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RESOLUTION NO. 3 3 5 3
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, AUTHORIZING THE MAYOR AND CITY CLERK OF THE CITY
OF AUBURN TO EXECUTE A GROUND LEASE BETWEEN THE CITY AND BILL
VANDERBERG FOR THE LEASE OF A 3.4 ACRE UNDEVELOPED SITE AT THE
AUBURN MUNICIPAL AIRPORT.
WHEREAS, the City has developed and maintained Auburn Municipal
Airport for the benefit of its residents and businesscommunity; and
WHEREAS, the City seeks to maximize use of the Airport to provide
aviation-related services and employment; and
WHEREAS, The City and Mr. Bill Vandenberg have negotiated a ground
lease for a 3.4 acre undeveloped site.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, IN A REGULAR MEETING DULY ASSEMBLED, HEREWITH
RESOLVE THAT:
Section 1. The Mayor and City Clerk of the City of Auburn, Washington,
are hereby authorized to execute an ground lease between the City and BILL
VANDERBERG. A copy of the Agreement is attached hereto, designated as
Exhibit "A", and incorporated by reference.
Resolution No. 3353
May 7, 2001
Page 1
Section 2. The Mayor is hereby authorized to implement such
administrative procedures as may be necessary to carry out the directives of this
legislation.
,J
DATED and SIGNED this ,) 1:/ day of May, 2001.
CITY OF AUBURN
CHARLES A. BOOTH
MAYOR
ATTEST:
Danielle E. Daskam,
City Clerk
APPROVED AS TO FORM:
JJ,(Q~~l
Michael J. Reynolds,
City Attorney
Resolution No. 3353
May 7, 2001
Page 2
LEASE AGREEMENT
BETWEEN
City of Auburn
and
Aviation Properties Inc.
Dated: May 31, 2001
~ III ~j:ftv.j'3 5" 3
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 1
Printed on May 31,2001
CITY OF AUBURN
AIRPORT HANGAR LAND LEASE AGREEMENT
THIS LEASE AGREEMENT, hereinafter referred to as "this Lease," is made as of
3u li\ e... ~ , 2001, by and between the City of Auburn, a Washington municipal corporation,
hereinafter referred to as "Lessor," and Avr,,+;OVI. frJf_rfres ::r~
hereinafter referred to as "Lessee."
WITNESSETH:
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 foJIowing 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 147,766 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 WRlTTEN, MADE BY LESSOR
OR ANY EMPLOYEE, AGENT OR REPRESENTATIVE 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, LEASAB1L1TY OR SUITABILITY FOR
COMMERCIAL PURPOSES, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
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Printed on May 31,2001
PURPOSE OF THE PREMISES, OR (OTHER THAN AS PROVIDED IN SECTION 1 (b)
HEREOF) THE PRESENCE OR ABSENCE OF ANY HAZARDOUS SUBSTANCES, WASTES
OR MATERIALS AS DEFINED BY STATE, FEDERAL OR LOCAL LAW, ALL OF WHICH
WARRANTIES LESSOR HEREBY EXPRESSL Y 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. If Lessor, for any reason whatsoever, cannot deliver
possession of the Premises to Lessee on the Commencement Date, Lessor shaJI 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. If possession cannot be delivered within sixty (60) days of the Commencement Date,
Tenant may at its option terminate this lease without penalty and receive a refund of any payments
made to Landlord within thirty (30) days of its notice of termination. The word "term" whenever
used herein refers to the initial term of this Lease and any valid extension(s) thereof.
3. PURPOSE
(a) Lessee shall use the Premises only for the construction, management and
maintenance of aircraft hangar buildings for 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 64.34 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 60 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, 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 specificaJIy 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:
Lessor: City of Auburn
Lessee: Aviation Properties, 1nc
Page 3
Printed on May 31,2001
(1 ) At no time will aircraft be fueled inside any Improvements situated on the
Premises;
(2)
hangar operations
thereto;
Conducting of any use, business, or commercial activity other than Lessee's
and other aviation-related activities as are incidental and reasonably related
(3)
Use of the Premises as a residence or for overnight sleeping;
(4) Working on aircraft except within the legal limits aJIowed 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, except as provided in Section 5(d) hereof.
4. RENT; IMPOSITIONS & LEASEHOLD EXCISE TAX
It is Lessee's intent to develop the Premises as a phased condominium project, which phases
shall be legally described and shown on the Survey Map and Plans for such condominium project.
For purposes of this Section 4, the portion of the Premises that is to be developed first shall be
defined as "Phase I" and the remaining portion of the Premises shall be defined as the "Subsequent
Phase(s)." Lessee shall determine and provide Lessor with written notice of the legal descriptions
and square footages of Phase 1 and the Subsequent Phase(s) prior to the Rent Commencement Date
(as hereinafter defined); provided, however, that the square footage of Phase 1 shall be at least
61,020 square feet (the "Minimum Square Footage of Phase 1"). In the event the Lessee does not
determine and provide Lessor with notice of the legal descriptions and square footages of Phase 1
and the Subsequent Phase(s) prior to the Rent Commencement Date, then the Minimum Square
Footage of Phase I shall be used to determine the initial Base Monthly Rent (as hereinafter
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 4
Printed on May 31,2001
defined); provided, however, that the Base Monthly Rent shall be automatically adjusted to the
amount that corresponds to the actual legal descriptions and square footages of Phase 1 and the
Subsequent Phase(s) upon the date of the recording of the Survey Map and Plans for Phase 1 of the
condominium proj ect, if such date is after the Rent Commencement Date. In the event the Premises
are developed as a single phase project, whether or not such project is a condominium, the Rent
provisions under this Section 4 for Phase 1 shall apply to the entire Premises.
