LEASE AND LEASE OPTIONS
THIS LEASE, made and entered into this /57 day of_ Lebruary 2000, by and between the City of Salinas, a municipal corporation of the State of California (hereinafter referred to as "Lessor"); and ADVANCETECH AIRCRAFT MAINTENANCE, INC., hereinafter referred to as "Lessee".
WITNESSETH:
WHEREAS, pursuant to the provisions of section 26220 et seq of the Government Code of the State of California, Lessor owns and operates an Airport in the City of Salinas, State of California, commonly known and described as Salinas Municipal Airport (hereinafter "Airport) and
WHEREAS, Lessee desires to lease a portion of said Airport, and; WHEREAS, it is mutually agreed that the letting hereunder is upon and subject to the following terms, covenants, conditions and provisions, and Lessee covenants, as a material part of the consideration of this lease, to keep, perform and comply with each and all of said terms, covenants, conditions and provisions by Lessee to be kept, performed and complied with, and this lease is made upon the condition of such performance and compliance:
1 - DEMISED PREMISES
A. The premises leased to Lessee are herein referred to as the Demised Premises and are a portion of the Salinas Municipal Airport, and are described and shown on Exhibit "A" attached and incorporated herein by reference. 1 B. (1) Right of First Refusal to Expansion Area.
Lessee shall have the right of first refusal to lease from Lessor, the expansion area identified on the Lease Area Plan attached hereto as Exhibit "B" pursuant to the same terms and conditions of this lease, for a period of one (1) year from the date of execution of this original lease. The rental rate for the expansion area shall be computed pursuant to the formula specified in Section IV "Rental" of this lease. Lessor shall not assign such expansion area to anyone else during the specified one (1) year right of first refusal period. If Lessee notifies Lessor of Lessee's intent to rent within the above described time, the expansion area shall be added to the leased premises and Lessee shall immediately commence paying rent on such expansion area at the same rental rate as the leased premises. If Lessee fails to notify Lessor of Lessee's intent to rent within the above described time, Lessor may rent the property to a third party. (2) Notwithstanding the above, Lessor may offer the expansion area to any third party, but Lessor shall provide Lessee with written notice of Lessor's intent to rent the expansion area to another person. Lessee shall exercise it's option to rent the expansion area by tendering payment of one month's rent and notifying Lessor that it is renting the expansion area within ten (10) calendar days after such written notice from Lessor. Failure to receive such tender of rent and notification from Lessee within the time specified herein shall relieve Lessor of all obligations to lease the expansion area to Lessee.
C. Easement.
Lessor hereby grants Lessee an access easement, thirty five (35) feet wide, through the existing City of Salinas landscape easement from Moffett Street to the southerly edge of the leased premises as shown on the Parcel Map, Exhibit "A". 2 •
2 - USE OF LEASED PREMISES
This Agreement is made for the purpose of allowing Lessee use of the Demised Premises and for granting Lessee certain non-exclusive rights and privileges which are more specifically described below:
a. Construction of hangar for operation of aircraft maintenance facility. b. Storage of owned single and multi-engine aircraft.
c. Storage of non-owned single and multi-engine aircraft for compensation. d. Only as specifically authorized by local ordinance, including the Salinas Zoning Code, or state or federal law, perform aircraft maintenance on owned and non- owned aircraft. As used in this subparagraph d, the term "Maintenance" shall be defined as "repair limited to exchange of parts and maintenance requiring no open flame welding or the use of Class I or II liquids", so as to comply with the provisions of the Uniform Building Code, Chapter 7, Group B, Division 3, and California Administrative Code Title 24.
Lessee agrees that all petroleum products used and stored by Lessee on the Airport shall meet all requirements of, and be in strict compliance with all applicable laws, ordinances, and regulations of any governmental authority.
Lessee shall not use the premises, or any part thereof, or permit them to be used for any purpose or purposes other than for the uses described above. Lessee shall not do or permit to be done upon the premises any act or thing which constitutes a nuisance or which may disturb the quiet enjoyment of the City, of any tenant of the City, or private businesses on adjacent land or neighboring property.
3 Lessee further agrees, within 72 hours from receiving written notice by the Lessor that a nuisance exists, to abate or otherwise cause said nuisance to be cured.
In the event Lessee has not taken corrective action within 72 hours, the Lessor may use all available remedies to abate the nuisance, including but not limited to entering and abating said nuisance, at the expense of the Lessee without any liability whatsoever to Lessor for monetary loss or anticipated profits of Lessee or others. 3 - TERM
A. The term of this lease shall be for a period of thirty (30) years commencing February 1, 2000 ('commencement date") and ending January 31, 2030 unless sooner terminated in the manner and under the conditions herein provided. (1) In the event Lessee fails to obtain satisfactory financing for its improvements within sixty (60) days of the date of execution of this lease, Lessee may elect to terminate this lease.
B. Lessor hereby grants to Lessee two (2) options to extend this lease for a period of Ten (10) years each from and after the expiration date thereof at a rental to be determined as hereafter provided. Lessor reserves the right to review and change or modify the terms and conditions as herein contained before any extension of this lease becomes effective. Each option shall be exercised by Lessee by delivering to Lessor notice in writing of its intent to exercise such option. Such notice shall be delivered not less than 180 days before the expiration of the term then in effect. Upon receipt of the notice, Lessee and Lessor shall negotiate a new rental rate and upon acceptance of the new rental rate, this lease shall thereby be extended for the new ten (10) year period 4 and the parties hereto shall be bound by all terms, covenants, and conditions hereof and as changed or modified, for such additional period. Failure to exercise this option by not giving the required 180 days' notice or not determining and accepting the new rental or changed conditions and terms, as hereinafter provided, shall operate to terminate any further option right upon the termination of the original term of this lease. 4 - RENTAL
A. Time and Place of Payments.
The Lessee shall make all rental payments monthly in advance on or before the first day of each new month. Checks should be made payable to the City of Salinas and be delivered to the City of Salinas at 200 Lincoln Avenue, Salinas, California, 93901, Office of the Finance Director, ATTN: Airport Fund. Failure to pay rent within a ten (10) day time frame from due date constitutes automatic default. The place and time of payment may be changed at any time by the Lessor upon thirty (30) days' written notice to Lessee. Lessee assumes all risk of loss and responsibility for late payment charges.
B. Rent.
(1) Initial Rent Amount. The initial annual rent amount for the first two and one half (2 ½) year period of this Lease Agreement shall be ELEVEN THOUSAND ONE HUNDRED FORTY FIVE AND TWENTY ONE HUNDREDTH DOLLARS, ($11,145.20), which shall be payable monthly in advance on or before the first day of each new month at the rate of
NINE HUNDRED TWENTY EIGHT AND SEVENTY SEVEN ONE HUNDREDTH DOLLARS ($928.77). Lessee shall begin paying rent the day following receipt of the Building Permit for improvements on the leased premises.
(2) Rental Adjustment Date. The rental adjustment date shall be each two and one 5 half (2 ½) year anniversary of the date of the commencement (as defined in Clause
3.A) of this Agreement. The rental adjustment period shall be the time between the rental adjustment dates. The annual rent amount, and the corresponding prorated monthly payments, under this Agreement shall be adjusted on each rental adjustment date as set forth below. The first adjustment to take place effective June 1, 2002. (3) Adjustment Index. The index used will be the Consumer Price Index for "All Urban Consumers" for San Francisco/Oakland/San Jose, California.
