HomeMy WebLinkAbout3379RESOLUTION NO. 3 3 7 9
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE A LEASE AGREEMENT WITH AVIATION SALES L.L.C., FOR A
GROUND LEASE AT THE AUBURN MUNICIPAL AIRPORT.
WHEREAS, the City of Auburn operates the Aubum Municipal Airport for
the benefit of the community and residents, and
WHEREAS, the Airport Master Plan encourages the development of
aviation-related services on available land at the airport, and
WHEREAS, the City has used local resources and Federal grant funding
to make improvements required by new aviation-related development, and
WHEREAS, the City has negotiated a ground lease with Aviation Sales
L.L.C., whereby he will develop specified property to support business and
aircraft support activities, and
WHEREAS, the City and AVIATION SALES L.L.C., have negotiated a
lease for said property.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, IN A REGULAR MEETING DULYASSEMBLED, HEREWITH
RESOLVE THAT:
Section 1. The Mayor of the City of Auburn is herewith authorized to
execute ground lease befinreen the City of Aubum and AVIATION SALES L.L.C.
Resolution 3379
July 24, 2001
Page 1
A copy of said ground lease is attached hereto as Exhibit "A" and incorporated
herein by this reference.
Section 2. The Mayor is hereby authorized to implement such
administrative procedures as may be necessary to carry out the directives of
fhis legislation. 4-
4 u S~
ADOPTED this (U day of ~Z, 2001.
CITY OF AUBURN
~ E
CHARLES A. BOOTH
Mayor
ATTEST:
Da 'elle E. Daskam
City Clerk
APPROVED AS TO FORM:
Michael J. Reynolds
City Attorney
Resolution 3379
July 24, 2001
Page 2
LEASE AGREEMENT
BETWEEN
C ity o f Auburn
and
Aviation Sales L.L.C.
325 South Washington Avenue, Suite 244
Kent, WA 98032
Dated: July 24, 2001
Lessor: City of Auburn Page 1
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
CITY OF AUBURN
AIRPORT HANGAR LAND LEASE AGREEMENT
THIS LEASE AGREEMENT, hereinafter referred to as "this Lease," is made as of
, 2001, by and between the City of Auburn, a Washington municipal
corporation, hereinafter referred to as "Lessor," and Aviation Sales, LLC 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 following terms, conditions, covenants and provisions:
1. PROPERTY SUBJECT TO THIS LEASE AGREEMENT
(a) For and in consideration of the rent and faithful performance by Lessee of the
terms and conditions and the mutual covenants hereof, Lessor does hereby lease to Lessee, and
Lessee does hereby lease from Lessor, the property legally described on Exhibit A-1 (hereinafter
referred to as the "Premises"), which Premises consist of approximately 8,280 square feet of
Land, as depicted on the Site Plan attached hereto as Exhibit A-2. Exhibit A-1 and Exhibit A-2
are hereby incorporated into this Lease by this reference. The Premises are situated in the
County of King, State of Washington, and are located at the Auburn Airport (the "Airport").
(b) Lessor represents and warrants that, to the best of the City's knowledge, without
duty of inquiry, there are no hazardous wastes or materials on, in or under the Premises.
(c) LESSEE ACKNOWLEDGES AND AGREES THAT IT IS RELYING SOLELY
ON ITS INSPECTION AND INVESTIGATION OF THE PREMISES, AND ACCEPTS THE
PROPERTY "AS-IS, WHERE IS" IN ITS PRESENT CONDITION WITH NO WARRANTIES
OF ANY KIND, EXPRESS OR IMPLIED, EITHER ORAL OR WRITTEN, MADE BY
LESSOR OR ANY EMPLOYEE, AGENT OR 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, LEASABILITY OR SUITABILITY FOR COMMERCIAL PURPOSES,
Lessor: City of Auburn Page 2
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PREMISES, OR 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 EXPRESSLY DISCLAIMS.
2. TERM
The term of this Lease shall be for fifty (50) years, beginning on the date of mutual
execution hereof (hereinafter referred to as the "Commencement Date"), and ending at midnight
on the day prior to the fiftieth (50ffi) anniversary of the Commencement Date, unless sooner
terminated pursuant to any provision of this Lease (the "Term"). If Lessor, for any reason
whatsoever, cannot deliver possession of the Premises to Lessee on the Commencement Date,
Lessor shall not be subject to any liability nor shall the validity of the Lease be affected;
provided, the Term of this Lease shall commence on the date possession is actually tendered to
Lessee but the Expiration Date shall not be adjusted.
