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HomeMy WebLinkAboutMINUTES - 11042008 - 2008-726 TO: BOARD OF SUPERVISORSContra FROM: Keith Freitas, Director of Airports si s Costa DATE: November 4, 2008 `$v Co u ntv STA ebun'�'� SUBJECT: APPROVE and AUTHORIZE the Director of Airports,or designee,to execute a Long-Term Lease with AeroSports, Inc., dba Bay Area Skydiving, for a Byron Airport Aviation Project, Byron Area (District III). SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION I. Recommended Action: APPROVE and AUTHORIZE the Director of Airports, or designee, to EXECUTE, on behalf of the County, a long-term ground lease between the County, as landlord, and AeroSports, Inc. dba Bay Area Skydiving, as tenant, in the amount of $800 per month with incremental increases, for the lease of approximately 37,462 square feet of land located at 3000 Armstrong Road,for the period of November 2008 to December 2018 (the "Lease"). II. FINANCIAL IMPACT: There is no negative impact on the General Fund. The Airport Enterprise Fund will receive lease rental and other revenues and the County General Fund will receive property,sales and possessory interest tax revenues from this development. Continued on Attachment: X SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON,41d Cor',77! y.� #P0RO D AS RECOMMEN ED OTHER VOT F SUPERVISORS UNANIMOUS(ABSENT 6»Ci ) I hereby certify that this is a true and correct copy of an action AYES: NOES: taken and entered on the minutes of the Board of Supervisors on ABSENT: ABSTAIN: the date shown. ATTESTED: Orig.Div: Airport DAVID TWA,Clerk of the Board of Sup visors and County Contact: Beth Lee, Phone(925)646-5722 Administrator cc: County Administrator Auditor-Controller Community Development Public Works Director By ?� Deputy Public Works Accounting Federal Aviation Administration Public Works Real Property General Services Lease Management SUBJECT: Authorization to Execute a Long-Term Lease with AeroSports, Inc., Byron Airport DATE: November 4, 2008 PAGE 2 III. REASONS FOR RECOMMENDATIONBACKGROUND: The Lease between Contra Costa County and AeroSports, Inc. dba Bay Area Skydiving, supersedes and replaces the original lease between the County and AeroSports dated June 16, 1991. This new Lease is for a ten-year term that expires in 2018. The tenant has the right to request two additional ten-year extensions of the original term, which the County may deny in its sole discretion. The Lease will permit a continuation of needed and desired general aviation activities and services at the Byron Airport. This general aviation focus is consistent with the policies identified within the Byron Airport Master Plan. Further, the Lease will provide rental and sales tax revenue to the Airport Enterprise Fund and County General Fund. A copy of the Lease signed by the tenant is attached hereto. .IV. CONSEQUENCES OF NEGATIVE ACTION: The County General Fund and the Airport Enterprise Fund would not realize the additional revenues. The County-owned land and building would be vacated and could negatively impact general aviation aircraft facilities, services and Airport demand needs. i L EAS E BETWEEN CONTRA COSTA COUNTY AND AEROSPOR.TS, INC. dba BAY AREA SKYDIVING For Operation at the BYRON, AIRPORT ' 1 TABLE OF CONTENTS AEROSPORTS, INC. dba BAY AREA SKYDIVING 1. PARTIES...............................................................................................................................3 2. PURPOSE.............................................................................................................................3 3. PREMISES............................................................................................................................3 4. USE......................................................................................................................................3 5. TERM .....................................................................................................................................4 6. HOLDING OVER...................................................................................................................5 7. RENT..........................:.........................................................................................................5 8. PERCENTAGE RENT AND OTHER ADDITIONAL RENT ........................................................9 9. ADDITIONAL PAYMENT PROVISIONS...........................:.............................................:......10 10. ADVERTISING AND SIGNAGE..........................................................................................11 11. SITE IMPROVEMENTS ......................................................................................................11 12. ALTERATIONS AND ADDITIONS..........................................................:............................14 13. SURRENDER OF POSSESSION .......................................................................................14 14. MAINTENANCE, REPAIR AND STORAGE........................................................................15 15. UTILITIES ..................................................................:......................................................15 16. WASTE, QUIET CONDUCT, NUISANCE, AND POLLUTION ...............................................15 17. HAZARDOUS MATERIALS..............................:........................:.........................................16 18. STORM WATER DISCHARGE......................................................................................,.....17 19. RULES AND REGULATIONS; UNLAWFUL USE.................................................................18 20. SECURITY........................................................................................................................18 21. HOLD HARMLESS AND INDEMNIFICATION..............:.......................................................18 22. INSURANCE........8"......................: . ............................................:......................................18 23. TAXES..............................................................................................................................20 24. INSPECTION, ACCESS AND NOTICE ...............................................................................20 25. SALE, ASSIGNMENT OR SUBLETTING.............................................................................20 26. DEFAULT AND REMEDIES ...............................................................................................21 27. WAIVER, VOLUNTARY ACTS.....,....................................................................................:.22 28. DESTRUCTION.................................................................................................................22 29. CONDEMNATION .............................................................................................................22 30. COUNTY'S PROCESSING AND TRANSACTION FEES......................................................22 31. NON-DISCRIMINATION.....................................................................:...............................23 32. - CHOICE OF LAW..............................................................................................................24 33. OPERATION OF AIRPORT BY COUNTY; FAA REQUIREMENTS .......................................24 34. NOISE ORDINANCE.......................................................................................................................25 35. DEVELOPMENT OF PREMISES...........:........................................................................................... 25 36. GENERAL PROVISIONS ...................................................................................................25 37. SIGNATURES.............................................................................................'......................27 EXHIBIT "A - Site Plan 2 LEASE BETWEEN CONTRA COSTA COUNTY AND AEROSPORTS, INC. DBA BAY AREA SKYDIVING 1. PARTIES A. Effective the COUNTY OF CONTRA COSTA, a political subdivision of the State of California ("County") and AEROSPORTS, INC. DBA BAY AREA SKYDIVING, a California Corporation, ("Tenant") hereby mutually agree and promise as follows: B. This lease between County and Tenant ("Lease") replaces the license between County and Tenant dated June 16, 1991. Effective on the "Commencement Date" (as defined below) of this Lease said prior license shall have no force or effect. 2. PURPOSE The purpose of this Lease is to lease to Tenant a portion of the Bryon Airport described hereinafter-as the' Premises to Tenant for the operation of a skydiving school and related .activities as described below. Byron Airport is a public Airport located on unincorporated land owned by County'near Byron, California, as shown on the Airport Layout Plan (the "Airport"), which is on file in the office of the Director of Airports. 3. PREMISES For and in consideration of the rent and faithful performance by Tenant of the terms and conditions and the mutual covenants hereof, County does hereby lease to Tenant and Tenant hereby leases from County, subject to all easements and encumbrances of.record; and subject to certain restrictions described herein, that parcel of real property consisting of approximately 0:86 acres of land, located at the northwesterly comer of the Airport, near Byron, California, as shown generally on Exhibit "A" - Site Plan, which exhibit is attached hereto and made a part hereof, and the full use of the space located in the County building (total of approximately 5,000 square feet) commonly know and designated as 3000 Armstrong Road, Byron, California which shall herein be referred to together as the "Premises." In addition to the Premises, Tenant shall have a right of access to the Airport taxis and runways at the "west side gate" of the Airport, as shown on Exhibit "A" and Tenant shall utilize a "Drop Zone" specified by the Director of Airports. The "Drop Zone" may be modified from'time-to-time by the Director of Airports in the interest of safety. 