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HomeMy WebLinkAboutLease LAG-10-001 GROUND AND BUILDING LEASE Between i City of Renton and The Boeing Company THIS GROUND AND BUILDING LEASE (hereinafter"Lease") is made and entered into this 1St day of June, 2010 by and between THE CITY OF RENTON, a Washington municipal corporation (hereinafter"Landlord") and The Boeing Company, a Delaware Company (hereinafter"Tenant"). FOR VALUABLE CONSIDERATION and in consideration of the covenants and agreements set forth in this Lease, Landlord and Tenant agree as follows: 1. GRANT OF LEASE: La. Legal Description and Reservation of Easement: Landlord hereby leases to Tenant, and Tenant leases from Landlord for the Term described in Section 3 below, the parcels of land and, where applicable the buildings and other improvements associated therewith, shown on the following Exhibits with the Lease Maps and Legal Descriptions and Boeing Building Numbers: Exhibit"A"—Lease Parcel 5-08/5-09 Building Exhibit`B"-Lease Parcel 5-50 and 5-50 Building . Exhibit "C" Lease Parcel Aircraft Positions A-4 through A-9 & Compass Rose I Exhibit"D"!Lease Parcel North Bridge Access I Exhibit"E"-Apron B Exhibit"F" Boeing Substation B-1 I Exhibit"G" Lease Parcel Fuel Farm/Building 5-45 I Each of these Exhibits are attached hereto and incorporated herein by this reference (hereinafter, "Premises"). Lb. Common Areas: Tenant, and its authorized representatives, subtenants, assignees, agents invitees, and licensees, shall have the right to use, in common with others, on a non-exclusive basis and subject to the Airport Regulations and Minimum Standards (as they may be amended from time to time) pursuant to Section 8(e), the public portion of the Renton Municipal Airport (Aka Clayton Scott Field. Hereinafter referred to as "Airport"), including the runway and other public facilities provided thereon. 1 h:/ootca/03z1f/city departments/airport/Boeing/Lease Changes-5/10/10(3) Lb.l Notwithstanding anything in this Lease to the contrary, Landlord acknowledges that direct access to the taxiways and runway from the Premises is essential to the conduct of Tenant's business on the Premises and, except, during construction activities occurring on the taxiways, runway or weather related events, Landlord shall ensure that Tenant and its representatives, subtenants, assignees, agents, invitees, and licensees have direct access to the taxiways and runway at all times during the Term(and the parties hereby agree that the Through the Fence Access Agreement set out in Attachment A, which is attached to this Lease and by this reference made a part of this Lease, contains the agreement of Landlord and Tenant with respect to such access by Tenant), PROVIDED that if Landlord plans any construction activity on the taxiways or runway, Landlord will schedule such activity so as not to interfere with Tenant's use of the Premises, the taxiways, or the runway, will notify Tenant of any plans for such activity not less than six months in advance of the commencement of such activity, and will consult and coordinate with Tenant to ensure that such activity does not interfere with Tenant's use of the Premises, the taxiways, or runway, except that in the case of an emergency Landlord may proceed with such activity without notice to the Lessee and will use its best reasonable efforts not to interfere with Tenant's use of the Premises, taxiway, or runway in addressing such emergency. For purposes of this provision, an "emergency" is a condition that presents an imminent threat of bodily injury to or death of any person or loss of or significant damage to any property. 2. CONDITIONS: i 2.a. Specific Conditions: This Lease, and Tenant's rights and permitted uses under this Lease, are subject to the following: 2.a.(1) Easements, restrictions and reservations of record; I 2.a.(2) The Airport Regulations and Minimum Standards pursuant to Section 8(e), including Landlord's standards concerning operation of aviation activities from the Airport, and 2.a.(3) All such non-discriminatory charges and fees for use of the Airport as may be established from time to time by Landlord as set out in Section 4.g of this Lease. 2.b. No Conveyance of Airport: This Lease shall in no way be deemed to be a conveyance of the Airport, and shall not be construed as providing any special privilege for any public portion of the Airport except as described herein. The Landlord reserves the absolute right to lease or permit the use of any portion of the.Airport for any purpose deemed suitable for the Airport, except that portion that is leased hereby; provided, however, that any such other lease, use or purpose shall not interfere with Tenant's ability to meet its obligations under Section 9 of this(Lease. 2.c. Ni ture of Landlord's Interest: It is expressly understood and agreed that Landlord holds and operates the Airport, and the Premises under and subject to a grant and conveyance thereof to Landlord from the United States of America, acting through its Reconstruction Finance Corporation, and subject to all the reservations, restrictions, rights, conditions, and exceptions of the United States therein and thereunder, which grant and conveyance has been filed for record in i 2 h:/ootca/03zif/city departments/airport/Boeing/Lease Changes-5/10/10(3) i I the office of the Recorder of King County, Washington, and recorded in Volume 2668 of Deeds, Page 386; and further that Landlord holds and operates said Airport and Premises under and subject to the State Aeronautics Acts of the State of Washington (chapter 165, laws of 1947), and any subsequent amendments thereof or subsequent legislation of said state and all rules and regulations lawfully promulgated under any act or legislation adopted by the State of Washington or by the United States or the Federal Aviation Administration, and subject to all of the foregoing, Landlord agrees that it will maintain the Airport as an airport and in the condition required for the conduct of Tenant's business at the Airport throughout the Term (as defined in Section 3b). It is expressly agreed that the Tenant also accepts and will hold and use this Lease and the Premises subject thereto and to all contingencies, risks, and eventualities of or arising out of the foregoing;and if this Lease, its Term, or any conditions or provisions of this Lease are or become in conflict with or impaired or defeated by any such legislation, rules, regulations, contingencies or risks, the latter shall control and, if necessary, modify or supersede any provision of this Lease affected thereby, all without any liability on the part of, or recourse against, Landlord in favor of Tenant, provided that Landlord does not exceed its authority under the foregoing legislation, rules and regulations. 2.d. Future Development/Funding: Subject always to Tenant's rights under Section l.b.I of this Lease, nothing contained in this Lease shall operate or be construed to prevent or hinder the . future development, improvements, or operation of Airport by Landlord, its agents, successors or assigns, or any department or agency of the State of Washington or of the United States, or the consummation of any loan or grant of federal or state funds in aid of the development, improvement, or operation of the Renton Municipal Airport, but no such action shall adversely affect_Tenant's use of the Premises, the taxiway, or runway. 3. TERM: 3.a. Initial Term: The initial term of this lease (herein referred to as the "Term" subject to the provisions of Section 3.b) shall be for a twenty (20) year period commencing on June 1, 2010, (hereinafter "Commencement Date"), and terminating on May 31, 2030 (hereinafter "Expiration Date'). The period from June 1, 2010 through May 31, 2030 is sometimes referred to in this Lease as the"Initial Term". 3.b. Option to Extend Term: In the event that Tenant is not in default under this Lease beyond any applicable notice'and cure period at the time Tenant exercises the right to extend the Term, and provided the Term of this Lease has not previously terminated pursuant to this Lease, then Tenant may extend the Term for two (2) respective additional periods of ten (10) years each (respective, the `,`First Extension Option" and the "Second Extension Option") by delivering a written notice to Landlord pursuant to Section 23. The period from June 1, 2030 through May 31, 2040 is sometimes referred to in this Lease as the "First Extended Term". The period from June 1, 2040 tlirough May 31, 2050 is sometimes referred to in this Lease as the "Second Extended Term" The First Extended Term and the Second Extended Term are sometimes referred to in this Lease individually or collectively as an "Extended Term" or as the "Extended Terms". The "Term" as used in this Lease shall include the Initial Term together with the First Extended Term, if the First Extension Option is exercised, and the Second Extended Term, if the 3 h:/ootca/03z1f/city departments/airport/Boeing/Lease Changes-5/10/10(3) t i Second Extension Option is exercised, and the Expiration Date shall be May 31, 2040, if Tenant exercises the First Extension Option, and May 31, 2050, if Tenant exercises the Second Extension Option. i 3.b.1. ,Rental: The amount of Minimum Monthly Rental to be paid during the First Extended Term shall be the Minimum Monthly Rental in effect at the end of the Initial Term and the amount of Minimum Monthly Rental to be paid during the Second Extended Term shall be the Minimum.Monthly Rental in effect at the end of the First Extended Term, but the Minimum Monthly Rental shall continue to adjust as described in Section 4.b during any Extended Term. 3.b.2. Notice of Desire to Extend Lease Term:. Notice of Tenant's desire to exercise either the First Extension Option or the Second Extension Option must be given not less than one (1) year prior to; the Expiration Date then in effect, and shall conform to the requirements in Section 23 (Notices), below. 3.b.3. Addendum: Upon the exercise of the First Extension Option or the Second Extension Option, Landlord and Tenant shall execute an Addendum to this Lease acknowledging the extension of the Term and the new termination date, and lease rates, if applicable. 4. RENT AND FEES: 4.a: Minimum Monthly Rent: Tenant shall pay to Landlord a Minimum Monthly Rent in the sum of eighty seven thousand, seven hundred fifty dollars and sixteen cents ($87,750.16) which amount is one-twelfth of the Total Annual Rent shown in the chart below, PLUS Leasehold Excise Tax as described in Section 5, below without deduction, offset, prior notice or demand, payable,promptly in advance on the first day of each and every month during the Term. All such payments shall be made to the Director of Finance, City of Renton, Renton Municipal Airport, 616 West Perimeter Road, Unit A, Renton, Washington 98057. The Minimum Monthly Rent is computed as follows: i Exhibit Lease Parcel/Building Leased 2010 Rates Annual Rent Description area (sq ft Exhibit A 5-08/5-09 Building and $356,707 $356,707.00 Land and Aircraft Position A-� Exhibit B 5-$0 Building(See note $153,600 $153,600.00 below) Exhibit B Land and Aircraft 132,896 $0.62/sq $82,395.52 Positions.A-2 &A-3 ft/yr (including land under 5-50 Buildm 1 4 h:/ootca/03zlf/city departments/airport/Boeing/Lease Changes-5/10/10(3) I i JI I Exhibit C Aircraft Position A-4 467,809 $0.62/sq $290,041.58 through A-9 and Compass ft/yr Rose Exhibit D North Bridge Access 16,778 $0.62/sq $10,402.36 ft/yr Exhibit E Apron B 167,829 $0.62/sq $104,053.98 ft/yr Exhibit F Boeing Substation B-1 453 $0.62/sq $280.86 ft/yr Exhibit G 5-45 Building(building $20,100 $205100 only) Exhibit G 5-45 Land (land only) 57,130 $0.62/sq $35,420.60 ft/yr Total Annual Rent=$1,053,001.90 plus Leasehold Excise Tax i Note relating to Exhibit B: The Parties acknowledge that in 2009 and 2010, the Tenant made a substantial capital investment in improvements to the 5-50 Building, including numerous alterations to the�structure as well as improvements within the building. Tenant's financial investment as well as these improvements and Tenant's use of the building as a paint hangar have made this a unique building. Pursuant to provisions in the prior lease, Renton will assume ownership of this building on June 1, 2010. So, while Landlord will charge Tenant rent for its use, the Parties have agreed to treat this building differently from other buildings in certain provisions of this Lease. The rental rate for the 5-50 Building shall adjust according to the terms set out in this Paragraph 4, EXCEPT that in those years when the Minimum Monthly Rent is adjusted to the"then current market rent", pursuant to Paragraph 4.b.2, below, the parties agree that the appraisal (or other form of analysis to determine fair market rental)relating to the 5-50 Building shall evaluate the building as an aircraft hangar, and as if the improvements made by Tenant in 2009-2010, and described in Paragraph 4.d,below, had not been made. However, the Parties agree that the condition of the building, as it is maintained by Boeing, shall be considered in the appraisal (or other form of analysis)to determine the fair market rental. I 4.b. Periodic Rental Adjustment: The Minimum Monthly Rent shall be subject to adjustment on the third (3rd) anniversary of the Commencement Date and every three years thereafter on the anniversary of the Commencement Date (any of which shall hereinafter be referred to as ."Adjustment Date" and the amount to which the Minimum Monthly Rent is adjusted at any Adjustment Date shall hereinafter be referred to as "Adjusted Monthly Rent") as follows: 4.b.1 Adjustment at Year 3, 9, and 15. As used in this Section 4.b.1, "Index"means the Consumer Price Index for All Urban Consumers for Seattle-Tacoma-Bremerton All Items (1982-84=100) (CPI-U) published by the United States Department of Labor, Bureau of Labor Statistics, Beginning Index means the Index that is published nearest, but preceding, the Commencement Date; and ".Adjustment Index"means the Index that is 5 h:/ootca/03zif/city departments/aiiport/Boeing/Lease Changes-5/10/10(3) published nearest, but preceding, the first, third, and fifth Adjustment Date, respectively. "Preceding Index" means, with respect to the third and fifth Adjustment Date (that is, June 1, 2019 and June 1, 2025) respectively, the Adjustment Index that was published nearest, but preceding the first and third Adjustment Date (that is, June 1, 2013 and June 1, 2019),respectively. For the Periodic Rent Adjustment that occurs at the first Adjustment Date, if the Adjustment Index for such Adjustment Date has increased over the Beginning Index, the Minimum Monthly Rent payable for the following three (3) year period (until the next Adjustment Date) shall be set by multiplying the Minimum Monthly Rent provided for in Section 4.a. of this Lease by a fraction, the numerator of which is the Adjustment Index for such Adjustment Date and the denominator of which is the Beginning Index. The product shall be the Adjusted Monthly Rent for the ensuing three (3) year period. In no event shall the Minimum Monthly Rent determined pursuant to this paragraph be less than the Minimum Monthly Rent set forth in Section 4.a. of this Lease. For the Periodic Rent Adjustments that occur at the third and fifth Adjustment Date, respectively, if the Adjustment Index published nearest, but preceding, such Adjustment Date has increased over the Preceding Index, the Minimum Monthly Rent payable for the following three (3) year period (until the next Adjustment Date) shall be set by multiplying the then current Adjusted Monthly Rent.by a fraction, the numerator of which is the New Adjustment Index and the denominator of which is the Preceding Index. The product shall be the Adjusted Monthly Rent for the ensuing three (3) year period. In no event shall the Adjusted Monthly Rent determined pursuant to this paragraph be less than the Minimum or Adjusted Monthly Rent established for the immediately preceding three (3) year period. 