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HomeMy WebLinkAboutAgenda Bill 4D 06/21/2010,4~~.vidcv ItP,vw #4: l7 ~SALU a ,~ Ig58 DATE: June 21, 20:1.0 TO: Honorable Mayor and Members of the City Council through City Manager FROM: Vincent Marengo, Director of Public Works SUBJECT: Resolution Approving a Commercial Lease Agreement with. Timothy Rogers, dba Calibro Avionics; at the Petaluma^Municipal Airport, and Authorizing the City Manager to Execute the Agreement on Behalf of'the City of Petaluma RE GO1VIlVIENDA'I'I ON: It is recommended that the City Council adopt the attached resolution approving a commercial lease agreement with Timothy .Rogers, .dba Calibro .Avionics, at the Petaluma Municipal Airport, and authorizing City Manager to executethe agreement on behalfof the City of Petaluma. BACKGROUND: To provide services for,Petaluma Muncpal.Airport users and generate-revenue to support airport operations, the City leases :hangars to aircraft owners and."users.. In 2007, the City Council approved Ordinance 2268 N.C.S., which amended the. Petaluma Municipal Code to provide for a more efficient approval process for Airport leases. Pursuant to Petaluma Municipal Code section 16:06:200, specialized leases.must be approved by Council resolution. The Calibro Avionics lease falls into this category because it is for specif c commercial use by Calibro's avionics business. For this reason, it requires individual approval by resolution. City ,Council approved a resolution for a commercial pease with Timothy Rogers, dba Calibro Avionics, at its October 1.9, 2009 meeting. However; further review of Elie lease agreement indicated that :item 3a:{Rent. Payments) called for correction of a rate increase date,, from December 31', .2009, to June'3.0; 2009, in order to align it with. other executive leases. In addition, the lease .agreement has .been revised to reflect the original .rental amount of $1,865, rather than $1.,920; as stated.: Subsequent to commencement-of the agreement, rate increases were imposed on all executive hangars on July 1, 2009.:For this reason, staff is returning to Council to request approval-ofa:revised lease .agreement. Agenda Review: - r-~ e .Dept. IDirector City Attorney Finance Director._~%~ City Mana g~T~-{, DISCUSSION: Hangar 18A is an executive City hangar, located within the Aviation Commercial Subzone at the Petaluma Municipal Airport. Timothy Rogers,. dba Calibro Avionics, installs and repairs aircraft avionics, which is allowed in this sub zone. Calibro desires to lease a hangar of this size to work on large aircraft, as well as multiple smaller aircraft. The avionics shop is well known throughout California and is a valued business partner to the Airport. This commercial operation cannot utilize the standard form .lease for hangars. FINANCIAL IMPACTS: Annual Lease Income from Hangar 1`8A: $23,040 Total Annual Lease Revenue to the Airport, including Hangar 18A $862,200 Name of Account: Lease T-hangar Account Number: 6100-43111 Current Account Balance: $606,508 ATTACHMENTS Resolution, including Exhibit-A to Resolution, Commercial Lease Agreement 2 ATTACHNiELVT 1 RESOLUTION APPROVING A COMMERCIAL LEASE AGREEMENT WITH TIMOTHY ROGERS, DBA CALIBRO AVIONICS, AT THE PE'I'ALUIVIA MUNICIPAL AIRPORT, AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT ON BEHALF OF THE CITY OF PETALUMA WHEREAS, Section 46 of Article VII of the Petaluma City Charter requires that action providing for lease of City property be taken by ordinance of the City Council unless the Council takes action pursuant to a ,general law of the State; and WHEREAS, Petaluma Municipal Code Chapter 1.6.06 was adopted by Ordinance 2268 N.C.S. in 2007 to comply with City Charter Section 46 and establish an approval process for airport leases; and WHEREAS, Petaluma Municipal Code section 16.06.200 provides that the City Council may approve specialized airport leases by resolution; and WHEREAS, Timothy Rogers, dba Calibro Avionics, operates ~a business at the Petaluma Municipal Airport and desires to enter into a specialized lease agreement for commercial use of hangar 18A, an executive hangar located in the Aviation Commercial Sub-zone of the Petaluma Airport; and WHEREAS, staff has negotiated with Mr. Rogers terms of the Commercial Lease Agreement, a copy of which is attached hereto as Exhibit A ("Calibro Avionics Lease"); and WHEREAS, the Calibro Avionics Lease was recommended for approval by the Airport Commission at its October 1, 2009 meeting. NOW, THEREFORE, BE IT RESOLVED that: 1. The Calibro Avionics Commercial Lease Agreement attached. hereto as Exhibit A and incorporated.herein by reference, is approved. 