2.A. MARKET ANALYSIS PERIOD
Lessee shall have a period of forty-five (45) days from the date of mutual execution of
this Lease to perform an analysis of the market for its intended use of the Premises (the "Market
Analysis Period"). If Lessee determines in its absolute and sole discretion that it is not satisfied
with the market, Lessee may terminate this Lease by delivering written notice to Lessor on or
before the end of the Market Analysis Period of its election to terminate the Lease due to market
conditions. If Lessee timely notifies Lessor of its election to terminate this Lease as provided
herein, the Lease shall terminate as of the date of Lessor's receipt of Lessee's notice, the Security
Deposit shall be refunded to Lessee, and the parties shall have no further obligations under this
Lease; provided, however, that the Indemnification/Hold Harmless provisions of Section 10 of
this Lease and the Costs and Attorneys' Fees provisions of Section 23 of this Lease shall survive
any such termination.
3. PURPOSE
(a) Lessee shall use the Premises only for the construction, management and
maintenance of aircraft hangar buildings for primarily the storage and maintenance of aircraft
and to conduct such other aviation-related activities as are incidental and reasonably related
thereto. 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 specifically prohibited on or from the Premises, unless
Lessor expressly authorizes such uses by Lessor's prior written consent, which consent may be
withheld in Lessor's sole and absolute discretion:
Lessor: City of Auburn Page 3
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
(1) At no time will aircraft be fueled inside any Improvements situated on the
Premises;
(2) Conducting of any use, business, or commercial activity other than
Lessee's hangar operations and other aviation-related activities as are incidental and reasonably
related thereto;
(3) Use of the Premises as a residence or for overnight sleeping;
(4) Working on aircraft except within the legal limits allowed by FAA for
persons working on their own aircraft; and
(5) Servicing of aircraft, by licensed aircraft mechanics unless they have a
valid City of Auburn business registration and have obtained liability insurance with policy
limits required to be maintained by Tenant elsewhere under this Lease or such lesser policy
limits as may be otherwise approved by Lessor.
(c) No building, structure, or improvements of any kind shall be erected, placed upon
operated or maintained on the Premises, nor shall any business or operation be conducted or
carried on in violation of any ordinance, law, statute, by-law, order, or rule of any governmental
agency having jurisdiction thereover.
(d) Upon mutual execution hereof, Lessee may pursue construction and development
of aircraft hangar buildings and related facilities (collectively, the "Improvements"), pursuant to
plans and specifications approved by Lessor and otherwise in accordance with Exhibit B
attached hereto and by this reference incorporated herewith. Lessee's plans and specifications
shall include, without limitation, details of any right of way or taxi-way entrances to be
constructed by Lessee, as well as the building materials for and design of the Improvements.
Lessor's approval of the plans and specifications shall not be unreasonably withheld. Upon
commencement of construction of the Improvements, the Improvements shall be deemed to
include and be part of the Premises for all purposes hereunder.
4. RENT; IMPOSITIONS & LEASEHOLD EXCISE TAX
(a) Commencing on the earlier to occur of (i) issuance of a building permit for
Lessee's proposed Improvements, or (ii) one hundred twenty (120) days after mutual execution
hereof (provided that if Lessee fails to apply for a building permit within ninety (90) days
following mutual execution hereof, the foregoing 120-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, Monthly Base Rent
of $276 plus state lease hold tax ("Monthly Base Rent"). Monthly Base Rent shall be payable on
or before the first (lst) day of each calendar month thereafter to the City of Auburn, Attn:
Finance Department, 25 West Main, Auburn, WA 98001 without notice, demand, offset,
abatement or deduction of any kind. On the date that Lessee executes this Lease, Lessee shall
Lessor: City of Auburn Page 4
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
deliver to Lessor the original executed Lease, cash in the amount equal to one (1) month's
Monthly Base Rent (which shall be applied toward the Monthly Base Rent due for the first
month for which Monthly Base Rent is payable hereunder), the cash Security Deposit, and all
insurance certificates evidencing the insurance required to be obtained by Lessee under this
Lease. The term "rent" whenever used herein refers to all amounts required to be paid by Lessee
hereunder. Rent for any fractional part of a calendar month at the commencement or expiration
or termination of the term shall be a prorated amount of the rent for a full calendar month based
upon a thirty (30) day month.
(b) Monthly Base Rent shall be subject to annual increases as provided in Section 5
below.