(a) Commencing on the earlier to occur of (i) issuance of a building permit for Lessee's
proposed Improvements for Phase 1, or (ii) one hundred twenty (120) days after mutual execution
hereof (provided that if Lessee fails to apply for a building permit within ninety (90) days following
mutual execution hereof, the foregoing I20-day period shall be reduced to ninety (90) days)
(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, Annual Base Rent as follows:
twenty-two cents per square foot ($.22/square foot) for the total square footage of Phase I (the
"Phase 1 Base Rent"), plus ten cents per square foot ($.10/square foot) for the total square footage
of the Subsequent Phase(s) (the "Subsequent Phase(s) Base Rent") (such amounts cumulatively
being the "Annual Base Rent"); provided, that commencing on the earlier to occur of (i) issuance of
a building permit for Lessee's proposed Improvements for the Subsequent Phase or (ii) if there are
multiple Subsequent Phases, on issuance of the respective building permits for each such
Subsequent Phase, the Subsequent Phase Base Rent or, if there are multiple Subsequent Phases,
then the respective portion of the Subsequent Phase Base Rent, shall automatically increase to the
then current amount for Phase 1 Base Rent; provided, further, that not later than three (3) years after
mutual execution hereof the entire Subsequent Phase(s) Base Rent shall be automatically increased
to the then current amount for Phase 1 Base Rent, whether or not Lessee has been issued building
permits for Improvements on the Subsequent Phase(s) or any portion thereof.
Monthly Base Rent shall be 1/12 of the Annual Base Rent, payable on or before the first
(I st) day of each calendar month thereafter to the City of Auburn, Attn: Finance Department, 25
West Main, Aubum, W A 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 (I) 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
Lessor: City of Aubum
Lessee: Aviation Properties, Inc
Page 5
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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. 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 aUow such items to remain unpaid for such length of time as shall permit the
Premises, or any part thereof, to be sold by any governmental, city or municipal authority for the
nonpayment of the same. Within ten (IO) 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, except as otherwise provided herein, the
rent due hereunder shall be absolutely net to Lessor and that Lessee shaU pay all costs expenses
regarding the Premises whether specifically mentioned herein or not.
5. ANNUAL PERIODIC RENT ADJUSTMENTS
(a) Monthly Base Rent shaU be adjusted on January 1 st of every year beginning January
1, 2002 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, 2007, to equal the "fair
market rental value" of the Premises, pursuant to the procedure set forth in Section 5(d) below. No
such 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, AU Items (Seatt1e-Tacoma-Bremerton) issued from time to time by the
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
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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, 2007, 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 MAl 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 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 of this Lease, Lessee shall deliver to
Lessor, as a Security Deposit for the faithful performance by Lessee ofits obligations under this
Lease, the amount of $2,078.04, which is equal to one (I) month's worth of Monthly Base Rent
(plus State Leasehold Tax), 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 defau1t(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 1avv, Lessee shall not be
entitled to interest on the Security Deposit. In no event or circumstance shall Lessee have the right
Lessor: City of Auburn .
Lessee: Aviation Properties, Inc
Page 7
Printed on May 31, 200 I
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 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 1/2%) per month from the date due until
paid.
8. OWNERSHIP OF IMPROVEMENTS; DISPOSlTlON AT END OF LEASE
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, excluding trade fixtures and movable equipment, 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.
9. INSURANCE COVERAGE
(a) The Lessee and any sublessee or assignee 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
Lessor: City of Auburn
Lessee: Aviation Properties, 1nc
Page 8
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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; with additional coverage for Aircraft, Owned. Lessor and its
agents, employees and officers shall be additional insureds.
(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 shaH 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 shaH have no liability for
premiurns; 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, 2007,
considering levels of inflation, risk of loss, premium expenses, and other relevant factors in
Lessor's commercially reasonable discretion.
(f) Lessor and Lessee hereby mutuaHy 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 shaH 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 fuHy, 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. INDEMNIFICA TION/HOLD 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 of
Premises, 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
shaH have been occasioned by the 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,
Lessor: City of Auburn
Lessee: Aviation Properties, 1nc
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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 Section have been specifically and mutually
negotiated between the parties.
11. DAMAGE AND DESTRUCTION; REPAIR.
In the event of damage to or destruction of the 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 andlorreStoration.
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 Lessor may withhold or
condition in its sole discretion; 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 nonstockho1ders or non-partners
or non-members, as applicable, as of the date hereof (provided that the foregoing shall not apply if
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 10
Printed on May 31,2001
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 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 construction, Lessor's
consent shall not be unreasonably withheld. As set forth in Section l2(b) 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
docurnent effecting the Transfer.
(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 partYVlTith 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 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
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 11
Printed on May 31, 2001
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 of this section.
16. ENVIRONMENTAL PROVISIONS
(a) Lessee covenants to defend, indemnif'y, 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 satisf'y a requirement of any environmental or land use law
or regulation, proximately resulting from use of the Premises during the term of this 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
indemnif'y and hold Lessor harmless from all costs involved in implementing the remedy.
(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.
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 12
Printed on May 31,2001
(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 I 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. AL TERA TIONS AND ADDITIONS
Following completion of the initial phases of 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. Lessee shall reimburse Lessor
for any sums expended for examination and approval or architectural or mechanical plans and
specifications of the Alterations. 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.
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 13
Printed on May 31, 2001
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, subject 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 of this 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, and/or 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 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.
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 14
Printed on May 31, 2001
24. DEF AUL T; REMEDIES
(a) Time is ofthe 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 peti~ion 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 vvithin 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 re1etting 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.
(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. 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 of termination;
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 15
Printed on May 31,2001
(II) The worth at the time of the award of the amount by which the unpaid rent
which would have been eamed 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;
(IV) 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 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
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 16
Printed on May 31,2001
modifications shall be generally in conformance with the model leasehold mortgage provisions
promulgated by the American Bar Association.
26. RETENTION OF AIRSPACE AND OTHER RlGHTS 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 Aubum 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 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
Aubum Airport or otherwise constitute a hazard. 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).
Lessor: City of Auburn
Lessee: Aviation Properties, 1nc
Page 17
Printed on May 31, 2001
(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 Aubum 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 off of 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
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 through the use of buildings, structures, walls, fences, and similar
barriers or a combination thereof, positive uninterrupted on-site security at all times for the
prevention of unauthorized pedestrian and vehicular access to the aircraft operating area (" AOA")
by way of the Premises, and direct or indirect points of entry of the AOA to accommodate
authorized individuals and authorized vehicles shall be controlled by Lessee in compliance with the
FAA and Airport security requirements. Lessee shall also provide security for on-site facilities.