Regardless of the index publication dates, the rental adjustment dates shall be on the dates defined by Section 4.B above. Until the rent adjustment can be actually calculated in accordance with this Agreement, Lessee shall continue to make payments at the existing rental rate. When the adjustment is calculated, the balance of rents due at the adjusted rate, from the rental adjustment date through the date of calculation, will be paid to Lessor within thirty (30) days of written notice by the Lessor. In no event shall the adjusted rent as established by the Consumer Price Index, be less than the rent in existence immediately prior to the adjustment date. (4) Rental Adjustment Computation. Rent will be adjusted by the percent change in the Consumer Price Index (as defined in section 4.B(3) during the rental adjustment period (as defined in section 4.B(2)).:
(5) Existing Annual Rent. The existing annual rent shall be the annual rent amount in effect on the date preceding the rental adjustment date. (6) Delinquent Rent. If Lessee fails to pay the rent when due, Lessee will pay, in addition to the unpaid rents, ten percent (10%) of the delinquent rent per month from the date when due and payable under the terms of this Agreement until the same shall 6 be paid. Rent shall be considered delinquent if not paid by the 10° day of each month.
All rentals and interest thereon shall be paid in lawful money of the United States of America.
(7) In the event the term of this Agreement is extended by exercise of option pursuant to Section 3.B herein, the rental rate shall be adjusted as follows:
(a) Six (6) months prior to the termination of the lease, Lessor shall propose the new initial annual rental rate for the option period and the parties hereto may, by mutual agreement, either change the rental rate or accept the new proposed rate. If agreement is not reached ninety (90) days prior to the termination of the lease, Lessor and Lessee shall each select a qualified real estate appraiser and said appraisers shall select a third appraiser. Lessor shall, upon selection of the appraisers, fix a time and place for a conference between the parties and the appraisers. Said conference shall be for the purpose of agreeing upon the general instruction to be given the appraisers.
(b) The appraisers selected by Lessee and Lessor shall, within forty five (45) days after receiving their instructions, deliver a copy of their fully documented written appraisal of the then current fair market rental rate for the demised premises to Lessee, Lessor, and the third appraiser. The third appraiser shall analyze said appraisals and conduct such investigations, interviews and discussions with or without the other appraisers or either of them as he deems necessary.
(c) At a time not to exceed fifteen (15) days after submission of the written appraisal and at a place the three appraisers shall name, the respective parties may have representatives appear and argue such appraisal matters as the 7 parties deem appropriate. Within five (5) days after such time, the appraisers shall make a final written determination of the then current fair market rental rate.
(d) If the appraisers are unable to agree, then the final determination shall be made by the third appraiser.
(e) Lessee and Lessor shall pay the cost of the appraiser chosen by them and equally share the cost of the third.
(f) Adjustment basis will be on the fair market rental value of industrial land in the Salinas area.
(g) All rental adjustments occurring after the initial rental rate is established for any option period pursuant to this Section 4.B(7) shall be made in accordance with, and at the times set forth in, Section 4.B.
5 - PERFORMANCE
A. Lessee shall, by December 30, 1999, submit to the Community Development Department, a Site Plan for review.
B. Lessee shall, by February 28, 2000, complete and submit to Lessor for review and approval, detailed working drawings and specifications covering the construction of all improvements including landscaping.
C. Lessor will promptly review and approve or note in writing any changes and corrections which must be made to the plans submitted. Any changes and/or corrections mutually agreed to by Lessor and Lessee must be made and the plans resubmitted to Lessor within thirty (30) days after the corrections and/or changes have been noted.
8 D. No improvement, including landscaping, shall be erected or placed on the leased premises and no alterations shall be made in the improvements and facilities constructed or to be constructed on the leased premises without the prior written approval of Lessor, said approval not to be unreasonably withheld. One (1) complete copy of plans for all buildings and improvements and for subsequent changes therein or alterations thereof shall, within fifteen (15) days after approval thereof by Lessor, be signed by Lessee and deposited with Lessor.
E. Lessee shall commence said construction of the proposed hangar within one (1) week of receipt of the Building Permit, and diligently pursue said construction to completion within six (6) months after said date. The date for completion of such work shall, however, be extended for the period of any unavoidable delay if Lessee makes a claim for such delay in writing to Lessor within ten (10) days after commencement of the cause of such delay. For the purpose of this lease the term "unavoidable delay" shall mean delay suffered by Lessee or Lessee's contractors which necessarily and materially interferes with the progress and extends the time required for completion of such work and which is caused by acts of God or the elements, strikes, lockouts, fires or other causes beyond the control of Lessee or Lessee's contractors.
F. Lessee shall either landscape or surface all portions of the leased premises not containing buildings. All surfacing to be two-inch asphaltic concrete or better. 9 G. Lessee shall provide, maintain and use for off-street parking purposes, within the leased premises, a minimum of off street parking spaces suitable for standard size (other than compact model) automobiles as required by local Ordinance including Zoning Code; provided that Lessor may at any time require Lessee to increase the number of parking spaces required hereby if Lessor shall determine that Lessee's operations or use of the premises require an increased number of spaces. All parking areas shall be surfaced with two-inch asphaltic concrete or better. Nothing herein contained in this paragraph shall be construed to allow Lessor to require Lessee to so increase the number of off-street parking spaces as to require the destruction of any building which Lessee has placed on said real property with Lessor's consent.
H. Should Lessee fail to begin construction of said improvements within one (1) week of receipt of the Building Permit, then this lease shall terminate and be of no further force and effect.
I. Lessee shall cause to be made, executed and delivered to Lessor, prior to the date of commencement of any work in or on the leased areas, corporate surety bonds approved as to form and as to surety by Lessor, with Lessee's contractor or contractors as principal, and Lessor as an additional obligee, each in the sum of one hundred percent (100%) of the amount of the contract for (a) the said required work in accordance with the approved plans and specifications, and (b) to provide that if Lessee or its contractor or contractors fail to pay for any materials, provisions of other supplies, used in or upon, for or about the performance of the work contracted to be done, or for any work or labor thereon of any kind, that the surety will pay the same, in an amount not exceeding the sum specified in the bond, and also, in case suit is brought upon the bond, a reasonable attorney's fee as set by the court.
J. Before commencing any work of improvement, Lessee shall ensure that all of its employees and/or all employees of any contractors retained by Lessee, are covered by Workers Compensation Insurance covering full liability for compensation under the Workers Compensation Insurance and Safety Act, for any person injured while performing any work or labor incidental to the work in or on the premises. Such coverage shall be obtained by a carrier authorized to act under the laws of the State of California, acceptable to Lessor.
6 - SAFETY
If Lessee operates fuel servicing vehicles, said vehicles shall fully meet the California State Vehicle Code Safety requirements and shall be clearly labeled as to the type of fuel contained in the vehicle. Fuel servicing vehicles shall be withdrawn from use during any period of deficiency. Surfaces on which any fuel servicing equipment is parked and any adjacent area that is within the control of Lessee at Airport shall be kept clear of accumulation of oil, grease, fuel and debris which are potential fire and safety hazards as determined by the Lessor's Airport Manager.
7 - REPAIR AND MAINTENANCE OF LEASED PREMISES
LESSEE agrees to maintain the Demised Premises and all improvements constructed thereon, in good order and repair and to keep said premises in a neat, clean and orderly condition. This includes, but is not limited to, the prevention of accumulation of any refuse or waste materials which might constitute a fire hazard or a public or private nuisance. Failure of LESSEE to properly maintain and repair the Demised Premises shall constitute a breach of the terms of this lease.
