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HomeMy WebLinkAboutOrdinance 2644 N.C.S. 03/19/20181 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 EFFECTIVE DATE OF ORDINANCE April 19, 2018 Introduced by Gabe Kearney ORDINANCE NO. 2644 N.C.S. Seconded by Chris Albertson ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA APPROVING REAL ESTATE TRANSACTION DOCUMENTS, BETWEEN THE CITY OF PETALUMA, AS LANDLORD, MANGON AIRCRAFT, INC., AS TENANT AND PETALUMA PILOT TRAINING CENTER AS TENANT, AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS NECESSARY TO COMPLETE THE REAL ESTATE TRANSACTION WHEREAS, Section 46 of the Charter of the City of Petaluma requires that specified actions for the acquisition, sale, or lease of real property be taken by Ordinance; and, WHEREAS, Landlord owns and operates the Petaluma Municipal Airport located at 601 Sky Ranch Drive, Petaluma, CA, which has been improved with hangars, among which are hangars commonly referred to as Hangar 18B and 18D located within the Aviation Commercial Zoning Area ("Premises"); and WHEREAS, WHEREAS, on March 26, 2105, Landlord and Petaluma Pilot Training Center, Inc., a California Corporation and subsidiary of Tenant, ("PPTC") entered into a lease consistent with form lease documents approved by the Petaluma City Council on February 24, 2014, by Resolution No. 2014-024 N.C.S., approving the use of form Hangar Lease Agreement, for Hangar 1813, also referred to herein as the Leased Premises; and WHEREAS, Mangon Aircraft, Inc. is the Parent Company of PPTC currently leases City property located at 501 Sky Ranch Drive and such lease allows for Tenant to offer flight instruction and aircraft rental; and WHEREAS, Tenant desires to move its flight instruction and aircraft rental to the Leased Premises at Hangar 18D; and WHEREAS, on January 12, 2015, Tenant submitted an application requesting that it be allowed to offer flight instruction and aircraft rental at the Leased Premises of Hangar 18D; and WHEREAS, PPTC and Landlord agree to terminate the lease between PPTC and Landlord for Hangar 1813, effective immediately, to allow for Mangon Aircraft, Inc. to lease the Leased Premises of Hangar 18D for the purpose of flight instruction and training of personnel in flight instruction; 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 for the proposed Ordinance No. 2644 N.C.S. Page 1 use set forth in the Application; and WHEREAS, Amendment three (3) to the Mangon Aircraft Inc. Lease would require flight instruction and aircraft rental to take place in Leased Premises of Hangar 18D; and WHEREAS, the City Council finds this action qualifies for categorical exemption under the California Environmental Quality Act (CEQA) pursuant to Title 14, Chapter 3 of the California Code of Regulations (CEQA Guidelines), sections 15061, 15301 because: a. The proposed plan is consistent with the General Plan Use; b. The project is a permitted use at the Petaluma Municipal Airport; c. The project would not result in any significant effects relating to traffic, noise, air quality, d, or water quality; e. There are no exceptions that would preclude application of the exemption; and f. The project is adequately served by all required utilities and public service. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PETALUMA AS FOLLOWS: Section 1: Findings. Based upon the City staff report, presentation, and input at the public meeting, based upon substantial evidence in the record, the City Council hereby makes the following findings: a. The above recitals are true and correct, and incorporated herein. b. The Lease is consistent with the City's following the Grant Assurances because it promotes Aviation, follows adopted commercial lease standards, and treats all parties fairly. c. The Lease is consistent with the Lease Standards because of the application process. Section 2: The City Council approves the Commercial Lease Agreement between the City of Petaluma, as landlord, and Mangon Aircraft, Inc., as Tenant for Hangar 18D as attached herein as Exhibit A to the Resolution. Approval of the Commercial Lease Agreement is contingent upon the execution of Amendment No. 1, as attached hereto as Exhibit B. Section 3: The City Council approves Amendment No. 1 to the Hangar Lease Agreement, between the City of Petaluma, as Landlord, and Petaluma Pilot Training Center, as Tenant, a copy of which is attached hereto as Exhibit B. Section 4: The City Council approves Amendment No. 3 to the Lease Agreement between the City of Petaluma, as Landlord, and Mangon Aircraft, Inc., as Tenant, a copy of which is attached hereto as Exhibit C. Section 5: On behalf of the City, the City Manager is authorized and directed to execute documents substantially in accordance with Exhibits A, B, and C as determined by the City Attorney, and all other documents reasonably necessary to complete the lease transaction. Section 6: If any section, subsection, sentence, clause, phrase or work of this Ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction or preempted by State legislation, such decision or legislation shall not affect the validity of the remaining portions of this Ordinance. The City Council of the City of Petaluma hereby declares that it