Lessee shall provide adequate lighting to provide for all-night illumination of the Taxilane apron of
Lessor: City of Aubum
Lessee: Aviation Properties, 1nc
Page 18
Printed on May 31,2001
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, Lessee agrees to
comply with said security requirements, 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 reasonable 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. 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-DISCRIMINA TlON
(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 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 fumishing 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
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.
Lessor: City of Auburn
Lessee : Aviation Properties, Inc
Page 19
Printed on May 31, 2001
( 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 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 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 covered
suborganizations, provide assurances to the Lessee that they similarly wil1 undertake Affirmative
Action programs, and that they wil1 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, W A 98001
LESSEE:
Aviation Properties.lnc
Box 6820465 Douglas Crescent
Langley _ BC V3A4B6
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.
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 20
Printed on May 31, 2001
Notices given by hand-delivery or by overnight 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) Estoppel 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 (or, if so, the
material facts pertaining thereto); (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 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 Majeure. 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.
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 21
Printed on May 31,2001
(e) Severabilitv. 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 aU 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.
33. RIGHTS OF ACCESS
During the Term hereof and during any extension or renewal thereof, Lessor shall
continuously provide to Lessee rights of pedestrian and vehicular ingress and egress to the Premises
from the nearest public road or highway. Lessor shall further continuously provide to Lessee rights
of aircraft access to the taxiway(s) leading to the runway(s) of the airport, and shall maintain any
such roadway(s) and taxiway(s) in reasonable conditions of repair suitable for the normal intended
uses of such facilities
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 22
Printed on May 31,2001
34. SIGNATURE
By signing in the space below, the LESSEE ACKNOWLEDGED HAVING READ AND
UNDERSTOOD AND AGREES TO THE CONTENTS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Lease.
LESSOR:
THE CITY OF AUBURN, a Washington municipal
corporation
By: ~ IJ. fi;,#
Print Name: . Ie.. R. e)
Title: f\ta ~
By:
Print
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e: Bill Vandenberg for Aviation Properties Inc.
LESSEE:
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 23
Printed on May 3 1,2001
STATE OF WASHINGTON
/\/ ss.
COUNTY OF KING Lv 1'1-
I certify that I know or have satisfactory evidence that C h trlll?;-/ Eo oH", 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 ~ r V of the City of Auburn, a Washington
municipal corporation, to be the e and voluntary act of such mumclpa1 corporatIOn for the uses
and purposes mentioned in the instrument.
Dated this '1 '0- d ,{-yJ<J(.i J\ e
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Notary public ?, and for .the state of Washington,
residing at , !I;J ('I) 1111 f'J W fl-
My appointment expo s ( tJ -- "2t( - LJ '3
STATE OF WASHINGTON
COUNTY OF KI' VI 5-
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I certify that 1 know or have satisfactory evidence that c' is
the person who appeared before me, and said person acknowledged that said person sig d 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 '7Yit rid- vI (If.~ru ne, 2001.
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My appointment expires /IJ. ;21-.1) ."3
.
Lessor: City of Aubum
Lessee: Aviation Properties, Inc
Page 24
Printed on May31, 2001
Exhibit A-I
Legal Description of Premises
LEASE AREA NORTH OF 23RD STREET NE BETWEEN "D" AND "E"
THAT PORTION OF LOTS 22,23,24,25,26, AND 27 OF MARDEL ADDITION
NO.2 AS RECORDED IN VOLUME 79 OF PLATS, PAGE 1, RECORDS OF
KING COUNTY, WASHINGTON, TOGETHER WITH THAT PORTION OF
"D" STREET NE AS SHOWN ON SAID PLAT OF MARDEL ADDITION NO.
2; QUIT CLAIMED TO THE CITY OF AUBURN AIRPORT DEPARTMENT
AS RECORDED UNDER AUDITOR'S FILE NO. 8211050440 AND
SURPLUS ED BY CITY OF AUBURN RESOLUTION NO.1 730, DESCRIBED
AS FOLLOWS:
BEGINNING AT THE NORTHWEST CORNER OF SAID MARDEL
ADDITION NO.2; THENCE SOUTH 89-21-15 EAST ALONG THE NORTH
BOUNDARY OF SAID MARDEL ADDITION NO.2 A DISTANCE OF 303.80
FEET; THENCE SOUTH 00-31-30 WEST, 484.07 FEET; THENCE NORTH 88-
58-22 WEST, 309.37 FEET TO A POINT LOCATED 307.5 FEET EAST,
MEASURED AT RIGHT ANGELS OF THE PAINTED CENTERLINE OF THE
MAIN RUNWAY FOR THE CITY OF AUBURN AIRPORT; THENCE
NORTH 00-39-04 EAST ALONG A LINE PARALLEL WITH SAID PAINTED
CENTERLINE OF THE MAIN RUNWAY, 482.01 FEET; THENCE SOUTH
80-21-15 EAST, 4.49 FEET TO THE POINT OF BEGINNING.
CONTAINING 149175 SQUARE FEET MORE OR LESS. (3.425
ACRES)
Lessor: City of Auburn
Lessee: Aviation Properties, 1nc
Page 25
Printed on May 31,2001
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Lessor: City of Aubum
Lessee: Aviation Properties, Inc
Page 26
Printed on May 3 1, 2001
Exhibit A-3
Site Plan
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Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 27
Printed on May 31, 2001
Exhibit B
Construction of Improvements
1. 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.
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.
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 attorney's 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 ofthe Lessor for Lessee's failure
to obtain and/or fully comply with any necessary permit.
Lessor: City of Auburn
Lessee: Aviation Properties, lnc
Page 28
PrintedonMay31,200I
6. Funding Assurances. Prior to Commencement of Construction, Lessee shall provide Lessor
with (a) evidence reasonably satisfactory to Lessor that all funding necessary for development and
construction of the Improvements has been secured or committed; and (b) a guaranty of completion,
in form and substance satisfactory to Lessor and issued or provided by a guarantor acceptable to
Lessor, providing for lien-free completion of the Improvements in accordance with the Plans.