(c) Commencing on the Lease Commencement Date, Lessee shall pay any and all
Impositions allocable to the Premises. The term "Impositions" shall mean all real estate taxes (to
the extent any portion of the Premises and any improvements thereon are subject to real estate
taxes), water and sewer charges, charges for public utilities, local improvement or general or
special benefit district assessments, license and permit fees or other charges which sha11 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 ox 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 thereo fl of any Imposition for which either is responsible in whole or in part, and
which such party in good faith believes is excessive, improper or invalid. In such event, the
payment thereof may be deferred during the pendency of such contest, if diligently prosecuted,
but in no event shall Lessee allow a lien for any unpaid taxes which it is contesting to attach to
the Premises. Each party agrees to join at the other's request in any such contest to the extent
such joinder is prerequisite to such prosecution under statute, regulation or administrative
practice. In connection with a judicial or administrative challenge to any assessment, Lessee
may take advantage of any stay in collection available under statute, regulation, or court or
administrative order or rules. Nothing herein contained, however, shall be so construed as to
allow such items to remain unpaid for such length of time as shall permit the Premises, or any
part thereof, to be sold by any governmental, city or municipal authority for the nonpayment of
the same. Within ten (10) days after the amount of such contested item is finally determined to
be due, the party liable for such Imposition shall pay the amounts so determined, together with
the penalties, interest and expenses associated with such contest.
(d) It is the intent of Lessee and Lessor that the rent due hereunder shall be absolutely
net to Lessor and that Lessee shall pay all costs expenses regarding the Premises whether
specifically mentioned herein or not.
Lessor: City of Auburn Page 5
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
5. ANNUAL PERIODIC RENT ADJUSTMENTS
(a) Monthly Base Rent shall be adjusted on January lst 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 (51h) 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 annual or fifth (51h) year adjustment, however, shall reduce the amount
of Monthly Base Rent below the amount of the respective Monthly Base Rent that is being
adjusted.
(b) Definitions: The adjusted Monthly Base Rent shall be determined in accordance
with the formula set forth in Section 5(c) below. In applying the formula, the following
definitions apply:
(1) "Bureau" means the U.S. Department of Labor, Bureau of Labor Statistics
orany successoragency.
(2) "Price Index" means the Consumer Price Index for the month of August
for all Urban Consumers, All Items (Seattle-Tacoma-Bremerton) issued from time to time by the
Bureau, or any other measure hereafter employed by the Bureau in lieu of the price index that
measures the cost of living or if said Bureau should cease to issue such indices and any other
agency of the United States should perform substantially the same function, then the indices
issued by such other agency.
(c) The adjusted Monthly Base Rent shall be determined by multiplying the Monthly
Base Rent being adjusted by a multiplier equal to the change in the Price Index since the last
adjustment, computed as follows:
(Percentage change in Price Index) x(current Monthly Base Rent) _(Adjusted Monthly Base Rent)
(d) Each five (5) years, commencing on January 1, 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 MAI appraiser. The annual adjustment formula set forth in
Sections 5(b) &(c) shall not be applied each such fifth (5t') 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 lease rate shall be determined
pursuant to the following process:
(i) If said appraisers should fail to agree, but the difference in their
conclusions as to Fair Market Rental Value is ten percent (10%) or less of the
lower of the two appraisals, the Fair Market Rental Value shall be deemed the
average of the two.
Lessor: City of Auburn Page 6
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
(ii) If the two appraisers should fail to agree on the Fair Market Rental Value,
and the difference between the two appraisals exceeds ten percent (10%), then the
two appraisers thus appointed shall appoint a third M.A.I. qualified appraiser, and
in case of their failure to agree on a third appraiser within ten (10) days after their
individual determination of the Fair Market Rental Value, either party may apply
to the Presiding Judge of the Superior Court for the county in which the Premises
are situated, requesting said Judge to appoint the third M.A.I. qualified appraiser.
The third appraiser so appointed shall promptly determine the Fair Market Rental
Value of the Premises and the average of the appraisals of the two closest
appraisers shall be final, conclusive and binding upon both parties. The fees and
expenses of said third appraiser or the one appraiser Landlord and Tenant agree
upon, shall be borne equally by Landlord and Tenant. Landlord and Tenant shall
pay the fees and expenses of their respective appraiser. All M.A.I. appraisers
appointed or selected pursuant to this subsection shall have at least ten (10) years
experience appraising commercial properties in the greater Seattle metropolitan
area.
(iii) Notwithstanding the foregoing, in no event shall the new Monthly Base
Rent be adjusted to reduce the amount of Monthly Base Rent below the amount of
the respective Monthly Base Rent that is being adjusted.