2. The City Manager is authorized to execute the Calibro Avionics Lease on behalf of the City of Petaluma. 3 EXlil~l~' ~- 'r0 ICES®LlJT10P1 C®MIVIERCIA~L LEASE AGREEMENT PETALUMA MUNICIPAL AIRPORT THIS LEASE AGREEMENT ("Lease") is made and entered into as of the day of 2010 (the date upon which this Lease has.: been approved by the Petaluma City Council- and hereinafter, the "Effective Date"), by and between the City of Petaluma (the "City"), a California municipal corporation, hereinafter referred ~to as "Landlord," and Timothy Rogers, dba Calibro Avionics, a sole proprietor, hereinafter. referred to as "Tenant." Landlord and Tenant are hereinafter individually referred to as "Party" and collectively referred to as the "Parties." WITNESSETH WHEREAS, Landlord is a California municipal corporation duly organized and operating under the laws of the State of California, and owns all that certain real property commonly referred to as the Petaluma Municipal Airport ("Airport"), located at 601 .Sky Ranch Road, Petaluma, California (the "Property"), including that certain improved property consisting of approximately 3,300 square feet, commonly known as Hangar 18A, located within the Aviation Commercial Subzone of the Airport, as more particularly described in Exhibit A attached hereto (the "Leased Premises"); and WHEREAS, Landlord deems it advantageous to itself and the operation of the Airport to lease certain portions of Airport land and facilities as further described herein, together with certain privileges, right, uses and interest therein, as hereinafter set forth; and WHEREAS, Tenant maintains a City business license. and proposes to lease the Leased.Premises fora "limited service commercial operation" which shall specifically involve aircraft radio equipment sales and maintenance, as-more particularly described herein; and WHEREAS, Tenant has indicated a willingness and ability to properly keep and maintain the Leased Premises in, accordance with standards established by Landlord.. and to otherwise comply with the terms and provisions of this Lease. NOW, THEREFORE, in consideration of the promises and mutual covenants contained in this Lease, the Parties hereby agree as follows: 4 1. LEASE OF PREMISES Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, pursuant to the covenants, terms and conditions set forth herein, the Leased Premises described in Exhibit A, Hangar 18A, which is attached hereto and made a part of this Lease. 2. LEASE TERM The term of the Lease ("Lease Term") shall commence on January 1, 2009 (the "Commencement Date") and shall continue thereafter on a month-to-month tenancy until either Party elects to terminate the Lease by giving the other Party at least thirty (30) calendar days' written notice. Upon the expiration of such Lease Term Tenant agrees to yield and deliver to Landlord the Leased Premises acid .any and all improvements and appurtenances erected or added by Tenant pursuant to Section 4 of this Lease. 3. RENT PAYMENTS (a) From the Commencement Date and continuing through June 30, 2009, Tenant shall make rent payments ("Rent") to Landlord in the amount of One Thousand Eight Hundred Sixty-Five .Dollars ($1,865) per month. Commencing on July 1, 2009 and continuing through June 30, 2010, Tenant shall pay Rent to Landlord in the amount of One Thousand Nine Hundred Twenty Dollars ($1,920) per month. All Rent shall be due in .advance, by the first day of each and every month, during the Lease Term. (b) At the commencement. of each subsequent twelve (12) month period, beginning on July 1, 2010 and .continuing through June 30th of the applicable year, Rent shall be; increased by the greater of (i) three percent (3%), or (ii) an amount equal to the percentage increase . in the Bureau of Labor Statistics Cost of Living Index -San Francisco -Oakland, all items,. for the preceding year. (c) In the event a Rent payment is not made within twenty (20) days of the due date, there shall be a late fee of ten percent (10%) of the amount due and owing, which late fee shall become part of that month's Rent. Furthermore, and in addition thereto, any amount of Rent and/or late fees unpaid after thirty (30) days shall be subject to a one and one-half percent (1-1/2%) interest charge on the unpaid amounts, which interest shall likewise become part of the Rent. 4. CONSTRUCTION OF IMPROVEMENTS AND ALTERATIONS (a) Unless otherwise provided in the Lease, neither Tenant nor Landlord shall have any responsibility for the construction of any improvements on or outside the Premises. 