7. Contractor. Lessee shall contract with an experienced, qualified general contractor
("Contractor") for construction of the Improvements that is reasonably acceptable to Lessor.
8. Insurance. The 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 - To the extent required by law;
(b) Empioyer'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) Premises - Operations
(ii) Elevators and Hoists
(iii) Independent Contractor
(iv) Contractual Liability assumed under the construction contract
(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 thefollowing:
(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;
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 29
Printed on May 31,2001
(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 and/or 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 ill 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 ansmg out of work
performed, materials furnished to, or obligations incurred by Les~ee. 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 fumished
to Lessee, shall be discharged by Lessee, by bond or otherwise, within ten (10) 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 ovvn choosing, and to the
extent Lessor is indemnified under this section, Lessee shall bear the cost of Lessor's separate
defense, including reasonable attomeys' fees.
11. 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
Lessor: City of Auburn
Lessee: Aviation Properties, Inc
Page 30
Printed on May 31,2001
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; Survev. 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 ofImprovements. 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 Aubum
Lessee: Aviation Properties, Inc
Page 3 I
Printed on May 3 I, 2001
AMENDMENTS TO LEASE AGREEMENT BETWEEN
CITY OF AUBURN AND AVIATION PROPERTIES, INC.
DATED MAY 31,2001
This document (the "AmendmenJ") amends that certain Lease Agreement
between the City of Auburn, a municipality of the Slate of Washing10n, and Aviation
Properties, Inc., a Washington corporation.
WHEREAS, the City of Auburn ("Auburn"), and Aviation Properties, Inc. ("API")
entered into a Lease Agreement, entitled "City of Auburn Airport Hangar Land Lease
Agreement" dated June 8, 2001, a memorandum of which was recorded with the
Auditor of King County, Washington, under Auditor's File No. 20020627002407 on the
27th day of June, 2002; and
WHEREAS, the City of Auburn Airport Hangar Land Lease Agreement (the
"Lease") contemplates that API will construct real property improvements on the
leasehold, consisting of buildings to be used as hangars for aircraft and related uses,
and the condominium units thereinafter sold to third parties; and
WHEREAS, the Lease contemplates that API will be required to obtain
construction financing to acquire the materials and to construct the real property
improvements; and
WHEREAS, the Lease specifically provides for amendment to accommodate
construction lending;
THEREFORE, Auburn, API and Bank NorthWest (the "Bank") do hereby agree,
warrant, undertake and acknowledge as follows:
1. Lease. The Lease is between Auburn as Lessor and API as Lessee and
has been filed of record as noted above. The Lease is in full force and effect and there
is no existing default on the part of either party. The Lease contemplates that API will
construct hangars for the storage of aircraft and related uses under a condominium
1
regime. The condominiums, when constructed, are to be sold to third parties. The
condominiums will be owned by third parties, but are constructed upon land owned by
Auburn which is leased to API for the purpose of the condominium development project.
2. Construction Lender. The Lease conternplates that API will require
construction financing to develop the condorninium hangar project. The Bank has
agreed to provide the financing for the construction of the improvements under certain
terms and condi1ions, including this Amendment to the Lease. Auburn agrees that Bank
and Bank's undertaking satisfies the requirements of Paragraph 6(a) of Exhibit B to the
Lease, regarding Funding Assurances.
3. Pertinent Documents. This Amendment takes into account the Lease and
the Condominium Declara1ion for Auburn Airport Hangar Condominium to be submitted
by API and approved by Auburn, which will be recorded with the King County Auditor in
due course. Additionally, API and its principals have executed the following documents
(the "Loan Documents"):
a. Corporate resolution to borrow/grant collateral;
b. Business Loan Agreement;
c. Promissory Note;
d. Commercial Guaranty of Bill Vanderberg;
e. Commercial Guaranty of Gordon Estrada;
f. Deed of Trust;
g. Assignment of Rents;
h. Security Agreement and Financing Sta1ement;
i. Hazardous Substances Certificate and Indemnity Agreement;
j. Agreement to Provide Insurance;
k. Disbursement Request and Authorization; and
I. Notice of Final Agreement.
4. ObliQation and Limitation on ObliQation of Bank. Bank undertakes to
make the loan to API in conformance wi1h the foregoing Loan Documents, upon their
proper execution, delivery and recording, as appropriate; the Condominium Declaration;
the Lease and this Amendment (which Auburn and API warrant is the first and only
2
amendment to the Lease). As between the parties, they agree that the Lease and this
Amendment shall supersede the Condominium Declaration so long as rights of third
parties are not thereby affected. Nothing set forth in this Amendment shall obligate Bank
to perform any obliga1ion due from API to Auburn, but Bank may perform any such
obligations and duties, including the payment of rent, to protect the financial interests of
the Bank and its interest in the security for the obligation of API to Bank, all as set forth
in Paragraph 6, below.
5. Specific Amendments. The following are references to paragraphs and
provisions of the Lease, to the extent that such Lease provisions are identified, and
otherwise constitute amendmen1s, revisions or modifications to the Lease, to-wit
5.1 Assignment and Subletting. Notwithstanding the provisions of
Paragraph 12 or other provisions of the Lease to the contrary, the rights of Bank to
assume and acquire the rights of API as Lessee under the Lease are as otherwise
provided in the Lease and in this Amendment. In particular, the assumption of API's
posi1ion, rights and obligations under the Lease do not require Auburn's prior written
consent, where the assignment is in foreclosure of Bank's financial interest, except to
1he extent of Auburn's approval and acceptance of this Amendment, to be accomplished
in the manner otherwise provided in this Amendment or the Lease. To the extent that
Paragraph 12 provides for a novation as between API, a condominium association, or a
unit owner, such novation shall not affect Bank's security or rights with regard to 1he
collateral for the loan, and shall not constitute a release of any obligation of API, and its
principals who execute guarantees on behalf of API.