If, in the opinion of the Lessor's Airport Manager, the Demised Premises are not being properly maintained, the Salinas Airport Manager may, after giving written notice to LESSEE and after a reasonable time, cause such repair and maintenance to be made.
The cost of such maintenance shall be added to the rent. If said costs are not paid promptly by LESSEE, this lease shall be deemed to be in default and LESSOR shall be entitled to all legal remedies provided hereunder.
8 - RESTORATION OF PREMISES
A. If during the term hereof the improvements constructed by Lessee on the leased premises or any part thereof shall be damaged or destroyed by fire or other casualty, Lessee may, at its cost and expense, either (a) repair or restore said improvements, in accordance with Zoning and Building requirements in effect at that time, or (b) tear down and remove the same from said premises. If Lessee shall elect to repair or restore said improvements, the work thereon shall commence within one hundred eighty (180) days after the damage occurs and shall be completed with due diligence. 12 B. If Lessee shall elect not to repair or restore said improvements, Lessee shall, at its sole expense, within one hundred eighty (180) days after said damage occurs, tear down and remove all parts thereof remaining and the debris resulting from said fire or other casualty and otherwise clean up said premises, including but not limited to filling all excavations and removing all foundations, debris, and other parts of said buildings remaining after same are removed, and peacefully surrender possession of said premises to Lessor in a clean and orderly condition.
Failure by Lessee to do so shall constitute a breach of the covenants and conditions of this lease. After completion of the above work to the satisfaction of Lessor, Lessee may give written notice to terminate this lease and shall then immediately comply with the requirements of Section 8-B.
9 - SIGNS
Lessee shall have the right to post such signs as are necessary and usual in the conduct of its business in and upon the leased premises. Location, size, shape and copy of all signs exposed shall be in accordance with the Salinas City Code and approved by Lessor's Airport Manager, Department of Community Development and Permit Center prior to installation.
13 10 - TITLE TO IMPROVEMENTS
A. Other provisions of this lease not withstanding, it is understood that leasehold improvements made by the Lessee after execution of the lease, and throughout the term of the lease, will remain the property of the Lessee.
B. Upon the expiration of the life of this lease, including extensions, or any sooner termination of this lease, Lessee shall redeliver possession of said Leased Premises to Lessor in substantially the same condition that existed immediately prior to Lessee's entry thereon, reasonable wear and tear, damage by the elements, earthquakes, acts of God, and any act of war excepted.
All improvements and fixtures made or attached to the Leased Premises shall be and become upon the termination of this lease, or at the sooner termination of Lessee's tenancy, the property of Lessor and shall not be removed by Lessee unless Lessee is directed to do so by Lessor; provided, however, if Lessee is not in default in the payment of rent or in the performance of its obligations under this lease, it may remove from said premises, at its sole expense, such personal property, including machinery and "trade fixtures", which are not a integral part of the premises, and which can be removed without damage to the premises, and provided the same may be removed prior to the expiration of this lease or of any extensions thereof. In no event will furniture, fixtures, and equipment, or other personal property, be removed until all rental due Lessor has been paid in full.
Lessee, at its sole cost and expense, shall, if directed by Lessor, remove all or part of the alterations, additions, modifications made to the premises by Lessee during the term of this lease and shall, within sixty (60) days after the expiration of this lease, restore 14 the premises to the condition existing before such alterations, additions, or modifications were made.
C. Upon the expiration of the term hereof, including extensions, or any sooner termination of this lease, Lessee shall execute, acknowledge and deliver to Lessor a proper instrument in writing releasing and quitclaiming to Lessor all right, title and interest of Lessee in and to the leased premises by virtue of this lease or otherwise.
Said instrument may also include all right, title and interest of Lessee in and to the leasehold improvement, this provision replacing the requirement of Clause 10-A and B herein above.
11 - EMINENT DOMAIN
A. If at any time during the term hereof the leased premises or any part thereof are taken by public authority by the laws of eminent domain, then and in every case the leasehold estate and interest of Lessee in said premises, or any part thereof taken, shall forthwith cease and terminate, and all compensation awarded by reason of the taking of the leased land and improvements, except those installed by Lessee, thereon shall be payable to and be the sole property of Lessor. Notwithstanding the foregoing, Lessee shall have the right to make a claim for compensation for its improvements, relocation expenses and business loss caused by such taking and as allowed by law.
B. If only a portion of the leased premises is so taken by the powers of eminent domain, Lessee may elect to terminate this lease giving one hundred twenty (120) days prior written notice of Lessee's intention to terminate.
C. It is mutually agreed between Lessor and Lessee that if such public taking shall prevent Lessee's use and occupancy of the premises and improvements, then Lessee shall have the option to terminate this lease, which option to terminate shall be 15 conditioned upon Lessee's removing or restoring said premises, at the sole option of Lessor, and paying to Lessor any rent accruing hereunder to the date of termination, and all unpaid taxes and assessments then alien upon said premises.
C. Any compensation which would otherwise be payable under this paragraph to Lessee shall be paid directly to any encumbrancer of the leasehold interest, to the extent of such encumbrance.
12 - TERMINATION BY LESSOR
In the event Lessor should require the leased premises in connection with the future expansion and/or operation of the Airport, Lessor may, upon six (6) months' written notice, terminate this lease.
Should Lessor alter its proposed plan of development of the Airport in a manner that would preclude Lessee from operating under the terms of this lease; or should any other government agency assume control of the Airport or any portion thereof in a manner that would preclude Lessee from operating under the terms of this lease; or should it occur that during the term of this lease any governmental action, law or ordinance should come into effect, the terms of which so restrict the use to which the leased premises can be put that Lessee is unable to use the leased premises in the manner contemplated herein, Lessor will, upon written request from Lessee, terminate this lease or extend the term of this lease for the period of time Lessee's operation is so precluded; and no rent shall accrue during said period.
If this lease is cancelled or property taken under the provisions of this section, Lessor will not be obligated to pay for any improvements constructed prior to the commencement date of this lease.
16 If this lease is cancelled under the provisions of this section, Lessor will be obligated to pay to Lessee the fair market value of Lessee's interest. It is mutually agreed and understood by the parties hereto that the term "Lessee's interest" as used herein is expressly limited to and defined as:
A. The then-in-place, fair market value, not to exceed the original construction cost, of those improvements constructed on the leased premises by Lessee, subsequent to the commencement date of this lease, which are considered fixtures under the rules of fixtures, expounded in Section 1013 and 1019 of the Civil Code of California. Fixtures include buildings, foundations and paving.
B. The fair market value of Lessee's interest as defined in Paragraph A above shall be determined by three (3) appraisers in the same manner as set forth in Section 4-D above for establishing the rental rate for each adjustment period of this lease. 12A - TERMINATION BY LESSEE
In the event Lessor ceases or substantially restricts the use of the Airport as an Airport and Lessee can no longer use the premises for the purposes contemplated in this agreement, Lessee may upon three (3) months written notice terminate this agreement.
City shall have no liability for any damages to Lessee in the event of such change in Lessor's use of the Airport.
13 - RESERVATIONS
A. The leased premises are accepted as-is by Lessee subject to any and all existing easements and encumbrances. Lessor reserves the right to install, lay, construct, maintain, repair, and operate such sanitary sewers, drains, storm water sewers, pipelines, manholes, and connections; water, oil and gas pipelines; telephone, telegraph and electric power lines; and the appliances and appurtenances necessary or convenient in connection therewith, in, over, upon, through, across and along any and all portions of the leased premises. No right reserved by Lessor in this clause shall be so exercised as to interfere unreasonably with Lessee's operations hereunder or to impair the security or any secured creditor of Lessee.