4.b.2 Adjustment at Year 6, 12, and 18. For the Periodic Rent Adjustments that occur in years six (6), twelve (12), and eighteen (18) (that is, effective June 1, 2016, June 1 2022, and June 1, 2028, respectively), Landlord and Tenant agree that the Minimum Monthly Rental shall be adjusted to the then current fair market rent. As soon as is practical prior to the relevant Adjustment Date, Landlord shall advise Tenant of Landlord's opinion of the then current,fair market rent for the Premises. If Tenant agrees with such opinion, such rent shall be the Adjusted Monthly Rent for the ensuing three (3) year period. If Tenant disagrees with such opinion, Tenant shall within thirty(30) days of Tenant's receipt of Landlord's opinion provide Landlord with Tenant's opinion of the then current fair market rent for the Premises (and if Tenant has not received Landlord's opinion prior to March 1 preceding the relevant Adjustment Date, Tenant may provide Landlord with Tenant's opinion of the then current fair market rent for the Premises at any time prior to the relevant Adjustment.Date). . If Landlord agrees with Tenant's opinion, such rent shall be the Adjusted Monthly Rent for the ensuing three (3) year period. If the parties have not agreed in writing on the fair market rent for the Premises on or before the applicable Adjustment Date, the parties shall use the procedure specified in Section 4.c to resolve such dispute. Whenever the Adjusted Monthly Rent is determined pursuant to this Section 4.b.2 after the relevant Adjustment Date, Tenant shall 6 k/ootca/03zlf/city departments/airport/Boeing/Lease Changes-5/10/10(3) continue to pay the Monthly Rental that was in effect immediately prior to the relevant Adjustment Date and the Adjusted Monthly Rent, once it is determined, shall be effective retroactively to the relevant Adjustment Date and the parties shall make the necessary adjustment to their accounts as soon as is practical. If prior to the relevant Adjustment Date neither party has provided the other with its opinion of the fair market rent for the Premises, the Monthly Rent in effect immediately prior to the relevant Adjustment Date shall be the Adjusted Monthly Rent for the ensuing three(3) year period. 4.c. Dispute Resolution Re: Readjustment of Rental: If the parties are unable to agree upon such adjusted rental by negotiation as set out in Section 4.b.2, then the parties shall submit the matter of the adjusted rental for the ensuing period to arbitration. Landlord and Tenant do hereby agree that the arbitration process shall be limited to not more than one hundred fifty(150) calendar days, using the following procedures: I 4.c(1). Landlord shall select and appoint one arbitrator and Tenant shall select and appoint one arbitrator, both appointments to be made within a period of sixty (60) days from the end of the negotiation period cited in paragraph 4d. Landlord and Tenant shall each notify the other of the identity of their arbitrator and the date of the postmark of the letter, or date of personal delivery, shall be considered the date of appointment. 4.c(2). The two appointed arbitrators shall meet, and shall make their decision in writing within thirty (30) days after the date of their appointment. If the appointment date for either arbitrator is later than the other, the latter date shall be the appointment date for purposes of the thirty(30) day deadline. 4.c(3) If the two arbitrators are unable to agree within a period of thirty (30) days after such appointment, they shall, within a period of thirty (30) days, select a third arbitrator. If such third arbitrator has not been selected or if such third arbitrator has not accepted such appointment within such thirty(30) day period, either Landlord or Tenant may apply to the head of the Seattle office of the American Arbitration Association to appoint said third arbitrator. 4.c(4). The three arbitrators shall have thirty (30) days from the date of selection of the third arbitrator to reach a majority decision unless the time is extended by agreement of both parties. The decision of the majority of such arbitrators shall be final and binding upon the parties hereto. 4.c(5). The arbitrators shall be experienced real estate appraisers and be knowledgeable in the field of comparable airport rentals and use charges in King County and shall give due consideration to any change in economic conditions from the preceding rental period. After a review of all pertinent facts, the arbitrators may increase or decrease such rental rate or continue the previous rental rate for the ensuing three(3)year period. 4.46). Leasehold improvements made by the Tenant shall not be considered as part of the leased premises for the purpose of future adjustments or readjustments of the rental rates. 7 h:/ootca/03zif/city departments/airport/Boeing/Lease Changes-5/10/10(3) 4.47). Each party shall a for and be responsible for the fees and costs charged b the pay P g Y arbitrator selected by him. The fee of the third arbitrator shall be shared equally by the parties. 4.c(8). The readjusted rental in each case, whether determined by arbitration or by agreement of the parties themselves, shall be effective as of the rental Adjustment Date. 4.d. 2009-2010 Tenant Improvements: For purposes of determining the fair market rental for the 5-50 Building for those adjustment periods pursuant to Paragraph 4.b.2, above, the Parties agree that the "2009-2010 Tenant Improvements" are those improvements made by Tenant to the 5-50 Building during 2009-2010. The 2009-2010 Tenant Improvements shall be identified by reference to the plans submitted by Tenant to Landlord in Tenant's permit application, incorporated by this reference as if fully set forth herein, until such time as said improvements are completed, at which time the Tenant shall submit to the Landlord "as built" drawings, certified by a professional engineer, and the 2009-2010 Tenant Improvements will be the improvements shown on such "as built" drawings, which shall be deemed to have been incorporated into this Lease upon their submittal by Tenant. 4.e Through the Fence Access Fee. The terms set out in Attachment A shall govern the amount of the Through the Fence Access Fee payable by Tenant in addition to Minimum Monthly Rent. For ease of reference, the parties note that the Through the Fence Access Fee shall be payable in monthly installments initially in the amount of Twenty-two Thousand Five Hundred Ninety-one and 04/100 Dollars ($22,591.04) which amount is one-twelfth of the Annual Through The Fence Access Fee provided for in Attachment A. The Through the Fence Access Fee shall be paid without deduction, offset, prior notice or demand, and shall be payable promptly in advance on the first day of each and every month during the Term. All such payments shall be made to the Director of Finance, City of Renton, Renton Municipal Airport, 616 West Perimeter Road, Unit A, Renton, Washington 98057. The Through The Fence Access Fee will be used by the Landlord solely for capital improvements to the airport and its associated facilities. No Leasehold Excise Tax is payable with respect to the Through The Fence Access Fee. 4.f. Late Payment Charge: If any Rent is not received by Landlord from Tenant by the third (3'd) business day after such Rent is due, Tenant shall immediately pay to Landlord a late charge equal to five percent (5%) of the amount of such Rent. Should Tenant pay said late charge but fail to pay contemporaneously therewith all unpaid amounts of Rent, Landlord's acceptance of this late charge shall not constitute a waiver of Tenant's default with respect to Tenant's nonpayment nor prevent Landlord from exercising all other rights and remedies available to Landlord under this Lease or under law. If any check received by Landlord from Tenant is returned unpaid for any reason, Landlord reserves the right to charge, and Tenant agrees to pay, an additional charge up to the maximum amount allowed by law. Unpaid amounts shall bear interest at the rate of twelve(12%)'percent per annum until paid. g h:/ootca/03z1f/city departments/airport/Boeing/Lease Changes-5/10/10(3) 4.g. Other Fees and Charges: Tenant shall pay, in addition to the Minimum Monthly Rent and other charges identified in this Lease, its proportionate share of all non-discriminatory fees and charges now in effect or hereafter levied or established by Landlord during the Term for any currently unanticipated Surface Water Utility charges imposed on the Airport by the City of Renton as surface water management charges. to the extent that such increase exceeds twenty percent (20%) of the amount of the Surface Water Utility charge so imposed on the Airport by the City of Renton for the immediately preceding calendar year. Tenant shall also pay all non-discriminatory fees and charges established by any governmental agency or authority other than Renton that become levied or charged during the Term against (1) the Premises, (2) the structures, business operations, or activities conducted by Tenant on, at, or from the Premises, (3) the use made by Tenant of the Premises, or (4) services rendered to the Premises or to Tenant at the Premises. 5. LEASEHOLD EXCISE TAX: Tenant shall pay to Landlord the leasehold excise tax as established by RCW Chapter 82.29A, as amended, or any replacement thereof, which tax shall be in addition to the Minimum Monthly Rent and other charges payable under this Lease and shall be paid separately to the Director of Finance, City of Renton, at the same time the Minimum Monthly Rent is due. If the State of Washington or any other governmental authority having jurisdiction thereover shall hereafter levy or impose any similar tax or charge on this Lease or the leasehold estate, then Tenant shall pay such tax or charge when due. Such tax or charge shall be in addition to Minimum Monthly Rent.and other charges payable under this Lease. 6. PAYMENT OF UTILITIES AND RELATED SERVICES: Tenant shall pay for all utilities and services used in the Premises, including without limitation, electricity, gas, water, sewer, garbage removal, janitorial service and any 'other utilities and services used in the Premises. Landlord shall not be liable for any loss or damage caused by or resulting from any variation, interruption, or failure of any utility services due to any cause whatsoever, except, and Only to the extent caused by Landlord's negligence. Landlord shall not be liable for temporary interruption or failure of such services incidental to the making of repairs, alterations or improvements, or due to accident, strike, act of God, or conditions or events not under Landlord's control. Temporary interruption or failure of utility services shall not be deemed a breach of the Lease or as an eviction of Tenant, or relieve Tenant from any.of its obligations hereunder. 7. TENANT'S ACCEPTANCE OF PREMISES: 7.a. Acceptance of Premises: Tenant accepts the Premises in their "AS IS" condition. Tenant accepts the Premises subject to all applicable federal, state, county and municipal laws, ordinances and regulations governing and regulating the use of the Premises. Subject to the other provisions of this Lease, this Lease is subject to all such laws, ordinances and regulations. Tenant acknowledges that, except as otherwise provided in this Lease, neither Landlord, nor Landlord's agents have made any representation or warranty as to the suitability of the Premises for the conduct of Tenant's business or use. Except as otherwise provided herein, Landlord 9 hlootca/03zlf/city departments/airport/Boeing/Lease Changes-5/10/10(3) i warrants Tenant's right to peaceably and quietly enjoy the Premises without any disturbance from Landlord, or.others claiming by or through Landlord. 8. USE OF PREMISES: 8.a. Use of Premises: The Premises are leased to the Tenant for the following described purposes and uses necessary to said purposes, in accordance with the Airport Regulations and Minimum Standards pursuant to Section 8(e): 8.a.(1) Aircraft storage, manufacturing, modification, operation, and maintenance including fueling, inspection, major and minor repair, and major and minor alteration of airframes, engines, avionics, interiors and aircraft components; flight test activities; training. 8.a.(2) Storage and tie-down of aircraft,both indoors and outdoors; 8.a.(3) Any use that is ancillary to aircraft storage, manufacturing, maintenance, operation, and modification, flight test activities, and training and any other use that is aviation related and requires access to the runway. 8.b. Continuous Use: Tenant covenants that the Premises shall be continuously used for those purposes set forth above during the Term, shall not be allowed to stand vacant or idle unless Tenant determines in its sole discretion that allowing the Premises to stand vacant or idle is necessary given business conditions affecting aircraft delivery and/or manufacturing at the time of such determination, and subject to reasonable, temporary interruptions for maintenance, construction, or other purposes. 8.c. Non-Aviation Uses Prohibited: Tenant agrees that the Premises may not be used for uses or activities that are not related, directly or indirectly, to aviation. 8.d. Signs: 8.d.(1) Advertising: No advertising matter.or signs shall be displayed on the Premises or structures, at any time, without the prior written approval of Landlord, which approval will not be unreasonably withheld. 