5.2 Priority. Paragraph 25(a) is amended or clarified to 1he extent that
Auburn warrants that there is no existing mortgage, deed of trust, or other Financial
Encumbrance against the real property which is the subject of 1he Lease, and that
Auburn will not cause or allow any new Financial Encumbrance to arise except as shall
be subordinate to the security of Bank.
5.3 Lender Security. With regard to Paragraph 25(b), this Amendment
memorializes the prospective grant of a first position deed of trust, between API as
grantor, and Bank as beneficiary, and Chicago Title Insurance Company of Bellingham
3
as trustee. In addition, this Amendment constitutes the notice of such proposed first
position deed of trust; and this Amendment constitutes partial satisfaction of Lessor's
agreement to make reasonable modifications to the Lease as requested by Bank.
6. Bank's Relationship to Auburn and API as Deed of Trust Beneficiarv.
6.1 Right of API to Grant Financial Encumbrance. API, as Lessee,
and its successors and assigns, shall have the unrestricted right to grant financial
encumbrances against its interests under the Lease to Bank, subject, however, to the
terms, conditions and limitations of this Paragraph 6. As used herein, "Financial
Encumbrance" shall mean a mortgage or deed of trust on the Leasehold Esta1e.
"Leasehold Estate" shall mean the estate of API created by the Lease upon and subject
to all the terms and conditions of the Lease, but expressly excluding Auburn's fee
simple interest in the land described in Exhibit A-1 of the Lease (it being the intent and
understanding of Auburn, API and Bank that Auburn's fee simple interest in the land
shall not be subordinate to Bank's Financial Encumbrance). Any such Financial
Encumbrance shall be subordinate to the rights of Auburn as set forth in accordance
with all the terms and conditions of the Lease, except as provided to the contrary in this
Amendment.
6.2 Notice of Loan Documents. By this Amendment, API and Bank
notify Auburn of the pending grant of a Financial Encumbrance to Bank by API. API
acknowledges that it remains obligated to provide Auburn notice of an intended grant of
a subsequent Financial Encumbrance.
6.3 Protection of Bank. So long as Bank's Financial Encumbrance shall
remain unsatisfied of record, the following provision shall apply:
(a) No cancellation, surrender or modification of the Lease shall be
effective as to Bank unless consented to in writing by Bank; provided thaI such consent
shall not be required in the event of a termination of the Lease in accordance with this
Section 6.3.
(b) Auburn, upon providing API any notice of:
(i) default under the Lease,
(ii) a termination of the Lease, or
4
(iii) a matter on which Auburn may predicate or claim a default,
shall at the same time provide a copy of such notice to Bank. No such notice by Auburn
to API shall be deemed to have been duly given unless and until a copy thereof has
been so provided to Bank. From and after the date such notice has been given to Bank,
Bank shall have the same period for remedying any default or acts or omissions which
are the subject matter of such notice, or causing the same to be remedied, as is given
API after the giving of such notice to API, plus in each instance, the additional periods of
time specified in subsections (c) and (d) of this Section 6.3, to remedy, commence
remedying, or cause to be remedied, the defaults or acts or omissions which are
specified in such notice. Auburn shall accept such performance by or at the instigation
of Bank as if the same had been done by API. API authorizes Bank to take any such
action at Bank's option and does hereby authorize entry upon the Premises by Bank for
such purpose.
(c) Anything contained in the Lease to the contrary notwithstanding,
if any default shall occur which entitles Auburn to terminate the Lease, Auburn shall
have no right to terminate the Lease unless, following the expiration of the period of
time given API to cure such default or the act or omission which gives rise to such
default, Auburn shall provide notification to Bank (a "Termination No1ice") of Auburn's
intent to so 1erminate at leas1 thirty (30) days in advance of the proposed effective date
of such termination if such default is capable of being cured by the payment of money,
and at least ninety (90) days in advance of the proposed effective date of such
1ermina1ion if such default is not capable of being cured by the payment of money (the
"Termination Notice Period"). The provisions of Section 6.3(d) shall apply only if, during
such thirty (30) or ninety (90) day Termination Notice Period, Bank shall:
(i) notify Auburn of Bank's desire to nullify such notice;
(ii) payor cause to be paid all Rent and other payments then
due and in arrears and which may become due during the Termination Notice Period as
specified in the Termination Notice to Bank;
(iii) comply or in good faith with reasonable diligence and
continuity, commence to comply with all non-monetary requirements of 1he Lease then
5
in default and reasonably susceptible of being complied with by Bank; provided,
however, that Bank shall not be required during such Termination Notice Period to cure
or commence to cure any default consisting of API's failure to satisfy and discharge any
lien, charge or encumbrance against API's interest in the Lease or the Premises junior
in priority to 1he lien of the Financial Encumbrance held by Bank; and
(iv) any notice to be given by Auburn to Bank pursuant to any
provision of this Section 6.3 shall be deemed properly addressed if sent to the Bank at
the address provided below in Paragraph 7.
(d)
(i) If Auburn shall elect to terminate the Lease by reason of
any default of API, and Bank shall have proceeded in the manner provided for by
Section 6.3(c), the specified date of the termination of the lease as fixed by Auburn in its
Termination Notice shall be extended for a period of six (6) months, provided that Bank
shall, during such six (6) months:
(A) payor cause to be paid the Rent and other monetary
obligations of API under the Lease as the same become due, and continuous good faith
efforts to perform all of API's other obligations under the Lease, including during any
period during which Bank is en1itled to possession of the Premises, the obligation to
operate and maintain the Improvements and the Premises in accordance with the
Lease, excepting obligations of API to satisfy or otherwise discharge any lien, charge or
encumbrance against API's interest in the Lease or the Leasehold Estate junior in
priority to the lien of the Financial Encumbrance held by Bank; and past non-monetary
obligations then in default and not reasonably susceptible of being cured by Bank; and
(B) if not enjoined or stayed, take steps to acquire or sell
API's interest in the Lease by foreclosure of the Financial Encumbrance or other
appropriate means and prosecute the same with due diligence.