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 of its obligations under this
Lease, the amount of $276 plus state lease hold tax which is equal to one (1) month's worth of
Monthly Base Rent payable at the initial rate set forth in Section 4(a) above. If Lessee is in
default hereunder, Lessor may, but without obligation to do so, use all or any portion of the
Security Deposit to cure the default or to compensate Lessor for all damages sustained by Lessor
in connection therewith. Lessee shall, immediately on demand, pay to Lessor a sum equal to the
portion of the Security Deposit so applied or used to replenish the amount of the Security
Deposit held to increase such deposit to the amount initially deposited with Lessor. At any time
after Lessee has defaulted hereunder, Lessor may require an increase in the amount of the
Security Deposit required hereunder for the then balance of the Term and Lessee shall,
immediately on demand, pay to Lessor such additional sums. As soon as practicable after the
expiration or termination of this Lease, Lessor shall return the Security Deposit to Lessee, less
such amounts as are reasonably necessary, as determined by Lessor, to remedy Lessee's
default(s) hereunder or to otherwise restore the Premises to a clean and safe condition,
reasonable wear and tear excepted. If the cost to restore the Premises exceeds the amount of the
Security Deposit, Lessee shall promptly deliver to Lessor any and all of such excess sums.
Lessor shall not be required to keep the Security Deposit separate from other funds, and, unless
otherwise required by law, Lessee shall not be entitled to interest on the Security Deposit. In no
event or circumstance shall Lessee have the right to any use of the Security Deposit and,
specifically, Lessee may not use the Security Deposit as a credit or to otherwise offset any
Lessor: City of Auburn Page 7
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
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 (24t') 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 faix 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.
OWNERSHIP OF IMPROVEMENTS; DISPOSITION 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, 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.
In the event that Tenant makes sewer system improvements, whether located on or off of
the Premises, any rights of Tenant to reimbursement for such sewer system improvements shall
be determined by a separate sewer system latecomers agreement ("Latecomers Agreement"),
which Latecomers Agreement shall be in the standard form used by the City of Auburn. Upon
completion of any such sewer system improvements, the sewer system improvements shall
attach to and become a part of the Premises.
Lessor: City of Auburn Page 8
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
9. INSURANCE COVERAGE
(a) The Lessee and any sublessee, assignee or licensee of Lessee shall procure and
maintain for the duration of the Agreement, insurance against claims for injuries to persons or
damage to property, which may arise from or in connection with the Lessee's operation and use
of the leased Premises, including Commercial general liability insurance with coverage at least
as broad as the most eommonly 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 shall be
canceled by either party, except after thirty (30) days prior to written notice by certified mail,
return receipt requested, has been given to Lessor. All policies shall expressly provide, if
available, that Lessor shall not be required to give notice of accidents or claims and that Lessor
shall have no liability for premiums; and be written by insurance companies having a Best's
rating of "A" and "X" or equivalent, which insurance companies shall otherwise be reasonably
acceptable to Lessor.
(d) Lessee shall furnish Lessor with evidences of the insurance required to be carried
by Lessee hereunder along with copies of policies and a copy of the amendatory endorsements,
including but not necessarily limited to the additional insured endorsement, evidencing the
insurance requirements of the Lessee.
(e) Policy limits shall be adjusted every five (5) years, commencing on January l,
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 mutually waive their respective rights of recovery
against each other for any loss of, or damage to, either parties' property to the extent that such
loss or damage is insured by an insurance policy required to be in effect at the time of such loss
or damage or which is actually carried by such party. Each party shall obtain any special
endorsements, if required by its insurer, whereby the insurer waives its rights of subrogation
against the other party. This provision is intended to waive fully, and for the benefit of the
parties hereto, any rights and/or claims which might give rise to a right of subrogation in favor of
any insurance carrier.
10. INDEMNIFICATION/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
Lessor: City of Auburn Page 9
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
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
shall have been occasioned by the sole gross negligence or willful misconduct of Lessor. Solely
for the purpose of effectuating Lessee's indemnification obligations under this Lease, and not for
the benefit of any third parties (including but not limited to employees of Lessee), Lessee
specifically and expressly waives any immunity that may be granted it under applicable federal,
state or local Worker Compensation Acts, Disability Benefit Acts or other employee benefit acts.
Furthermore, the indemnification obligations under this Lease shall not be limited in any way by
any limitation on the amount or type of damages, compensation or benefits payable to or for any
third party, under Worker Compensation Acts, Disability Benefit Acts or other employee benefit
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 and/or restoration.