5 (b) Tenant may not construct any improvements, make any alterations, install any fixtures, or make any additions to the Leased Premises without the prior written consent of Landlord. In the event that such consent is given, Tenant shall be responsible for obtaining all required permits; including but not limited to .building permits, prior to commencing work authorized by Landlord pursuant to this Section 4, and shall be subject to Landlord's further reasonable conditions, including without limitation, construction in conformity with all applicable laws, ordinances, rules and regulations (including, if applicable, California prevailing wage requirements contained in Section 1720 and following of the California Labor Code). Tenant shall further be required to submit the design of any such authorized work to Landlord for approval before commencing work. (c) Upon completion of such work, any Landlord-authorized alterations, fixtures, additions or other improvements pursuant to this Section 4 shall become the property of Landlord and may not be removed or altered without..Landlord's prior written consent. (d) Landlord may require Tenant to remove, at Tenant's sole expense, any unauthorized alterations, fixtures, additions or improvements and/or require Tenant to restore the Leased Premises to its condition. prior to the Lease Term, .normal wear and tear excepted. In the event that Tenant fails to comply with such requirement within any reasonable period established by Landlord, Landlord may remove such improvements, fixtures, additions or other alterations and deduct the cost thereof'from amounts, if any, otherwise payable to Tenant pursuant to this Lease. Tenant's :failure to comply with the requirements of this Section 4 shall constitute an Event of Default. 5. UTILITIES AND PARHING (a) Tenant shall pay telephone service and all costs, if any, for the installation and connection of such services. Landlord shall pay for all water, sanitary sewage, and electric power, and shall pay all costs, if any, for the installation and connection of such services. (b) Tenant shall. have access to such parking as may be identified on Exhibit A,. subject to Landlord- s ..reasonable notification to Tenant of future changes to entrances, exits, traffic lanes, boundaries and location of parking areas. 6. USE OF PREMISES The Leased Premises shall be used as follows: (a) Tenant shall' use and occupy the Leased Premises for its normal business operations ("Commercial Operations") which consist of the sale, maintenance, repair, refurbishment, construction and reconstruction, demonstration and sale of any and all 6 types of aircraft radio equipment; together with all. operations customarily ancillary thereto, and for no other purpose. (b) Tenant is prohibited from engaging in the following: (i) The sale of food to or the consumption thereof by the public, provided, however, that "snack foods", sandwiches and candy may be sold from mechanical dispensers. (ii) The sale or consumption of alcoholic beverages, provided that coffee and soft drinks may be sold from mechanical dispensers as provided above. (iii) The use of or permission to use the Leased. Premises in any manner constituting waste or a public or private nuisance, or a disturbance to the quiet enjoyment of the use of the surrounding Airport Property and/or facilities. (iv) The use, storage, transportation, release. or disposal of any "Hazardous Substance," as defined in California Health and Safety Code Sections 25501 (o), (p) and .(g), on the Property, including without limitation on the Leased Premises, by Tenant or any of Tenant's employees, agents, contractors, or invitees. (v) Any use that is riot permitted in the Aviation Commercial Subzone of the Airport. 7. DUTY TO ACT CONCERNING CONTAMINATION Notwithstanding .Section 7, b) (iv), and in addition and not in lieu of said Section and of Section 23 regarding indemnity, if the presence of any Hazardous Substance on the Leased Premises caused or permitted by Tenant results in any contamination of the Leased Premises and/or the Airport, Tenant shall promptly and at its sole expense take all actions as are necessary to render the Leased Premises and the Airport in compliance. with all .applicable environmental laws,; provided, however, that Landlord's approval of such actions shall first be obtained. Landlord's approval shall riot be unreasonably withheld so long as Tenant's proposed actions, in Landlord's sole reasonable judgment, will not potentially have any material adverse long-term or short-term effect on the Leased Premises and/or the Airport. 