B. Lessor agrees that rights granted to third parties by reason of this clause shall contain provisions that the surface of the demised premises shall be restored as nearly as practicable to its original condition upon the completion of any construction. Lessor further agrees that should the exercise of these rights temporarily interfere with the use of any or all of the leased premises by Lessee, the rental shall be reduced in proportion to the interference with Lessee's use of the leased premises.
C. 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.
D. The 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.
18 E. This lease shall be subordinate to the provisions and requirements of any existing or future agreement between the Lessor and the United States, relative to the development, operation or maintenance of the Airport.
F. Lessor reserves the right to take any action it considers necessary to protect the aerial approaches of the Airport against obstruction, together with the right to prevent Lessee from erecting, or permitting to erect, any building or other structures on the Airport which, in the opinion of Lessor, would limit the usefulness of the Airport or constitute a hazard to aircraft.
G. Lessor reserves and excepts from this lease all that portion of the real property herein leased which is superadjacent to a plane sixty (60) feet above and parallel to the existing ground surface of said real property (which portion is hereby referred to as "Superadjacent Air Space').
H. Lessor further reserves and excepts from this lease, and Lessee hereby grants to Lessor (insofar as the hereinafter described easements and rights in any manner or to any extent that affect the leased premises, any improvements which may be made thereon, and Lessee's leasehold or other interest therein and Lessee's use, occupancy or enjoyment thereof):
1. An avigation easement over and laterally adjacent to the leased premises and any improvements which may be made thereon, including but not limited to the easement and right to fly, or cause or permit flight by any person of, any aircraft of and all kinds now or hereafter known, in, through, across or about any portion of said superadjacent air space and any air space laterally adjacent thereto; and
2. The easement and right to cause or create, or permit to be caused or created, such noise, vibration, currents and other effects of air, illumination and fuel consumption which may arise or occur:
(a) from or during the use of said avigation easement and such flight as is described in subsection H.1. hereinabove, or
(b) from or during the use by such aircraft of any Salinas Municipal Airport facilities, including but not limited to the landing, storage, repair, maintenance, operation, warmup and take-off of such aircraft, upon, within or about said Airport, and the approach and departure of aircraft to or from such Airport.
The easements and rights herein reserved and excepted by Lessor, and the easements and rights herein granted by Lessee to Lessor, shall be deemed both in gross and also appurtenant to each and every portion of the real property of the Salinas Municipal Airport (save and except the leased premises herein described). 20 14 - LEASE SUBORDINATE TO AGREEMENTS WITH U.S.A.
This lease shall be subordinate to the provisions and requirements of any existing or future agreement between Lessor and the United States of America relative to the development, operation or maintenance of the Airport.
15 - WAR OR NATIONAL EMERGENCY
This lease and all the provisions hereof shall be subject to whatever right the United States Government has affecting the control, operation, regulation and taking over of said Airport or the exclusive or non-exclusive use of the Airport by the United States during the time of war or national emergency.
16 - USE TO CONFORM WITH FEDERAL AVIATION REGULATIONS
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Lessee agrees that Lessee's use of the leased premises, including all future construction, modification or alteration thereon, shall comply with all applicable Federal Aviation Regulations now in force or those that may be hereafter adopted by Federal authority.
17 - USE TO CONFORM WITH CITY OF SALINAS REGULATIONS
Lessee agrees to comply at all times with all applicable provisions of the Salinas City Code including, but not limited to, Chapter 4 and Chapter 37 of said Code. 21 Lessee further agrees to comply with all the rules and regulations established by the Salinas City Council, the Salinas Airport Commission and the Salinas Airport Manager for the use of the leased premises and all other portions of the Salinas Municipal Airport. 18 - NON-DISCRIMINATION
A. The Lessee for himself, his heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree "as a covenant running with the land" that in the event facilities are constructed, maintained, or otherwise operated on the said property described in this lease, for a purpose for which a Department of Transportation (DOT) programor 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 Subtitle A, Office of the Secretary, Part 21, Nondiscrimination 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. The Lessee for himself, his personal representatives, successors in interest, and assigns, as part of the consideration hereof, does hereby covenant and agree "as a covenant running with the land" that"
1. No person on the grounds of race, color, or national origin shall be excluded from participating in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities.
22 2. That in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the grounds of race, color or national origin shall be excluded from participation in, denied the benefits of, or otherwise by subject to discrimination.
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, Department of Transportation, Sub-title A, Office of the Secretary, Part 21, Nondiscrimination 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. That in the event of breach of any of the above nondiscrimination covenants, Lessor shall have the right to terminate the lease and to reenter and repossess said land and the facilities thereon, and hold the same as if said lease had 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 non- discriminatory basis to all users thereof and it shall charge fair, reasonable and non- discriminatory prices for each unit or service; PROVIDED THAT the Lessee may be allowed to make reasonable and non-discriminatory discounts, rebates or other similar type of price reductions to volume purchasers.
E. Non-compliance with Paragraph D above shall constitute a material breach thereof and in the event of such non-compliance the Lessor shall have the right to terminate the lease agreement and the estate hereby created without liability therefore or at the election of the Lessor or the United States either or both said governments shall have the right to judicially enforce provisions.
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F. Lessee agrees that it shall insert the above five (5) provisions in any lease 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.
19 - AFFIRMATIVE ACTION PROGRAM
The Lessee assures that it will undertake an affirmative action program as may be required by 14 CFR Part 152, Subpart E, to insure 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 14 CFR Part 152, Subpart E. The Lessee assures that no person shall be excluded on those grounds from participating in or receiving the services or benefits of any program or activity covered by this subpart. The Lessee assures that it will require that its covered suborganizations provide assurance to the Lessee that they similarly will undertake affirmative action programs and that they will require assurances from their suborganizations, as may be required by 14 CFR Part 152, Subpart E, to the same effort.
20 - NON-EXCLUSIVE RIGHT
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, as amended, (49 U.S.C. 1349a). 24 21 - LESSEE AGREEMENTS
A. Lessee agrees to comply with the notification and review requirements covered in Part 77 of the Federal Aviation Regulations and Ordinance No. 1719 of the City of Salinas, dated November 21, 1977, in the event future construction of a building is planned for the leased premises, or in the event of any planned modification or alteration of any present or future building or structure on the leased premises.
B. The Lessee by accepting this, expressly agrees for itself, its successors and assigns that it will not erect nor permit the erection of any structure or object, nor permit the growth of any tree on the land leased hereunder to penetrate the transitional surfaces, as defined in Federal Aviation Regulations and Ordinance No. 1719 of the City of Salinas. In the event the aforesaid covenants are breached, the owner reserves the right to enter upon the land leased hereunder and to remove the offending structure or object and cut the offending tree, all of which shall be at the expense of the Lessee.
C. The Lessee by accepting this lease, agrees for itself, its successors and assigns 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 Salinas Municipal Airport or otherwise constitute a hazard. In the event the aforesaid covenant is breached, the owner reserves the right to enter upon the premises hereby leased and cause the abatement of such interference at the expense of the Lessee.
25 c
22 - UTILITIES
A. The costs of bringing utilities of gas, electricity, sewage, drainage, telephone and water to said property as may be necessary, shall be borne by Lessee.
B. Lessee shall install, connect and maintain, at Lessee's sole cost and expense, all necessary utilities and utility facilities and services, including but not limited to light, power, gas, telephone, water, sewage, drainage, garbage, rubbish and other disposal facilities and services. In addition to the rent hereinbefore reserved, Lessee shall pay for all water, gas, heat, light, power, telephone, sewage, garbage and rubbish disposal, and all other services supplied to said premises.