12. ASSIGNMENT AND SUBLETTING.
(a) Except as set forth below, neither this Lease nor any interest therein may be
assigned, mortgaged, transferred or encumbered, nor shall all or any part of the Premises be
sublet (each of which, a"Transfer") without Lessor's prior written consent, which Lessor may
withhold or condition in its sole discretion. 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
Lessor: City of Auburn Page 10
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
limitation, one or more sales or transfers, by operation of law or otherwise, or creation of new
stock, by which an aggregate of more than fifty percent (50%) of Lessee's stock, or partnership
or membership interests, as applicable, shall be vested in a party or parties who are
nonstockholders or non-partners or non-members, as applicable, as of the date hereof (provided
that the foregoing shall not apply if Lessee's stock is listed on a recognized national stock
exchange or is traded over-the-counter). Any assignee or subtenant (each, a"Transferee") shall
assume all of Lessee's obligations under this Lease and shall be jointly and severally liable with
Lessee hereunder. Consent of the Lessor to any Transfer shall not operate as a waiver of the
necessity for consent to any subsequent Transfer. In connection with each request for consent to
a Transfer, Lessee shall pay the reasonable cost of processing same, including reasonable
attorneys fees, upon demand of Lessor. If Lessor consents to any proposed Transfer, Lessee may
enter into the same, but only upon the specific terms and conditions set forth in Lessee's Request
for Consent; any such Transfer shall be subject to, and in full compliance with, all of the terms
and provisions of this Lease; the consent by Lessor to any Transfer shall not relieve Lessee of
any obligation under this Lease; Lessor may require the Lessee and the Transferee to execute a
Lessor's consent form; and no Transfer shall be binding on Lessor unless Lessee and the
transferee shall deliver to Lessor a fully-executed counterpart of the document effecting the
Transfer.
(b) Notwithstanding the foregoing, 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
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
a11 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
Lessor: City of Auburn Page 11
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
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, indemnify, and hold Lessor harmless from any
imposition or attempted imposition by any person upon Lessor of any obligation or cost
("liability") of whatever form, including, without limitation, damages; claims; governmental
investigations, proceedings or requirements; attorney fees in investigation, at trial or
administrative proceeding, or on appeal; witness or consultant costs; or any other liability to the
extent that such liability arises from a violation, or from the failure to satisfy a requirement of
any environmental or land use law or regulation, proximately resulting from use of the Premises
during the term 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
indemnify 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.
(d) Lessee shall notify Lessor within twenty-four (24) hours of any release of a
reportable quantity of any hazardous substance (as that term is defined in CERCLA, 42 USC
9601, et. seq. or the Washington Model Toxics Control Act), or of the receipt by Lessee of any
notices, orders or communications of any kind from any governmental entity which relate to the
existence of or potential for environmental pollution of any kind existing on or resulting from the
use of the Premises or any activity conducted thereon. If Lessee fails to comply with any of the
requirements of this section, Lessor may undertake, without cost or expense to Lessor, any
actions necessary to protect Lessor's interest including steps to comply with such laws.
17. MAINTENANCE / COMMIT NO WASTE
Lessee shall at all times during the term of this Lease maintain the Premises and all
improvements thereon, in good condition and shall, at its sole cost and expense, keep the
Premises, clean and in a safe and sanitary condition, and shall provide all necessary repairs and
maintenance to the Premises. Lessee agrees not to allow conditions of waste and refuse to exist
on the premises. Lessee shall conform to and comply with all valid ordinances, regulations or
Lessor: City of Auburn Page 12
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
laws affecting the Premises, the Improvements or any other improvements on the Premises or the
use thereo£ Lessor shall have no obligation whatsoever to keep, maintain, alter, remodel,
improve, repair, decorate or paint the Improvements or any other improvements hereafter
situated upon the Premises. It is the intention of the parties that Lessee and not Lessor shall have
the full responsibility and obligation for the repair and maintenance of the Improvements and
other improvements hereafter situated upon the Premises and Lessee waives, to the full extent
allowed by law, any right or remedy against Lessor based upon the condition of the
Improvements or any improvements hereafter situated upon the Premises or any failure by
Lessor or Lessee to repair or maintain the Improvements or any such improvements.
18. ALTERATIONS AND ADDITIONS
Following completion of the initial construction of Lessee's proposed Improvements,
Lessee shall not make any alterations, improvements, additions, or utility installations in or about
the Premises (collectively, "Alterations") without first obtaining the written consent of Lessor
and, where appropriate, in accordance with plans and specifications approved by Lessor. Any
alterations required to be made to the Premises by any applicable building, health, safety, fire,
nondiscrimination, or similar law or regulation ("law") shall be made at Lessee's sole expense
and shall be subject to the prior written consent of Lessor. 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.
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
Lessor: City of Auburn Page 13
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
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.
24. DEFAULT; REMEDIES
(a) Time is of the essence of this agreement.