8. NONDISCRIMINATION (a) Tenant for itself, its personal representatives, successors in interest and assigns as apart of the consideration hereof, does hereby covenant and agree that in the event the Leased Premises and any improvements thereon are constructed, 7 maintained or otherwise- operated for a purpose for- which a Department of Transportation 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 other requirements imposed pursuant to 49 Code of Federal Regulations Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, as the same may be amended from time to time. Furthermore, Tenant shall use the premises in compliance with all other requirements imposed by or pursuant to 49 Code of Federal Regulations Part 21,, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, as the same may be amended from time to time. (b) Tenant for itself, its personal representatives, successors in interest and assigns, as apart of the consideration hereof, does hereby covenant and agree that there shall be no discrimination against or segregation of any person or group of persons on account of race color, religion, creed, sex, .sexual orientation, disability, marital status, familial status, ancestry or national origin in the use, occupancy, or enjoyment. of the Leased Premises or any part thereof, nor shall Tenant or any person claiming under or through Tenant establish or permit any such practice or practices of discrimination or segregation, including with respect to the hiring, promotion or employment of employees, consultants or contractors. Tenant shall include such provisions in all leases, licenses, permits, contracts and other instruments executed by Tenant with respect to the Leased Premises, and shall diligently enforce the same. 9. OPERATION OF AVIATION BUSINESS BY TENANT (a) This Lease shall be subordinate and subject to the Grant Agreement ("Grant Agreement"), by and between the United States of America, Federal Aviation Agency, and the City, and any subsequent amendments thereto. (b) Tenant shall publish a schedule setting forth its hours of operation. (c) The Airport Manager shall investigate any complaints against Tenant by members of the public. If the City finds that the complaint is justified, the City may direct Tenant to take such reasonable action as necessary to rectify 'the complaint or prevent its recurrence. If Tenant is aggrieved by any such directive, Tenant may appeal therefrom to the City's Airport Commission, whose decision shall be appealable to the Petaluma City Council, whose decision shall be final. 8 (d) Tenant agrees to observe and obey all rules and regulations promulgated and enforced by Landlord or any other appropriate authority having jurisdiction over the Airport during the Lease Term and at all times to use and operate the Leased Premises in compliance with all applicable statutes, ordinances, laws, regulations and other requirements, now or hereafter imposed, by the City, county, state, or federal authorities. Landlord's rules and regulations are expressly made a part of this Lease. 10. CONDITION OF PREMISES Except as may be otherwise specified in this Lease, Tenant hereby accepts the Leased Premises in the condition existing as of the earlier of Tenant's possession of the Leased Premises or commencement of the Lease Term. 11. MAINTENANCE AND REPAIRS Landlord shall have no obligation to make repairs to the Leased Premises. Tenant shall, at its sole cost and expense, keep and maintain the Leased Premises and appurtenances, and every part thereof, in good and sanitary order, condition and repair, and hereby waives all ~~ right to make repairs at the expense of Landlord as provided. in Section 1942 et seq. of the California Civil Code or otherwise. Any failure to maintain or make said repairs upon being notified by Landlord shall constitute an Event of Default by Tenant. . 12. SIGNS Tenant shall be privileged to erect such signs and advertising media as comply with all applicable laws, rules and regulations, including without limitation the requirements of the Petaluma Municipal Code governing signs. 13. INSURANCE Tenant agrees to procure and maintain at its cost and expense, and at all time :during the Lease Term, insurance in accordance. with this Section T3 and Exhibit B which is attached hereto and made a part of this Lease. Exhibit B sets forth the minimum kinds and amounts of insurance that Tenant must maintain pursuant to this Lease, as well as required endorsements and other requirements. Insurance required pursuant to this Section l3 and Exhibit B may be modified in the sole discretion of City's Risk Manager or City Manager. Any such approved insurance modifications shall be by written amendment of this Lease in accordance with Section 27. Failure to maintain the required insurance in effect for the duration of this Lease shall constitute an Event of Default by Tenant. 