23 - USE OF PUBLIC AIRPORT FACILITIES
Lessee is granted the non-exclusive use of all public Airport facilities, including but not limited to taxiways, runways, aprons, navigational aids, and facilities relating thereto, for purposes of landings, take-offs, and taxiing of Lessee's aircraft. All such use shall be in accordance with the laws of the United States of America, the State of California, and the rules and regulations promulgated by their authority with reference to aviation and air navigation, and in accordance with all reasonable and applicable rules, regulations and ordinances of Lessor now in force or hereafter prescribed or promulgated by ordinance or by law.
24 - TAXES AND ASSESSMENTS
Lessee shall pay all taxes (including possessory interest tax) and assessments that may be levied upon the leased premises, any and all buildings and improvements and other 26 •
property situated therein, and any interest of Lessee therein, for the full term of this lease.
25 - INSURANCE
(a) Lessee shall, throughout the duration of this lease, maintain comprehensive general liability and property damage insurance, or commercial general liability insurance, covering all operations of the Lessee, its agents and employees, performed in connection with this lease including but not limited to premises and automobile. (b) Lessee shall maintain the following limits:
General Liability
Combined Single Limit Per Occurrence $1,000,000
Automobile Liability
Combined Single Limit Per Occurrence $ 300,000
Aggregate $ 500,000
Fire Insurance
Fire Legal Liability coverage of $100,000;
Fire insurance with extended coverage and debris - cleanup provisions, in an Amount equal to ninety percent (90%) of actual cash value of all improve- ments installed by Lessee in or on the leased premises. (c) All insurance companies affording coverage to the Lessee shall be required to add the City of Salinas as "additional insured" under the insurance policy. (d) All insurance companies affording coverage to the Lessee shall be insurance organizations authorized by the Insurance Commissioner of the State Department of Insurance to transact the business of insurance in the State of California. /
(e) All insurance companies affording coverage shall provide thirty (30) days written notice by certified or registered mail to the City of Salinas should the policy be cancelled or reduced in coverage before the expiration date. For the purposes of this notice requirement, any material change prior to expiration shall be considered cancellation. (f) Lessee shall provide evidence of compliance with the insurance requirements listed above by providing a certificate of insurance, in a form satisfactory to the Risk Manager, concurrently with the submittal of this Agreement. A statement on the insurance certificate which states that the insurance company "will endeavor" to notify the certificate holder, "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representatives" does not satisfy the requirements of subsection (e) herein. The Lessee shall ensure that the above quoted language is stricken from the certificate by the authorized representative of the insurance company.
(g)) Lessee shall provide a substitute certificate of insurance no later than thirty (30) days prior to the policy expiration date. Failure by the Lessee to provide such a substitution and extend the policy expiration date shall be considered a material default by the Lessee.
(h) Maintenance of insurance by the Lessee as specified in the Agreement shall in no way be interpreted as relieving the Lessee of any responsibility whatsoever and the Lessee may carry, at its own expense, such additional insurance as it deems necessary. (i) In addition to requiring statutory workers compensation insurance pursuant to Section 5.I herein, Lessee shall also require all contractors and subcontractors who perform work on the leased premises to maintain general liability insurance in an amount of no less than $1 million combined single limit per occurrence which complies 28 with all of the provisions of subsections (c) through (g) above. Lessee shall provide City with copies of such insurance certificates upon request. 26 - COMMON AIRPORT AREAS
Lessee shall have the privilege of using, in common with others to whom such privileges may also be given by Lessor, such airplane runways as are provided in the Salinas Municipal Airport for the take-off and landing of airplanes. Lessee shall also be entitled, in common with others to whom such privileges may also be given by Lessor, to such of the following services as may be provided by said Airport, to facilitate the take-off and landing of aircraft at and the flying of aircraft within and about said Airport, to wit: landing lights, floodlights, signals and other such facilities. Such privileges however, shall be subject to all rules and regulations now in effect or hereafter established by the City of Salinas governing or controlling such privileges, uses or operations, and shall be subject to the payment of all such fees or charges as the City of Salinas may now or hereafter impose for such privileges, uses and operations. 27 - LIENS AND CLAIMS
A. Lessee shall not suffer or permit to be enforced against Lessor's title to the leased premises, or any thereof, any lien, claim or demand arising from any work of construction, repair, restoration, maintenance or removal as herein provided, or otherwise arising (except liens, claims or demands suffered by or arising from the actions of Lessor).
B. Lessee shall pay all such liens, claims and demands before any action is brought to enforce the same against such land; and Lessee agrees to hold Lessor and said land free and harmless from all liability for any and all such liens, claims or demands, together with all costs and expenses in connection therewith.
C. Should Lessee fail or refuse to pay any lien, claim or demand arising out of the construction, repair, restoration, maintenance and use of said premises and the buildings and improvements hereon, or any other claim charge or demand which Lessee has agreed to pay under the covenants of this lease, Lessee or its authorized encumbrances, if any, shall, within thirty (30) days provide written notice from Lessor to Lessee or its said encumbrancer, pay and discharge the same or shall furnish to City, in a form satisfactory to City, sufficient security to hold Lessor and said land free from all liability for such lien, claimor demand and all costs and expenses in connection therewith. Should Lessee or its said encumbrancer, within said thirty (30) days period, not pay and discharge said lien, claim or demand or not provide said security to Lessor, then Lessor may at its option, either treat such failure or refusal as a breach of or default under this lease, or may pay any such lien, claim or demand, or settle or discharge any action therefore or judgment thereon, and all costs, expenses and other sums incurred or paid by Lessor in connection therewith shall be repaid to Lessor by Lessee upon written demand, together with interest thereon at the rate of ten percent (10%) per annum from the date of payment until repaid, and any default in such repayment shall constitute a breach of the covenants and conditions of this lease. 28 - RIGHT TO ASSIGN AND SUBLET
A. Lessee shall not encumber, sublet, assign or otherwise transfer this lease, or any 30 right or interest herein, to any of the buildings and improvements on the leased premises, without the prior written consent of Lessor, and no such encumbrance, subletting, assignment or transfer, whether voluntary or involuntary, by operation of law, under legal process or proceedings, or otherwise, shall be valid or effective without such prior written consent, provided, however, Lessee may lease space in the hangar for the purpose of aircraft storage without prior consent of Lessor.
B. If Lessee hereunder is a corporation or an unincorporated association or a partnership, the transfer, assignment or hypothecation of any stock or interest in said corporation, association or partnership, in the aggregate in excess of twenty-five percent (25%) shall be deemed an assignment within the meaning of this lease. The following transfers are excepted from the provisions of this paragraph:
1. Transfer or assignment of stock or interest to a shareholder or member of the same corporation, association, or partnership.
2. Transfer or assignment of stock or interest to a spouse, child, or grandchild of a shareholder or member.
D. Should Lessee attempt to make or suffer to be made any such encumbrance, assignment, transfer or subletting, except as aforesaid, or should any right or interest of Lessee hereunder or in or to said buildings and improvements be transferred or sold by or under court order or legal process, or otherwise, then any of the foregoing events shall be deemed a breach of the conditions and restrictions of this lease and thereupon Lessor may, at its option, terminate this lease forthwith by written notice thereof to Lessee, or exercise other rights provided by law or in this lease to be exercisable by Lessor in the event of any default or breach under this lease. 31 •
E. Should Lessor consent to any such encumbrance, assignment, transfer or subletting, such consent shall not constitute a waiver of any of the restrictions of this clause and the same shall apply to each and every encumbrance, assignment, transfer or subletting hereunder and shall be severally binding upon each and every encumbrancer, assignee, transferee, subtenant and other successor in interest of Lessee.