4. USE The Premises may be used by Tenant only for aircraft storage, and for the operation of a skydiving school and related activities limited to the following: (i) sales and service of skydiving equipment, (ii) skydiving lessons, and (iii) charter flights for skydiving lessons. In addition, Tenant may operate a fueling facility or fuel truck on the Premises for the purpose of self-fueling of based aircraft only. The fueling truck shall be operated and maintained by Tenant's authorized personnel strictly within both the provisions of Contra Costa County Ordinances 87-8 and 88-82, as amended, and the rules and regulations of all other entities having jurisdiction over the Airport, and all self-fueling must be in compliance with Federal 3 Aviation Administration Advisory Circular 150/5190-5. The fueling truck must be in compliance with all applicable rules and regulations at all times throughout the term of this Lease. No fueling of automobiles or trucks is allowed on the Premises. With respect to non-Tenant owned aircraft, Tenant may not taxi such aircraft to Tenant's fueling facility, or deliver fuel to such aircraft by operation of a fuel truck, or provide any other assistance in the fueling of such aircraft. Tenant shall not use the Premises, or permit others to use the Premises, for any other purpose (including without limitation skydiving events) without the prior written approval of the Director of Airports, which may be withheld in the Director's sole discretion. Tenant shall comply with any safety directives by the Director of Airports or his designated representative relating to safety items. Unsafe practices must be corrected immediately. .The Director of Airports or his designated representative may require the use of a radio equipped ground safety officer on duty during all times when the skydiving activities are occurring. Prior to commencing any skydiving activities, Tenant shall obtain approval, and provide written evidence to County of such approval, from the. Federal Aviation Administration air traffic staff acknowledging skydiving activities near or through published airways. 5. TERM A. TERM: This Lease is for a term of ten (10)years (the 'Term"), commencing on_ , 2008, (the "Commencement Date"), and expiring on , 2018. The Commencement Date shall also be known as the first day of year one of the Lease. B. EXTENSION: No earlier than the beginning of the seventh (7th) year of the Lease Term, and no later than the end of the ninth (9th) year of the Lease Term, Tenant may request that the Term of this Lease be extended for an additional ten (10) year period (the "Extension Period") by giving the County sixty (60) days prior written notice of its desire to extend the Term (the "Extension Request"). The Extension Request shall be deemed received by the County upon the Director of Airport's execution of an Acknowledgement of Receipt of the Extension Request. The Director of Airports, in his or her sole discretion may, but shall not be required to, provide written authorization to extend the Lease Term for the Extension Period on the same terms and conditions contained herein. The Director of Airports will respond in Writing to Tenant within sixty (60) days after receipt of the Extension Request. Failure by the Director of Airports to respond in writing within the sixty (60) day period shall operate as a denial of the Extension Request. No earlier than the beginning of the seventh (7th) year of the Extension Period, and no later than the ninth (9th) year of the Extension Period, Tenant may request that the Term of this Lease be extended for a second ten (10) year period by following the same terms and conditions described in this Section. Tenant shall have no right to extend the Lease Term if, prior to delivering either the first or the second Extension Request, the Lease has been cancelled, or if Tenant is in default at the time it delivers the first or the second Extension Request or at any time thereafter. Failure to deliver either Extension Request within the timeframe 'set forth above shall constitute a waiver of Tenant's right to request an extension of the Lease Term. 4 6. HOLDING OVER In the event Tenant shall remain in possession of the Premises after the expiration of the term of this Lease, such holding over shall not be deemed to operate as a renewal or extension of this Lease, but shall only create a tenancy from month.to month, which may be terminated at any time by County or Tenant upon thirty (30) days written notice. All terms and conditions of this Lease then in place shall govem the month-to-month tenancy. 7. RENT Tenant shall pay rent commencing on the Commencement Date. Rent shall be payable in advance and without demand on or before the first day of each month during the Term of this Lease. Rent for any partial month shall be prorated at a rate of 1/30th of the applicable monthly Rent per day. A. Ground Rent. Tenant shall pay to County as consideration for the use of the Premises, ground rent in the amount of Eight Hundred Dollars and No/100 Dollars ($800.00) ("Ground Rent") per month. Effective upon the first day of Years 2 through 9 of the Lease, Years 11-19 (if applicable) and Years 21 through 29 (if applicable), Ground Rent shall be increased (or remain unchanged-but not decreased) based upon the change in the Consumer Price Index ("CPI") for the most recent one year period ending June 30. 2008 (the "CPI Adjustment"). CPI,.as used herein, shall mean the Consumer Price Index for all Urban Consumers, All Items, for the San Francisco-Oakland-San Jose Metropolitan Area . (1982-84 = 100), as published by the Bureau of Labor Statistics of the U. S. Department of Labor, or its successor. At no time will the Rent be decreased by a CPI Adjustment.. In the event there is a decrease in the CPI, the monthly Rent for the year in question shall be the same as the monthly Rent for.the preceding year. County will notify Tenant of any increase in the Ground Rent when County completes its calculation of the increased Ground Rent. If the notice of increased Ground Rent is provided after the effective date of the increase, Tenant will pay any increased Ground Rent retroactively to the effective date within ten (10) days following the date of County's notice to Tenant. B. Revaluation of Ground Rent. Ground Rent shall be revalued by County on the ninth (9 ) anniversary of the Commencement Date, and. thereafter, at the end of each succeeding nine (9) year period of the Lease Term. Ground Rent shall be revalued on , 2017, and, 2026 ("Revaluation Dates"). Ground Rent shall be revalued based upon the fair market rental value of the Premises in their as-is condition, using the Revaluation Process described in this Section below, provided, however, that the revalued Ground Rent shall never be less than the Ground Rent during the preceding year. in other words, in the event there is a decrease in the fair market rental value for the year in question, the revalued Ground Rent shall be the same as the Ground Rent for the preceding -year. Prior to each Revaluation Date, County shall initiate the Ground Rent revaluation process as set forth in detail in subsection B(2) below, (the "Revaluation Process") for the determination of Ground Rent for the following period. Ground Rent established- through the Revaluation Process shall be 5 reviewed annually for CPI adjustment pursuant to the process set forth in Section 7.A. Ground Rent. (1) Conditions of Revaluation: The revaluation of Ground Rent, including any appraisals prepared as part of the Revaluation Process, shall be conducted . under the following conditions: a) All negotiations and actions taken by County and Tenant under this Section shall be undertaken and conducted by the parties in good faith. b) If the Revaluation Process is not concluded by the Revaluation Date, the Ground Rent determined by the Revaluation .Process described herein shall be retroactive to the Revaluation Date to which the Revaluation Process applies. Tenant shall make any retroactive payments of Ground Rent no later than ten (10) days following the completion of the Revaluation Process. c) Except as otherwise provided herein, no waiver by County of any of the provisions of this Section shall be deemed to have been made by County, unless made expressly in writing by the Director of Airports and no waiver by Tenant shall be deemed to have been made unless made expressly in writing by the duly authorized agent of Tenant. d) All time periods specified in this Section shall be counted in calendar days. (2) Revaluation Process: The Revaluation Process shall consist of the following: a) The County shall make an initial determination of the amount of the Ground Rent .revaluation (the "County Revaluation") and shall notify Tenant in writing of the amount of the new monthly Ground Rent ("Revaluation Notice"). b) If Tenant disagrees with the County Revaluation, the Tenant may file with the County a dispute of the amount of the County Revaluation ("Tenant Dispute") and include Tenant's proposed Ground Rent revaluation amount. The Tenant Dispute must be in writing and delivered to the Director of Airports no later than twenty-one (21) days after the Revaluation Notice is mailed to Tenant ("Dispute Period"). In the event that the Tenant does not file a Tenant Dispute with the County within the Dispute Period, the County Revaluation shall automatically be deemed to be accepted by Tenant, Tenant shall be deemed to have waived the right to contest the amount of the County Revaluation, and the new Ground Rent, as initially determined by the County, shall become effective on the, applicable Revaluation Date, and the Revaluation Process shall be concluded. c) If Tenant delivers a Tenant Dispute to the County within the Dispute Period, County and Tenant shall have twenty-one (21) days following County's receipt of the Tenant Dispute to attempt to establish a new Ground Rent by negotiation ("Rent Negotiation Period"). The Rent Negotiation Period may not be extended beyond the initial twenty-one (21) 6 day period except by mutual written agreement of the Tenant and the Director of Airports. d) If County and Tenant are unable to agree upon a new Ground Rent during the Rent Negotiation Period, including any agreed upon written extension thereof, then County and Tenant shall proceed to the next. step in the Revaluation Process by each appointing an appraiser to appraise the fair market value of the Premises and providing written notice to the other identifying that party's appraiser. The appointment of the appraiser shall be made and notice of the appointment shall be given to the other party . not less than twenty-one (21)days after the end of the Rent Negotiation Period (including any agreed-upon extension thereof) ("Selection Period"). Each appraiser shall be a member of the American Institute of Real Estate Appraisers, have the designation of Member of the Appraisal Institute ("MAI"), and shall have current aviation appraisal experience in appraising property in the geographic real estate market where the Premises is situated. Each party shall be. responsible for paying the fees and costs of the appraiser it has selected. In the event that Tenant does not appoint an appraiser and provide County with written notice of the appointment within the Selection Period: (i) the initial County Revaluation shall automatically be deemed to be accepted by Tenant, (ii) the new monthly Ground Rent, as initially determined by the County Revaluation, shall become effective on the applicable Revaluation Date,.