8.42) Building Address: The building street number, as assigned by the City of Renton, shall be displayed in the upper right-hand corner of the East and West side of each building, as viewed from Perimeter Road and the Taxiway. The number type and color shall be as directed by the Airport Manager, and the number size shall be as required by current Fire Code. 8.e. Conformity with Laws, Rules and Regulations: Tenant shall comply with applicable federal, state, county and municipal laws, ordinances and regulations concerning Tenant's use of the Premises. Tenant shall keep and operate the Premises and all structures, improvements, and activities in or about the Premises in conformity with the Airport Regulations and Minimum Standards and other reasonable rules and regulations now or hereafter adopted by Landlord, 10 h:/ootca/03z1f/city departments/airport/Boeing/Lease Changes-5/10/10(3) I provided that all such Airport Regulations and Minimum Standards and other rules adopted hereafter are non-discriminatory, all at Tenant's cost and expense. Tenant shall use the Premises and all structures, improvements, and activities in or about the Premises in conformity with all applicable rules and regulations now or hereafter adopted by (i) the Federal Aviation Administration, (ii) the State of Washington, or(iii) other state or federal governmental authority, all at Tenant's cost and expense. 8.f. Waste; Nuisance; Illegal Activities: Tenant shall not permit any waste, damage, or injury to the Premises or improvements thereon, nor allow the maintenance of any nuisance thereon, nor the use thereof for any illegal purposes or activities; provided, however, that the foregoing shall not be construed to alter or expand the scope of Tenant's obligations under Section 9 of this Lease. 8.g. Increased Insurance Risk: Tenant shall not do or permit to be done in or about the Premises anything which will be dangerous to life or limb, or which will increase any insurance rates upon the Premises or other buildings and improvements at the Airport; provided, however, that the foregoing is not intended to prevent or impede Tenant from taking such actions as may be reasonably necessary for Tenant to meet its obligations under Section 9 of this Lease. 8.h. Aircraft Registration Compliance: The Tenant is hereby notified of the Washington State law concerning aircraft registration and the requirement that tenant comply therewith. See Title 47.68.250 RCW: Public Highways and Transportation. 9., ENVIRONMENTAL MATTERS: 9.a. Agreed Order/Remediation of Known Contamination: 9.a.(1). The Parties acknowledge that Tenant is the owner of certain fee and leasehold interests in the City of Renton (the "Existing Boeing Renton Site") which includes or in the past has included portions of the Premises and otherwise lies immediately east of the Airport across the Cedar River Waterway, as generally depicted on Exhibit H attached hereto. 9.a.(2). The Parties acknowledge that there has been a release into the environment of Hazardous Substances (as defined in Section 28 of this Lease) into the soil and groundwater of and under the Existing Boeing Renton Site (the "Existing Boeing Renton Site Contamination") and that the Existing Boeing Renton Site Contamination may have migrated to other portions of the Premises or the Airport (collectively, the "Known Contamination"). These conditions are documented in the reports and other records listed in Exhibit I attached hereto; provided, however, that the Known Contamination shall not include any Hazardous Substances originating beyond the boundaries of the Existing Boeing Renton Site as those boundaries existed at the time such Hazardous Substances were released into the* environment, even if such Hazardous Substances are described in any of the documents listed in Exhibit I. Landlord acknowledges that Tenant has made all such reports available to Landlord for its review, and Landlord represents that it has reviewed those reports to its satisfaction. . 11 h:/ootca/03Af/city departments/airport/Boeing/Lease Changes-5/10/10(3) I i 9.a.(3). Tenant has advised Landlord that Tenant has entered into, and may from time to time modify, substitute; replace, or supersede, an agreed order for corrective action under the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901, et seq., ("RCRA") (Agreed Order No. DE 97HZ-N233) (hereinafter, "Agreed Order," a copy of which has been provided to Landlord) with the State of Washington Department of Ecology ("Ecology") and/or other lead governmental agencies ("Lead Agencies"). In the Agreed Order, Tenant has agreed to perform certain soils and groundwater investigation of Hazardous Substances with respect to the Existing Boeing Renton Site, and may be required to perform groundwater or other remediation of Hazardous Substances with respect to other portions of the Premises, the Airport, or adjacent property beyond the boundaries of the Existing Boeing Renton Site. In general, the areas subject to the Agreed Order are depicted on Exhibit X attached to the Agreed Order. In particular, the portions of the Premises subject to the Agreed Order are depicted on Exhibits A, B, C and G attached to the Agreed Order. 9.a.(4). Except as otherwise provided in this Section 9, Tenant shall, at its sole cost and expense, remediate the Known Contamination existing as of the Commencement Date with respect to the soil and groundwater of and under the Premises, and/or the soil and groundwater of and under the Airport (if applicable under Sections 9.a.(2) or 9.a.(7)), in accordance with the requirements, if any, of the Agreed Order and any applicable Enviroiunental Laws and Requirements (as defined in Section 28 herein), to the reasonable satisfaction of Ecology and any other Lead Agencies, and in accordance with commercially reasonable standards for commercial / industrial facilities (collectively, the "Remediation"). ' Such Remediation obligations shall continue until such time as Ecology or other Lead. Agency exercising authority over the Remediation at or about the Premises provides written notice approving the Remediation or written notice, consistent with the then prevailing industry and/or commercial standards indicating that, based on its then current knowledge and with customary qualifications;no further action is required with respect to the subject of the Remediation (in either case, a "No Further Action Letter"). In the event Tenant completes,its Remediation obligations under this Lease, and Ecology or another Lead Agency exercising authority over the Remediation subsequently requires further Remediation of any Known Contamination for which Tenant is responsible under this Lease, Tenant will perform such Remediation until Ecology or such other Lead Agency provides written notice indicating that it plans to require no further action with respect to the subject of the Remediation. To the extent Tenant has not completed such Remediation of any Known Contamination on or before the termination or earlier expiration of this Lease, Landlord shall provide to Tenant all reasonable and necessary access to the Premises and the Airport to enable Tenant to complete such Remediation. 9.a.(5). Tenant shall keep Landlord reasonably apprised of Tenant's efforts to.satisfy the requirements of the Agreed Order and any future orders pertaining to the Remediation., including providing copies to Landlord on request of reports issued by Tenant's consultants or filed with Ecology or other Lead Agency in connection therewith. Except as provided otherwise in this Lease, Tenant, not Landlord, shall be responsible for satisfying all conditions imposed in the Agreed Order and any future orders pertaining to the .Remediation; provided, however, that Landlord shall not obstruct or interfere with Tenant's efforts to satisfy such conditions. 12 hlootca/03Af/city departments/airport/Boeing/Lease Changes-5/10/10(3) 9.a.(6). Landlord agrees that it will permit the recording of such notices, covenants, and other so-called "institutional controls" with respect to the Premises or the Airport as reasonably may be required by Ecology or other Lead Agency, as a condition to Ecology or such other Lead Agency agreeing to issue a No Further Action Letter with respect to the subject of the Remediation, and Landlord will execute such instruments and documents as Tenant reasonably may request in connection with such institutional controls. 9.a.(7). Tenant agrees to remediate the Known Contamination on Airport property on and adjacent to the location of the old Boeing Fuel Farm which was located in the southeast corner of the.Airport. Tenant agrees to remediate that Known Contamination in conjunction with any future demolition of the adjacent hangar buildings located at 289 East Perimeter Road which is the premises referenced in the Bosair, LLC Lease Agreement LAG 86-003 which was effective August 1, 1986. Landlord will coordinate the timing of the remediation and provide Tenant at least six(6)months notice of the date of demolition of the hangar buildings. 9.b. Landlord's Representation and Warranty: Except as to the Known Contamination identified in the reports listed in Exhibit I, Landlord hereby represents and warrants that to Landlord's knowledge, (i) Landlord has no reason to believe that Hazardous Substances have been generated, treated; stored, released, or disposed of at, in, on, under, from, or about the Premises or the Airport in violation of any Environmental Laws or Requirements, or in a manner that may give rise to liability for environmental investigation or cleanup (removal or remedial), damage to property, or personal injury to Landlord or any other person at the Premises, the Airport, or any adjacent or surrounding property; and (ii) no claim of liability relating to the presence of any Hazardous Substances or any other adverse environmental conditions at, in, on, under, from or about the Premises or the Airport has been made or threatened by any governmental entity or any other third party. 9.c. Hazardous Substances Use: 9.c.(1) Use: Except as (i) used by Tenant to carryout its obligations under this Lease; or (ii) used in connection with Tenant's use of the Premises as described in Section 8.a above, Tenant shall not possess, use, generate, store, treat, release, or dispose of any Hazardous Substances at, in, on, under, from, or about the Premises or in any Tenant improvements or alterations placed on the Premises by Tenant, without the prior written consent of Landlord. With regard to any Hazardous Substances that Tenant proposes to use on the Premises for purposes other than those identified in (i) or (ii) above, Landlord shall, taking into account such factors as Landlord may reasonably determine to be relevant, promptly grant or withhold consent to such proposed use of Hazardous Substances. Landlord's consent shall not be unreasonably withheld. 9.c.(2). Compliance with Environmental Laws and Requirements: Any use by Tenant of Hazardous Substances on the Premises shall be carried out in compliance with applicable Environmental Laws and Requirements, at Tenant's sole cost and expense. Tenant shall not cause, nor permit or allow its agents, employees, or contractors to cause, the release of any Hazardous Substances at, in, on, under, from, or about the Premises in a manner violating any 13 h:/ootca/03zif/city departments/airport/Boeing/Lease Changes-5/10/10(3) I applicable Environmental Laws and Requirements or giving rise to liability for environmental response or cleanup (removal or remedial), damage to property, or personal injury to Landlord or any other person at the Premises while Tenant, its agents, employees and contractors are on the Premises during the Term of the Lease. Tenant shall, at its own cost and expense, promptly take all actions reasonably. necessary under applicable Environmental Laws and Requirements to investigate, remove or remediate any such release of Hazardous Substances caused by Tenant or its agents, employees, or contractors while on the Premises that occurred during the Term of the Lease. In the event of material non-compliance by Tenant with the requirements of this Section 9.c.(2), after notice to Tenant and a reasonable opportunity for Tenant to effect such compliance, Landlord may,.but is not obligated to, enter upon the'Premises and take such actions and incur such costs and expenses as reasonably required to cure such material non-compliance with applicable Environmental Laws and Requirements to protect its interest in the Premises. Notwithstanding the foregoing, Landlord may take immediate action reasonably necessary under the circumstances to respond to an emergency caused by such material non-compliance that would result in immediate and material adverse harm to the environmental condition of the Premises, or the Airport; in such event, Landlord shall notify Tenant promptly of the emergency and afford Tenant a reasonable opportunity to participate in the emergency response. Tenant shall reimburse Landlord for Landlord's reasonable and documented costs and expenses incurred to effect such cure. Tenant shall notify Landlord promptly upon discovery of any release of Hazardous Substances at, in, on, under, from or about the Premises caused by Tenant or its agents, employees, or contractors while on the Premises during the Term of the Lease, to the extent the same must be reported to any governmental agency pursuant to any applicable Environmental Laws or,Requirements. 9.d. Environmental Indemnities: 9.d.(1). Indemnification by Tenant: 9.d.(1)(a). Landlord shall have no responsibility to the Tenant, pursuant to this Lease or otherwise; with respect to (i) Remediation of the Known Contamination Tenant is responsible for remediating under Sections 9.a.(4) or 9.a.(7);. or (ii) the investigation, removal or remediation of a release of any Hazardous Substances at, in, on, under, from, or about the Premises during the Term caused by Tenant in breach of its obligations under Section 9.c. herein, except`as otherwise provided in this Section 9.d. Tenant shall defend,.indemnify and hold harmless Landlord from and against any and all actions, causes of action, claims, administrative proceedings, orders, judgments, penalties, fines, liabilities, losses, damages, obligations and expenses of any kind and nature whatsoever (each a "Claim") for personal injury or death, third party real or personal property damage or loss, environmental investigation or cleanup activities (removal or remedial), or incident to establishing the right to indemnification, including, but not limited to, governmental oversight costs, environmental resource damages, penalties or fines, removal costs, remedial costs, disposal taxes, and reasonable fees incurred by the Landlord for attorneys, consultants, or engineers, arising from or in connection with Tenant's failure to comply with its obligations under this Lease with respect to that Known Contamination, or with respect to the release of any Hazardous Substances at, in, on, under, from, or about the Premises during the Term caused by Tenant in breach of its obligations under Section 9.c herein, except in each case 14 h:/ootca/03Af/city departments/airport/Boeing/Lease Changes-5/10/10(3) to the extent caused by the negligence or willful misconduct of Landlord or its agents, employees, tenants, or contractors ("Tenant Environmental Indemnity Claims, Damages and Costs"). In the event any action or proceeding is brought against Landlord by reason of any Claim falling within the scope of the foregoing indemnity, Tenant upon written notice from Landlord to Tenant within 60 days after Landlord receives notice of the Claim shall defend same at Tenant's expense by counsel reasonably satisfactory to Landlord. 