F. Lessor agrees that it will not unreasonably withhold its consent to any subletting, assignment, or transfer requiring its prior approval hereunder, but Lessor may withhold such consent:
1. If the proposed assignee shall not covenant in writing to keep, perform and be bound by each and all the covenants and conditions of this lease herein provided to be kept and performed by Lessee and to assume any previously accrued obligations hereunder.
2. If this lease is in default at such time in any respect.
3. At any time while there is any work of improvement or demolition in progress or incompleted on leased premises.
4. Until a determination has been made by Lessor that the assignee, transferee, subtenant or other successor in interest of Lessee can pay rent and operate in accordance with the standards required by Lessor.
F. Any document which purports to assign, transfer, encumber or sublet the Demised Premises or any part thereof, shall incorporate directly or by reference all provisions of this lease unless otherwise amended in writing. 29 - DEFAULT
A. In the event Lessee shall default in the performance of any condition or covenant in this lease (except the payment of rent), Lessor may, at its option, take such action as provided in paragraph C hereof, but only if Lessee fails to rectify said default within thirty (30) days after written notice thereof is served upon Lessee by Lessor. In the event, however, that the default is of such nature that the same cannot be rectified in such thirty (30) days period, then such default shall be deemed to be rectified if Lessee shall have commenced the compliance of the provisions hereof breached by it within said thirty (30) day period and shall with all diligence prosecute work or perform the particular provisions until the same shall have been fully rectified or performed.
B. In the event Lessee should fail to pay any installment of rent or pay any other sum due provided in this lease to be paid by Lessee at the time or times herein specified, Lessor may, at its option, take such action as provided in paragraph C hereof, but only if said default is not rectified within ten (10) days after written notice thereof is served on Lessee by Lessor.
C. In the event Lessee shall fail to pay rent or any other sum provided in this lease, or in the event of any other breach of this lease by Lessee, then Lessor, in addition to and without prejudice to any other right or remedy of Lessor hereunder, shall have 33 immediate right of re-entry and may remove all persons and personal property from the leased premises, and such personal property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Lessee. Should Lessor elect to re-enter, as herein provided, or should Lessor take possession pursuant to legal proceedings or pursuant to any notice provided by law, Lessor may either terminate this lease or may from time to time, without terminating this lease, relet premises or any part thereof for such term or terms (extending, at Lessor's option, beyond the term of this lease) and at such rental or rentals and upon such other terms and conditions as Lessor in its sole discretion may deem advisable with the right to make alterations and repairs to the leased premises. Upon such reletting:
1. Lessee shall be immediately liable to pay to Lessor, in addition to any indebtedness other than rent hereunder, the cost and expenses of such reletting and of any such alterations and repairs, incurred by Lessor, and the amount, if any, by which the rent reserved in this lease for the period of such reletting (up to but not beyond the term of this lease) exceed the amount agreed to be paid as rent for the leased premises for such period of such reletting; or
2. At the option of Lessor, rents received by Lessor from such reletting shall be applied: first, to the payment of any indebtedness hereunder of Lessee to Lessor, other than rent due; second, to the payment of any costs and expenses of such reletting and of any such alterations and repairs; third, to the payment of rent due and unpaid hereunder; and the reside, if any, shall be paid by Lessor and applied in payment of future rent as the same may become due and payable hereunder.
3. If Lessee has been credited with any rent to be received by such reletting under Option (1), and such rent shall not be promptly paid to Lessor by the new tenant, 34 or if such rentals received from such reletting under Option (2) during any month be less than that to be paid during that month by Lessee hereunder, Lessee shall pay any such deficiency to Lessor. Such deficiency shall be calculated and paid monthly. No such re-entry or taking possession of the leased premises by Lessor shall be construed as a election by Lessor to terminate this lease unless a written notice of such intention be given to Lessee or unless the termination thereof be decreed by a court of competent jurisdiction. Notwithstanding any such reletting without termination, Lessor may at any time thereafter elect to terminate this lease for any breach, in addition to any other remedy available to Lessor hereunder, Lessor may recover from Lessee all damages which Lessor may incur by reason of such breach, including any cost of recovering the leased premises, and including the worth at the time of such termination of the excess, if any, of the amount of rent and charges equivalent to rent reserved in this lease for the remainder of stated term, all of which amount shall be immediately due and payable from Lessee to Lessor.
30 - INDEMNIFICATION AND HOLD HARMLESS
This lease is made upon the express condition that Lessor, its officers and employees are to be free from liability and claim for damages by reason of any injury to any person or persons, including Lessee, or property of any kind whatsoever or to whomsoever belonging, including Lessee's, from any cause or causes whatsoever while in or upon or in any way connected with the leased premises or Lessee's use thereof, or from the failure of Lessee to keep the leased premises and all improvements and other property therein in good, safe and sanitary condition, or otherwise connected with Lessee's use of 35 the leased premises or of other parts of the Salinas Municipal Airport during the term of this lease. Lessee hereby covenants and agrees to indemnify and save harmless Lessor, its officers and employees from all liability, loss, cost and obligations on account of or. arising out of or resulting from any such injuries or losses however occurring. It is agreed, however, that the above provision does not apply to injury, damage or loss caused by willful or negligent acts of Lessor, or of officers or employees of Lessor acting within the course and scope of their employment by Lessor, when neither Lessee nor any of its officers, employees, agents or contractors are in any way at fault or have contributed in any way to causing the injury, damage or loss. 31 - ABANDONMENT, ETC.
Except as may be herein in this lease otherwise expressly provided, Lessee shall not vacate or abandon the premises at any time during the term of this lease; and if Lessee shall abandon, vacate or surrender said premises or be dispossessed by process of law or otherwise, any property belonging to Lessee and left on the premises shall be deemed, at the option of Lessor, to be abandoned.
32 - CO-ORDINATES
Co-ordinates used in the description in this lease are based upon the "Horizontal Control Net California Plan Co-ordinates, Zone 4," for the City of Salinas, on file in the office of the City Engineer of the City of Salinas.
-
33 - BANKRUPTCY, ETC.
Either (a) the appointment of a receiver to take possession of all or substantially all of the assets of Lessee, or (b) a general assignment by Lessee for the benefit of creditors, or (c) any action taken or suffered by Lessee under any insolvency or bankruptcy act, shall constitute a breach of this lease by Lessee. Notwithstanding the above provisions, the filing of any involuntary petition in bankruptcy against Lessee shall not constitute a breach of this lease, unless and until there is an adjudication in such involuntary bankruptcy proceedings that Lessee is bankrupt, which adjudication shall constitute a breach of this lease.
34 - WAIVERS
The waiver by Lessor of any breach of any term, covenant or condition contained in this lease shall not be deemed to be a waiver of such term, covenant or condition in any subsequent breach of the same or any other term, covenant or condition; and the consent or approval by Lessor to or of any act by Lessee requiring Lessor's consent or approval shall not be deemed to waive or render unnecessary Lessor's consent or approval to or of any subsequent similar acts by Lessee, and the subsequent acceptance of rent hereunder by Lessor shall not be deemed to be a waiver of any preceding breach by Lessee of any term, covenant or condition other than the failure of Lessee to pay the particular rent so accepted, regardless of Lessor's knowledge of such preceding breach at the time of acceptance of such rent.
