
hardware, and reinstall in the existing door tracks.Note:Depending on the
condition/serviceability of the upper tracks,they may also require replacement.If so,that
will also be accomplished.
• Remove all electrical conduit,wiring,boxes,etc. added in the non-load-bearing walls, •
and cap at the breaker box. This WILL be performed by a licensed electrician.
• Correct leaking plumbing in the included restrooms. This may require new piping,which
WILL be independently determined and corrected by a licensed plumber.
• Additional lighting, likely LED for energy efficiency,will also be installed in the newly
created hangar bay, consistent with the plans to house an MRO as sublessee.
• .Install tie down--on SE corner of the building(tie-down ring details to be mutually
agreed upon between airport and tenant)
• Remove/cap east wall water spigot in wash rack
*The above Tenant Improvement items or any alternative alterations described in Article 6.1 are
still subject to those conditions and responsibilities also described in Article 6.1.
S50 Hangars,LLC/COA V2
2131 E St NE—Commercial Building Lease
Resolution 5683 Page 28 of 28