9 14. TAXES Tenant agrees to pay promptly all taxes and assessments related to items of property including both real .and. personal property within the purview of this Lease, which maybe levied or assessed upon, said properties leased or owned by Tenant, as Tenant's interest may appear when the said taxes and assessments become due and payable during the occupancy of the. Leased Premises under any levy or assessment by county, City or other legally authorized .governmental authority. Without limiting the foregoing, Tenant is advised that under California Revenue and Taxation Code Section 107.6, execution of this Lease may create a possessory interest in Tenant subject to property taxation and hereby acknowledges that in such event Tenant shall be solely responsible for the payment of property taxes levied on any such interest. 15. RIGHT OF ENTRY To the maximum extent permitted by law, Landlord shall have the right to enter the Leased Premises at all reasonable times to inspect the Leased Premises to insure compliance with this Lease and provide for Airport safety. Landlord shall endeavor to provide Tenant with advance notice of inspections and to permit Tenant to be present during inspections. Tenant shall provide Landlord with a key to all Tenant-furnished locks securing the Leased Premises and/or Landlord shall retain a key to any Landlord- provided locks. Landlord shall be entitled to treat Tenant's failure to comply with this key requirement as an Event of Default by Tenant. 16. ASSIGNMENT OR SUBLETTING (a) Tenant shall not assign or sublease Tenant's rights under this Lease or delegate any of Tenant's obligations under this Lease without the prior written consent of Landlord, which consent shall not be unreasonably withheld. Signed copies of all such Landlord-approved subleases and/or agreements shall be furnished to Landlord upon execution. .Any purported. assignment, sublease or delegation without Landlord's prior written consent shall be void. In addition, Landlord .shall be entitled to treat any purported assignment, sublease or delegation by Tenant without Landlord's prior written consent as an Event of Default by Tenant. (b) Notwithstanding written consent of Landlord, no sublease or assignment shall release Tenant .from its obligations under this Lease, including without limitation its obligation to pay Rent. Landlord's consent to one assignment or sublease shall not be. deemed consent to subsequent assignments or subleases. In the event of a default by 10 Tenant's assignee or sublessee, Landlord shall be entitled, at its option, to proceed directly against Tenant without the necessity of exhausting any remedies against such assignee or sublessee. . 17. EVENTS OF DEFAULT Each of the following shall constitute an "Event of Default": (a) Tenant's failure to make any payment. of Rent or other required payment under this Lease when due. (b) Tenant's vacation or abandonment of the Leased Premises before the end of the Lease Term. (c) The placement of all or' substantially all of Tenant's assets in the hands of a receiver or trustee where such receivership or trusteeship continues for a period of thirty (30) calendar days or more, an assignment by Tenant for the benefit of creditors, an adjudication of Tenant as bankrupt, Tenant's institution of any proceedings under any state or federal bankruptcy act in which Tenant seeks. to be adjudicated bankrupt or to be discharged of debts, or the filing of any voluntary proceeding against Tenant under bankruptcy laws where Tenant consents and acquiesces thereto by pleading or by default. (d) Tenant's failure, within thirty (30) calendar days written notice thereof, to correct any breach or default of any of the terms, covenants, or conditions of this Lease; provided, however, that if the nature of Tenant''s default is such that it cannot reasonably be cured within said 30-day period, Tenant shall not be deemed to be in default if Tenant commences such cure within said 30-day period and,thereafter diligently prosecutes such cure to completion. 18. IMMEDIATE TERMINATION Landlord may act to terminate this Lease immediately for cause, without notice, in the case of a failure by Tenant or anyone acting under or through Tenant to comply with the terms of this Lease, where such .failure .presents a clear and immediate danger to the public health, safety and welfare .generally and/or to Airport operations and/or. users. Tenant specif tally waives any right Tenant may have under applicable law or this Lease to a three (3)-day or other period ..provided in Section l 7, or otherwise, in which to cure any breach of this Lease; should Landlord elect not to provide such period for cure of Tenant's breach. 