(ii) If at the end of such six (6) month period, Bank is
complying with Section 6.3(d)(i), the Lease shall not then terminate, and the time for
completion by Bank of its proceedings shall continue so long as Bank is enjoined or
stayed and thereafter for so long as Bank proceeds to complete steps to acquire or sell
6
API's interest in 1he Lease by foreclosure of the Financial Encumbrance or by other
appropriate means with reasonable diligence and continuity. Nothing in this Section
6.3(d), however, shall be construed to extend the Lease beyond the original term
thereof, or to require Bank to continue such foreclosure proceedings after the default
has been cured. If the default shall be cured and Bank shall discontinue such
foreclosure proceedings, the Lease shall continue in full force and effect as if API had
not defaulted under the Lease.
(iii) If Bank is complying with this Section 6.3(d), upon the
acquisition of API's Leasehold Estate herein by Bank, or its designee or any other
purchaser at a foreclosure sale or otherwise, and the discharge of any lien, charge or
encumbrance against API's interest in the Lease or the Premises which is junior in
priority to the lien of the Financial Encumbrance held by the Bank, and which API is
obligated to sa1isfy and discharge by reason of the terms of the Lease, this Lease shall
continue in full force and effect as if API had not defaulted under this Lease.
(iv) For the purposes of this Section 6.3, the granting of a
Financial Encumbrance to Bank shall not be deemed to constitute an assignment or
transfer of the Lease or the Leasehold Estate, nor shall Bank, as such, be deemed to be
an assignee or transferee of the Lease or the Leasehold Estate so as to require Bank,
as such, to assume the performance of any of the terms, covenants or conditions on the
part of API 10 be performed hereunder, but the purchaser at any sale of the Lease and
of the Leasehold Estate in any proceedings for the foreclosure of Bank's Financial
Encumbrance, or the assignee or transferee of 1he Lease of the Leasehold Estate under
any instrument of assignment or transfer in lieu of the foreclosure of Bank's Financial
Encumbrance, shall be deemed to be an assignee or transferee within the meaning of
this Section 6.3 and shall be deemed to have agreed to perform all the terms,
covenants and conditions on the part of API to be performed hereunder from and after
the date of such purchase and assignment. If Bank shall become the holder of the
Leasehold Estate and if the Premises shall have been or become materially damaged
on, before or after the date of such purchase and assignment, Bank, or such designee
shall be obligated to repair, replace, or reconstruct the Improvements only to the extent
7
of the net insurance proceeds received by Bank or such designee by reason of such
damage. However, should such net insurance proceeds be insufficient to repair, replace
or reconstruct the Improvements to the extent required by the Lease and should Bank
or such designee choose not to fully reconstruct the Improvements 10 the extent
required by the Lease, such failure shall entitle Auburn to terminate the Lease, and the
net insurance proceeds shall be distributed first to Bank and then to other parties in
accordance with their respective interests.
(v) Bank or olher acquirer of the Leasehold Estate pursuant to
foreclosure, assignment in lieu of foreclosure, or other proceedings, may, upon
acquiring API's Leasehold Estate, without further consent of Auburn, sell and assign the
Leasehold Estate on such terms and to such persons and organizations as are
acceptable to Bank or other acquirer and thereafter be relieved of all obligations under
the Lease; provided that the assignor shall have complied with all the requirements
described in Section 6.3(d)(i)(A) above; and further provided such assignee has
delivered to Auburn its written assignment to be bound by all the provisions of the
Lease, including any and all restrictions on further assignments, alienation, subletting,
and further transfers of its interest hereunder.
(vi) Notwithstanding any other provisions of the Lease, any
sale of the Lease and the Leasehold Estate and any proceedings for the foreclosure of
Bank's Financial Encumbrance, or the assignment or transfer of the Lease and of the
Leasehold Estate in lieu of the foreclosure of Bank's Financial Encumbrance, shall be
deemed to be a permitted sale, transfer or assignment of the Lease and of the
Leasehold Estate.
(e) In the event of the termination of the Lease as a result of API's
default, Auburn shall, in addition 10 providing the notices of default and termination as
required in Sections 6.3(b) and (c), provide Bank with written no1ice that the Lease has
been terminated (Final Termination Notice), together with a statement of all sums which
. would at that time be due under the Lease but for such termination, and of all other
defaults, if any, then known to Auburn. Auburn agrees to enter into a new Lease ("New
Lease") of the Premises with Bank or its designee for the remainder of the term of the
8
Lease, effective as of the date of termination, at the same Rent and upon the terms,
covenants and conditions of the Lease; provided:
(i) Bank shall make written reques1 upon Auburn for such
New Lease within thirty (30) days after the date Bank receives Auburn's Final
Termination Notice if any default specified in such notice can be cured by the payment
of money, or within sixty (60) days after the date Bank receives Auburn's Final
Termination Notice if no such defaul1 is capable of being cured by the payment of
money;
(ii) Bank shall payor cause to be paid to Auburn at the time of
the execution and delivery of such New Lease, any and all sums which would have at
the time of execution and delivery thereof be due pursuant to the Lease (including
interest as required under the 1erms of the Lease), but for such termination, and, in
addition thereto, all reasonable expenses, including reasonable attorney's fees, which
Auburn shall have incurred by reason of such termination and the execution and
delivery of the New Lease and which have not otherwise been received by Auburn from
API or other parties in interest under API;
(iii) Bank or such designee shall agree to remedy any of API's
defaults of which Bank was notified by Auburn's Final Termination Notice and which are
reasonably capable of being so cured by Bank or such designee;
(iv) any New Lease made pursuant to this Section 6.3(e) shall
have the same priority as the Lease, and the Lessee under such New Lease shall have
the same right, title and interest in and to the Premises and the Existing Improvements
and improvements thereon as API had under the Lease as of the date of the New
Lease; and
(v) if not satisfied or olherwise released, the priority of Bank's
Financial Encumbrance shall not be affected.