9.d.(1)(b). Notwithstanding any provision of this Agreement to the contrary, (i) Tenant shall not in any case be liable or responsible for the following damages to Landlord: (a) any form of incidental or consequential damage, including, without limitation, any loss of profits, proceeds or rents; (b) any loss of reputation or goodwill or any form of intangible property damage; (c) any loss of any actual or prospective economic or business opportunity or contractual relations; (d) any "stigma" damages; (e) any damages related to delays in development, leasing, occupying, operations, construction or income streams resulting therefrom; or (f) any damage to the Premises, the Airport, or other real property in any manner related to the presence of Hazardous Substances which is not required to be remediated under the terms of this Lease or otherwise (collectively, "Special Damages"); and (ii) Tenant shall not in any case be liable or responsible for any Tenant Environmental Indemnity Claims, Damages or Costs (A) to the extent the same are the result of any release into the environment of any Hazardous Substances by Landlord, any successor or assign of Landlord, or any of its or their tenants, agents, contractors, or employees, or.(B) .to the extent the Known Contamination in question is increased, exacerbated or made more costly or difficult to remediate by reason of any act or omission of Landlord, any successor or assign of Landlord, or any of its or their tenants, agents, contractors, or employees, or (C) to the extent attributable to the future use or contemplated or attempted use of the Premises or the Airport for the purposes of any residence, hospital, health care facility, school or other use as to which heightened or special requirements or standards apply under any applicable Environmental Laws or Requirements (a "Heightened Use") as of the Commencement Date or at any time in the future. 9.d.(1)(c). Notwithstanding any provision of this Lease to the contrary, Tenant shall have no obligation or liability hereunder or otherwise with respect to any release into the environment of any Hazardous Substance which occurs at., in, on, under, from, or about the Premises or Airport (A) prior to the Commencement Date (excluding the Known Contamination); or (B) on or after the Commencement Date, other than to.the extent that any such release is directly or proximately caused by Tenant or its agents, employees, or contractors while on the Premises during the Term of the Lease. 9.d.(1)(d). Notwithstanding any provision of this Lease to the contrary, Tenant shall have no obligation or liability under Section 9 of this Lease or otherwise to perform the Remediation of the Known Contamination, or to investigate, remove or remediate a release of any Hazardous Substance for which Tenant would be responsible under Section 9.c. above, unless and until and only for so long as Landlord grants to Tenant all reasonable and necessary access to the Premises and the Airport in accordance with Section 9 of this Lease or any other agreements between Tenant and Landlord, including to the extent required following termination or earlier expiration of this Lease, in whole or in part. 15" hlootca/03zlf/city departments/airport/Boeing/Lease Changes-5/10/10(3) 9.d.(2).. Indemnification by Landlord: 9.d.(2)(a). Tenant shall have no responsibility to the Landlord, pursuant to this Lease or otherwise, nor shall Tenant have any other liability or responsibility of any kind, with respect to a release of any Hazardous Substances at, on, in, under, from, or about the Premises or the Airport unless such release(i) constitutes part of the Known Contamination Tenant is responsible for remediating under Sections 9.a.(4) or 9.a.(7); or (ii) was caused by Tenant in breach of its obligations under Section 9.c herein, except as otherwise provided in this Section 9.d. Landlord shall defend, indemnify and hold harmless Tenant, any financial institution or entity which finances in whole or in part Tenant's construction on the Premises, or any of its or their directors, officers, agents, employees, and contractors (collectively, "Indemnitees") from and against any Claims for personal injury or death, third party real or personal property damage or loss, environmental investigation or cleanup activities (removal or remedial) or incident to establishing the right to indemnification, including but not limited to, governmental oversight costs, environmental resource damages, penalties or fines, removal costs, remedial costs, disposal taxes, increased costs of construction and increased interest or other costs related to any loan obtained by Tenant in connection with the Premises, and reasonable fees incurred by Tenant or any Indemnitee for attorneys, consultants, or engineers, arising from or in connection with a release of any Hazardous Substances at, in, on, under, from, or about the Premises or the Airport, unless such release (i) constitutes part of that Known Contamination; or (ii) was caused by Tenant in breach of its obligations under Section 9.c herein, except in each case to the extent caused by the negligence or willful misconduct of Landlord or its agents, employees, tenants, or contractors ("Landlord Environmental Indemnity Claims, Damages and Costs"). In the event any action or proceeding is brought against Tenant by reason of any Claim falling within the scope of the foregoing indemnity, Landlord upon written notice from Tenant to Landlord within 60 days after,Tenant receives notice of the Claim shall defend same at Landlord's expense by counsel reasonably satisfactory to Tenant. 9.d.(2)(b) Notwithstanding any provision of.this Lease to the contrary, Landlord shall not in any.case be liable or responsible to Tenant for any Special Damages, as defined in Section 9.d.(1)(b)herein. 9.d.(2)(c) Notwithstanding any provision of this Lease to the contrary, Landlord's obligation under Section 9.d(2)(a) shall apply to any Claim (i) arising out of or in connection with a release of any Hazardous Substances which constitutes part of the Known Contamination, to the extent the Known Contamination in question is increased, exacerbated or made more costly or difficult to remediate by reason of any act or omission of Landlord, any successor or assign of Landlord, or any of its or their tenants, agents, contractors, or employees, or (ii) which involves a Heightened Use, as described in Section 9.d.(1)(b). 9.e. No Admission: Tenant's obligations under this Section 9 apply only as between it and Landlord, and shall not extend to any other person or entity. Further, nothing in this Section 9 shall be considered an admission by Tenant of any fact, issue, law, or liability and shall not be 16 h:/ootca/03&/city departments/airport/Boeing/Lease Changes-5/10/10(3) admissible in evidence against Tenant in any judicial or administrative proceeding other than a proceeding by Landlord to enforce the terms of this Section 9. Tenant expressly reserves its rights to assert claims against third parties or entities with respect to any matters addressed in this Section 9. 9.f Survival: The provisions of Sections 9.a.(4), 9.a.(5), 9.a.(6), 9.a.(7), 9.b, 9.c, 9.d, and 9.e shall survive the expiration or sooner termination of-the Term. No subsequent modification or termination of this Lease by agreement of the parties or otherwise shall be construed to waive or to modify any provisions of this Section 9 unless the termination or modification agreement or other document expressly so states in writing. 10. MAINTENANCE: 10.a. Maintenance of Premises: The Premises and all of the improvements or structures thereon shall be used and maintained by Tenant in a neat, orderly, and sanitary manner. Landlord shall not be called upon to make any improvements, alteration, or repair of any kind upon the Premises. Tenant is responsible for the clean-up and proper disposal at reasonable and regular intervals of rubbish, trash, waste and leaves upon the Premises, including that blown against fences bordering the Premises. Tenant shall maintain in good condition and repair the Premises, subject to ordinary wear and tear, including without limitation, the interior and exterior walls, floors, roof, and ceilings, and any structural portions of the Premises (but excluding the structural portions of buildings that are on the Premises as of the Commencement Date, which are Landlord's responsibility as set out below), the exterior and interior portions of all doors, windows, glass, utility facilities, plumbing and sewage facilities within the building or under the floor slab including free flow up to the main sewer line, parking areas, landscaping, fixtures, heating, ventilating and air conditioning, including exterior mechanical equipment, exterior utility facilities, and exterior electrical equipment serving the Premises. Tenant shall make all repairs, replacements and renewals, whether ordinary or extraordinary, anticipated or unforeseen, that are necessary to maintain the Premises in the condition required by this Section. Tenant shall not be responsible for the structural portions of Landlord owned Buildings. Notwithstanding the foregoing, Landlord shall be responsible for the following: (a) the structural integrity of any Landlord-owned buildings (that is, those buildings that are on the Premises as of the Commencement Date); (b) the integrity and utility of all water supply lines, sanitary sewer lines, and storm water drainage lines without the Premises that serve those buildings that are on the Premises as of the Commencement Date; and (c) for the replacement as required of any and all HVAC systems serving any Landlord owned buildings that are on the Premises as of the Commencement Date (provided that Tenant is responsible for the annual maintenance and repair for such HVAC systems). The Parties agree that notwithstanding anything to the contrary in this Lease, Tenant shall be solely responsible for all maintenance relating to the 5-50 Building (Paint Hangar) and all improvements thereto through the Term of this Lease. The Parties acknowledge that as of the 17 h:/ootca/03zlf/city departments/airport/Boeing/Lease Changes-5/10/10(3) 0 date .of this Lease, there is asbestos impregnated into the siding material on the 5-50 Building (Paint Hangar). If, for any reason, the skin of the 5-50 Building (Paint Hangar) needs to be replaced during the Term of this Lease, the cost of removal and replacement shall be borne by Tenant. 10.b. Removal of Snow/Floodwater/Mud: Tenant shall remove from the Premises all snow and/or floodwaters or mud deposited therefrom, with the disposition thereof to be accomplished in such a manner so as to not interfere with or increase the maintenance activities of Landlord upon the public areas of the Airport. Landlord shall be responsible for the removal of any snow, ice, floodwaters, mud, or other debris that may be found on the taxiways, runway, common areas and other public spaces of the Airport; for the maintenance, repair, renewal, and replacement of any and all utility lines serving the taxiways, runway, common areas and other public spaces of the Airport. . 10.c. Maintenance of Premises: Tenant shall repair or replace any ripped or corroded skin of any buildings on the Premises, and the repairs so made by Tenant must be acceptable to the Landlord. Tenant shall also repair or replace any dents larger than 1.5 inches in length or diameter in the exterior skins of any buildings. Further, Tenant shall, every ten years of the Lease, paint the buildings whether needed or not. 10.d. Maintenance, Repair and Marking of Pavement: Tenant shall be responsible for, and shall perform, the maintenance, repair and marking (painting) of pavement surrounding the buildings within and on the Premises. Such maintenance and repair shall include, as a minimum, crack filling, weed control, slurry seal and the replacement of unserviceable concrete or asphalt pavements, as necessary. To the degree the concrete and asphalt pavements are brought to FAA standards at any time during the Term of this Lease; Tenant shall maintain the concrete and asphalt pavements in such condition. 10.e. Right of Inspection: Tenant will allow Landlord or Landlord's agent, free access at all reasonable times to the Premises for the purpose of inspection, or of making repairs, additions or alterations to the Premises, or any property owned by or under the control of Landlord. Landlord shall provide ten (10) days advance notice of any such inspection and use reasonable efforts not to interfere with Tenant's use of the Premises during any such inspection. 10.f. Landlord May Perform Maintenance: If Tenant fails to perform Tenant's X p obligations under this Section, Landlord may, at its option, but shall not be required to, enter the Premises, after thirty (30) days' prior written notice to Tenant, except in the event of an emergency when no notice shall be required, and put the same in good order, condition and repair, and the cost thereof together with interest thereon at the rate of twelve (12%) percent per annum shall become due and payable as additional rental to Landlord together with Tenant's next installment of Rent. 10.g. Limitation: Nothing in this.Section 10 shall be construed to alter, expand or diminish Tenant's or Landlord's respective rights and obligations under Section 9 of this Lease. 