19. REIVIEDIES (a) In the event- of .any Event. of Default. by Tenant, and in addition to any and all other rights and remedies of Landlord .hereunder or. provided by law, Landlord shall have the right to terminate this Lease ancUor Tenant's: possessory rights hereunder, to re-enter and keep possession of'the Leased.Premises, and except as otherwise provided herein, to remove all persons and property therefrom and store such property at Tenant's risk and for Tenant's account,. ,and Tenant shall have no further claim thereon or hereunder. Landlord's re-entry or' taking of possession- of the Leased Premises shall not be construed as an election on LLandlord'`s part to terminate the Lease unless Landlord shall have given written notice of such .intention to Tenant. For o long as the Lease continues in effect, Landlord may enforce all .of Landlord's .rights and remedies hereunder, including without limitation the right to recover all Rentand other:monetary payments as they become due. Landlord shall have the. right to commence an, action against Tenant for damages, injunction, and/or specific-performance. (b) No remedy specif ed in this Section 19 shalt be considered exclusive of any other remedy,. but the same shall be cumulative and shall be in addition to every other remedy provided hereunder or now or hereafter existing at 1_aw or in equity. The rights given hereunder to receive, collect or sue for any Rent or other monetary payments, or the enforce the terms of this Lease:. or prevent the breach thereof, or the exercise of any other right or remedy by Landlord shall. not in any way affect, impair or toll Landlord's right to terminate Tenant's right of possession because of any Event of Default or breach of any of the covenants, provisions or conditions of this Lease beyond the applicable cure period. (c) No waiver of Landlord or default by Tenant of any of the terms, covenants, or conditions hereof to be per-formed,. kept; or observed by Tenant shall be construed to be or act as waiver by Landlord of .any subsequent default of any of the terms, covenants, and conditions herein contained to be performed, .kept, and observed. by Tenant.. 20. RIJSERVATION AS TO:NAVIGATIONAL AII) Landlord reserves the right during the term of this Lease, or any renewal and/or extension thereof, to install .air navigational aids, including lighting; in; on, over, under, and across the Leased Premises: In the exercise of any of the rights hereof, Landlord agrees to give Tenant not. less than ninety (90) days written notice of its intention to install such. air navigational aids: If Tenant's enjoyment of the Leased Premises is substantially interfered -with by any such installation, Tenant's Rent .shall be reduced in proportion to such interference. 12 21. INDEMNITY To the fullest extent permitted by law, Tenant hereby covenants and agrees to, .and shall, indemnify, hold harmless and defend, with counsel reasonably acceptable to Landlord, the City and its officers, officials, employees, agents and volunteers ("Indemnitees") from and against all claims, losses, damages, demands, costs, expenses and liabilities, including, without limitation attorneys' fees and costs of litigation ("Liability") of every nature arising out of or °n connection with anything done, performed, or omitted to be done or performed on the Leased Premises b.y the Tenant or arising out of Tenant's performance of its obligations pursuant to this .Lease. Notwithstanding the foregoing, to the extent that this Lease is deemed a "construction contract" within the meaning of California Civil Code Section 2783, as may be amended from time to time, such indemnity shall not. include Liability for the .active negligence of Landlord. This Section 21 shall survive the expiration or earlier termination of this Lease. 