(iii) Tenant shall be deemed to have waived the right to further contest the amount of the County Revaluation by arbitration or in any other manner, and (iv) the Revaluation Process shall be concluded. In the event that County does not appoint an appraiser and provide Tenant with written notice of the appointment within the Selection Period specified in this Section above, (i) the new monthly Ground Rent shall be the Ground Rent as determined by Tenant's appraiser, or the Ground. Rent for the preceding year, whichever is greater, (ii) such new monthly Ground Rent shall become effective on the applicable Revaluation Date, (iii) County shall be deemed to have waived the right to contest the amount of the new monthly Ground Rent by arbitration or in any other manner, and (iv)the Revaluation Process shall be concluded. e) If County and Tenant each properly appoint an appraiser during the Selection Period, the issue of the Ground Rent revaluation shall be submitted to the two appraisers to .each make an independent determination of the fair market value of the Premises. Each appraisal must be completed and a copy of the appraisal report delivered to the other .party no later than sixty (60) days from the date of his or her appointment ("Appraisal Period") unless otherwise extended by the . mutual agreement of County and Tenant. f) Upon completion of both of the above appraisals, County and Tenant shall make a final attempt to establish a new .monthly Ground Rent by negotiation. In the event that County and Tenant cannot agree on a revaluation of the monthly Ground Rent, either County or Tenant may declare an impasse in the negotiations by providing written notice of the impasse to the other party. The written notice of impasse (referred to hereinafter as the "Final Proposal') shall include all of the following information: (i) a statement that the declaring party has determined that negotiations have reached an impasse; (ii) the declaring party's final proposed Ground Rent revaluation figure; (iii) a statement that the recipient has ten (10) days to either give written acceptance of the amount of the Ground Rent revaluation specified in the Final Proposal or deliver a counter-final proposal ("Counter-Final Proposal') to the declaring party; and (iv) any other supplementary information as the declaring party deems appropriate. The party upon whom the Final Proposal is served shall then have ten (10) days following receipt of the Final Proposal to either accept the Final Proposal or to reject the Final'Proposal and deliver a Counter- Final Proposal to the declaring party. g) If neither the Final Proposal nor the Counter Final Proposal is accepted, not later than thirty-five (35) days after delivery of the Final Proposal, the appraiser selected by County and the appraiser selected by Tenant shall jointly select a third appraiser with the designation of MAI (Member of the Appraisal Institute).and with current aviation appraisal experience and who has substantial experience in appraising property in the geographic real estate market where the Premises is situated. The third appraiser will determine the fair market value of the Premises. The third appraiser shall render a final written decision within thirty -(30) days of his or her. appointment. The cost of the third appraiser shall be shared equally by County and Tenant. The appraisers decision as to the fair market value of the Premises shall be binding on all parties and shall apply retroactively to the Revaluation Date. C. Fuel Flowage Fees: On the first day of each calendar quarter, Tenant shall pay to' County a fuel flowage fee for the preceding quarter equal to $0.08 per gallon (the "Fuel Flowage Fee") for all fuel dispensed-on the Premises. The Fuel Flowage Fee shall increase annually by $0.005 per gallon. The first annual increase shall take place one (1) year from the Commencement Date. The Fuer Flowage Fee shall be reviewed and may be revised by County in its sole discretion every five (5) years after the Commencement Date of this Lease. County shall give notice to Tenant in writing of any revised Fuel Flowage Fee, which shall be effective the month after such notice is given. All fuel dispensed on the Premises must be dispensed strictly in accordance with Section 4. Use. above. D. Records to. Be Maintained. Tenant shall record all sales or other transactions., whether cash or credit, and shall keep full and accurate books of account and records in accordance with United States Generally Accepted Accounting Principles consistently applied, including without limitation, a sales journal general ledger, and all bank account statements showing deposits of all "Gross Receipts" (as defined below). In addition, Tenant shall keep all cash register receipts with regard to all Gross Receipts, credits, 8 refunds and other pertinent transactions,as well as a record of any other exclusions or deductions from Gross Receipts. 8. PERCENTAGE RENT AND OTHER ADDITIONAL RENT In addition to the payment of Ground Rent, Tenant shall pay percentage rent to County in an amount equal to (i) two percent (2%) of the Gross Receipts generated from business approved by the Director of Airports pursuant to Section 4. USE, conducted on the Premises. Percentage Rent shall be paid no later than the tenth (10) of the month for the previous month's Gross Receipts. A. Gross Receipts. The term "Gross Receipts" is defined as all revenue and receipts received by the Tenant and.derived from or delated to the Premises, including, but not limited to, all rent revenue and receipts received from sublessees, if any, the gross amount received from all sales and cash payments received therefor, credit extended at the time of a credit sale, all charges for services performed on the Premises, and the .gross amount received from any and all of the sources of income derived from the business conducted on the Premises. The term "Gross Receipts" shall not include the sale price of fixtures, equipment or property not sold in the ordinary course of business. In the case of insurance sales and premiums, Gross Receipts shall refer only to the commissions received. B. Statement of Gross Receipts and Percentage Rent Review. Tenant shall furnish to County a written statement of monthly Gross Receipts ("Statement of Gross Receipts")within thirty(30) days after the close of each calendar quarter. C. Certified Annual Statement. Within one.hundred twenty (120) days following the close of Tenant's fiscal year, and within one hundred twenty (120) days following the termination of this Lease, Tenant shall deliver to County an annual statement of Gross Receipts, certified as being correct by an authorized accounting officer of the Tenant ("Certified Annual Statement'). D. Inspection of Records. County shall have the right to inspect the books and records of Tenant from which any Statement of Gross Receipts or Certified Annual Statement is prepared at any reasonable time upon request. For this purpose, Tenant shall keep for a period of five (5) years after submission to County of any such statement, all of Tenant's records, books, accounts and other data pertaining or necessary to the verification of Gross Receipts as defined herein, and. shall, upon request, make the same available to County and/or County's auditor, representative or agent for examination at any time during said five (5) year period. Failure to keep, maintain and make available, the records, books, accounts and other data as required by this section shall constitute a default of this Lease. E. Audits., County, at its sole cost and expense, may engage the services of an independent certified public accountant to audit and verify the accuracy of Tenant's records, books, and accounts including the Certified Annual Statement. In the event the audit shows that an additional amount of Percentage Rent is due and payable to County, Tenant shall make such payment within (7) days to County. If the audit shows that there has been an overpayment of Percentage Rent, County shall, at the sole option of.County, promptly repay to Tenant the amount of such overpayment or credit same to any future rent due County by Tenant. If the audit shows a discrepancy that is 9 greater than five percent (5%) of the Percentage Rent paid to County, Tenant shall pay for the audit. F. Additional Rent. In addition to Ground Rent and Percentage Rent, and the Fuel Flowage Fee described above, Tenant shall pay, as additional rent all other charges, costs and fees required to be paid by Tenant pursuant to the provisions of this Lease (such amounts, "Additional Rent," and together with Ground Rent, Percentage Rent and the Fuel Flowage Fee, "Rent"). 9. ADDITIONAL PAYMENT PROVISIONS A. Late Rental Payments: In the event Tenant fails to pay County any amount due under this Lease within five (5) days after such amount is due, Tenant shall pay to County a late charge of One Hundred and No/100 Dollars ($100.00) per occurrence (the "Late Charge"), plus interest on said unpaid balance at a rate of one and one-half percent (1-1/2%) per month, from the date said payment was due and payable until paid in full. Tenant shall pay all Late Charges, as Additional Rent on or before.the date the next installment of Ground Rent is due. County and Tenant hereby agree that it is and will be impracticable and extremely difficult to ascertain and fix County's actual damage from any late payments and, thus, that Tenant shall pay as liquidated damages to County the Late Charge specified in this Section, which is the result of the parties' reasonable endeavor to estimate fair average compensation therefor (other than attorneys' fees and costs). County's acceptance of the Late Charge as liquidated damages shall not.constitute a waiver of Tenant's default with respect to the overdue amount or prevent County from exercising any of the rights and remedies available to County under this Lease. B. Form and Place of Payment: All Rent and fees shall be paid in cash or by personal check, certified check, or money order,-payable to the County of Contra Costa, and must be received on or before due date at the Director of Airports Office, 550 Sally Ride Drive, Concord, California 94520, or at such other place as County may designate from time to time. C. Returned Checks: If a check written by Tenant is returned for insufficient funds, County may impose a reasonable service charge in addition to any Late Charge and in addition to any charges imposed by the bank. County may require Tenant to pay Rent by certified check or money order if Tenant's bank or banks have returned one or more personal checks in a twelve.(12) month period. D. Security Deposit: Upon execution of this Lease, Tenant shall pay to County the sum of Two Thousand Seven Hundred Twenty-Two and 50/100 Dollars ($2,722.50) in cash or by certified check or money order payable to the County of Contra Costa, as security for the faithful performance of the terms, covenants, and conditions of this Lease (the "Security Deposit"). If Tenant is in default under the terms of this Lease, County may in its sole discretion (but shall not be required to) apply the Security Deposit, or any portion of it, to any expense, loss or(i) any Rent or other sum in default, (ii) any amount that County may spend or become obligated to spend in exercising County s rights under this Lease, or (iii) damage sustained by County resulting from Tenant's default. Upon demand by County, Tenant shall immediately pay to County a sum equal to the portion of the Security Deposit expended or applied by County as provided in this subsection so as to maintain the Security Deposit in the sum initially deposited. Upon 10 the expiration or termination of this Lease and a final accounting by County, any remaining Security Deposit balance shall be refunded to Tenant, without interest. Tenant waives the provisions of California Civil .Code section 1950.7, and all other provisions of law in force or that become in force after the date of execution of this Lease, that provide that County may claim from a Security Deposit only those sums reasonably necessary to remedy defaults in the payment of Rent, to repair damage caused by Tenant or to clean the Premises. County and Tenant agree that County may, in addition, claim those sums reasonably necessary to compensate County for any other foreseeable or unforeseeable loss or damage caused by the act or omission of Tenant or Tenant's officers, agents, employees, independent contractors or invitees. 