18 h:/ootca/03zlf/city deparnnents/airport/Boeing/Lease Change's-5/10/10(3) 11. ALTERATIONS: I La. Landlord's Consent Required for Subsequent Alterations: Tenant will not make any alterations, additions or improvements in or to the Premises without the written consent of Landlord first having been obtained, which consent shall not be unreasonably withheld, conditioned, or delayed; provided, however, that Landlord promptly shall give its consent for any alterations, additions or improvements reasonably necessary for Tenant to meet its obligations under Section 9 of this Lease or to comply with any applicable Environmental Law or Requirement. Other than reasonable approval of the exterior appearance of any improvements proposed by Tenant, Landlord shall not impose conditions or requirements in addition to or in excess of those mandated under applicable building codes or other Uniform Codes. Landlord's consent shall not be required for any alteration that costs less than $75,000, subject to any required permits, i.e., building permits. Where no permits are required for the requested work, Landlord shall respond to any request for approval of Tenant's plans and specifications for any alterations, improvements, or additions within thirty (30) calendar days, and shall provide specific reasons for any disapproval. Where no permits are required for the requested work, Landlord's consent shall be deemed given if Landlord does not respond to Tenant's request for such consent within such thirty(30)business day period. 1 Lb. Protection from Liens: Before commencing any work relating to alterations, additions and improvements affecting the Premises ("Work"), Tenant shall notify Landlord in writing of the expected date of commencement of the Work. Tenant shall pay, or cause to be paid, all costs of labor, services and/or materials supplied in connection with any Work. Tenant shall keep the Premises free and clear of all mechanics' and materialmen's liens and other liens resulting from any Work. Tenant shall have the right to contest the correctness or validity of any such lien if, immediately on demand by Landlord, it procures and records a lien release bond issued by a responsible corporate surety in an amount sufficient to satisfy statutory requirements therefor in the State of Washington. Tenant shall promptly pay or cause to be paid all sums awarded to the claimant on its suit, and, in any event, before any execution is issued with respect to any judgment.obtained by the claimant in its suit or before such judgment becomes a lien on the Premises, whichever is earlier. If Tenant shall be in default under this Section, by failing to provide security for or satisfaction of any mechanic's or other liens, then Landlord may, at its option, in addition to any other rights or remedies it may have, discharge said lien by (i) paying the claimant an amount sufficient to settle and discharge the claim, (ii) procuring and recording a lien release bond, or (iii) taking such other action as Landlord shall deem necessary or advisable, and, in any .such event, Tenant shall pay as Additional Rent, on Landlord's demand, all reasonable costs (including reasonable attorney fees) incurred by Landlord in settling and discharging such lien together with interest thereon at the rate of twelve (12%) percent per year from the date of Landlord's payment of said costs. Landlord's payment of such costs shall not waive any default of Tenant under this Section. I I.c. Bond: At any time Tenant either desires to.or is required to make any repairs, alterations, additions, improvements or utility installation thereon, Landlord may, at its option, 19 h:/ootca/03z1f/city departments/airport/Boeing/Lease Changes-5/10/10(3) � r require Tenant, at Tenant's expense, to obtain and provide to Landlord a lien and completion bond in an amount equal to the estimated cost in connection with Tenant's improvements, to insure Landlord against liability for mechanics and materialmen's liens and to insure completion of the Work. In determining whether or not to require such a bond, Landlord will specifically take into account the amount of the contract and Tenant's financial resources. 1 l.d. Notification of Completion: Upon completion of capital improvements made on the Premises, Tenant shall promptly notify Landlord of such completion. I Le. Landlord May Make Improvements: . Tenant agrees that Landlord may, at its option and at its expense, make repairs, alterations or improvements which Landlord may deem necessary or advisable for the preservation, safety, or improvement of utilities or Airport infrastructure on the Premises, if any, but shall not interfere in any significant way with Tenant's rights, or Tenant's fulfillment of its obligations, under this Lease in exercising such rights. All such work will be performed by Landlord at Landlord's sole cost and expense without charge or liability risk of any kind to Tenant. Landlord will advise Tenant of the nature of and schedule for such work as far in advance as is practical, and will schedule such work so as to minimize any disruption of Tenant's business at the Airport or use of the Premises. 12. IMPROVEMENTS: 12.a. Tenant Improvements: As further consideration for this lease, it is agreed that upon the expiration or sooner termination of the Term, all structures and any and all improvements of any character whatsoever installed on the Premises shall be and become the property of the Landlord, and title thereto shall automatically pass to Landlord at such time, except as provided otherwise under any applicable Environmental Law or Requirement, and none of such improvements now or hereafter placed on the Premises shall be removed therefrom at any time without Landlord's prior written consent, which shall not be unreasonably withheld, conditioned or delayed with respect to any such structures or improvements reasonably necessary or appropriate for Tenant to fulfill its obligations under Section 9 of this Lease or to comply with any applicable Environmental Law or Requirement. During the Term, Tenant shall hold title to all improvements placed by Tenant on the Premises. Tenant covenants and agrees that Tenant will pay and satisfy in full all outstanding liens, or other debts, affecting or encumbering such improvements before transfer of ownership of such improvements to Landlord upon the expiration or sooner termination of the Term. Alternatively, Landlord may, at its option, require Tenant,upon the expiration or sooner termination of the Term, if any, to remove any and all improvements and structures installed by Tenant from the Premises and repair any damage caused thereby, at Tenant's expense (other than any structure or improvements reasonably necessary for Tenant to fulfill its obligations under Section 9 of this Lease or to comply with any applicable Environmental Law or Requirement). Parties agree that despite Landlord's ownership of the 5-50 Building(Paint Hangar), at the end of the Term of this Lease, Landlord may, at its option,require Tenant, at Tenant's sole cost and expense, to remove the 2009-2010 Tenant Improvements other than those designated in this Section 12.a, and any other improvements made by Tenant during the Term of the Lease and to return the 5-50 Building to a condition suitable as an aircraft storage hangar. HVAC systems,and associated instrumentation, lighting, 20 hlootca/03&/city deparhnents/airport/Boeing/Lease Changes-5/10/10(3) and utility systems shall be preserved in order to assure the 5-50 Building can function as an aircraft storage hangar. Tenant shall not be required to remove the following elements of the 2009-2010 Tenant Improvements: (a) seismic structural upgrades; (b) structural and electrical additions to the building frame; (c) slab penetrations for drainage and ventilation and associated gratings and covers (used to support aircraft movement and parking) EXCEPT, Landlord may, at its option, require Tenant to seal ventilation ducts located in such slab penetration; (d)utility systems suitable for aircraft storage. Tenant shall remove the following elements of the 2009- 2010 Tenant Improvements, unless otherwise directed by Landlord: (w) contents of boiler room; (x) aircraft painting process equipment; (y)removable specialty improvements related to aircraft painting operations; (z) office areas within the 5-50 building. It is recognized that the condition of the improvements and requirements for establishing the building as an aircraft storage hangar may change over time. Therefore the Landlord and Tenant shall enter into good faith negotiations a minimum of one(1) year before expiration of the lease to determine elements of the building that will stay in place,be removed, or be replaced. Should the Landlord and Tenant mutually agree to changes to the provisions of Section 12.a regarding the 5-50 building, these changes shall be formalized in an agreement executed by both parties. Tenant owned improvements include,but are not limited to the following improvements: Exhibit Lease Parcel/Building Tenant Owned Improvements Description Exhibit A 5-08/5-09 Building and One(1) 12,000 gallon car gas tank,piping and Land and Aircraft Position pump, one(1) 15,000 gallon diesel tank and the A-1 electrical distributions stem Exhibit B 5-50 Building The 2009 and 2010 improvements made by Tenant in the 5-50 Building, as described in Paragraph 4.d, above. (The parties note that the 5-50 Building does not have an occupancy permit as of the date of this Lease.) Exhibit B Land and Aircraft Positions Crew shelters,portable light standards;portable A-2 &A-3 (including land storage buildings,blast fences and the electrical under 5-50 Building) distributions stem Exhibit C Aircraft Position A-4 Crew shelters, portable light standards, portable through A-9 and Compass . storage buildings,blast fences, employee Rose restroom, the South Bridge over the Cedar River and the electrical distributions stem Exhibit D North Bridge Access 60' Slide Gate and the North Bridge over the Cedar River Exhibit.E Apron B Crew shelters,portable storage building,portable light standards and the electrical distribution system. Exhibit F I Boeing Substation B-1 The electrical distribution system. Exhibit G 5-45 Land (land only) Four(4)-40,000 gallon Jet A fuel tanks, one (1) 15;000 gallon off-spec fuel tank, one 1 15,000 21 h:/ootca/03zif/city departments/airport/Boeing/Lease Changes-5/10/10(3) gallon diesel tank and all associated electrical and plumbing apparatus. 12.b. Demolition of 5-50 Building (Paint Hangar): Upon the expiration or sooner termination of the Term, if any, Landlord may choose to have the 5-50 Building (Paint Hangar) demolished rather than returned to a condition suitable for use as an aircraft storage hangar. In such event, Tenant shall pay to Landlord that amount that Tenant would have expended to return the 5-50 Building (Paint Hangar) to a condition suitable for use as an aircraft storage hangar, taking into account the retention of those elements as described in (a), (b), (c), and (d) in Section 12.a, the alteration, if requested by Landlord, provided for in item (c) in Section 12.a, and the-removal, if Landlord directs such removal, of those elements described in (w), (x), (y), and (z) in Section 12.a ("Tenant's 5-50 Restoration Amount"). The Parties acknowledge that there is asbestos impregnated into the siding material on the 5-50 Building. Further, the Parties acknowledge that Tenant's use of the 5-50 Building as a paint hangar has required the use of a boiler room and that on the date of this Lease there is or may be asbestos insulation used in said boiler room. If Landlord elects to demolish the 5-50 Building at the expiration or sooner termination of the Term, if any, and the cost of such demolition is increased due to the presence of asbestos impregnated in the skin of the 5-50 Building and the effect of applicable Environmental Laws and Regulations in force at the time, Tenant shall bear the increase in cost of demolition of the 5- 50 Building that is attributable to the presence of such impregnated asbestos (notwithstanding anything to the contrary contained in Section 9.c of.this Lease) in addition to Tenant's 5-50 Restoration Amount. The cost of demolition of the 5-50 Building shall include the cost of disposal of debris resulting from such demolition, and cost increases due to the presence of asbestos in the siding and the boiler room as described above shall be included in the amount of the increase in demolition costs that Tenant bears under.this Section 12.b. 12.c. Landlord or Third Party Improvements Adjacent to Compass Rose: If the airport property immediately adjacent to, and north of the existing Compass Rose is developed in the future, the Landlord shall ensure that the Tenant has an opportunity to review the development plans for the property at an early stage in the development process to ensure that any buried power lines will not interfere with the viability of the Compass Rose. 13. EXEMPTION OF LANDLORD FROM LIABILITY: Landlord or Landlord's agents shall not be liable for-injury to Tenant or to Tenant's business or loss of income therefrom or for damage which may be sustained by the person, goods, wares, merchandise or property of Tenant, its authorized representatives, caused by or resulting from (a) fire, electricity, gas, water or rain which may leak or flow from or into any part of the Premises, (b) any defect in or the maintenance or use of the Premises, or any improvements, fixtures and appurtenances thereon, (c) the Premises or any improvements, fixtures and appurtenances thereon becoming out of repair, (d) the breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires, appliances, plumbing, heating, ventilating or air conditioning or lighting fixtures of the Premises, (e) flooding of the Cedar.River or other body of water, or from any other source whatsoever, whether within or without the Premises; or (f) any act or omission of any other tenant or occupant of the building in which the Premises are located, or their agents, servants, employees, 22 h:/ootca/03z1f/city departments/airport/Boeing/Lease Changes-5/10/10(3) or invitees, provided, that the foregoing exemption shall not apply to losses to the extent that they arise from the failure of Landlord to perform an obligation of Landlord under this Lease or under applicable law nor to losses to the extent caused by Landlord's or its agents', contractors', or employees' negligence or willful misconduct, and provided further, that nothing in this Section 13 shall be deemed to alter, expand or diminish Landlord's and Tenant's respective rights and obligations under Section 9 of this Lease. 