would have passed and adopted this Ordinance and each Ordinance No. 2644 N.C.S. Page 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 and all provisions thereof irrespective of the fact that any one or more of said provisions be declared unconstitutional, unlawful other otherwise invalid. Section 5: This Ordinance shall become effective thirty (30) days after the date of its adoption by the Petaluma City Council. Section 6: The City Clerk is hereby directed to publish or post this Ordinance or a synopsis for the period and in the manner provided by the City Charter and any other applicable law. INTRODUCED, and ordered posted/wed, this 5th day of March 2018. ADOPTED this 19th day of March 2018, by the following vote: Ayes: Albertson, Barrett, Mayor Glass, Vice Mayor Healy, Kearney, King Noes: None Abstain: None Absent: None David Glass, Mayor ATTEST: APPROVED AS TO FORM: Claire Cooper, City Clerk Lisa Tennenbau , Assistant City Attorney Ordinance No. 2644 N.C.S. Page 3 Exhibit A to Ordinance COMMERCIAL LEASE AGREEMENT THIS LEASE AGREEMENT ("Lease") is made and entered into as of the day of 2016 (the "Effective Date"), by and between the City of Petaluma, a California municipal corporation, hereinafter referred to as "Landlord," and Mangon Aircraft, Inc., a California corporation referred to herein 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 3,764 square feet, commonly known as Hangar 18D, located within the Aviation Commercial Subzone of the Airport, as more particularly described in Exhibit A attached hereto (the "Leased Premises"); and WHEREAS, Section 46 of the Charter of the City of Petaluma requires that specified actions for the acquisition, sale, or lease of real property be taken by Ordinance; and, WHEREAS, Chapter 16.06 of the Petaluma Municipal Code governing Airport Leases was enacted in satisfaction of Section 46 of the City Charter ordinance requirement concerning leases to Airport property; and WHEREAS, Section 16.06.200 of Chapter 16.06 provides that the City Council may approve ground leases and specialized leases by resolution and Section 16.06.300 of Chapter 16.06 provides that the City Manager may execute on behalf of the City Airport lease agreements approved by the City Council by resolution; and WHEREAS, the Airport has been improved with various facilities; and WHEREAS, Tenant has entered into a ground lease agreement ("Ground Lease") with the Landlord to a portion of the Airport located at 501 Sky Ranch Drive which the Tennant has improved with facilities Tenant has operated to provide aircraft maintenance and related services, aircraft parts sales and retail sales of aircraft, and flight school services, and such Ground Lease has been amended from time to time in support of Tennant's operations at the Airport; and WHEREAS, Landlord -owned improvements at the Airport include in addition to the Leased Premises various hangars, include the hangar designated as Hangar 1813; and Ordinance No. 2644 N.C.S. Page 4 WHEREAS, on March 26, 2015, Petaluma Pilot Training Center, Inc., a California Corporation and subsidiary of Tennant, ("PPTC") entered into an agreement with the Landlord pursuant to Petaluma Municipal Code Chapter 16.06 to lease Hangar 18B for aircraft storage; and WHEREAS, on January 12, 2015, Tennant submitted an application requesting that it be allowed to offer flight instruction and aircraft rental at the Leased Premises and Tennant currently desires to move its flight instruction and aircraft rental operations from its facilities at 501 Sky Ranch Drive to the Leased Premises; and WHEREAS, the Leased Premises are located in the Airport Commercial Subzone in which Tennant's proposed flight instruction and aircraft rental operations are a permitted use; and WHEREAS, upon relocation of Tennant's flight instruction and aircraft rental operations to the Leased Premises, Tennant will no longer have need of Hangar 1813, and accordingly PPTC would like to terminate the hangar lease between PPTC and the City to Hangar 1813; and WHEREAS, because relocation of Tennant's flight instruction and aircraft rental operations to the Leased Premises is not intended to result in an expansion of use, Tennant and the Landlord have agreed to amend the Ground Lease revising the permitted uses under the Ground Lease to exclude flight instruction and aircraft rental operations, so long as such operations are occurring pursuant to this Lease, and Amendment Number Three (3) to the Ground Lease has been prepared to delete flight instruction and aircraft rental from the permitted uses pursuant to the Ground Lease; and WHEREAS, the City Council has on September 12, 2016, adopted Resolution no. 2016 - Approving a Commercial Lease Agreement between Mangon Aircraft, Inc., and the City to Hangar 18D Located at the Petaluma Airport for Operation of a Flight School and Related Aircraft Storage, Approving Amendment 1 to the Lease Agreement between Petaluma Pilot Training Center, Inc., and the City to Hanger 18B to Terminate that Lease Agreement, and Approving Amendment 3 to the Ground Lease Agreement between Mangon Aircraft, Inc. and the City of Petaluma to Delete Flight School Operations as a Permitted Use under that Lease; 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 for the proposed use set forth in the Application; 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 comply otherwise 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: 1. LEASE OF PREMISES Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, pursuant to Ordinance No. 2644 N.C.S. Page 5 the covenants, terms and conditions set forth herein, the L e a s e d Premises described in Exhibit A, also referred to as Hangar 18D, which is attached hereto and made a part of this Lease. 