10. ADVERTISING AND SIGNAGE Tenant, at Tenant's sole cost and expense, may only erect and maintain on the Premises such sign or signs ("Signage") of the type, style, size, design, and location permitted and approved in writing by the Director of Airports. All Signage must be consistent with the written sign policy of the Airport and in compliance with all applicable laws, rules, ordinances, and regulations and required approvals, authorizations, and permits, prior to erecting any Signage. County reserves the right to disapprove any of Tenant's Signage and to require Tenant to remove any Signage. 11. SITE IMPROVEMENTS Other than the uses described in Section 4.-USE, any new development or expansion of space during the Lease Term will require approval in writing in advance by County along with any necessary environmental review. The following steps will also be required. A. Plans and County's Approval: Prior to requesting approval of its development plans from the Director of Airports, Tenant shall obtain (at Tenant's sole cost and expense) written approval of its development plans from an aviation engineer selected by County. Tenant' shall then obtain the Director of Airports' written approval- of all plans and specifications (together "Plans") for buildings, paving, landscaping, or other improvements before any construction may be commenced. All improvements shall conform with any general requirements of County and shall be constructed or installed in conformance with the Plans, and all applicable statutes, ordinances, building codes, applicable Airport or FAA policy and standards for development, and rules and regulations of County, and such other authorities as may have jurisdiction over the .Premises or Tenant's operations thereon, including, but not limited to, the Contra Costa County Public Works Department, the Contra Costa County Department of Conservation and Development, and/or the Federal Aviation Administration. Tenant shall be solely responsible for obtaining all necessary permits and approvals, and for paying any and all fees required for said construction. County's approval of Tenant's Plans shall not constitute a representation or warranty as to such conformity and responsibility shall remain at all times in Tenant. Tenant .shall reimburse County for all costs incurred by County in connection with the review and approval of Tenant's Plans, including without limitation all costs and expenses associated with any environmental review of the Plans and all costs and expenses arising as a result of the aviation engineer's review and approval of the Plans, within ten (10) days of the date of County's request for reimbursement of such amounts. • 11 B. Construction Schedule: Within thirty (30) days following approval of the Plans by the aviation engineer, Tenant shall submit (i) three (3) sets of Plans which shall have been reviewed and stamped by the aviation engineer and (ii) a detailed construction schedule to the Director of Airports for review and approval or disapproval. Tenant shall not submit the Plans to the Contra Costa County Department of Conservation and Development until the Director of Airports has approved the Plans. The Director of Airports' review and approval or disapproval shall be completed within thirty (30) days of submission. If the Director of Airports disapproves of the Plans, the Director of Airports will provide the reasons for its disapproval to Tenant, and Tenant shall have thirty (30) days to revise the Plans, and resubmit them to the Director of Airports. The Director of Airports' review and approval or disapproval of the revised Plans will be completed within thirty(30)days of re-submission. Failure of the Director of Airports to respond within thirty(30) days of re-submission shall be deemed disapproval of the Plans. The Director of Airports' approval is separate and distinct from approvals Tenant is required to obtain from County, other County Departments, and all other authorities having jurisdiction over the Premises, and the requirements imposed on the Director of Airports by this Section do not apply to other County Departments and authorities. Within fourteen (14) days following approval of the Plans by the Director of Airports, Tenant shall submit (i) the Plans to the Contra Costa County Department of Conservation and Development for review and approval and (ii) satisfactory evidence (as determined by the.Airport Land Use Commission) to the Airport Land Use Commission that Tenant's intended use of the Premises is consistent with the Airport Land Use Compatibility Plan. Tenant shall comply with all measures identified with the approved conditions of approval for the Development Plan regarding the rezoning at the Airport (County File DP 063031). Tenant shall commence construction of the improvements shown on the Plans within forty-five (45) days after receiving a grading permit for the improvements from the Contra Costa County Department of Conservation and Development, and shall complete the construction of the improvements within twelve (12) months after receiving the grading permit and the Director of Airports' approval. Tenant shall provide County with a Notice of Intent to Construct the improvements at least sixty (60) days prior to construction or delivery of materials. The deadlines provided in this Section may be extended upon written approval of the Director of Airports in consideration of time lost as a result of work stoppages, strikes, and shortages of material, acts of God, or other reasons beyond Tenant's control, as determined by the Director of Airports, in his or her sole discretion. C. Performance and Payment Bonds: Not less than ten (10) working days before the commencement of construction of the improvements, Tenant shall, at its sole cost and expense, furnish to County a payment bond of a surety company licensed to transact business in the State of California, or other type of security satisfactory to the County, with Tenant as principal, in the penalty sum of one hundred percent (100%) of the total estimated cost of the improvements and all other necessary appurtenances specified in the Plans, guaranteeing the payment of all labor, materials, provisions, supplies and equipment used in, upon, for or about the performance of said construction work or labor done thereon of any kind whatsoever and protecting County from any liability, losses or damages arising therefrom. Simultaneously, Tenant shall also provide County 12 a performance bond of a surety company licensed to transact business in the State of California, or other type of security satisfactory to County, with Tenant as principal, in an amount equal to one hundred percent (100%) of the total estimated cost of the improvements, guaranteeing faithful performance within twelve (12) months of the commencement of all construction work associated with the improvements. Said bonds or other security shall be in a form acceptable to County and shall name County as obligee. D. Inspection and Acceptance: Tenant shall be responsible for obtaining any necessary permits from all Contra Costa County departments having jurisdiction over the Airport, including but not limited to, the Department of Conservation and Development and the Public Works Department, and all other agencies having jurisdiction over the Airport. All Improvements, including but not limited to buildings, on the Premises, shall be subject to inspection, testing, and acceptance in accordance with applicable law by the Contra. Costa County Public Works Department and the Department of Conservation and Development. Nothing in this Lease shall be construed as approval by County or any other governmental entity acting in its or their governmental capacity of the improvements or to release Tenant .from any governmental application, review or requirement. E. No Warranties: The inspection, testing and acceptance by Tenant under this or any other Section of this Lease, of any plans submitted by or acts performed by County shall not constitute a warranty by County, and shall not relieve Tenant of its obligation to fulfill the provisions of this Lease and of the Plans as approved by County, nor shall County be thereby estopped from exercising any of its remedies provided at law or equity or under this Lease. F. Engineering: County shall furnish Tenant with control information required for ground and pavement elevations, specifications for earthwork, pavement, and drainage. Tenant shall be responsible for all other engineering work and the accuracy thereof. Any material deviations from the approved Plans must have prior written approval by the County. G. Utilities: Upon the prior written approval of the Director of Airports, Tenant may install any utilities on the Premises at its own cost and expense and shall pay any and all' connection, inspection, and service fees in connection therewith. H. Paving and Concrete: Tenant shall upgrade the pavement for the aircraft movement areas and concrete floors located on the Premises such that they will accommodate the heaviest aircraft expected to operate in the area, or fully loaded fuel trucks, whichever is of greater weight, with a minimum expected pavement life of no less than twenty-five (25) years. All road.access shall be in accordance with Contra Costa County Public Works Department standards. I. Frontage Improvements: Tenant shall, at Tenant's sole expense, construct any necessary frontage improvements. Said frontage improvements shall be completed according to specifications furnished by County and approved by the Contra. Costa County Public Works Department. J. Notice of Nonresponsibility: A notice of County non-responsibility shall be_posted and recorded by Tenant during construction in accordance with Civil Code Sections 3094 13 ' and 3129. Tenant shall mail a copy of the notice to the Director of Airports upon filing with the County Recorder. K. Signs: Tenant may erect signs and advertising media and place the same upon the improvements in accordance with FAA and applicable Airport policy and standards for development, after obtaining the written approval of the Director of Airports and of any other public agency having jurisdiction. 