14. ASSIGNMENT & SUBLETTING: 14.a. Assignment/Subletting: Tenant shall not voluntarily >�assi or encumber its interest in this Lease or in the Premises, or sublease any part or all of the Premises, without Landlord's prior written consent, which consent shall notbe unreasonably withheld, conditioned, or delayed. Any assignment, encumbrance or sublease without Landlord's consent shall be void and shall constitute a default by Tenant under this Lease. No consent to any assignment or sublease shall constitute a waiver of the provisions of this Section and no other or subsequent assignment or sublease shall be made without Landlord's prior written consent. Before an assignment or sub- lease will be approved, the proposed assignee or sub-tenant must comply with provisions of the then current Airport Leasing Policies, including, but not limited to the "Analysis of Tenant's Financial Capacity," independent of Tenant's compliance or Financial Capacity. In the case of an assignment of the full leasehold interest and/or complete sale of the stock or other interests in Tenant and concomitant transfer of ownership of Tenant, (a) in the case of an assignment, the proposed assignee shall deliver to Landlord a written instrument duly executed by the proposed assignee stating that it has examined this Lease and agrees to assume, be bound by and perform all of Tenant's obligations under this Lease, to the same extent as if it were the original Tenant, and (b) in the case of a stock transfer, Transferee shall deliver a written acknowledgment that it shall continue to be bound by all the provisions of this Lease after the transfer. Except in the case of an assignment of the full leasehold interest, any assignment permitted herein will not relieve Tenant of its duty to perform all the obligations set out in this Lease or addenda hereto. In no event will the assignment of the full leasehold interest or the complete sale of the stock or other interests in Tenant and concomitant transfer of ownership of said entity cause an extension of the Term of this Lease. i 14.b. Permitted SublettinK. Notwithstanding the provisions of Section 13.a. above, Tenant may sublet portions of the Premises for the purpose of aircraft hangar storage and airplane tie-down space, without Landlord's prior written consent, on a month-to-month or longer basis (but not longer than the Term), provided that Landlord is informed on at least an annual basis, in writing, of the name of the subtenant(s), the purpose of the sublease, the amount of the rental charged, and the type of aircraft stored (make, model and registration number). Additionally, such information shall be disclosed upon request by Landlord. In addition, so long as Tenant's annual revenues are $1 billion or more, Tenant with the consent of Landlord, may assign its rights under this Lease or sublet all or any portion of the Premises to a subsidiary of Tenant or any entity controlled directly or indirectly by Tenant,.or the surviving entity in any merger of or with Tenant, PROVIDED that Tenant, or any such surviving entity shall remain liable to perform the obligations of the Tenant hereunder notwithstanding such assignment or sublease and Tenant 23 I hlootca/03zlf/city departments/airport/Boeing/Lease Changes-5/10/10(3) shall notify Landlord of such intent to assign or.sublease with sufficient notice to allow Landlord time to enter into an Operating Permit with the sublessee. 14.c. Conditions to Assignment or Sublease: Tenant agrees that any instrument by which Tenant assigns or sublets all or any portion of the Premises shall (i) incorporate this Lease by reference, (ii) expressly provide that the assignee or subtenant may not further assign or sublet the assigned or sublet space without Landlord's prior written consent (which consent shall not, subject to Landlord's rights. under this Section, be unreasonably withheld, conditioned, or delayed), (iii) acknowledge that the assignee or subtenant will not violate the provisions of this Lease, and (iv) in the case of any assignment, acknowledge that Landlord may enforce the provisions of this Lease directly against such assignee. If this Lease is assigned, whether or not in violation of the terms and provisions of this Lease, Landlord may collect Rent from the assignee. Acceptance of rent by the Landlord shall not be a waiver of any of Landlord's remedies against Tenant for violation of provisions of this Lease. A subtenant may cure Tenant's default. In either event, Landlord may apply the amount collected from the assignee or subtenant to Tenant's obligation to pay Rent under this Lease 14.d. No Release of Tenant's Liability: Neither an assignment or subletting nor the collection of Rent by Landlord from any person other than Tenant, nor the application of any such Rent as provided in this Section shall be deemed a waiver of any of the provisions of this Section or release Tenant from its obligation to comply with the terms and provisions of this Lease and Tenant shall remain fully and primarily liable for all of Tenant's obligations under this Lease, including the obligation to pay Rent under this Lease, unless Landlord otherwise agrees in writing. Notwithstanding the foregoing, in the event that Landlord's consent to assignment is obtained for a complete assignment and Assignee agrees in writing to assume all of the obligations and liabilities of this Lease accruing after such assignment, Tenant shall be relieved of all liability arising from this Lease and arising out of any act, occurrence or omission occurring after Landlord's consent is obtained. To the extent that any claim for which indemnification of the Landlord (including with respect to Hazardous Substances as specifically addressed in Section 9.d herein) arises after Tenant's complete assignment for conduct predating said assignment, the Tenant shall not be relieved of obligations or liability arising from this Lease. 14.e. Documentation: No permitted subletting by Tenant shall be effective until there has been delivered to Landlord a copy of the sublease and an executed Operating Permit and Agreement in which the subtenant agrees not to violate and to act in conformity with the terms and provisions of this Lease; provided, that no Operating Permit shall be required for the subletting of hangar or tie-down space for aircraft storage purposes. No permitted assignment shall be effective unless and until there has been delivered to Landlord a counterpart of the assignment in which the assignee assumes all of Tenant's obligations under this Lease arising on or after the date of the.assignment. 141 No Merl Without limiting any of the provisions of this Section, if Tenant has entered into any subleases of any portion of the Premises, the voluntary or other surrender of this 24 h:/ootca/03z1f/city departments/airport/Boeing/Lease Changes-5/10/10(3) Lease by Tenant, or a mutual cancellation by Landlord and.Tenant, shall not work a merger and shall terminate all or any existing subleases or subtenancies. 15. DEFAULT AND REMEDIES: 15.a. Default.: The occurrence of any of the following shall constitute a default by Tenant under this Lease: 15.a.(1) Failure to Pay Rent. Failure to pay Rent when due, if the failure continues for a period of five (5) business days after notice of such default has been given by Landlord to Tenant. A "business day" is any day other than: (A) a Saturday or Sunday; (B) a federal or State of Washington legal holiday; (C) a day when banks are not generally open for business in the City of Renton; and(D) December 23 through December 31, inclusive. 15.a.(2) Failure to Comply with Airport Regulations and Minimum Standards. Failure to comply with the Airport Regulations and Minimum Standards, if the failure continues for a period of twenty-four (24) hours after notice of such default is given by Landlord to Tenant. If the failure to comply cannot reasonably be cured within twenty-four(24)hours, then Tenant shall not be in default under this Lease if Tenant commences to cure the failure to comply within twenty-four(24) hours and diligently and in good faith continues to cure the failure to comply. 15.a.(3) Other Defaults. Failure to perform any other provision of this Lease, if the failure to perform is not cured within thirty(30) days after notice of such default has been given by Landlord to Tenant. If the default cannot reasonably be cured within thirty (30) days, then Tenant shall not be in default under this Lease if Tenant commences to cure the default within thirty(30)days and diligently and in good faith continues to cure the default. The foregoing shall not be construed to alter or expand the scope of Tenant's obligations under Section 9 herein, including but not limited to, the time allotted to Tenant under any applicable Environmental Laws or Requirements to perform the activities it is obligated to perform under Section 9. 15.a.(4) Appointment of Trustee or Receiver. The appointment of a trustee or receiver to take possession of substantially all of the Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within sixty (60) days; or the attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where such seizure is not discharged within sixty(60) days. 15.b. Additional Security: If Tenant is in default under this Lease, and such default remains uncured for more than three (3) business days after Landlord gives Tenant notice of such default, then at any time when Tenant's annual revenues are less than One Billion Dollars ($1,000,000,000) Landlord, at Landlord's option, may require Tenant to provide adequate assurance of future performance of all of Tenant's obligations under this Lease in the form of a deposit in escrow, a guarantee by a third party acceptable to Landlord, a surety bond, a letter of credit or other security acceptable to, and approved by,.Landlord. If Tenant fails to provide such adequate assurance within twenty(20) days of receipt of a request by Landlord for such adequate 25 h:/ootca/03zif/city departments/airport/Boeing/Lease Changes-5/10/10(3) assurance, such failure shall constitute a material breach of this Lease and Landlord may, at its option, terminate this Lease. 15.c. Remedies: If Tenant commits a default, then following the expiration of the notice and cure periods set forth in Section 15.a above, Landlord shall have the following alternative remedies, which are in addition to any remedies now or later allowed by law, and Landlord shall use reasonable efforts to mitigate its damages: 15.c.(I) Maintain Lease in Force. To maintain this Lease in full force and effect and recover the Rent and other monetary charges as they become due, without terminating Tenant's right to possession, irrespective of whether Tenant shall have abandoned the Premises. If Landlord elects to not terminate the Lease, Landlord shall have the right to attempt to re-let the Premises at such rent and upon such conditions and for such a term, and to do all acts necessary to maintain or preserve the Premises as Landlord deems reasonable and necessary, without being deemed to have elected to terminate the Lease,including removal of all persons and property from the Premises (excluding property of any nature or type located at, in, on, under or about the Premises in fulfillment of Tenant's obligations under Section 9 of this Lease or in compliance with any applicable Environmental Laws or Requirements); such property may be removed and stored in a public warehouse or elsewhere at the cost of and on the account of Tenant. In the event any such re-letting occurs, this Lease shall terminate automatically upon the new Tenant taking possession of the Premises. Notwithstanding that Landlord fails to elect to terminate the Lease initially, Landlord at any time during the Term may elect to terminate this Lease by virtue of such previous default of Tenant so long as Tenant remains in default under this Lease. Notwithstanding the foregoing, Landlord shall not undertake or permit any activity at, in, on, under, from, or about the Premises or the Airport that would interfere with Tenant's ability to meet its obligations under Section 9 of the Lease or comply with any applicable Environmental Laws or Requirements, including but not limited to, any such activity that reasonably may damage, impede, or interfere with the effectiveness of any investigation or cleanup of a release of any Hazardous Substances at, in, on,under, from or about the Premises or the Airport. 15.c.(2) Terminate Lease. To terminate Tenant's right to possession by any lawful means, in which case this Lease shall terminate and Tenant shall immediately surrender possession of the Premises to Landlord. In such event Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's default including without limitation thereto, the following: (i)any and all unpaid Rent which had been earned at the time of such termination, plus (ii) any and all Rent which would have been earned after termination until the time of occupancy of the Premises by a new tenant following the reletting of the Premises, plus (iii) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under. this Lease or which in the ordinary course of things would be likely to result therefrom, including without limitation, any costs or expenses incurred by Landlord in (A) retaking possession of the Premises, including reasonable attorney fees therefor, (B) maintaining or preserving the Premises after such default, (C) preparing the Premises for reletting to a new tenant, including repairs or necessary alterations to.the Premises for such reletting, (D) leasing commissions incident to reletting to a new tenant, and (E) any other costs necessary or appropriate to relet the Premises; plus (iv) at Landlord's election, such 26 h:/ootca/03z1f/city departments/airport/Boeing/Lease Changes-5/10/10(3) other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable state law. The amounts referenced in this Section include interest at 12% per annum. Notwithstanding the foregoing, Landlord shall not undertake or permit any activity at, in, on, under, from, or about the Premises that would interfere with Tenant's ability to meet its obligations under Section 9 of the Lease or to comply with any applicable Environmental Law or Requirement, including but not limited to, any such' activity that reasonably may damage, impede, or interfere with the effectiveness of any investigation or cleanup of a release of any Hazardous Substances at, in, on, under, from or about the Premises or the Airport. 16. BINDING AGREEMENT: Subject to the restriction upon assignment or subletting as set forth herein, all of the terms, conditions, and provisions of this Lease shall be binding upon the parties, their successors and assigns, and in the case of a Tenant who is a natural person, his or her personal representative and heirs. The rights of the Tenant under this Lease shall not be affected by any sale, lease, or other disposition of the Airport (other than the exercise by FAA of its paramount rights) or the City's interest in the Lease, or any transfer of operational control of the Airport by the City to any third party. 