2. LEASE TERM The term of the Lease ("Lease Term") shall commence on , 2016 (the "Commencement Date") and shall continue for a three year period or until Tenant elects to terminate the Lease by giving the Landlord thirty (30) day's written notice. Upon the expiration of such Lease Term, Tenant agrees to yield and deliver to Landlord the Leased Premises including any and all improvements and appurtenances erected or added by Tenant pursuant to Section 4 of this Lease that have been accepted in writing by the Landlord. Those improvements and appurtenances not accepted by the Landlord shall be removed prior to yielding and delivering the Leased Premises. The Tenant shall have the option of extending the term of this agreement for up to two additional years subject to written request to and approval by the Landlord, such approval shall not be unreasonably withheld. 3. RENT PAYMENTS (a) From the Commencement Date, Tenant shall make rent payments ("Rent") to Landlord in the amount of Two Thousand Four Hundred Twenty-eight Dollars ($2,428.00) per month based on 50 percent higher than standard rate for hangar for aircraft storage ( i.e. $0.645/sf based on 3,764 sf). All Rent shall be due in advance, by the first day of each and every month, duringthe Lease Term. (b) At the commencement of each subsequent twelve (12) month period, beginning on July 1, 2017 and continuing through June 30th of the applicable year, Rent shall be increased 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. (d) Tenant shall post a security deposit with Landlord in an amount equal to two months' Rent at the time of execution of this Lease. In accordance with Section 4(c), Tenant shall return the Leased Premises to Landlord at the expiration or termination of this Lease in the same condition as at the beginning of the Lease term, normal wear and tear excepted. In the event repairs are necessary to restore the Leased Premises to the same condition as at the beginning of the Lease term, normal wear and tear excepted, Landlord may deduct any and all repair costs, including, but not limited to, staff time Ordinance No, 2644 N.C.S. Page 6 or administration costs, from the security deposit. The Landlord shall not be required to consider the security deposit as payment of first and last month's rent, but Landlord may at its sole option, deduct any unpaid Rent from the security deposit, either prior to or after deduction of any amounts needed for repairs. Any security deposit balance remaining after all repair costs and/or other deductions permitted under this Lease shall be refunded to Tenant following the expiration or termination of this Lease. No interest will be payable on the security deposit. If the security deposit balance is insufficient to cover the cost of repairing the Leased Premises and/or Rent pursuant to this section, Tenant shall promptly remit to Landlord the repair costs and/or Rent in excess of the security deposit upon receipt of Landlord's invoice for such costs and/or payments. 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 Leased Premises. (b) Except as provided in Section 4(e), 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, such consent shall not be unreasonably withheld. 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 be removed at Tenant's sole expense prior to termination of the Lease, or in Landlord's sole discretion, the Landlord -authorized alterations, fixtures, additions or other improvements may remain and become the property of Landlord. (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. Ordinance No. 2644 N.C.S. Page 7 (e) Subject to applicable building permits, Landlord hereby approves of Tenant improving Leased Premises with temporary class rooms and storage. All the foregoing improvements shall be undertaken at Tenant's sole expense. Permission granted for such alterations does not constitute regulatory approval, and to the extent that such improvements are subject to any regulatory approval or permit, such alterations shall not commence until any and all applicable regulatory approvals and/or permits have been granted. Tenant hereby agrees to submit an application for building permits within thirty (30) days of the City executing this Lease. Tenant further agrees that the foregoing alterations shall commence and be completed within 180 days of receiving the required building permit(s) from the City. 5. UTILITIES Tenant shall pay telephone service and all costs, if any, for the installation and connection of such services. 