12. ALTERATIONS AND ADDITIONS Tenant accepts the Premises in an "as is" condition with no warranty, express or implied, on the part of County as to the condition of any existing improvements, the condition of the soil or the geology of the soil. Tenant shall not make any alterations to, or erect any structures or make any exterior improvements, on the Premises without the prior written consent of County. In addition, Tenant shall give County five (5) days notice in writing prior to the start of construction of any alterations or additions previously approved by County. Any alteration or addition approved by County shall be constructed at the sole cost and expense of Tenant. In the event Tenant makes alterations or constructs additions that violate the conditions contained in this Lease (an "Unauthorized Addition"), County has the right to direct Tenant to remove any Unauthorized Addition, and upon such direction from County to Tenant, Tenant shall remove any Unauthorized Addition at Tenant's sole cost and expense. 13. SURRENDER OF POSSESSION On the expiration, or .termination or cancellation of this Lease, Tenant shall surrender to County the Premises and all of Tenant's improvements and alterations in good condition (ordinary wear and tear excepted), except for alterations and improvements that Tenant has. the right to remove. or is obligated to remove under the provisions of this Lease. If County does not desire title to such improvements, Tenant shall, upon written notice by County, and.at Tenant's sole expense, restore the Premises to a condition satisfactory to County. If Tenant falls to remove its personal property or other improvements from the Premises at County's request, or fails to restore the Premises. to. a condition satisfactory to County, upon the expiration, termination or cancellation of this Lease, said property may be removed, and said restoration may be performed, by County at Tenant's sole expense, and the cost of said removal or restoration shall be'deducted from Tenant's Security Deposit, as provided for in Section 9D. Security Deposit. In the event that County's cost of performing the work just . described is greater than the amount of the Security Deposit described herein held by County, Tenant shall immediately pay to County the amount which will repay the amount expended by County in full.-Such additional amounts shall be considered to be Additional Rent. If Tenant fails to surrender any portion of the Premises to County on expiration or thirty (30) days after termination or cancellation of the Lease, as required by this Section, Tenant shall defend, indemnify, and hold harmless County from all claims, liability, costs, and damages resulting from Tenant's failure to surrender the Premises, including, without limitation, claims made by a succeeding lessee or sublessee resulting from Tenant's failure to surrender'the Premises. Title to Tenant's personal property shall at all times during the term of this Lease, or any extension thereof, remain in Tenant. 14 14. MAINTENANCE, REPAIR AND STORAGE A. Maintenance. Tenant shall, at its.sole expense, throughout the term of this Lease, maintain the Premises in good order, condition, and repair. All maintenance, repairs, and replacements shall be of a quality equal to or better than the current materials and workmanship and consistent with approved plans. County shall be the sole judge of the quality of and standards for maintenance pursuant to rules and regulations that may be established by the County. Tenant shall perform all maintenance and repairs in compliance with, and all maintenance and repairs necessary to comply with, all applicable statutes, ordinances, resolutions, regulations, orders, and policies now in existence or adopted from time to time by the United States, the State of California, the County of Contra Costa and other government agencies with jurisdiction over the Airport. If Tenant fails to perform its maintenance obligations as described herein within thirty (30) days of written notice by County to Tenant of such failure, County shall have the right to enter upon the Premises and to perform such necessary maintenance obligations and Tenant shall be required to reimburse County for the costs thereof within ten (10) days after receipt of an itemized invoice therefor. If such maintenance obligations are of such a nature that they cannot reasonably be completed within such thirty (30). day period, Tenant shall be deemed to have performed its maintenance obligations -within such thirty (30) day period if Tenant has started such maintenance obligations within such thirty (30) day period and diligently pursues such maintenance obligations to completion. B. Storage on Premises. No materials, supplies, products, equipment or other personal property that is not directly necessary for the uses outlined in Section 4, USE, and no vehicles other than Tenant's employees' personal vehicles and the fuel truck described in Section 7C. Fuel Flowage Fees; shall be permitted to remain on any portion of the Premises without the prior written consent of the Director of Airports. Tenant shall store personal property items, supplies and materials and combustibles inside the County hangar in a safe, neat and sanitary manner. 15. UTILITIES Tenant shall pay, on Tenant's own account, all charges for utilities used or consumed on the Premises, including, but not limited to, gas, water, electricity, garbage disposal, storm water and sanitary sewer services, janitorial services, and telephone services; 16. WASTE, QUIET CONDUCT, NUISANCE,AND POLLUTION A. Tenant shall not commit, or'suffer to be committed, any waste upon the Premises or any nuisance or other act or thing that may disturb the quiet enjoyment of the use of Byron- Airport or surrounding property. B. Tenant shall provide, as necessary, a separate drainage, collection, and/or separation system to ensure that no untreated liquid waste from any type of operation, including aircraft cleaning and oil change operations will enter the Airport storm drainage or sanitary system. 15 C. Tenant shall not permit any activity on the Premises that:directly or indirectly produces unlawful amounts or levels of air pollution, (e.g., gases, particulate matter, odors, fumes, smoke, dust), water pollution, noise, glare, heat emissions, electronic or radio interference with navigational and communication facilities for the operation of the Airport and for its use by aircraft, trash or refuse accumulation, vibration, prop-wash, jet blast, or any other activity that is hazardous or dangerous by reason or risk of explosion, fire, or harmful emissions. D. County shall have the right to enter onto the Premises at any time without prior notice to verify Tenant's compliance with this Section. 17. HAZARDOUS MATERIALS A. Definition of Hazardous Materials: As used in this Lease, the term "Hazardous Materials" shall mean any hazardous or toxic substance, hazardous or radioactive material, or hazardous waste, pollutant or contaminant at any concentration that is or becomes regulated by the United States, the State of California, or any local government authority having. jurisdiction over the Premises. Hazardous Materials include, but are not limited to, the following: (1) Any "hazardous waste," "extremely hazardous waste,"or"restricted hazardous waste," as defined in Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health & Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law); (2) any "hazardous substance" as that term is defined in Section 25316 of the California Health & Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act);.(3) any material or substance listed as a chemical known to cause cancer or reproductive toxicity pursuant to Section 6380 of the California Labor Code, Division 5, Part 1, Chapter 2.5 (Hazardous Substances Information and Training Act); (4) any "hazardous.waste" as that term is defined in the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903); (5) any "hazardous substance" as that term is defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601); (6) any pollutant, contaminant, or hazardous, dangerous, or toxic chemical, material, or substance, within the meaning of any other applicable federal, state, or local statute,.ordinance, resolution, regulation, order, policy, or requirement, including consent decrees and administrative orders imposing liability or standards of conduct concerning any hazardous, dangerous, or toxic waste, substance, or material, now or hereafter in effect; (7) any petroleum product; (8) any radioactive material, including any "source material", "special nuclear material", or "byproduct material" as defined in 42 U.S.C. Section 2011 et seq.; (9) any asbestos in any form or condition; and (10) any polychlorinated biphenyls (PCBs) and any substances or any compounds containing PCBs. B. Use of Hazardous Materials: Tenant shall not cause or permit any Hazardous Material, as defined in this Section, to be generated, brought onto, stored, used, emitted, released, discharged or disposed of in, on, under, or about the Premises by Tenant or its officers, employees, agents, contractors, renters, guests or invitees, except for limited quantities of (1) standard office and janitorial supplies containing chemicals categorized as Hazardous Materials; (2) motor oils, hydraulic fluids, fuel and other materials commonly used in aircraft storage and fueling facilities; (3) such other Hazardous Materials as are approved in advance in writing by County. 16 C. Notification to the Director of Airports. ,If, during term of this Lease, Tenant becomes aware of (a) any actual or threatened release of any Hazardous Materials on, under, or about the Premises; or (b) any inquiry, investigation, proceeding, or claim by any government agency or other person regarding the presence of Hazardous Material on, under, or about the Premises, Tenant shall (1) immediately provide verbal notification to the Director of Airports and (2) provide written notification of such release or investigation to the Director of Airports within twenty-four (24) hours after learning of it. In the event Tenant receives any claims, notices of violation, reports, or other writings concerning the aforementioned release or investigation, Tenant shall furnish copies of all such materials to County no later than the business day following Tenant's receipt thereof. Notification to the Director of Airports under this Section does not relieve Tenant of any obligation to notify any governmental agency under any applicable law. D. Indemnification: Tenant shall, at Tenant's sole expense and with legal counsel reasonably acceptable to County, indemnify, protect, defend, and hold.harmless County and County's officers, employees, agents, and contractors from and against any and all demands, losses, claims, costs, suits, liability and expenses (including without limitation, attorneys' fees and consultant fees), arising out of or relating to the violation of any law regulating or the use, handling, generation, emission, release, discharge, storage or disposal, of any Hazardous Materials (such as those laws listed in this Section 17) ("Environmental Laws") by Tenant or Tenant's officers, employees, agents, contractors, renters, guests or invitees. This indemnification applies whether or not any government agency has issued a cleanup order. Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision include, but are not limited to: (1) losses attributable to diminution in the value of the Premises; (2) loss or restriction of use of rentable space on the Premises; (3) adverse effect on the marketing of any rental space. on the Premises; and (4) penalties and fines levied by, and remedial or enforcement actions of any kind issued by any regulatory agency (including but not limited to the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the Premises and surrounding properties). This indemnification clause shall survive any expiration or termination of this Lease. 18. STORM WATER DISCHARGE County' has applied for and received a National Pollutant Discharge Elimination Permit ("NPDEP") under the Federal Clean Water Act, which covers Tenant's operations on the Premises. Tenant shall ensure that no pollution or Hazardous Materials of any type will be discharged into the storm water system at the Airport, and shall comply with the NPDEP in all respects and be help responsible for any such discharge by Tenant or by, any of Tenant's officers, employees; agents, contractors, renters, guests; or invitees during the entire term of the Lease. Any fine or cost of remedial action required of County, by any agency or agencies having jurisdiction thereover, as a result of actions on or discharges from the Premises, will be charged to Tenant, and Tenant shall immediately reimburse County for these costs upon demand. In addition, any discharge of pollutants or Hazardous Materials, as defined herein, on or from the Premises shall be considered a default of this Lease and shall be grounds for its 17 termination. County will give Tenant a copy of the NPDEP so Tenant can understand its responsibilities under this section. 19. RULES AND REGULATIONS: UNLAWFUL USE Tenant shall obey and observe, and shall ensure that all persons entering upon the Premises obey and observe, all of the terms and conditions of this Lease and all statutes, ordinances, resolutions, regulations, orders, and policies now in existence or adopted from time to time by the United States (including, but not limited to, the Federal Aviation Administration), the State of California, the County of Contra Costa, the San Francisco Bay Regional Water Quality Control Board, and any other governmental agencies with jurisdiction over the Airport (collectively, the "Applicable Laws") including, but not limited to, Applicable Laws concerning health, safety, fire, accessibility, police, and the environment. Tenant shall be responsible for paying all fines and penalties levied by any governmental .agency for any violation of an Applicable Law associated with activities on the Premises. 20. SECURITY County shall have no obligation to provide security to the Premises. At a minimum, Tenant shall provide adequate all-night illumination of the perimeter of all buildings, vehicular parking lots, and pedestrian walkways on and surrounding the Premises, as approved in writing by the Director of Airports, and shall provide that level of additional security that Tenant desires, as approved in writing by the Director of Airports. 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 the Airport, Tenant shall comply with said security requirements at Tennant's sole expense. If Airport is fined by the FAA for a security violation caused by Tenant, Tenant shall immediately reimburse County upon demand. 21. HOLD HARMLESS AND INDEMNIFICATION Tenant shall'indemnify, defend, save, protect and hold harmless County, its governing body, elective and appointive boards, commissions, officers, agents, and employees from and against any and all claims, costs, judgments, and liabilities, including reasonable attorneys' fees, for any damage, injury, or death, or inverse condemnation claims of third parties or any combination of the foregoing, including without limitation, all consequential damages, from any cause whatsoever to persons or property arising directly or indirectly out of, from, or connected with Tenant's acts or omissions or the performance of Tenant's obligations under this Lease or the acts or omissions, intentional or negligent, of Tenant's officers, agents, servants, employees, licensees, sublessees, renters, contractors, concessionaires subcontractors, guests, or business invitees, save and except claims or litigation arising through (and only to the extent of) the sole negligence or sole willful misconduct of County, its officers or employees, and, if required by the County, will defend any such actions at Tenant's sole cost and expense. 22. INSURANCE Tenant shall procure and maintain, at its sole cost and expense, at all times during the term of this Lease, the following insurance policies issued by an insurance company or insurance 18 companies authorized to do business in California, with a financial rating of at least an A- status as rated in the most recent edition of Best's Insurance Reports: A. Commercial Genera! Liability, Property Damage, and Hangarkeeper's Insurance: Tenant shall obtain and maintain, owner, landlord, and tenant Commercial General .Liability Insurance with a financial rating of at least an A- or P status (pooled insurance coverage) covering and insuring all. parties hereto (including naming Contra Costa County and its officers, agents, and employees as additional insureds under the policy or policies) with a minimum combined single limit coverage of One Million and No/100 Dollars ($1,000,000.00) for all damages due to bodily injury, sickness or disease, or death to any person and damage to property, including the loss of use thereof, arising out of each accident or occurrence arising out of ownership, maintenance, or use of the Premises and all operations necessary or incidental thereto. Tenant shall also obtain and maintain Hangarkeeper's Liability Insurance in the minimum amount f One Million and No/100 Dollars ($1,000,000.00) for each aircraft in or on the Premises. Both liability insurance and Hangarkeeper's insurance shall be factored periodically to maintain adequate coverage. B. Fire Insurance: Tenant shall insure for fire and extended coverage risks all personal property, improvements, and alterations in, on, or about the Premises. Such insurance shall be in an amount equal to one hundred percent (100%) of insurable, full replacement value of any improvements located thereon, and shall include vandalism and malicious mischief endorsements. Said fire insurance policies shall contain loss payable endorsements in favor of the parties as their respective interests may appear hereunder. County and its officers, agents, and employees shall be named as additional insureds in such policy or policies. C. - Casual : In the event of damage to or destruction of buildings or other improvements on the Premises, Tenant shall fully repair or replace them, and the proceeds of any insurance policy paid on account of such damage or destruction shall be used to defer the cost of repairing or replacing the improvements. D. Worker's Compensation: Tenant shall obtain workers' compensation insurance as required by law; covering all employees of Tenant, if any, and said insurance must be kept in force during the entire term of this Lease. E. Form of Policies: All policies of insurance required by this Section shall be in such standard form and written by such qualified insurance companies as shall be satisfactory to County. Upon the execution of this Lease agreement, evidence of such insurance shall be provided by Tenant by filing with County a copy of the policy and policies, together with duly executed certificates to the effect that the insurance required by this Lease is extended in favor of and consistent with the terms set forth herein. All such certificates shall specifically state that "Contra Costa County, its officers, agents and employees" are named as additional insureds under such policy or policies, and shall contain a provision that written notice of cancellation, lapse or any change shall be delivered to County thirty (30) days in advance of the effective date thereof. Contra Costa County, its officers, agents, and employees, shall be named insureds in all such policies. 19 F Notice: Each party hereto shall give to the other prompt and timely notice of any claim made or suit instituted with which the party has been served or coming to its knowledge that in any way, directly, contingently, or otherwise, affects or might affect the other party. Each party shall have the right to participate in the defense of any claim or suit instituted to the extent of its own interest. 23. TAXES Tenant agrees to pay before delinquency all taxes (including, but not limited to, possessory interest tax), assessments, license fees, and other charges that are levied and assessed upon Tenant's interest in the Premises or upon Tenant's personal property installed or located in or on the Premises under any levy and assessment by County or other governmental authority. Tenant may pay any taxes or assessments under protest in good faith, without liability, cost or expense to the County, to contest the amount. 24. INSPECTION, ACCESS AND NOTICE County and its agents shall have the right to go upon and inspect the Premises for any reason, including, but not limited to, any improvement constructed, or in the course of being constructed, repaired, added to, rebuilt, or restored thereon. County shall also have the right to serve or to post and to keep posted on the Premises or on any part thereof, any notice .permitted by law or this Lease, including, but not limited to, a notice pursuant to Section 3094 of the Civil Code. County shall not be liable in any manner for any inconvenience disturbance, _ loss of business, or other damage arising out of County's entry onto the Premises as provided in this Section. Tenant shall provide access through the Premises for emergency vehicles. 25. SALE, ASSIGNMENT OR SUBLETTING A. No Sublease or Assignment. Tenant shall not voluntarily sell, assign, transfer or encumber (each, a "Transfer") its interest in this Lease or in the Premises or sublease or allow any other person or entity (except Tenant's authorized representatives) to occupy or use all.or any part of the Premises. Tenant shall not sell or otherwise encumber all or any portion of the improvements to the Premises. Any Transfer of the Premises or any sale or other encumbrance of the improvements thereon shall be voidable and, at County's election, shall constitute a default of this Lease. B. Tenant as a Corporation or.Limited Liability Company. If Tenant is a corporation or a limited liability company, any (i) dissolution merger, consolidation, or other reorganization of Tenant, (ii) the sale or other transfer of a controlling percentage of the capital stock or membership interests of Tenant, or(iii) the sale of fifty percent (50%) of the value of the assets of Tenant shall be deemed a voluntary assignment subject to the provisions of this Lease. The phrase "Controlling Percentage" means (a) in the case of a corporation, the ownership of and the right to vote stock possessing more than fifty percent (50%) of the total combined voting power of all classes of Tenant's capital stock issued, outstanding, and entitled to vote for the election of directors or (b) in the case of a limited liability company, the ownership of and the right to vote membership interests possessing more than fifty percent (50%) of the total combined voting interests of Tenant. 