(b) If (i) any rent or other payment due from Lessee hereunder remains unpaid for
more than ten (10) days after the date it is due; (ii) Lessee files a voluntary petition in bankruptcy
or makes a general assignment to the benefit of, or a general arrangement with, creditors; (iii)
there is an involuntary bankruptcy filed against Lessee that has not been dismissed within thirty
(30) days of filing; (iv) Lessee becomes insolvent; or (v) a receiver, trustee, or liquidating officer
is appointed for Lessee's business; or (vi) if Lessee violates or breaches any of the other
covenants, agreements, stipulations or conditions herein, and such violation of breach shall
continue for a period of thirty (30) days after written notice of such violation or breach is sent to
Lessee, then Lessor shall have the rights and remedies provided in this Section 24, in additional
to any other right or remedy available at law or equity (all notice and cure periods set forth above
Lessor: City of Auburn Page 14
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
are in lieu of and not in addition to any notice required pursuant to applicable unlawful
detainer/eviction statutes).
(c) Upon any default under this Lease, Lessor may reenter the Premises in the manner
then provided by law, and remove or put out Lessee or any other persons found therein. No such
reentry shall be construed as an election on Lessor's part to terminate this Lease unless a written
notice of such intention is given to Lessee.
(d) Lessor may elect to re-let the Premises or any part thereof upon such terms and
conditions, including rent, term and remodeling or renovation, as Lessor in its sole discretion
may deem advisable. To the fullest extent permitted by law, the proceeds of any reletting shall
be applied: first, to pay Lessor all costs and expenses of such reletting (including without
limitation, costs and expenses incurred in retaking or repossessing the Premises, removing
persons or property therefrom, securing new Lessees, and, if Lessor maintains and operates the
Premises, the costs thereof); second, to pay any indebtedness of Lessee to Lessor other than rent;
third, to the rent due and unpaid hereunder; and fourth, the residue, if any, shall be held by
Lessor and applied in payment of other or future obligations of Lessee to Lessor as the same may
become due and payable, and Lessee shall not be entitled to receive any portion of such revenue.
(e) Lessor may also elect to terminate the Lease and all rights of Lessee by giving
notice to Lessee of such election. If Lessor elects to terminate the Lease, Lessor shall have the
right to reenter the Premises and remove all persons, and to take possession of and remove all
equipment and fixtures of Lessee in the Premises, in the manner then provided by law. Lessee
hereby waives all damages that may be caused by Lessor's reentering and taking possession of
the Premises or removing or storing the property thereof, and Lessee shall save Lessor harmless
therefrom, and no such reentry shall be considered a forcible entry. If Lessor so elects to
terminate the Lease, Lessor may also recover from Lessee:
(I) The worth at the time of the award of the unpaid rent which had been
earned at the time of termination;
(II) The worth at the time of the award of the amount by whicli the unpaid rent
which would have been earned after termination until the time of the award exceeds the amount
of rental loss that the Lessee proves could have been reasonably avoided;
(III) The worth at the time of the award of the amount by which the unpaid rent
for the balance of the term after the time of the award exceeds the amount of rental loss that the
Lessee proves could be reasonably avoided;
(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.
Lessor: City of Auburn Page 15
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
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 modifications shall be generally in conformance with the model
leasehold mortgage provisions promulgated by the American Bar Association.
26. RETENTION OF AIRSPACE AND OTHER RIGHTS BY LESSOR
(a) Lessor retains the public and private right of flight for the passage of aircraft in
the airspace above the surface of the property hereinbefore described, together with the right to
cause in said airspace such noise as may be inherent in the operation of aircraft, now known or as
hereinafter used, for navigation of or flight in said airspace and for use of said airspace for taking
off from, landing on or operating at Auburn Municipal Airport.
(b) Lessor reserves the right to further develop or improve the landing area of the
Airport as it sees fit, regardless of the desires or view of the Lessee and without interference or
hindrance.
Lessor: City of Auburn Page 16
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
(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.
( fl 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
Auburn 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).
(i) This Lease and all the provisions hereof shall be subject to whatever right of the
United States Government now has or in the future may have or acquire, affecting the control,
operation, regulation, and taking over of the Auburn Airport by the United States during the time
of the war or national emergency.
(j) Lessor reserves the right to take any action it considers necessary to protect the
aerial approaches of the Auburn Airport against obstructions, together with the right to prevent
Lessee from erecting or permitting to be erected any building or other structure on the Premises
which, in the opinion of Airport or the Federal Aviation Administration, would limit the
usefulness of the Auburn Airport or constitute a hazard to aircraft.
(k) Lessee, as well as Lessee's assignees and sublessees, and the agents, employees
and customers thereof, shall have the rights of access to and use of all areas and facilities of the
Auburn Airport which are intended for the common use of all Lessees and occupants of the
Lessor: City of Auburn Page 17
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
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 ADMINISTR.ATION 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 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,
Lessor: City of Auburn Page 18
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
any notice permitted by law or by this Lease, any other notice or notices that may at any time be
required or permitted by law or by this Lease. Airport shall not be liable in any manner for any
inconvenience, disturbance, loss of business, or other damages arising out of Lessor's entry on
the Premises as provided in this Section except for such damage that is caused directly by, or
through the gross negligence of, Lessor, their employees, agents, or representatives.