22. EMINENT DOMAIN It is expressly agreed by Landlord and Tenant that in the event eminent domain proceedings are undertaken by any governmental agency, other than the City, affecting the whole of the Airport, or any part thereof, which would adversely affect Tenant's interest hereunder, Landlord .and Tenant shall each have the right to represent its respective interest and prosecute its respective claim, consistent with current eminent domain laws and procedures. No provision of this Lease is intended to giver Tenant greater rights or remedies than Tenant would otherwise have under eminent domain law. 23. NATIONAL EMERGENCY In the event that a national emergency or a declaration by federal, state or county government causes a drastic. curtailment of civilian aviation activities, Tenant shall be entitled to submit a request for reduction in Rent. Tenant shall be entitled to present facts and data to show that such a curtailment has taken place aril that the curtailment has seriously affected Tenant's utilization of the Leased Premises. If such facts and data indicate that a reduction in Rent is warranted, then Landlord and Tenant shall agree to negotiate a reduction in Rent during the period of curtailment. 24. NOTICES Any and all notices to be given-under this lease, or otherwise, may be served by enclosing the same in a sealed envelope addressed to the party intended to receive the same, at its 13 address, and deposited in the United States Post Office as registered 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 by the parties hereto, the address of the Landlord and.. the proper party to receive any such notices on its behalf is: City of Petaluma City Hall Post Office Box 61 Petaluma, CA 94953 Attention: City Manager and the address of the Tenant is: Calibro Avionics 561 Sky Ranch Drive Suite I Petaluma, CA 94954. Attention: Timofhy Rogers 25. SEVERABILITY If any term or portion of this Lease is held to be invalid, illegal, or otherwise unenforceable by a court of competent ,jurisdiction to be void' or unenforceable, the remaining provisions of this Lease shall continue in full force and effect. 26. ENTIRE AGREEMENT This Lease, including any Exhibits thereto, constitutes the entire agreement between the Parties and supersedes all prior agreements or understandings, oral or written, between the Parties concerning the subject matter of this Lease. 27. AMENIDMENT This Lease may be amended only by a written instrument executed by authorized representatives of each Party. 28. G®VERNING LAW ANI) VENUE This. Lease is and shall be enforced and interpreted under the State of California and the City of Petaluma. Any action to enforce or interpret this Lease shall be filed in the Superior Court of Sonoma County, California or, if cognizable therein, the Federal District Court for the Northern District of California. 14 29. CONSTRUCTION This Lease is the product of negotiation and compromise: on the part of both Parties, who agree that, riotwithstanding California Civil Code Section 1654, any uncertainty in this ,Lease shall not be construed against the drafter of the Lease. 30. NON-WAIVER The failure to. enforce any provision of this Lease or the waiver thereof in a particular instance shall not be construed. as a general'waiver of any part of such provision, and the provision shall remain in .full force and effect.. 31. HEADINGS The headings used in this Lease are for convenience only and are not intended to affect the interpretation or construction of any provisions herein. 32. SURVIVAL All obligations arising prior to the expiration: or termination of this Lease, including without limitation Tenant's indemnity ,obligation pursuant to Section 21, and any provisions of this Agreement allocating liability between Landlord and Tenant shall survive the expiration or earlier termination. of this Lease. 33. NO THIRD PARTY BENEFICIARIES The Parties do not intend "to create, and nothing in this Lease shall be construed to create, any benefit or right in any third party. 34. ATTORNEYS' FEES In the, event. either Party hereto shall commence any legal action or proceeding by reason of the. alleged failure of the other to perform or keep any term, covenant or condition of this Lease performed or kept, the Party prevailing in said action or proceeding shall be entitled to recover; in addition to its costs of suit, reasonable attorneys' fees as fixed by the court having jurisdiction. 35. TENANT'S AUTHORITY If Tenant is a corporation, each individual executing this Lease on behalf of Tenant represents and. warrants that Tenant is qualified to do business in California and that he or she is duly authorized to execute and deliver this Lease on~ behalf of Tenant and shall deliver appropriate certification thereof if requested. If Tenant is other than a ]5 corporation, each individual executing this Lease on, behalf of Tenant represents and warrants that he or she.is duly authorized to execute this Lease on behalf of Tenant and that this Lease is binding ~on Tenant. Tenant. agrees that the execution of any written consent hereunder, or any written modif cation or termination of this Lease, by any authorized agent of Tenant, shall be binding on Tenant. 