37 35 - LITIGATION INVOLVING LEASE
In the event Lessor is made a party to any litigation concerning this lease or the leased premises of any act or omission by Lessee, Lessee shall hold Lessor harmless from all loss or liability, including reasonable attorney's fees incurred by Lessor in such litigation. In case suit shall be brought for an unlawful detainer of said premises, for the recovery of any rent due under the provisions of this lease, or because of the breach of any other covenant or provision herein contained on the part of Lessee to be kept or performed, and Lessor prevails therein, Lessee shall pay to Lessor a reasonable .. attorney's fee, which shall be fixed by the court.
36- HOLDING OVER
Any holding over after the expiration of the term of this lease with the consent of Lessor shall be construed to be a tenancy from month to month at a monthly rental equal to one twelfth of the rental for the year immediately preceding the expiration of said term, and shall otherwise be on the terms and conditions herein in this lease specified so far as applicable, except that there shall be no right to extend the term of this lease.
38 37- LESSEE'S ASSUMPTION AND WAIVER
This lease is made upon the express condition, and (in consideration of Lessor's leasing the premises as herein provided) Lessee covenants, that Lessee hereby voluntarily assumes all risk of loss, damage or injury to the person or property of Lessee (including the leasehold interest of Lessee herein), and of its agents or employees, and of any other person in or about the leased premises, which during the term of this lease may be caused by or arise or occur in any manner from:
A. Flight of any aircraft of any and all kinds now or hereafter known in, through, across, around or about any portion of the airspace over the leased premises; or B. Noise, vibration, currents and other effects of air, illumination and fuel consumption, or fear thereof, arising or occurring from or during such flight, or from or during the use by such aircraft of Salinas Municipal Airport facilities, including but not limited to landing, storage, repair, maintenance, operation, warm-up and take-off of such aircraft, and the approach and departure of aircraft to or from said Airport.
Lessee hereby waives and releases Lessor, its officers, employees, agents and contractors, from any and all claims or causes of action which it may now or hereafter have against Lessor, its officers, employees, agents or contractors, for any loss, damage or injury as outlined in A and B of this paragraph.
38- CONSTRUCTION OF LEASE
Whenever the singular number is used in this lease and when required by the context, the same shall include the plural, and the masculine gender shall include the 39 feminine and neuter genders. If there be more than one Lessee designated in or signatory to this lease, the obligations hereunder imposed upon Lessee shall be joint and several; and the term "lessee" as used herein shall refer to each and every of said signatory parties severally as well as jointly.
Each term and provision of this lease performable by Lessee shall be construed to be both a covenant and a condition.
This instrument contains all of the agreements and conditions entered into and made by and between the parties hereto and may not be modified orally or in any manner other than by an agreement in writing signed by all parties hereto or their respective successors in interest.
39- TIME
Time is and shall be of the essence of each term and provision of this lease. 40 - MATERIAL BREACH
Each and every term, condition, covenant and provision of this lease is and shall be deemed to be a material part of the consideration for Lessor's entry into this lease, and any breach hereof by Lessee shall be deemed to be a material breach. 41- NOTICES
Except as is otherwise herein provided, all notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements, appointments or designations hereunder by either party shall be in writing and shall be sufficiently given and served upon the other party if sent by mail, postage prepaid and addressed as follows:
If to Lessor, the same shall be addressed to:
Airport Manager
Salinas Municipal Airport
30 Mortensen Avenue
Salinas, CA 93905
or to such other place as Lessor may by such similar notice in writing designate.
If to Lessee, the same shall be addressed to:
Advancetech Aircraft Maintenance, Inc,
1605 Moffett Street
Salinas, CA 93905
or to such other place as Lessee may by such similar notice in writing designate. 42- ENCUMBRANCES OF LEASEHOLD INTEREST
Lessee may encumber by mortgage or deed of trust or mortgages or deeds of trust Lessee's leasehold interest in said premises and its rights in the improvements to be placed by Lessee thereon to secure a loan from any bank or savings and loan institution that is federally insured to construct the buildings, structures or improvements mentioned in Section 5 hereof and for the expansion of Lessee's buildings, structures or improvements thereon, provided the unpaid balance of any and all such loans and increases shall not at any time exceed $750,000.00 without the prior written consent of the Council of the City of Salinas first had and obtained. In connection therewith, 41 Lessee may assign, for security purpose, Lessee's leasehold interest in said premises and Lessee's rights in the improvements to be placed by Lessee thereon, to the mortgagees or trustees under such mortgages or deeds of trust, such encumbrances and assignments to be subject, however, to the following covenants and conditions, each and all of which shall be binding upon and inure to the benefit of Lessor, Lessee, mortgagees, and trustees:
A. That any such encumbrances and assignments for securing purposes shall not be effective unless a photocopy of the particular mortgages or deeds of trust encumbering Lessee's leasehold interest in said leased premises and Lessee's rights in the improvements to be placed thereon shall be filed with Lessor's City Clerk within ten (10) days from and after the date of their execution.
B. That, except as hereinafter otherwise provided, the mortgages or deeds of trust and all rights acquired thereunder shall be subject to each and all of the covenants, conditions and restrictions set forth in this lease and to all rights and interests of Lessor hereunder.
C. That in the event of any conflict between the provisions of this lease and the provisions of such mortgages or deeds of trust, the provisions of this lease shall control.
D. That in the event at any time prior to the expiration of the term of this lease there shall be a non-substantial destruction of the buildings, structures and improve- ments on the leased premises, then notwithstanding the provisions of Section 8 of this lease, Lessee shall be required to diligently restore said buildings, structures and improvements, and Lessee agrees to use the proceeds of the fire and extended coverage insurance mentioned in Section 24 hereof for the purpose of restoring and rehabilitating said buildings, structures and improvements. 42 •
E. That in the event at any time prior to the expiration of the term of this lease there shall be a substantial destruction of all the buildings, structures and improvements other than on the leased premises, then Lessee shall have the rights as are given to Lessee by the provisions of Section 8 of this lease to either diligently restore and rehabilitate said buildings, structures and improvements or to terminate this lease.
In the event Lessee should elect to restore and rehabilitate said buildings, structures and improvements, Lessee agrees to use the proceeds of such fire and extended coverage insurance mentioned in Section 25 hereof to restore and rehabilitate said buildings, structures and improvements.
In the event Lessee should elect to terminate this lease, Lessee shall first disburse the proceeds of the fire and extended coverage insurance mentioned in Section 25 hereof to the mortgagees or trustees in such amount to pay off in full the indebtedness secured by said mortgage or deeds of trust. The remaining proceeds, if any, of such fire and extended coverage insurance shall be paid to Lessor for such amounts, if any, due and owing to Lessor by Lessee under any of the terms of this lease. Thereafter, any proceeds remaining shall be disbursed to Lessee.
F. That Lessor shall mail to the trustees or mortgagees (if such trustess or mortgagees shall have first requested such notice from Lessor in writing and provided Lessor with an address to which such notice shall be sent) a duplicate copy of any and all notices in writing which Lessor may from time to time give to or serve upon Lessee under and pursuant to the terms and provisions of this lease. Said copies shall be mailed to mortgagees or trustees as nearly as is reasonably possible to do so at the same time such notices are given to Lessee.