20 26. DEFAULT AND REMEDIES The occurrence of any of the following shall constitute a default(a "Default") by Tenant: A. Failure by Tenant to pay any Rent or other charges when due, if the failure continues for three (3) days after notice has been given to Tenant. Notwithstanding the foregoing, failure by Tenant to pay any Rent or other charges when due twice in any twelve (12)- month period shall constitute an immediate Default without further notice from County. B. Tenant abandons the Premises through its failure to occupy and operate the Premises for sixty(60) days. C. To the'extent permitted by law: (i) Tenant shall become insolvent, file a voluntary petition in bankruptcy or an. involuntary petition in bankruptcy is filed against Tenant, or Tenant shall lose possession of the Premises, or' any portion thereof, by virtue of any attachment, execution, or.receivership, and such insolvency, bankruptcy proceedings or loss of possession is not terminated in Tenant's favor within sixty(60) days thereafter. (ii) Tenant makes a general assignment for the benefit of creditors. D. Failure to comply with any of the provisions of Section 32. Non-Discrimination. E. Any act, condition, event, or failure of performance by Tenant constituting a default under any other provision of this Lease. F. Failure to perform any other provision of this Lease, if the failure to perform is not cured within thirty (30) days after written notice has been given to Tenant. If, in County s reasonable judgment, the Default cannot reasonably be cured within thirty (30) days, Tenant shall not be in Default of this Lease if Tenant commences to cure the Default within the thirty (30) day period and diligently and in good faith continues to cure the Default to completion.. Safety hazards must.be cured immediately. In the_event of a Default, County, at its option, may exercise any and all remedies now or hereafter available to County under law or in equity, all of such rights and remedies to be cumulative and not exclusive, and may declare that the tenancy is terminated and that all of Tenant's rights under this Lease are forfeited. Upon termination of this Lease, County has the right to recover from Tenant: (1) The worth, at the time.of the award, of the unpaid Rent and fees that had been earned at the time of the termination of this Lease; (2) The worth, at the time of the award, of the amount by which the unpaid Rent and fees that would have been earned after the date of termination of this Lease until the time of award exceeds the amount of the loss of Rent and fees that Tenant proves could have been reasonably avoided; (3) 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 award exceeds the amount of the loss of Rent and fees that Tenant proves could have been reasonably avoided; and (4) Any other amount, and. court costs, necessary to compensate County for all detriment proximately caused by Tenant's default. 21 "The worth, at the time of the award," as used in (1) and (2)'of this Section, is to be computed by allowing interest at the rate of ten percent (10%) per annum or the maximum rate permitted by law, whichever is greater. `The worth, at the time of the award," as used in Paragraph (3) of this Section, is to be computed by discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (I%). 27. WAIVER, VOLUNTARY ACTS The waiver by County of any breach or default shall not constitute a continuing waiver of any other breach or default, whether of the same or any other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by either party shall give the other any contractual right by custom, estoppel, or otherwise. The subsequent acceptance of Rent pursuant to this Lease shall not constitute a waiver of any preceding breach or default by Tenant other than default in the payment of the particular rental payment so accepted, regardless of County's knowledge of the preceding breach or default at the time of accepting the Rent, nor shall acceptance of Rent or any other payment after termination constitute a reinstatement, extension, or renewal of the Lease or revocation of any notice or other act by County. 28. DESTRUCTION If the improvements or-Tenant's personal property on the Premises is damaged or destroyed as a result of any uninsurable cause or risk at the time of damage or destruction, Tenant shall repair, replace, and/or rebuild the Improvements so they are in substantially_ the same condition as they were in immediately before damage or destruction. 29. CONDEMNATION If the whole or any part of the Premises shall be taken for any public or quasi-public use under any actions or by any statute or by right of eminent domain, 'or by private purchase in lieu thereof, then this Lease shall automatically terminate as to the portion taken as of the date said title shall be taken. If any part of the Premises so taken renders the remainder thereof unusable for the purposes for which the Premises were leased, or a portion of the entire Premises is so taken and County deems the balance of the entire Premises unusable for its intended purposes, then County, at its option, shall have the right to terminate this Lease on ninety(90)days notice to Tenant. In the event that this Lease shall terminate or be terminated by such condemnation or other similar taking, all Rent provided for in this Lease shall be paid to the date of termination and Tenant shall have no claim against County for the value of any unexpired portion of the Lease Term, and County shall be entitled to receive the entire award without apportionment with Tenant. If the remaining part of the Premises will be reasonably suitable for the operation of the business described in Section 4. USE, this Lease shall continue in full force and effect as to such remaining part and Ground Rent shall be reduced, pro rata, by the number of square feet of the Premises taken and the Ground Rent shall reflect such reduction. 30. COUNTY'S PROCESSING AND TRANSACTION FEES In the event that Tenant requires or requests County's review, investigation, processing, recordation, or any other action in connection with any Tenant document, proposal or other 22 matter, Tenant shall pay such costs and expenses incurred by County thirty (30) days after demand therefor by County. In addition to any amounts due from Tenant pursuant to the foregoing paragraph, Tenant shall pay to County a transaction fee of Two Thousand Five Hundred and NO/100 Dollars ($2,500.00) ("Transaction Fee"), plus all County's costs, including, but not limited to, staff time at rates, determined by the County Auditor, for County's time spent in connection with County's reviewing a transaction until said transaction is completed. 31. NON-DISCRIMINATION A. Tenant hereby covenants and agrees that in the event.facilities are constructed, maintained,.or otherwise operated on the Premises for a purpose for which a United States Department of Transportation ("DOT") program or activity is extended or .for another purpose involving the provision of similar services or .benefits, Tenant shall maintain and operate such facilities and services in compliance with all requirements imposed pursuant to Title 49, Code of Federal Regulations, Part 21, Non-discrimination in Federally Assisted Programs of the Department of Transportation ("Title 49, CFR Part 21"), and as said Regulations may be amended. B. Tenant hereby covenants and agrees that (1) no person shall be excluded from participation in, denied the benefits of, or be otherwise subjected to, discrimination in the use of the Premises on the grounds of race, color, sex, or national origin, (2) that in the construction of any improvements on, over, or under the Premises and the furnishing of services thereon, no person shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination on .the grounds of race, color, sex, or national origin, and (3) that Tenant shall use the Premises in compliance with all other requirements imposed by or pursuant to Title 49, CFR, Part 21, and as said Regulations may be amended. C. Tenant assures that it will. undertake an affirmative action program as required by 14 CFR Part 152, Subpart E ("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 Subpart E. Tenant assures that no person shall be excluded. on these grounds from participating in or receiving the services or benefits of any program or activity covered by Subpart E. Tenant assures that it will require that its covered sub-organizations provide assurances to the Tenant that they similarly will undertake affirmative action programs and that they will require assurances from their sub-organizations as required by Subpart E to the same effect. D. In the event of breach of any part of the above nondiscrimination covenants, County shall have the right to terminate this Lease and to re-enter and repossess the Premises 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 the expiration of any appeal rights. E. Tenant agrees that it shall insert the above four paragraphs in any sublease, agreement, contract, assignment, etc. by which Tenant grants a right or privilege to any . person, firm, or corporation to render services, supplies, and sales to the public on the Premises. 23 32. CHOICE OF LAW This Lease shall be interpreted and enforced under the laws of the State of California, with venue in the Superior Court of Contra Costa County, California. 