30. NON-DISCRIMINATION
(a) Lessee for himself, his heirs, personal representatives, successors in interest, and
assigns, as a part of the consideration hereof, does hereby covenant and agree that in the event
facilities are constructed, maintained, or otherwise operated on the Premises described in this
lease agreement for a purpose for which a Department of Transportation ("DOT") program or
activity is extended or for another purpose involving the provision of similar services or benefits,
the Lessee shall maintain and operate such facilities and services in compliance with a11 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: 1) no person
on the grounds of race, color, sex, or national origin shall be excluded from participation in,
denied the benefits of, or be otherwise subjected to, discrimination in the use of said facilities, 2)
that in the construction of any improvements on, over, or under the Premises and the furnishing
of services thereon, no person on the grounds of race, color, sex, or national origin shall be
excluded from participation in, denied the benefits of, or be otherwise subjected to
discrimination, and 3) that the Lessee shall use the Premises in compliance with all other
requirements imposed by or pursuant to Title 49, Code of Federal Regulations, DOT, Sub-title A,
Office of the Secretary, Part 21, Non-discrimination in Federally Assisted Programs of the
Department of Transportation, Effectuation of Title VI of the Civil Rights Act of 1964, and as
said Regulations may be amended.
(c) In the event of breach of any of the above non-discrimination covenants, Lessor
shall have the right to terminate this Lease agreement and to re-enter and repossess said Premises
and the facilities thereon, and hold the same as if said lease agreement has never been made or
issued. This provision does not become effective until the procedures of 49 CFR Part 21 are
followed and completed, including expiration of appeal rights.
(d) Lessee shall furnish its accommodations andlor 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.
Lessor: City of Auburn Page 19
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
(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).
( fl 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 similazly will undertake
Affirmative Action programs, and that they will require assurances from their suborganizations,
as required by Sub-part E, to the same effort.
31. NOTICES
All notices hereunder may be hand-delivered, delivered by recognized national overnight
courier service, or sent via U.S. First Class mail, postage prepaid, to the following addresses:
LESSOR: City of Auburn
25 West Main
Auburn, WA 98001
LESSEE: Aviation Sales, LLC
325 South Washington Avenue
Suite 244
Kent, WA 98032
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.
Lessor: CiTy of Auburn Page 20
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
(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; (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 thereo fl; 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.
(e) Severabilitv. If any term, covenant, or condition of this Lease (or part thereo fl 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 thereo fl of this Lease shall be valid and be enforced to fullest extent
permitted by law.
( fl Authori . Each party hereto warrants that it has the authority to enter into this
Lease and to perform its obligations hereunder and that all necessary corporate
action to authorize this transaction has been taken, and the signatories, by
executing this Lease, warrant that they have the authority to bind the respective
parties.
Lessor: City of Auburn Page 21
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
33. 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: C!" P)- ~Ojt
Print Name: Charles A. Booth
Title: Mavor
LESSEE:
By:
Print Name:
Jay Spivak
Aviation Sales, LLC
325 South Washington Avenue
Suite 244
Kent, WA 98032
d as tWorm:
Lessor: City of Auburn Page 22
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
STATE OF WASHINGTON
COUNTY OF KING
ss.
I certify that I know or have satisfactory evidence that t150B1-7'1 is
the person who appeared before me, and said person acknowledged that said person signed this
instrument, on oath stated th t said person was authorized to execute the instrument and
acknowledged it as the /~~ro2 of the City of Auburn, a Washington
municipal corporation, to be the free and voluntary act of such municipal corporation for the uses
and purposes mentioned in the instrument.
Dated this rl , 2001.
lAa-11-14~
D
AS
(Signature of Notary)
y~'\0.~p.R~,9~s'• eI lt, C 1,9
S
% Q: O~~~ ~G j (Legibly Print or Stamp Name of Notary)
oNotary publi 'n and for the s ate of Washington,
r o Zh residing at
STq~~~•1P`~_ My appointment expires /O- ZS-~"j3
STATE OF WASHINGTON
ss.
COUNTY OF
I certify that I know or have satisfactory evidence that is the person
who appeared before me, and said person acknowledged that said person signed 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
2001.