(f) If the holder of another Financial Encumbrance shall request a
New Lease, Auburn shall enter in10 such New Lease with the party whose Financial
Encumbrance is superior in priority. Auburn, without liability to API or Bank, may rely
upon a mortgagee title insurance policy, or similar policy or guarantee, issued by a
9
responsible title insurance company doing business in King County as the basis for
determining the appropriate party entitled to such New Lease, and the party which
executes the New Lease shall indemnify, defend and hold Auburn harmless from and
against any claims by API or the holders of other Financial Encumbrances with respect
to such de1ermination. Provided, nothing set forth in 1he Lease or this Amendment shall
authorize API to grant another financial encumbrance except as may be allowed by the
Loan Documents.
(g) Nothing herein contained shall require Bank as a condition of its
exercise of rights hereunder to cure any default of API which by its terms is not
reasonably susceptible of being cured by Bank or such designee in order to comply with
the provisions of Section 6.3(c) and (d), or as a condition of entering into the New Lease
provided for by Section 6.3(e). The financial condition of Bank or its successor to API's
interest under the Lease or a New Lease shall not be a consideration in the
determination of the reasonable susceptibility of cure of the default. No default or Event
of Default, the cure of which, and no obligation of API, the performance of which,
requires possession of the Premises, shall be deemed reasonably susceptible of cure of
performance by Bank or a successor to API's interest under the Lease or a New Lease
not in possession of the Premises, provided such holder is otherwise complying with the
requirements described in Seclion 6.3(d), above, nor shall Bank be required to cure the
bankruptcy, insolvency, or any related or similar condition of API.
(h) API's share of the proceeds arising from an exercise of the
power of eminent domain, shall be disposed of as provided for by Bank's Financial
Encumbrance.
(i) A Standard Mortgagee Clause naming Bank may be added to
any and all insurance policies required to be carried by API under the Lease on
condition that the insurance proceeds are to be applied in the manner specified in the
Lease and the terms of the Financial Encumbrance shall so provide; except that the
Financial Encumbrance may provide a manner for the disposition of such proceeds, if
any, otherwise payable directly to API (but no such proceeds, if any, which are
supposed to be payable jointly to Auburn and API).
10
0) API and Auburn shall give Bank notice of any arbitration or legal
proceedings between Auburn and Bank involving obligations under the Lease. Bank
shall have the right to intervene, within sixty (60) days after receipt of such notice of
arbitration or legal proceedings, in any such proceedings to be made a party to such
proceedings, and the parties hereto do hereby consent to such intervention. Bank, after
intervening in any such proceedings, shall not be entitled to receive an award of
attorney's fees from Auburn. Bank, as an intervening party, shall be bound by the
outcome of such proceedings. In the event that Bank shall no1 elect to intervene or
become a party in any such proceedings, Auburn and API shall give Bank notice of, and
a copy of any award or decision made in any such proceedings, which shall be binding
on Bank, if it has not intervened, after receipt of notice of such proceedings.
(k) So long as Bank's Financial Encumbrance is in existence,
unless Bank otherwise expressly consents in wri1ing or Auburn shall have terminated
the Lease in accordance with the terms hereof, the fee title to the Premises and the
Leasehold Estate of API therein created by the Lease shall not merge but shall remain
separate and distinct, notwithstanding the acquisition of said fee title and said
Leasehold Estate by Auburn or by API or by any third party, by purchase or otherwise.
(I) Notices from Auburn to Bank shall be mailed to the address
furnished Auburn in Paragraph 7, below, and those from Bank to Auburn shall be mailed
to the address designated in Paragraph 31 of the Lease. Such notices, demand and
requests shall be given in the manner described in the Lease and shall in all respects
be governed by the provisions of the Lease.
(m) No payment to Auburn by Bank shall constitute agreement that
such payment was, in fact, due under 1he terms of the Lease; and Bank, having made
any payment to Auburn pursuant to Auburn's wrongful, improper or mistaken notice or
demand shall be entitled to the return of any such payment or portion thereof, provided
written demand therefor shall have been delivered not later than one (1) year after the
date of such payment.
(n) In the event of any proceeding by either Auburn or API under
the United States Bankruptcy Code (Tille 11 U.S.C.) as now or hereafter in effect:
11
(i) If the Lease is rejected in connection with bankruptcy
proceeding by API or a trustee in bankruptcy for API, such rejection shall be deemed an
assignment by API to Bank of the Leasehold Estate and all of API's interest under the
Lease, in the nature of an assignment in lieu of foreclosure, and the Lease shall not
terminate and the Bank shall have all rights as if such bankruptcy proceeding had not
occurred, unless Bank shall reject such deemed assignment by notice in writing to
Auburn within thirty (30) days following rejection of the Lease by API or API's trustee in
bankruptcy. If any court of competition jurisdiction shall determine that the Lease shall
have been terminated notwithstanding 1he terms of the preceding sentence as a result
of rejection by API or the trustee in connection with any such proceeding, the rights of
Bank to a New Lease from Auburn pursuant to Section 6.3(e) hereof shall not be
affected thereby.
(Ii) If the Lease is rejected by Auburn or by Auburn's trustee in
bankruptcy:
(A) API shall not have the right to treat the Lease as
terminated, excep1 with the prior written consent of Bank; and the right to treat as
terminated in such even1 shall be deemed assigned to Bank, whether or not specifically
set forth in Bank's Financial Encumbrance, so that the concurrence in writing of API and
Bank shall be required as a condition to treating the Lease as terminated in connection
with such proceeding.
(B) If the Lease is not treated as terminated in
accordance with Section 6.3(n)(i), above, then the Lease shall continue in effect upon
all the terms and conditions se1 forth herein, including rent, but excluding the
requirements that are not then applicable or pertinent to the remainder of the term
thereof. Thereafter, API or its successors shall be entitled to any offsets against rent
payable hereunder for any damages arising from such rejection and any such offset
properly made shall not be deemed a default under the Lease. The lien of Bank's
Financial Encumbrance then in effect shall extend to the continuing possessory rights of
API following such rejection with the same priority with respect to Bank as it would have
enjoyed had such rejection not taken place.