17. CONDEMNATION: If the whole or any substantial part of the Premises shall be condemned or taken by Landlord or any county, state, or federal authority for any purpose, then the Term shall cease as to the part so taken from the day the possession of that part shall be required for any purpose, and the rent shall be paid up to that date. From that day the Tenant shall have the right to either cancel this lease and declare the same null and void, or to continue in the possession of the remainder of the same under the terms herein provided, except that the rent shall be reduced in proportion to the amount of the.Premises taken for such public purposes. All damages awarded for such taking for any public purpose shall belong to and be the property of the Landlord, whether such damage shall be awarded as compensation for the diminution in value to the leasehold, or to the fee of the Premises herein leased. Damages awarded for the taking of Tenant's improvements located on the Premises shall belong to and be awarded to Tenant. 18. SURRENDER OF PREMISES: Tenant .shall quit and surrender the Premises, as described in paragraph I.a. at the end of the Term in as good a condition as the reasonable use thereof would permit, normal wear and tear excepted. Alterations, additions or improvements which may be made by either of the parties hereto on the Premises, except movable office furniture or trade fixtures put in at the expense of Tenant, shall be and remain the property of the Landlord and shall remain on and be surrendered with the Premises as a part thereof at the termination of this lease without hindrance, molestation, or injury. Tenant may remove from the Premises movable office furniture or trade fixtures put in at the expense of Tenant. Tenant shall, at its expense, properly and promptly repair to Landlord's reasonable satisfaction any damage to the Premises occasioned.by Tenant's use thereof, or by the removal of Tenant's movable office furniture or trade fixtures,which repair shall include the patching and filling of holes and repair of structural damage. Any such repairs and/or renovations shall be completed by Tenant at surrender of the Premises or at the end of the Initial Term, whichever comes first. Nothing in this Section 18 shall be construed to alter or expand the scope of Tenant's obligations under Section 9 of this Lease. 27 h:/ootca/03Af/city departments/airport/Boeing/Lease Changes-5/10/10(3) Notwithstanding anything to the contrary in this Paragraph 18, the Parties agree that the provisions relating to the 5-50 Building (Paint Hangar) set out in Paragraphs 12.a and 12.b, above, shall govern the surrender of that building. 19. INSURANCE: 19.a. Tenant's Insurance: Tenant, at Tenant's own cost and expense, will provide and keep in.full force and effect during the Lease Term, commercial general liability insurance with limits of not less than $1,000,000 covering bodily injury to any person, including death, and loss of or damage to real and personal property, or shall self-insure for the same. Insurance provided hereunder may be provided under Tenant's blanket liability insurance policy. During the Lease Term Landlord shall be named as an additional insured under insurance carried pursuant to this section to the extent of Tenant's undertaking set forth in Section 19.b. and a publicly available internet site containing an electronic memorandum evidencing such insurance coverage shall be made available to Landlord. Such memorandum. of insurance will provide for forty five (45) days' advance notice in the event of cancellation. Tenant shall be in default of this Lease if said liability policy is canceled or terminated and is not replaced with insurance as required by this section, except when Tenant has elected to self-insure as provided in this Section. The insurance required herein shall be primary insurance as respects the City. Any insurance, self-insurance, or insurance pool coverage maintained by the City shall be excess of the Tenant's insurance and shall not contribute with it. In the event of the cancellation of such insurance, Tenant will (1) replace such insurance prior to the date on which it is canceled with insurance that meets the requirements of this section or(2)provide self-insurance to replace such insurance. The Liability Insurance limits set out in this Section shall be subject to change every six (6) years to coincide with the rental adjustment date. The new Liability Insurance limits shall be established by the then current limits being imposed by Landlord throughout the city, but any such increase shall be reasonable in the circumstances in light of the practices of commercial landlords in the City of Renton, and in no event will Tenant be required to maintain commercial general liability coverage in excess of Five Million Dollars ($5,000,000.00), and PROVIDED that Landlord reserves the right to negotiate a higher figure if and when Tenant exercises an option to extend the Lease Term. 19.b. Indemnity: Tenant shall defend, indemnify, and hold harmless Landlord from and against any and all third party claims or liability for bodily injury to or death of any person or loss of or damage to any property arising out of Tenant's use of the Leased Premises or the Renton Municipal Airport or from the conduct of Tenant's business or from any activity, work or thing done, permitted or suffered by Tenant, its agents, employees, contractors or invitees in or about the Leased Premises or the Renton Municipal Airport except: 19.b.(1) claims and liabilities to the extent caused by any negligence on the part of Landlord, its agents, employees, contractors or invitees, or I 19.b.(2) claims and liabilities for property damage addressed in Section 19.c. 28 h:/ootca/03zif/city departments/airport/Boeing/Lease Changes-5/10/10(3) In the absence of any negligence on the part of the Landlord, its agents,.employees, contractors or invitees, such indemnity shall include all reasonable costs, attorneys' fees and expenses incurred in the defense of any such claim or any action or proceeding brought thereon. In the event any action or proceeding is brought against Landlord by reason of any claim falling within the scope of the foregoing indemnity, and in the absence of any negligence on the part of Landlord, Tenant upon written notice from Landlord to Tenant within 60 days after Landlord receives notice of the claim shall defend same at Tenant's expense by counsel reasonably satisfactory to Landlord. The foregoing indemnity is conditioned upon Landlord providing notice to Tenant within sixty (60) days after Landlord receives notice of any claim that falls within the scope of the foregoing indemnity, providing Tenant'an opportunity to defend or settle such claim, and cooperating fully with Tenant in any defense or settlement of the claim or liability, PROVIDED, HOWEVER: (1) if Landlord is served with a summons and complaint in connection with such a claim, Landlord shall provide notice of such claim to Tenant in a.manner that will permit Tenant to answer such summons and complaint within applicable time limits and (2) if Landlord fails to provide notice of a claim to Landlord (whether or not Landlord has been served as provided above), Tenant's indemnity obligation shall nevertheless continue, but Tenant's obligation to Landlord under this section shall be reduced by the amount, if any, by which Tenant's liability under this indemnity has been increased by reason of such failure by Landlord. 19.c. Mutual Waiver of Claims: Landlord and Tenant each hereby release the other from, and.waive, their entire claim of recovery for loss of or damage to property arising out of or incident to fire, lightning g or any other perils normally included in an all risk property insurance policy when such property constitutes the Leased Premises or is in, on or about the Leased Premises, whether or not such loss or damage is due to the negligence of Landlord or Tenant or their respective agents, employees, guests, licensees, invitees or contractors. 19.d. Mutual Waiver of Subro atg ion: Each of Landlord and Tenant shall cause its insurance carriers to waive all rights of subrogation against the other party hereto to the extent of Landlord's or Tenant's claims for property damage covered in Sections 19.b. and 19.c. . 20. TAXES: Tenant shall be responsible for the payment of any and all taxes and assessments upon any property or use acquired under this Lease and upon any alterations or improvement made by Tenant to the Premises. 21. HOLDING OVER: If Tenant, with Landlord's prior consent, remains in possession of the Premises after expiration or termination of the Term, or after the date in any notice given by Landlord to Tenant terminating this Lease, such possession by Tenant shall be deemed to be a month-to-month tenancy terminable by Landlord by a notice given to Tenant at least thirty (30) days prior to the end of any such monthly period or by Tenant by a notice given to Landlord at least thirty (30) days prior to the end of any such monthly period. During such month-to-month tenancy, Tenant shall pay Rent in the amount then agreed to in writing by Landlord and Tenant. All provisions of this Lease, except those pertaining to term, shall apply to the month-to-month tenancy. 29 Uootca/03a1f/city departments/airport/Boeing/Lease Changes-5/10/10(3) 22. NO WAIVER: It is further covenanted and agreed between the parties hereto that no waiver by Landlord of a breach by Tenant of any covenant, agreement, stipulation, or condition of this lease shall be construed to be a waiver of any succeeding breach of the same covenant, agreement, stipulation, or condition, or a breach of any other covenant agreement, stipulation, or condition. The acceptance by the Landlord of rent after any breach by the Tenant of any covenant or condition by Tenant to be performed or observed shall be construed to be payment for the use and occupation of the Premises and shall not waive any such breach or any right of forfeiture arising therefrom. 23. NOTICES: All notices or requests required or permitted under this Lease shall be in writing; shall be personally delivered, delivered_by a reputable express delivery service such as Federal Express or DHL, or sent by certified mail, return receipt requested, postage prepaid, and shall be deemed delivered on receipt or refusal. All notices or requests to Landlord shall be sent to Landlord at Landlord's Address set forth below and all notices or requests to Tenant shall be sent to Tenant at Tenant's Address set forth below. Landlord's Address: Airport Manager Renton Municipal Airport 616 West Perimeter Road, Unit A Renton, Washington 98057 Tenant's Address For Notice: The Boeing Company Attn: Lease Administration 4501 E. Conant Street Mail Code: D851-0097 Long Beach, CA 90808 With a copy,to: The Boeing Company Attn: Site Director Mail Code 67-12 PO Box 3707 Seattle WA 98124-2207 Either party may change the address to which notices shall be sent by written notice to the other party. All notices shall be deemed delivered when received, provided that noticed delivered to Tenant beginning on December 23 of any calendar year through January 1 of the following calendar year shall not be deemed to have been received until the close of the first day when Tenant is open for business in such following calendar year. Notwithstanding any other provision of this Agreement to the contrary, if one party makes a payment to the other party for an amount owing under this Lease in an amount less than the full amount then due and payable, the unpaid balance shall remain due and payable, whether or not such unpaid amount is in dispute and whether or not the party making such payment has placed a "Payment in Full" or similar legend on the instrument by which payment is made, unless the parties have executed and delivered a separate written agreement settling the amount owed (a 30 h:/ootca/03zlf/city departments/airport/Boeing/Lease Changes-5/10%10(3) "Settlement Agreement"). The party receiving value for such partial payment shall not be deemed to have waived its right to receive the balance of the remaining amount due unless such party has executed and delivered a Settlement Agreement waiving its claim to such balance. Any payment from Landlord to Tenant shall be addressed as follows, and shall not be delivered to Tenant's address for notices: Tenants Address for Payment: Via US Mail: Boeing Shared Services Group P.O. Box 842289 Dallas, TX 75284-2289 Via Courier Delivery: Bank of America Lockbox Services Infomart Lockbox 842289 1950 N Stemmons Freeway, Suite 5010 Dallas, TX 75207 24. DISCRIMINATION PROHIBITED: 24.a. Discrimination Prohibited: Tenant covenants and agrees not to discriminate against any person or class of persons by reason of race, color, creed, sex or national origin in the use of any of its facilities provided for the public in the Airport. Tenant further agrees to furnish services on a fair, equal and not unjustly discriminatory basis to all users thereof, and to charge on a fair, reasonable and not unjustly discriminatory basis for each unit of service; provided that Tenant may make reasonable and non-discriminatory discounts, rebates, or other similar types of price reductions to volume purchasers. 24.b. Minority Business Enterprise Policy It is the policy, of the Department of Transportation that minority business enterprises as defined in 49 C.F.R. Part 23 shall have the maximum opportunity to participate in the performance of leases as defined in 49 C.F.R. 23.5. Consequently, this lease is subject to 49 C.F.R. Part 23, as applicable. No person shall be excluded from participation in, denied the benefits of or otherwise discriminated against in connection with the award and performance of any contract, including leases covered by 49 C.F.R. Part 23, on the grounds of race, color, national origin or sex. 24.c. Application to Subtenants: Subject to the provisions of Section 13 of this Lease, Tenant agrees that it will include the above clause in all assignments of this lease or sub-leases, and cause its assignee(s) and subtenant(s) to similarly include the above clause in further assignments or subleases of this Lease. 25. FORCE MAJEURE: In the event that either party hereto shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, lockouts, labor troubles, inability to procure materials, failure of power, other utilities or related 31 hlootca/03zlf/city departments/airport/Boeing/Lease Changes-5/10/10(3) services, restrictive governmental laws or regulations, failures or delays in obtaining governmental approvals or permits that are not caused by Tenant, riots, insurrections, war, or other reason of like nature not the fault of the party delayed in performing work or doing acts required under the terms of this Lease, then performance of such act shall be extended for a period equivalent to the period of such delay. The provisions of this Section shall not, however, operate to excuse Tenant from the prompt payment of rent, or any other payment required by the terms of this Lease, to be made by Tenant. 