(Signature ofNotary)
(Legibly Print or Stamp Name of Notary)
Notary public in and for the state of Washington,
residing at
My appointment expires
Lessor: City of Auburn Page 23
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
Exhibit A-1
Legal Descrintion of Premises
[Attach]
Lessor: City of Auburn Page 24
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
HANGER EASEMENT NUMBER 2
THE EAST 115.00 FEET OF THE WEST 230.00 FEET OF THE FOLLOWING
DESCRIBED TRACT OF LAND:
BEGINNING AT THE NORTHERNMOST NORTHEASTERLY CORNER OF
CITY OF AUBURN SHORT PLAT NUMBER SP 15-81 AS RECORDED UNDER
KING COUNTY AUDITOR'S FILE NUMBER 8207299002; THENCE SOUTH
00°39'02" WEST ALONG THE EAST BOUNDARY OF SAID CITY OF AUBURN
SHORT PLAT NUMBER SP 15-81, A DISTANCE OF 689.49 FEET; THENCE
NORTH 89°03'15" WEST ALONG THE NORTHERNMOST SOUTH BOUNDARY
OF SAID CITY OF AUBURN SHORT PLAT NUMBER SP 15-81, A DISTANCE
OF 18.50 FEET; THENCE NORTH 00°38'14" EAST, 13.96 FEET TO THE TRUE
POINT OF BEGINNING; THENCE CONTINUING NORTH 00°38'14" EAST,
72.00 FEET; THENCE NORTH 89°21'46" WEST, 470.00 FEET; THENCE
SOUTH 00°38'14" WEST, 72.00 FEET; THENCE SOUTH 89°21'46" EAST,
470.00 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 8280 SQUARE FEET.
Exhibit A-2
Site Plan
[Attach]
Lessor: City of Auburn Page 25
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
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 cazd-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 Smokiny. 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 of the Lessor for
Lessee's failure to obtain andlor fully comply with any necessary permit.
Lessor: City of Auburn Page 26
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
6. Fundiniz 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 - Statutory Limits for the State in which the work is to be
performed, together with "ALL STATES," "VOLtJNTARY COMPENSATION" AND "FOREIGN
COMPENSATION" coverage endorsements;
(b) Employer's Liability Insurance with a limit of not less than $500,000.00;
(c) Commercial General Liability - at least $1,000,000 Combined Single Limit, including
Personal Injury, Contractual and Products/Completed Operations Liability naming Lessor and Lessee
as additional insured. Coverage must be primary and non-contributing and include the following:
(i) 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 (XLJC) Coverage
(d) Automobile Liability - Including Owned, Hired and Non-owned licensed vehicles
used in connection with performance of the construction work of at least: $1,000,000 per occurrence,
$3,000,000 general aggregate (including umbrella limits). Coverage must include the following:
(i)
Owned vehicles
(ii)
Leased vehicles
(iii)
Hired vehicles
(iv)
Non-owned vehicles
(e) Procure or cause contractor to procure and maintain installation floater insurance to
protect against the risk of physical damage until acceptance of the construction work;
Lessor: City of Auburn Page 27
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
( fl Furnish the Lessor with certificates of insurance evidencing such coverage prior to the
commencement of the construction work. All insurance shall be carried in companies reasonably
acceptable to the Lessor;
(g) The following statement sha11 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 sha11 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, sha11 be made by the other without the written approval of the affected parly; (i) The carrying of any of the insurance required hereunder sha11 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 in the
adjustment or litigation of a11 claims arising under the terms of this Section.
9. No Liens. Lessee shall keep the Premises free from any liens arising out of work
performed, materials furnished to, or obligations incurred by Lessee. Lessee further covenants
and agrees that any mechanic's or materialmen's liens filed against the Premises or against the
Improvements for work claimed to have been done for or materials claimed to have been
furnished to Lessee, shall be dischazged 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
Lessor: City of Auburn Page 28
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379
own choosing, and to the extent Lessor is indemnified under this section, Lessee shall bear the
cost of Lessor's separate defense, including reasonable attorneys' fees.
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
minimum: (a) the then current construction schedule prepared by the Contractor (including the
expected Completion Date); and (b) notice of any laborer's or materialmen's liens filed against
the Premises.
12. As-Built Drawings; Survey. Within thirty (30) days following the Completion Date for
any Improvements, Lessee shall deliver to Lessor two (2) copies of complete as-built drawings
of the Improvements (or marked-up construction drawings which may consist of the Plans,
annotated with field notes identifying all changes made thereto in the course of construction) and
an ALTA as-built survey prepared by a licensed surveyor, certified to Lessor and showing the
location of the Improvements, all easements and utilities, (including underground utilities).
13. Condition of Improvements. Lessee assumes full responsibility for the design,
construction and condition of the Improvements, and any improvements constructed on the
Premises during the Lease Term, and Lessee hereby fully releases Lessor from any and all
liability relating thereto.
Lessor: City of Auburn Page 29
Lessee:Aviation Sales LLC July 24, 2001
Exhibit to Resolution No. 3379