6. USE OF PREMISES The Leased Premises shall be used as follows: (a) Tenant shall use and occupy the Leased Premises for flight instruction and aircraft rental and storage ("Commercial Operations") together with all operations customarily ancillary thereto, and for no other purposes. i. Maintenance of the aircraft owned and rented by Licensee, or employees or contractors of Licensee possessing an A & P license, and/or by FAA -certified persons, or entities employed by or affiliated with Airport on-site contractors, shops or facilities shall be a permitted use for purposes of flight instruction and aircraft rental and storage, so long as all such maintenance (except for normal pre-flight maintenance, including preventive maintenance as defined in Part 43 and elsewhere in the Federal aviation Regulations), occurs only within the hangar on the Premises, or in other designated areas of the Airport where such maintenance is permitted, or in other areas of the Airport with permission of the airport manager. Licensee may not spray paint aircraft or other equipment on the Premises or anywhere else at the Airport. Spray painting aircraft or other equipment is not a permitted use under this Agreement; provided, however, that minor paint touch up and application of corrosion safeguards that qualify as preventive maintenance under applicable federal aviation regulations are permitted uses under this Agreement. Licensee may not permit maintenance contractors onto the Premises or other area of the airport for purposes of performing maintenance on Licensee's rented or owned aircraft except in accordance with this provision. Doing so is not a permitted use under this Agreement. (b) Tenant is prohibited from engaging in the following: (i) The sale of food to or the consumption thereof by the public, provided, Ordinance No. 2644 N.C.S. Page 8 however, that "snack foods," sandwiches and candy may be sold from mechanical dispensers. (ii) The sale or consumption of beverages, provided that coffee and soft drinks may be sold feom mechanical- dispensers as provided above. All sale or consumption of alcoholic beverages is prohibited. (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 (q), on the Property, including without limitation on the Leased Premises, by Tenant or any of Tenant's employees, agents, contractors, or invitees. Notwithstanding, this condition does not apply to de minimis amounts of oil, brake fluid, and other consumable materials necessary to be on-site for routine addition to aircraft as a result of the pre-flight checklist inspection. Premise shall not be used to warehouse these or other hazardous substances. (v) Any use that is not explicitly permitted in this Lease or any amendments thereto. (c) Landlord may treat any use of the Premises by Tenant that is not a permitted use as a material breach of this Lease subject to termination for cause in accordance with Section 18 of this Lease. 7. DUTY TO ACT CONCERNING CONTAMINATION Notwithstanding Section 6(b) (iv), and in addition and not in lieu of said Section and of Section 20 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 not 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 a part of the consideration hereof, does hereby covenant and agree that in the event the Leased Premises and any improvements thereon are constructed, 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 13 Ordinance No. 2644 N.C.S. Page 9 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 Leased 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 they may be amended from time to time. (b) Tenant for itself, its personal representatives, successors in interest and assigns, as a part 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 witll 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 airport wide policies, including but not limited to the Lease Standards, and any subsequent amendments thereto. (b) In the Airport Manager's discretion, the Airport Manager investigates any complaints against Tenant by members of the public. If the Airport Manager finds that the complaint is justified, the Airport Manager 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. (c) 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. (d) Tenant agrees to furnish services on a reasonable and not unjustly discriminatory, basis to all users of the Airport. Tenant further agrees to charge reasonable, and not Ordinance No. 2644 N.C.S. Page 10 unjustly discriminatory, prices for each unit or service, provided that Tenant may be allowed to make reasonable and non-discriminatory discounts, rebates, or other similar types of price reductions to volume purchasers. (e) Tenant shall at all times abide by the most current published version of the Petaluma Municipal Airport Lease and Licensing Policies and Standards for Services and Operations Minimum Standards. A version will be kept in the airport office as well as available online. An updated version will be provided to the tenant when any significant changes are made to this policy manual. 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. By executing this Lease, Tenant acknowledges that it has had the opportunity to inspect the Leased Premises and accepts the Leased Premises in the AS IS condition. 11. MAINTENANCE AND REPAIRS Landlord shall have no obligation to make repairs for tenant improvements to the Leased Premises. Tenant shall, at its sole cost and expense, keep and maintain the interior of 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. This provision shall not apply to the fire suppression system or bi-fold hangar door, which shall remain the maintenance responsibility of the Landlord. 