36. EFFECTIVE .DATE This Lease shall take effect on the effective date of appropriate action by the City Council of the City of Petaluma approving this Lease in the manner and form required by the City of. Petaluma Charter, the Petaluma .Municipal Code, and all applicable law or regulatory requirements. Upon the Effective Date, the Commencement Date of this Lease shall be January 1, 2009. IN WITNESS WHEREOF; the parties hereto have set their hand: the day and year first above written. CITY OF PETALUMA By City Manager ATTEST: City Clerk APPROVED AS'TO FORM: City Attorney APPROVED: Airport Manager TENANT By Timothy Rogers, dba Calibro Avionics, a sole proprietorship 16 APPROVED: Department Director APPROVED: Risk Manager APPROVED: Finance Director 17 EXI~IBIT A 'I'® AGREEMEN'T' (Attach legal description and diagram of the Leased Premises showing.. location of parking) 18 EXIIIBI'I' B TO AGREENIEN'I' INSTRANCE REQUII2ElVIENTS All requirements herein. prodded shall appear either in the :body of the insurance policies or as endorsements and shall specifically bind the insurance carrier:. Tenant shall procure and maintain at its own cost and expense, for the duration of the Lease, the following kinds and amounts of insurance. A. Minimum Scope. of Insurance Coverage shall be at least.: as broad as: 1. Insurance. Services. Office Commercial: General Liability coverage: a. Personahinjury; b. Contractuallablity. 2. Insurance Services; Office form covering Automobile. Liability, code 1 (any auto). 3. Workers' Compensation insurance as required by the State of California and Employer' Liability Insurance. . 4. Such other insurance coverages and limits as may be required by the City. B. 1Vlinimum Limits of Insurance Tenant shall maintain.. limits no .less than: 1. General Liability:' $1.,000,000 per occurrence for bodily injury, personal injury and property damage:.If Commercial General Liability Insurance or other form with a general. aggregate liability is used; either the general aggregate limit shall - apply separately to this Lease or the general.. aggregate limit shall be twice the required occurrence aimit. 2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: Bodily Injury by Accident - $1,0:00,000 each accident. Bodily Injury by Disease - $1.,000;000 policy limit. Bodily Injury by'Disease - $1:,,O.OQ;000 each.employee. 4. Such other insurance coverages and limits as may be required by the City. C. Deductibles and Self=Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured. retentions as respects the City, its officers, officials, employees, and volunteers;. or Tenant. shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense .expenses. 19 D. Other Insurance Provisions The required ..general liability and automobile policies are to contain, or be endorsed to contain the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Tenant; products and completed. operations of the Tenant; premises owned, occupied. or used by the Tenant; or automobiles owned, leased, hired or borrowed by the Tenant. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, officials, employees, agents or volunteers. 2. For any claims related to this Lease, the Tenant's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any ~ insurance or self-insurance maintained by the City, its officers, officials; employees, agents or volunteers shall be excess of the Tenant's insurance and shall not contribute with it. 3. Any- failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect- coverage provided to the City, its officers, officials, employees; agents or volunteers.. 4. The Tenant's insurance shall apply separately to each insured against whom claim is made or suit is brought. except, with. respect to the limits of the insurer's liability. 5. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given fo the City. E. Acceptability of Insurers Insurance is to be placed. with insurers with a current A.M. Best's rating of no less than A:VII. F. Verification of Coverage On or before execution of-the. Lease, Tenant shall furnish the City with original endorsements effecting .coverage required by this exhibit:.. The endorsements are to be signed. by aperson authorized by that insurer to bind'. coverage. on its behalf. The endorsements.. are. to `be on forms provided by the City.. As an alternative to the City's forms, the Tenant' insurer may provide complete,.. certified copies of all required insurance policies, including endorsements effecting the coverage required by the City. 1410218.2 20