33. OPERATION OF AIRPORT BY COUNTY; FAA REQUIREMENTS A. Aviation Hazards: County reserves the right to take any action it considers necessary to protect the aerial approaches of the Airport against obstructions, together with the right to prevent Tenant from erecting, or permitting to be erected, any building or other structure on the Premises which, in the opinion of the County or the Federal Aviation Administration, would limit the usefulness of the Airport or constitute a hazard to aircraft. B. Navigational Aids: County reserves the right during the term of this Lease or any renewal and/or extension thereof to install, at its sole expense, air navigational aids including lighting, in, on, over, under, and across the Premises. In the exercise of any of said, rights, County agrees to give Tenant no less than sixty (60) days' written notice of its intention to install such air navigational aids and to coordinate such installation with Tenant. C. Landing Area: County reserves the right to further develop or improve the landing area of the County as it sees fit, regardless of the desires or view of Tenant, and without interference or hindrance therefrom. D. Nuisance: Tenant acknowledges that the Premises are adjacent to a public Airport and, that Tenant and Tenant's employees and invitees may experience discomfort due to the noise, crowds, and fumes associated with the operation of an .airport. Tenant has negotiated for and entered into this Lease with knowledge of such condition. Tenant hereby waives any claim it, or its subtenants, may have or claim to have for diminution of value of the leasehold caused or related in any way to the operation of the Airport, whether such diminution of value is because of noise, crowds, fumes or otherwise. Further, Tenant and its successors and assigns, and every successor-in-interest to the leasehold or any part thereof covenants that they shall not claim compensation for diminution of value of the leasehold due to, or request equitable relief to abate a nuisance arising from, operation of the Airport. E. Right of Flight: There is hereby reserved to County, its successors and assigns, for the use and benefit of the pubic, a right of flight for the passage of aircraft in the airspace above the surface of the Premises. This right of flight shall include the right to cause in said airspace any noise inherent in the operation of any aircraft used for navigation or flight through the said airspace or landing at, taking off from, or operation on the Airport. F. Covenant Not to Encroach. Tenant by accepting this Lease expressly agrees for itself and 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 above any County "Imaginary Surfaces" as described in the most recent Airport Layout Plan, which is on file in the office of the Director of Airports. In the event the aforesaid covenant is breached. County reserves the right to enter upon the Premises and to remove the offending structure or object and or to cut the offending tree, which shall be at the sole expense of Tenant. 24 1 34. NOISE ORDINANCE Tenant shall abide by all conditions of Contra Costa County Ordinances 87-8 and 88-82, as amended, or any other rules or ordinances relating to noise standards at the Airport, as may be approved from time to time by the Contra Costa County Board of Supervisors. Tenant will provide quarterly noise abatement training, if required, to pilots of aircraft based on the Premises. 35. DEVELOPMENT OF PREMISES A. Tenant shall comply with the notification and review requirements covered by 14 CFR Part 77 of the Federal Aviation Regulations in the event future construction of a building is planned for the Premises, or in the event of any planned modification or alteration of any present or future building or structure situated on the Premises. B. Tenant shall not erect nor permit the erection of any structure or object, or permit the growth of any tree on the Premises to exceed the established height contours. In the event the aforesaid covenants are breached, County reserves the right to enter upon the Premises and remove the offending structure or object and cut the offending tree, all of which shall be at Tenant's sole cost and expense. C. Tenant shall not make use of or develop the Premises in any manner that might interfere with the landing and taking off of aircraft from the Airport or otherwise constitute a hazard. In the event the aforesaid.covenant is breached, County reserves the right to enter upon the Premises and cause the abatement of such interference at the sole cost and expense of Tenant. D. Nothing herein shall be construed to grant or authorize the granting of an exclusive right as prohibited under the Federal Aviation Act (49 U.S.C. Section 40103(e)). E. This Lease and all of its provisions shall be subject to whatever right the United States Government now has or in the future may have or acquire, affecting the control, operation, regulation and taking over of the Airport by the United States during a time of war or national emergency. 36. GENERAL PROVISIONS A. Notices. Any and all notices to be given under this Lease, or otherwise, shall be made by enclosing same in a sealed envelope addressed to the party intended to receive same, at its address, and deposited in the United States Post Office as certified mail with postage prepaid. When so given, such notice shall be effective from the date of the mailing of the same. For the purpose thereof, unless otherwise provided in writing, the address of County is: Contra Costa County Director of Airports Buchanan Field Airport 550 Sally Ride Drive Concord, CA 94520 and the address of Tenant is: 25 Aerosports, Inc. dba Bay Area Skydiving 6901 Armstrong Road Hangar 26 P.O. Box 88 Byron, CA 94514 B. Binding on Successors. The covenants and conditions herein contained shall, subject to the provisions on assignment, apply to and bind the heirs, successors, executors, administrators, and assigns of all of the parties hereto. C. Invalid Provisions; Severability. It is expressly understood and agreed by and between the parties hereto that in the event any covenant, condition, or provision contained herein is held to be invalid by a court of competent jurisdiction, such invalidity shall not invalidate any other covenant, condition or provision of this Lease, provided, however, that the invalidity of any such covenant, condition, or provision does .not materially prejudice either County or Tenant in their respective rights and obligations contained in the valid covenants, conditions, and.provision of this Lease. D. Provisions. All provisions, whether covenants or conditions, on the part of Tenant shall be deemed to be both covenants and conditions. E. Mechanic's and Materialman's Liens. Tenant shall not permit any mechanic's, materialman's, or other lien against the Premises or the property of which the Premises forms a part, in connection with any labor, materials, or services furnished or claimed to have been furnished. If any such lien shall be filed against the Premises or property of which the Premises forms a part, Tenant shall cause the same to be discharged, provided, however, that either party may contest any such lien, so long as the enforcement thereof is stayed. F. Written Agreement. Neither party has relied on any promise or representation not contained in this Lease. All previous conversations, negotiations, and understandings are of no further force or effect. This Lease and all exhibits attached hereto contains all the agreements of the parties and cannot be amended or modified, except by a written agreement signed by both parties hereto. G. Time is of the Essence. Time is of the essence of each provision of this Lease. H. Cumulative Rights and Remedies. The rights and remedies with respect to any of the terms and conditions of this Lease shall be cumulative and not.exclusive and shall be in addition to all other rights and remedies at law or in equity. .Each right or remedy shall be construed to give it the fullest effect allowed in law. I. No Third-Party Beneficiaries. Nothing in this Lease, express or implied, is intended to confer on any person, other than County and Tenant, and their respective successors- in-interest, any rights or remedies under or by reason of this Lease. J. Lease Authorization. This Lease is made and entered into by County in exercise of its authority as recognized in Section 25536 of the Government Code of the State of California. Tenant hereby represents and warrants that it is a sole proprietorship duly organized and validly existing under the laws of the State of California. 26 K. Counterparts. This Lease may be executed in one or more counterparts, each of which shall be deemed a duplicate original, but all of which together shall constitute one and the same instrument. L. Headings and Captions. The section headings and captions of this Lease are, and the arrangement of this instrument is, for the sole convenience of the parties to this Lease. The section headings, captions, and arrangement of this instrument do not in any way affect, limit, amplify or modify the terms and provisions-of this Lease. The Lease shall not be construed as"if it had been.prepared by one of the parties, but rather as, if both parties have prepared it. The parties to this Lease and their counsel have read and reviewed this Lease and agree that any rule of construction to the effect that ambiguities . are to be resolved against the drafting party shall not apply to the interpretation of this Lease. 37. SIGNATURES COUNTY TENANT CONTRA COSTA COUNTY, a political AEROSPORTS, INC., DBA BAY AREA Subdivision of the State of California SKYDIVING, a California Corporation By By u� Keith Freitas Ats Director of Airports Its RECOMMENDED FOR APPROVAL: By Beth Lee Assistant Director of Airports By Karen A. Laws Principal Real Property Agent APPROVED AS TO FORM: SILVANO B. MARCHESI, County Counsel By Pamela Zaid, Deputy County Counsel RB:srtr ar G:XRea1Prop\Airporfl13ay Area Skydiving Lease Agree(09-22-08)ver.1 i.doc 09/22/08 27 Byron Airport Property Lease Bay Area Skydiving EXHIBIT "A" Real property, being a portion of the North one-half of Section 22, Township 1 South, Range 3 East, Mount Diablo Meridian, situated in an unincorporated area of the County of Contra Costa, State of California, more particularly described as follows: Commencing at the northeast comer of said Section 22 (T1S, R3E, MDB); thence along the north line of said Section 22, South 89119'57" West, 2654.71 feet to the northeast corner of the northwest one-quarter of said section 22; thence leaving said north line, South 10003'51" West, 1030.50 feet to the Point of Beginning of the herein described parcel of land; thence from said Point of Beginning, South 89010'35" East, 17.00 feet; thence South 30106'27" East, 108.22 feet; thence South 53125'10" East, 70.00 feet; thence South 39152'29" East, 122.50 feet; thence South 8131'46" West, 60.05 feet; thence South 71111'43" East, 39.44 feet; thence South 8031'46" West, 16.26 feet; thence North 71111'43" West, 81.75 feet; thence North 87158'09" West, 158.87 feet; thence North 0049'25" East, 285.82 feet to the Point of Beginning. Containing an area of 0.86 acres of land, more or less. - Exhibit "B"-attached and by this reference made apart hereof.- This ereof.This real property description has been prepared by me or under my direction, in conformance with the Professional Land Surveyors Act. O\,AND g Signature: (� .- c, -� � SA. STFR`�� Licensed Land Surveyor v 2 p Contra Costa County Public Works Department ' Exp.9/30/07 Date: 4 L.S.6571 �/�3 �� 2� OF G:\Design\SURVEYS\Legals\Exhibits2005\Byron Airport(rev-2).doc April 3,2007 13 TC f"1'- ten[ 5•S�+ a F 1���,�'- t � �� �Y ,CS � 1. - . %*4, Jt+�,i v> ,t•e ' tf{o a vM, `3 r t �t P ....1 1 5`• ,4. ���e iC��4"� � - i ���>�. � >{ ����hv� Y4��r �K �t j. 3�Ja.• ..r��.� �r 4-Q,`�w' f »> 5 �/,. .�� �� �v i`., t�J� Af Jica�,'41��tt��•`M� iA;i .fJ " v t r <^ �' 'r � jJ. i , {� ,•, i� �OYk i jV 1+L T(',• _, 'Y� '/Yi y'Z G .yW,ra"�}! 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