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 13 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 13 and Exhibit B and in the most current published version of the Petaluma Municipal Airport Lease and Licensing Policies and Standards for Services and Operations Minimum Standards as may be modified at the sole discretion of City Manager. Any such approved insurance modifications shall be by written amendment of this Lease in Ordinance No. 2644 N.C.S. Page 1 1 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. Ordinance No. 2644 N.C.S. Page 12 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 may be 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 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. Ordinance No. 2644 N.C.S. Page 13 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. 18. 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 specifically waives any right Tenant may have under applicable law or this Lease to a three (3) -day or other period provided in Section 17, 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. Tenant may terminate with 30 -day written notice to Landlord and removal of all improvements and appurtenances that Landlord has NOT agreed in writing to accept. 19. REMEDIES (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 and/or 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 Landlord's part to Ordinance No. 2644 N.C.S. Page 14 terminate the Lease unless Landlord shall have given written notice of such intention to Tenant. For so 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 Rent and 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 specified in this Section 19 shall 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 law 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 performed, 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. INDEMNITY To the maximum extent permitted by law, Tenant shall, at its own expense, indemnify, defend with counsel acceptable to Landlord, (which acceptance will not be unreasonably withheld), and hold harmless Landlord and its officers, officials, employees, agents and volunteers ("Indemnitees") from and against any and all alleged liability, loss, damage, claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, civil penalties and fines, expenses and costs (including, without limitation, claims expenses, attorney's fees and costs and fees of litigation) (collectively, "Liability") of every nature, whether actual, alleged or threatened, arising out of or in connection with the Lease and/or use of the Leased Premises and/or failure to comply with any of the terms of this Lease and/or termination of the Hangar Lease Agreement with PPTC, regardless of any fault or alleged fault of the Indemnitees. Tenant's obligation to indemnify, defend and hold harmless under this provision shall not be excused because of Tenant's inability to evaluate Liability, or because Tenant evaluates Liability and determines that Tenant is not or may not be liable. Tenant must respond within 30 calendar days to any tender for defense and indemnity by the City, unless the time for responding has been extended by an authorized representative of Landlord in writing. In the event that Landlord must file responsive documents in a matter tendered to Tenant prior to Tenant's acceptance of tender, Tenant agrees to fully reimburse all costs, including but not limited to attorney's fees and costs and fees of litigation, incurred by Landlord in filing such responsive documents. Ordinance No. 2644 N.C.S. Page 15 Notwithstanding the foregoing, to the extent this Lease is a "construction contract" as defined by California Civil Code Section 2783, as may be amended from time to time, Consultant's duty to indemnify under this provision shall not apply when to do so would be prohibited by California Civil Code Section 2782, as may be amended from time to time. 21. 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 give Tenant greater rights or remedies than Tenant would otherwise have under eminent domain law. 22. 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 and 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. 23. 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 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: Mangon Aircraft, Inc. 501 Sky Ranch Drive Petaluma, CA 94954 Attention: Ron Mangon Ordinance No. 2644 N.C.S. Page 16 24. 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. 25. 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. 26. AMENDMENT This Lease may be amended only by a written instrument executed by authorized representatives of each Party. 27. GOVERNING LAW AND 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. 28. CONSTRUCTION This Lease is the product of negotiation and compromise on the part of both Parties, who agree that, notwithstanding California Civil Code Section 1654, any uncertainty in this Lease shall not be construed against the drafter of the Lease. 29. 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. 30. 