43 G. That the mortgagees or trustees may, at their option, at any time before the rights of Lessee shall have been terminated as provided in this lease, pay any of the rents due under this lease or pay any taxes or assessments and make any repairs or improvements or do any other act or thing which may be necessary and proper to be done in the observance of the covenants and conditions of this lease to prevent the termination of this lease. All payments so made and all things so done and performed by mortgagees or trustees shall be as effective to prevent the termination of the rights of Lessee thereunder as if they were done and performed by Lessee instead of by mortgagees or trustees.
H. That in the event a mortgagee or trustee or third person acquires Lessee's interest in the lease and possession of the leased premises by foreclosure, by trustee's sale, or as a result of any other action or remedy provided for or by any mortgage or deed of trust, or by deed or assignment in lieu of trustee's sale or foreclosure proceedings, such mortgagee or trustee or third person shall take Lessee's interest in the leased premises and possession of the leased premises subject to all the provisions of this lease and shall, so long as trustee or mortgagee or third person shall be the owner of the leasehold interest and legally entitled to possession of the leased premises by reason of such foreclosure, trustee's sale, or any other action or remedy provided for or by any mortgage or deed of trust or deed of assignment in lieu of trustee's sale or foreclosure proceedings, personally assume all of Lessee's obligations under this lease.
I. In the event such mortgagee or trustee or third person acquires, as a result of this paragraph, Lessee's interest in the leased premises and possession of the leased premises, such trustee, mortgagee or third person may encumber, by mortgages or deeds of trust, for security purposes, its leasehold interest in said premises and its rights 44 •
in the improvements placed by Lessee thereon to secure loans thereof from any bank or savings and loan institution that is federally insured to the same extent as Lessee has such right under and by virtue of the provisions of Section 42 hereof, it being understood that any reference to Lessee appearing therein shall apply to such mortgagee or trustee or third person.
Notwithstanding the provisions of Section 29 hereof, Lessor shall not, in the event of a breach of this lease by Lessee, terminate this lease or re-enter, retake possession of or relet the premises or take advantage of any other legal right or remedy Lessor might have by reasons of a breach if, within thirty (30) days after notice of such breach has been sent to the mortgagees or trustees or third persons, the mortgagees or trustees or third persons commence an action to obtain possession of said premises, including the appointment of a receiver, or institute foreclosure proceedings to sell the interest of Lessee at foreclosure sale or trustee's sale, or acquire title to Lessee's interest by deed or assignment in lieu of such trustee's sale or foreclosure proceedings, and thereafter diligentiy proceed in good faith to cure such breach; provided, however, that the rental agreed to be paid and the other covenants of Lessee hereunder are fully paid and are fully performed and the breach cured by such mortgagees or trustees or third persons or by Lessee during such thirty (30) day period.
If any such breach is of such a nature that it is impossible for physical reasons to cure the breach within thirty (30) days after notice thereof, Lessor shall not terminate this lease or re-enter, retake possession of or relet the premises, or take advantage of any other legal right or remedy Lessor might have by reason of a breach, as long as such mortgagees or trustees or third persons shall have commenced the curing of such breach within said thirty (30) days and shall then be continuously and diligently 45 proceeding in good faith to cure such breach so that it can and will be cured within a reasonable time; provided the rental agreed to be paid is in fact paid within said thirty (30) day period and thereafter paid on time and provided further that other covenants and obligations of Lessee which are not physically impossible of performance within said thirty (30) day period are in fact fully performed by such mortgagees or trustees or third persons or by Lessee within said thirty 30) day period. 43 - HEIRS, SUCCESSORS AND ASSIGNS
All of the covenants, agreements, conditions and undertakings herein contained shall, subject to the provisions as to assignments, apply to and bind the representatives, heirs, executors, administrators, successors and/or assigns of all the parties hereto; and all the parties hereto shall be jointly and severally liable hereunder. 44 - MARGINAL CAPTIONS
The various headings and numbers herein and the grouping of the provisions of this lease into separate sections and paragraphs are for the purpose of convenience only and shall not be considered part hereof.
45 - MISCELLANEOUS
Lessee will not commence improvement of leased premises prior to issuance of a Building Permit by the City.
46 46 - PARTIAL INVALIDITY
If any term, covenant, condition or provision of this lease is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby.
47 - HAZARDOUS SUBSTANCES
A. Pursuant to Health and Safety Code section 25359.7, Lessee shall notify Lessor in writing within a reasonable time of any material release of hazardous substances and of any hazardous substances that have come to be located beneath the Salinas Municipal Airport.
B. Prior to the expiration of this lease, Lessee shall at its sole expense, remove all items of personal property, including but not limited to all flammable substances and hazardous materials and wastes as defined by state or federal law at the time of expiration of the lease.
C. Lessee shall make available for inspection to the Lessor, all records relating to the maintenance, release, mitigation, cleanup and disposal of any hazardous substances on the premises.
47 D. Lessee shall comply with all federal, state and local laws and regulations relating to hazardous materials and wastes, and shall timely comply with the orders of any governmental agencies relating thereto.
E. Lessor may reasonably enter upon and inspect the premises at any time. 48 - INSTALLATION OF SEPTIC TANK
Lessor authorizes installation of a septic tank on Lessee's leased premises. This authorization is subject to the provisions of Section 36-10, Subpart (b) of the Salinas City Code. All county and state standards for any septic system installed shall be met and a separate permit from the Monterey County health department must first be obtained.
APPROVED AS TO FORM:
VERA TODOROV SALINAS, a municipal corporation
Assistant City Attorney
Auran. labelen
MAYOR
RECOMMENDED FOR APPROVAL: LESSEE:
i Chael Chatre Pengu
JIM CHAPPELL
Airport Manager Advancetech Aircraft Maintenance, Inc.
a camel ba
Advancetech Aircraft Maintenance, Inc.
CITY CLERK
48 RUNWAY
LEGEND VOLUME 10 "SURVEYS" PAGE 104 THIS
THE BORDER LINE SHOWN THUS. CITY OF SALINAS - VOLUME 116 "OFFICIAL RECORDS" PAGE 76 мАР
INDICATES THE EXTERIOR BOLADARIES OF THE LAND INCLUDED DATE WITHIN THE PARCELS BEING CREATED BY THIS MAP.
DISTANCES AND DIMENSIONS ARE EXPRESSED IN FEET AND
CECIMALS THEREOF.
DEARINGS AND DISTANCES WITHIN PARENTHESIS REFER TO cir:
DATA OF FRIOR RECORD.
PLE. DENOTES EASEMENT FOP. PUBLIC UTLITIES, LANDSCAPING AND PEDESTRIAN ACCESS/SIDEWALK PURPOSES.
DENOTES A FOLND I/Z' DIA, STEEL BAR TAGSED L.3.3304
LINE MOMENTS CONCRETE CENTER
BASIS OF BEARINGS 17000
THE BEARING OF N.339059'W. SHOWN AS A CENTERLINE OF STAi
WOFFETT SIREET (A PUBLIC STREET) ON MAP FILED FOR RECORD IN VOLLME 15 OF "CIES AND TOWNS" AT PAGE 54 WAS USED AS THE
BASIS OF BEARING FOR THIS MAF AND WAS TAKEN FROM FOUND
MONUMENTS MARKING SAID LINE.
PARCEL A
NE
1.163 AC.
HAM
M_10.6F.30S .W5.205 CUTE
NST
CF r.
-AT:
... Z
REEL BED "0.2- PAGE 34
SIG:
Sol: 3130522:
- 18.00 19.00 -
1183050N I70.A:
15'15* 3.10
¢ 306.90 1:0.00
: C = = : - 1.
LOT 11 LOT 12
EXHIBIT "A"