12
(0) The rights of Bank hereunder shall not diminish any right or
claim of Auburn against API.
6.4 Assignment by Bank. Notwithstanding any other provisions of the
Lease, if Bank or other successor in interest shall acquire title to API's interest in the
Lease by foreclosure or other sale pursuant to a Financial Encumbrance thereon or by
assignment in lieu of foreclosure or by an assignment from a designee or wholly owned
subsidiary corpora1ion of Bank, or under a New Lease pursuant to this Paragraph 6,
Bank may assign such Lease and shall thereupon be released from all liability for the
performance or observance of the covenants and conditions of such Lease contained
on API's part to be performed and observed from and after the date of such assignment;
provided that the assignee of Bank shall have assumed the Lease in accordance with
its terms.
7. Notice. Any notice to be given by Auburn or API to Bank in the manner
provided for notices in Paragraph 31 of the Lease, shall be given as follows:
Bank Northwest
Main Office
100 Grand Avenue
P.O. Box 1038
Bellingham, WA 98225
8. Definitions. Words and phrases used in this Amendment which have the
first letter of the word, or the first letter of each word in 1he phrase, capitalized, are
"defined terms." Such words or terms shall have the meanings given to them by this
Amendment, or by the Lease if not defined in this Amendment.
DATED this 'OJ.yi.. day of (\.oliO"'" W , 2002.
City of Auburn
A Washington Stat unicipality
Its: '1\Y'~"'" 1. q ~IA-/l ~
By:
13
.
Aviation Properties, Inc.
A Washington Corporation
BY:~~/ ~--
ItS( p /1. ~. . d __, J
Bank NorthWest
~
-
14
RETURN TO:
TITLE OF DOCUMENT:
AF# OF AFFECTED DOCUMENT:
GRANTOR:
GRANTEE:
ABBREV. LEGAL DESCRIPTION:
TAX PARCEL NO.:
MEMORANDUM OF GROUND LEASE
CITY OF AUBURN
AVIATION PROPERTIES, INC.
P1N. SW 1/4, SW 1/4 SEC. 6, TSHP 21N, RSE, &
P1N. NW 1/4, NW 1/4 SEC. 7, TSHP 21N, RSE
5143200070
MEMORANDUM OF GROUND LEASE
NOTICE IS HEREBY GIVEN that on the g ~ day of~~ .~ CITY OF
AUBURN, a Washington Municipal Corporation, as Lessor, and AVIATION PROPERTIES, INC., a
Washington Corporation, as Lessee, executed a Ground Lease, wherein Lessor agreed 10 lease 10 Lessee and
Lessee agreed 10 lease from Lessor the Premises designated therein and descnbed more fully below, for the
Term designated therein and descnbed below:
1. PREMISES: The following descnbed real estate situate in King County, Washington:
See attached Exlnbit A
2. TERM: The term of the Ground Lease is 50 years, commencing on June 8, 2001 and ending
at midnight on June 7, 2051 unless extended or earlier terminated pursuant to the terms of the Ground Lease.
3. PURPOSE OF MEMORANDUM OF GROUND LEASE: This Memorandum is prepared to
satisfy the recordation requirements of Section 20 of the Ground Lease, and is .not intended to modify or
supplement the Ground Lesse in any way. .
4~ ~
DATED this day of '-I ~ .2002.
LESSOR: CITY OF AUBURN, a Washington
Municipal Corporation
LESSEE: AVIATION PROPERTIES, INC., a
Washington Corporation
By:
Its:
(jJF -
-
~J;~
1
~
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I hereby certify that I know or have satisfactory evidence that fe-l~~. L-ewt"'S
is the person who appeared before me, and said person acknowledged that (s)he signed this instrument, on
oath stated that (s )he was authorized to execute the instrument and acknowledged it as the Mayor of the City
of Auburn, a Washington Municipal Corporation, to be the free and voluntary act of such party for the uses
and purposes mentioned in the instrument.
DATED: _-........,......, 2002.
f'v<:" ...:... :.j8~'1
;~'v ...~,ON ~" '-1',
:' /:!? ~'~"
: ~ Ii ~01p..RY (/l:' ~
~o:o -- : ~
~. :,0 pUe0G "'l: ~
" '. (),' f
'I, ';""',(0. 2 "'~:,." .f'
'-~h-'"'''' -
II, '<:QF'N _:
" """,----
STATEOFWASHINGTON )
) ss.
COUNTY OF KING )
~tlISd~
NOTARY PUBUC for the State of
WashingtoI1- My Commission
expires Jtl- zS -1!J3
I hereby certify that I know or have satisfactory evidence that .. ',Ill....... I ,.........1~
is the person who appeared before me, and said person acknowledged that (s Signed this. ~ent, on
oath stated that (s )he was authorized to execute !he instrument and ackn edged it as !he PreSident of
Aviation Properties, Inc., a Washington Corporation, to be !he free and v untary act of such party for !he
uses and purposes mentioned in !he instrument
,-.."
DATED: ~ l.-f- ,2002.
PUBUC for the State of
My Commission
2
*
AUBuRN
Peter B. Lewis, Mayor
,
WASHINGTON
25 West Main Street * Auburn WA 98001-4998 * www.auburnwa.gov * 253-931-3000
STATE OF WASHINGTON )
) ss.
COUNTIES OF KING AND PIERCE )
I, Danielle Daskam, the duly appointed, qualified City Clerk of the City of
Auburn, a Municipal Corporation and Code City, situate in the counties of King and
Pierce, State of Washington, do hereby certify that the foregoing is a full, true and
correct copy of Resolution No. 3353 of the resolutions of the City of Auburn,
entitled "RESOLUTION NO. 3353."
I certify that said Resolution No. 3353 was duly passed by the Council and
approved by the Mayor of the said City of Auburn on the 21st day of May, 2001.
Witness my hand and the seal of the City of Auburn this 31st day of March, 2006.
))()7L~lfJa-Lh#*t~
Danielle Daskam, City Clerk
City of Auburn
AUBURN * MORE THAN YOU IMAGINED