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. 31. SURVIVAL All obligations arising prior to the expiration or termination of this Lease, including without limitation Tenant's indemnity obligation pursuant to Section 20, and any provisions of this Agreement allocating liability between Landlord and Tenant shall survive the expiration or earlier termination of this Lease. Ordinance No. 2644 N.C.S. Page 17 32 33 34. 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. 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. 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 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 modification or termination of this Lease, by any authorized agent of Tenant, shall be binding on Tenant. 35. 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. IN WITNESS WHEREOF, the parties hereto have set their hand the day and year first above written. LANDLORD — CITY OF PETALUMA By: City Manager Ordinance No. 2644 N.C.S. TENANT — MANGON AIRCRAFT, INC. Page 18 IN WITNESS WHEREOF, the parties hereto have set their hand the day and year first above written. LANDLORD — CITY OF PETALUMA By: City Manager ATTEST: City Clerk APPROVED: City Attorney APPROVED: Airport Manager APPROVED: Department Director "M-10 m Risk Manager TENANT — MANGON AIRCRAFT, INC. tea, Ordinance No. 2644 N.C.S. Page 19 EXHIBIT A TO AGREEMENT (Attach legal description and diagram of the Leased Premises showing location of parking) Ordinance No. 2644 N.C.S. Page 20 EXHIBIT A TO AGREEMENT (Attach legal description and diagram of the Teased Premises showing location of parking) Exhibit A Ordinance No. 2644 N.C.S. Page 21 MINIMUM INSURANCE REQUIREMENTS Lessee shall not take possession under this Agreement until Lessee shall have obtained all insurance required under this Exhibit and such insurance shall have been approved by the City's Risk Manager as to carrier and sufficiency; nor shall Lessee allow any subcontractor, unless Lessee has obtained prior written City approval for subcontractor, to commence work on or within the leased premises until all similar insurance required of the Lessee and/or subcontractor shall have been so obtained and approved. All requirements herein provided shall appear either in the body of the insurance policies or as endorsements and shall specifically bind the insurance carrier. Lessee shall procure and maintain for the duration of the Agreement all necessary insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Agreement. A. Minimum Scope of Insurance Coverage shall be at least as broad as: 1. Aviation General Liability coverage: a. Blanket contractual liability b. Broad form property coverage c. Personal injury d. Hanger Keepers Liability (may be required later if operations change, or if Aviation Insurance Industry standards change) e. Completed Operations f. Breach of Warranty Endorsement 2. Aircraft Liability 3. Automobile Liability. 4. Workers' Compensation insurance as required by the State of California and Employer's Liability insurance. 5. Such other insurance coverages and limits as may be required by the City of Petaluma. B. Minimum Limits of Insurance Lessee shall maintain limits no less than: 1. Aviation General Liability: $2,000,000; Ordinance No. 2644 N.C.S. Page 22 2. Hanger Keepers Liability: $3,000,000 (if required). 3. Aircraft Liability: $1,000,000 4. Automobile Liability (if applicable): $1,000,000 per accident for bodily injury and property damage. 5. Employer's Liability: Bodily Injury by Accident - $1,000,000 each accident. Bodily Injury by Disease - $1,000,000 policy limit. Bodily Injury by Disease - $1,000,000 each employee. 6. Such other insurance coverages and limits as maybe required by the City of Petaluma. C. Deductibles and Self -Insured Retentions 1. Any deductibles or self-insured retentions must be declared to and approved by the City of Petaluma. At the option of the City of Petaluma, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City of Petaluma, its officers, officials, employees, and volunteers; or the Lessee shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses. Policies containing any self-insured retention (SIR) provision shall provide or be endorsed to provide that the SIR may be satisfied by either the named insured or the City of Petaluma. The City of Petaluma reserves the right to obtain a full certified copy of any insurance policy and endorsement. Failure to exercise this right shall not constitute a waiver of right to exercise later. Other Insurance Provision Requirements Additional Insured Requirements: 1. The required general liability and automobile policies are to contain, or be endorsed to contain the following provisions: a. The City of Petaluma, its officers, officials, employees, agents and volunteers are to be covered as additional insureds as respects alleged: liability arising out of activities performed by or on behalf of the Lessee; products and completed operations of the Lessee; premises owned, occupied or used by the Lessee; or automobiles owned, leased, hired or borrowed by the Lessee. The coverage shall contain no special limitations on the scope of protection afforded to the City of Petaluma, its officers, officials, employees, agents or volunteers. b. Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City of Petaluma, its officers, officials, employees, agents or volunteers. Ordinance No. 2644 N.C.S. Page 23 c. The Lessor'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. d. Lessee shall furnish properly executed Certificates of Insurance from insurance companies acceptable to the City of Petaluma and signed copies of the specified endorsements for each policy prior to commencement of work under this agreement. Such documentation shall clearly evidence all coverages required above including specific evidence of separate endorsements naming the City of Petaluma and shall provide that such insurance shall not be materially changed, terminated or allowed to expire except after 30 days prior written notice by certified mail, return receipt requested, has been filed with the City Clerk. Lessee shall replace such certificates for policies expiring prior to expiration under this agreement. Acceptability of Insurers Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A: VII. Completed Operations Lessee shall maintain insurance as required by this contract to the fullest amount allowed by law and shall maintain insurance for a minimum of five years following the completion of this lease. In the event the Lessee fails to obtain or maintain completed operations coverage as required by this agreement, the City of Petaluma at its sole discretion may purchase the coverage required and the cost will be paid by the Lessee. Cross -Liability The Liability policy shall include a cross -liability or severability of interest endorsement. Failure to Maintain Insurance Coverage If Lessee, for any reason, fails to maintain insurance coverage, which is required pursuant to this agreement, the same shall be deemed a material breach of contract. The City of Petaluma, at its sole option, may terminate this agreement and obtain damages from the Lessee resulting from said breach. Alternatively, the City of Petaluma may purchase such required insurance coverage, and without further notice to Lessee, the City of Petaluma may deduct from sums Ordinance No. 2644 N.C.S. Page 24 due to Lessee any premium costs advanced by the City of Petaluma for such insurance. Primary and Non -Contributory For any claims related to this project, the Lessor's insurance coverage shall be primary insurance as respects the City of Petaluma, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City of Petaluma, its officers, officials, employees, agents or volunteers shall be excess of the Lessor's insurance and shall not contribute with it. The additional insured coverage under the Lessor's policy shall be "primary and non- contributory" and will not seek contribution from the City of Petaluma's insurance or self-insurance and shall be at least as broad as CG 20 0104 13. Subrogation Waiver Lessee agrees to waive subrogation rights against City of Petaluma regardless of the applicability of any insurance proceeds, and to require all Lessees, sub- lessees or others involved in any way with the services to do likewise. INSURANCE REMINDER THE CITY OF PETALUMA'S INSURANCE DOES NOT COVER ANY OF LESSEE'S PERSONAL PROPERTY, INCLUDING AIRCRAFT Ordinance No. 2644 N.C.S. Page 25 Exhibit B to Ordinance AMENDMENT NO. ONE TO HANGAR LEASE AGREEMENT This Amendment No. One to Hangar Lease Agreement ("Amendment") is made and entered into this day of , 201_, by and between the CITY OF PETALUMA, a municipal corporation ("City"), and PETALUMA PILOT TRAINING CENTER, INC., a California corporation ("Lessee"). RECITALS WHEREAS, Section 46 of the Charter of the City of Petaluma requires that specified actions for the acquisition, sale, or lease of real property be taken by Ordinance; and, WHEREAS, Chapter 16.06 of the Petaluma Municipal Code governing Airport Leases was enacted in satisfaction of Section 46 of the City Charter ordinance requirement concerning leases to Petaluma Airport property; and WHEREAS, Section 16.06.200 of Chapter 16.06 provides that the City Council may approve ground leases and specialized leases by resolution and Section 16.06.300 of Chapter 16.06 provides that the City Manager may execute on behalf of the City Airport lease agreements approved by the City Council by resolution; and WHEREAS, the City owns and operates the Petaluma Municipal Airport located at 601 Sky Ranch Drive, Petaluma, CA. , which has been improved with various facilities; and WHEREAS, Lessee has entered into a ground lease agreement ("Ground Lease") with the City to a portion of the City Airport located at 501 Sky Ranch Drive which the Lessee has improved with facilities Lessee has operated to provide aircraft maintenance and related services, aircraft parts sales and retail sales of aircraft, and flight school services, and such Ground Lease has been amended from time to time in support of Lessee's operations at the City Airport; and WHEREAS, City -owned improvements at the City Airport include hangars designated as Hangars 18B and 18D; and WHEREAS, on March 26, 2015, Petaluma Pilot Training Center, Inc., a California Corporation and subsidiary of Lessee, ("PPTC") entered into an agreement with the City pursuant to Petaluma Municipal Code Chapter 16.06 to lease Hangar 18B for aircraft storage; and WHEREAS, on January 12, 2015, Lessee submitted an application requesting that it be allowed to offer flight instruction and aircraft rental at Hangar 18D and Lessee currently desires to move its flight instruction and aircraft rental operations from its facilities at 501 Sky Ranch Drive to Hangar 18D; and Ordinance No. 2644 N.C.S. Page 26 WHEREAS, Hangar 18D is located in an area of the City Airport zoned Aviation Commercial in which Lessee's proposed flight instruction and aircraft rental operations are a permitted use; and WHEREAS, upon relocation of Lessee's flight instruction and aircraft rental operations to Hangar 18D, Lessee will no longer have need of Hangar 18B, and accordingly PPTC would like to terminate the hangar lease between PPTC and the City to Hangar 1813; and WHEREAS, because relocation of Lessee's flight instruction and aircraft rental operations to Hangar 18D is not intended to result in an expansion of use, Lessee and the City have agreed to amend the Ground Lease revising the permitted uses under the Ground Lease to exclude flight instruction and aircraft rental operations, so long as such operations are occurring pursuant to the Hangar Lease to Hangar 18D, and Amendment Number Three (3) to the Ground Lease has been prepared to delete flight instruction and aircraft rental from the permitted uses pursuant to the Ground Lease; and WHEREAS, the City Council has on March 5, 2018, adopted Resolution no. 2018- Approving a Commercial Lease Agreement between Mangon Aircraft, Inc., and the City to Hangar 18D Located at the Petaluma Airport for Operation of a Flight School and Related Aircraft Storage, Approving Amendment 1 to the Lease Agreement between Petaluma Pilot Training Center, Inc., and the City to Hanger 18B to Terminate that Lease Agreement, and Approving Amendment 3 to the Ground Lease Agreement between Mangon Aircraft, Inc. and the City of Petaluma to Delete Flight School Operations as a Permitted Use under that Lease; and NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Lessee enter into this Amendment. AGREEMENT 1. Termination: The Parties hereby agree to terminate the Lease immediately upon execution of this Amendment by all parties. The Lessee's obligations as set forth in section 14 of the Lease shall survive termination. 2. Waiver of Notice: The Parties hereby waive their right to any applicable notice as set forth in section 6 of the Lease, or under any applicable law. 3. Release. Upon termination of this Agreement, Lessee may be or may become eligible to receive compensation, reimbursement, assistance, including, but not limited to, the fair market value of real and personal property, loss of goodwill, loss of profits, actual and reasonable expenses for moving a business, loss of tangible real property as a result of moving the business, expenses incurred in searching for replacement site for the business, expenses to reestablish at the new site, "in -lieu payments" and other such benefits (collectively, "Benefits") under the California Ordinance No. 2644 N.C.S. Page 27 Relocation Assistance Act (Govermnent Code, § 7260, et seq.), Title 25 of the California Code of Regulations, Article I, § 19 of the California Constitution, the California Eminent Domain Law (Civil Procedure Code, § 1230.010, et seq.) or other similar local, state, or federal statute, ordinance, regulation, rule, or decisional law (collectively "Compensatory Laws"). Lessee ftnther acknowledges that it has received full and fair compensation of all Benefits Lessee is or might be or might become entitled to recover from City as a result of, or in any way related to, the Lease, the leased premises, the execution of this Amendment, and the subsequent expiration or termination of the Lease. Therefore, being fully informed of and understanding the acknowledgements made herein and of Lessee's rights or potential rights to benefits under the Compensatory Laws, Lessee hereby expressly and unconditionally waives, and releases City from, any and all rights of Lessee to claim, demand, sue for, or receive any Benefits which Lessee is or might be or might become entitled to recover from City as a result of, or in any way related to the Lease or leased premises, the execution of the Amendment, and the subsequent expiration of or termination of the Lease. The City acknowledges and agrees that the release and waiver set forth in this paragraph is material consideration for City entering into this Amendment, and into the Agreement with Mangon for Hangar 18B for purposes of flight instruction and training of personnel in flight operations, and that but for this release and waiver, City would not have entered into this Amendment or the Agreement with Mangon for Hangar 18B. By releasing and forever discharging the claims described herein, Lessee expressly waives any rights under California Civil Code section 1542, which provides: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of the date first written above. CITY OF PETALUMA TENANT — MANGON AIRCRAFT, INC. City Manager ATTEST: City Clerk Ordinance No. 2644 N.C.S. Page 28 APPROVED AS TO FORM: City Attorney APPROVED: Department Director APPROVED: Risk Manager APPROVED: Finance Director Ordinance No. 2644 N.C.S. Page 29