26. TRANSFER OF PREMISES BY LANDLORD: In the event of any sale, conveyance, transfer or assignment by Landlord of its interest in the Premises, Landlord shall be relieved of all liability under this Lease arising out of any act, occurrence, or omission occurring after the consummation of such sale, conveyance, transfer, or assignment. The Landlord's transferee shall be deemed to have assumed and agreed to carry out all of the obligations of the Landlord under this Lease, including any obligation with respect to the return of any security deposit. 27. ATTORNEYS FEES AND COSTS: COLLECTION COSTS: If either party brings any action for relief against the other party, declaratory or otherwise, arising out of this Lease, including any action by Landlord for the recovery of Rent or possession of the Premises, the prevailing party shall be entitled to reasonable attorneys' fees, and costs of litigation as established by the court. If the matter is not litigated or resolved through a lawsuit, then any attorney's fees for collection of past-due rent or enforcement of any right of Landlord or duty of Tenant hereunder shall entitle Landlord to recover, in addition to any late payment charge, any costs of collection or enforcement, including attorney's fees. 28. DEFINITIONS: As used in this Lease, the following words and phrases, whether or not capitalized, shall have the following meanings: "Additional Rent"means any charges or monetary sums to be paid by Tenant to Landlord under the provisions of this Lease other than Minimum Monthly Rent. "Agreed Order" shall have the meaning ascribed to it in Section 9.a.(3). "Authorized representatives" means any officer, agent, employee, independent contractor or invitee of either party. "Claim" shall have the meaning ascribed to it in Section 9.d.(1)(a). "Ecology" shall have the meaning ascribed to it in Section 9.a.(3). "Environmental Laws and Requirements" means any and all federal, state, local laws, statutes, ordinances, rules, regulations and/or common law relating to environmental protection, contamination, the release, generation, production, transport, treatment,processing, use, disposal, or storage of Hazardous Substances, worker health or safety or industrial hygiene, and the regulations. promulgated by regulatory agencies pursuant to these,laws, and any applicable federal, state, . and/or local regulatory agency-initiated orders, requirements, obligations, directives, notices, approvals, licenses, or permits. 32 h:/ootca/03ARcity departments/airport/Boeing/Lease Changes-5/10/10(3) "Existing Boeing Renton Site" shall have the meaning ascribed to it in Section 9.a.0). "Existing Boeing Renton Site Contamination" shall have the meaning ascribed to it in Section 9.a.(2). "Expiration" means the coming to an end of the time specified in the Lease as its duration, including any extension of the Term. "Hazardous Substances" means any and all material, waste, chemical, compound, substance, mixture or byproduct that is identified; defined, designated, listed, restricted or otherwise regulated under any Environmental Laws and Requirements as a "hazardous constituent," "hazardous substance," "hazardous .material," "extremely hazardous material," "hazardous waste," "acutely hazardous waste," "hazardous waste constituent," "infectious waste," "medical waste," "biohazardous waste," "extremely hazardous waste," "pollutant," "toxic pollutant" or "contaminant." The term "Hazardous Substances" includes, without limitation, any material or substance which is (i) hexavalent chromium; (ii) pentachlorophenol; (iii) volatile organic compounds; (iv) petroleum; (v) asbestos; (vi) designated as a "hazardous substance"pursuant to Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1321); (vii) defined as a "hazardous waste" pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6001 et seq. (42 U.S.C. § 6903); (viii) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601); or (ix) designated as a "hazardous substance" pursuant to the Washington Model Toxics Control Act, RCW 70.105D.010 et seq. "Heightened Use"shall have the meaning ascribed to it in Section 9.d.(I)(b). "Known Contamination" shall have the meaning ascribed to it in Section 9.a.(2). "Landlord Environmental Indemnity Claims, Damages and Costs" shall have the meaning ascribed to it in Section 9.d.(2)(a). "Lead Agencies" shall have the meaning ascribed to it in Section 9.a.(3). "No Further Action Letter" shall have the meaning ascribed to it in Section 9.a.(4). "Parties"means Landlord and Tenant. "Person" means one or more human beings, or legal entities or other artificial persons, including without limitation, partnerships, corporations, trusts, estates, associations and any combination of human beings and legal entities. "RCRA" shall have the meaning ascribed to it in Section 9.a.(3). "Remediation" shall have the meaning ascribed to it in Section 9.a.(4). 33 h:/ootca/03Af/city departments/airport/Boeing/Lease Changes-5/10/10(3) i "Rent" means Minimum Monthly Rent, as adjusted from time to time under this Lease, and Additional Rent. "Tenant Environmental Indemnity Claims, Damages and Costs" shall have the meaning ascribed to it in Section 9.d.(1)(a). 29. EMERGENCY RESPONSE: Tenant must provide to the Airport .Manager reasonable access and response in times of emergency or urgency. Landlord's emergency response services will be provided to Tenant at no additional charge to Tenant as part of Landlord's general governmental obligations. Landlord acknowledges that Tenant maintains an emergency response capability at the Premises for use in connection with the operation of Tenant's business at the Airport. 30. GENERAL PROVISIONS: 30.a. Entire Agreement: This Lease sets forth the entire agreement of the parties as to the subject matter hereof and supersedes all prior discussions and understandings between them. This Lease may not be amended or rescinded in any manner except by an instrument in writing signed by a duly authorized officer or representative of each party hereto. 30.b. Governing Law: This Lease shall be governed by, and construed and enforced in accordance with, the laws of the State of Washington. 30.c. Severability: Should any of the provisions of this Lease be found to be invalid, illegal or unenforceable by any court of competent jurisdiction, such provision shall be stricken and the remainder of this Lease shall nonetheless remain in full force and effect unless striking such provision shall materially alter the intention of the parties. 30.d. Jurisdiction and Venue: In the event any action is brought to enforce any of the provisions of this Lease, the parties agree to be subject to exclusive in personam jurisdiction in the Superior Court of the State of Washington in and for the County of King or in the United States District Court for the Western District of Washington. 30.e. Waiver: No waiver of any right under this Lease shall be effective unless contained in a writing signed by a duly authorized officer or representative of the party sought to be charged with the waiver and no waiver of any right arising from any breach or failure to perform shall be deemed to be a waiver of any future right or of any other right arising under this Lease. 30.f. Captions: Section captions contained in this Lease are included for convenience only and form no part of the agreement between the parties. 30.9. Assignee as Tenant: The term "Tenant" shall be deemed to include the assignee where there is a full assignment of the Lease. 30.h. Effectiveness: This Lease shall not be binding or effective until properly executed and delivered by Landlord and Tenant. 34 h:/ootca/03z1f/city departments/airport/Boeing/Lease Changes-5/10/10(3) i i i 30.i. Gender and Number: As used in this Lease, the masculine shall include the feminine and neuter, the feminine shall include the masculine and neuter, the neuter shall include the masculine and feminine, the singular shall include the plural and the plural shall include the singular, as the context may require. 30J. Time of the Essence: Time is of the essence in the performance of all covenants and conditions in this Lease for which time is a factor. 30.k. Joint and Several Liability_ If Tenant is composed of more than one person or entity, then the obligations of all such persons and entities under this Lease shall be joint and several. .30.1. No Recordation Without Consent of Landlord: Tenant shall not record this Lease or any memorandum of this Lease without Landlord's prior written consent. 30.m. Cumulative Remedies: No remedy or election hereunder shall be deemed exclusive, but shall, wherever possible, be cumulative with all other remedies at law or in equity. 30.n. Corporate Authority: If Tenant is a corporation or limited liability company, each individual executing this Lease on behalf of said corporation or limited liability company represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation or limited liability company pursuant to duly enacted resolutions or other action of such corporation or limited liability company and that this Lease is binding upon said corporation or limited liability_company in accordance with its terms. 30.o. Addenda to Lease: The provisions of this Lease shall be subject to those of any Addenda attached hereto. TENANT: LANDLORD: The Boeing Company THE CITY OF RENTON a Delaware corporation a Washington municipal corporation By: By Its: RJ�I ���� c� C�� Y� Mayor Denis Law Date: Ll 0 Date: l q//,) 35 h:/ootca/03zif/city departments/airport/Boeing/Lease Changes-5/10/10(3) I i • ATTEST: �1T7"l4/YLC,2 � �Q.�.en City Clerk Bonnie I . Walton Date: m /9 a?aio Approved as to legal form: Lawrence J. Warren, City Attorney [ACKNOWLEDGENTS TO BE ADDED FOR EACH SIGNATURE] Attachment A Through The Fence Access Agreement 36 hlootca/03zlf/city departments/airport/Boeing/Lease Changes-5/10/10(3) ACKNOWLEDGMENT State of Washington ) ss. County of King ) I certify that I know or have satisfactory evidence that Steve Sahlinger is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that„h-e/she was authorized to execute the instrument and acknowledged it as the Authorized Signatory of The Boeing Company, a Delaware corporation to be the free and voluntary act and deed of such party for the uses and purposes mentioned in the instrument. 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LEASE PARCEL FUEL FARMBUILDING 545 wMiclf C 1, OP iF RY RF.✓ BE'n9JN LCb EXHIBIT"G" .4EHi0N WA 45SSt.em Fmecs,+en ...... _. .........______.........._.__ SGhLF: PRO:EC'03 DRPSNNG F.'.LE NNJE: "�'b0r`®" 7'=100' 035066 35066-SURV-EX-G L Exhibit H N �^ a z z ULL m ph � � m o'w' Uc t m � L -Z. o Q rn m c o G �+ Zi c m ya am 3 p Qt � z � a m 00 .. �4 �y 0 00 a 11 ,�k ma 1F' 4,�.1 +cam C1 11 � � € -``-___--- � f ? .� ;`fie'�-•„_ ��•�` .� 1^Ya_.. " _cis 4 �- Y :k. -•��'�^°^ ------^ 0 . O a � B •t ^,�• Ewa � r�-,...�r,.r + _. f ,lip - __ m M o c4i 3 OQ °a c �' � g 4 V Q H . - •+wa-•v%Vwava—&s«-sacua•M•aga Attachment A to Ground and Building Lease Between the City of Renton and The Boeing Company THROUGH THE FENCE ACCESS AGREEMENT RECITALS: A. This is an Attachment to the Ground and Building Lease between the City of Renton ("City') and The Boeing Company ('Boeing"), LAG 10-001 (hereinafter "Lease") pursuant to which the City will lease to Boeing and Boeing will lease from the City certain premises ("Premises") on Renton Airport (the "Airport) for a term of twenty (20) years commencing on June 1, 2010. This agreement shall be referred to herein as the "Through The Fence Access Agreement" or "this Agreement". B. In order to use the Premises for their intended purpose, Boeing requires access to the Airport from two properties to the east of the Airport owned by Boeing and used by Boeing for the production, assembly, testing, design, and support of commercial jet aircraft; Boeing also requires access to such properties from the Airport. These properties are Apron T" (South) and the Assembly Plant (North). (These two properties are sometimes referred to in this Agreement jointly as the Boeing Renton Plant ). C. The purpose of this Agreement is to establish the conditions for Boeing to access the Airport from the Boeing Renton Plant. This Agreement is intended by the parties to meet the requirements of a "through the fence" agreement as required by FAA Order 5190.613 (the FAA Airport Compliance Manual) and the Compliance Guidance Letter issued by the Federal Aviation Administration in connection therewith in draft form in October 2009. AGREEMENTS: In consideration of the mutual promises of the parties set out in this Agreement, and for other good and valuable consideration,the receipt and sufficiency of which is hereby acknowledged,the City and Boeing hereby agree as follows: 1. Grant of License: The City hereby grants to Boeing an exclusive license to enter and exit the Airport through the access point or.points shown on Exhibit 1 attached hereto (each, a "Boeing Access Point"). 2. Consistency with Federal Property Conveyance Obligations and Federal Grant Assurances: This Through The Fence Access Agreement permits access to the Airport from private property which is not owned or controlled by the City. The.City has advised Boeing that, as the Airport Sponsor,the City is required by its federal property FINAL TTF as of 4-30-10(2).doc Page 1.of 10 conveyance obligations to ensure that the Airport maintains a fee and rental structure for the facilities at the Airport to make the airport as self sustaining as possible. The access to the airport granted under this Agreement is subordinate to the Federal Grant Assurances given by the City to the Federal Aviation Administration in exchange for federal funding of capital improvements at the Airport. The City warrants to Boeing that the license granted by this Agreement does not contravene said Federal Grant Assurances. 3. Specific Right of Access Granted: This Through The Fence Access Agreement grants Boeing access onto the Airport from the Boeing Renton Plant, including Apron D and access to the Boeing Renton Plant and Apron D from the Airport. This Agreement specifically allows personnel, vehicles and.aircraft access to and from the airport as long as the need for access to and from the Airport is consistent with the aviation related uses specifically mentioned in Section 8—Use of Premises in the Lease. 4. Payment of Access Fee: Boeing shall pay to City an annual Through the Fence Access Fee in the initial annual amount of Two Hundred Seventy-one Thousand Ninety- two and 52/100 Dollars ($271,092.52), payable in equal monthly installments on the first day of each month during the term of the Lease (including extensions thereof), subject to increases as set out below. A Through The Fence Fee Through The Initial Lease Term The Through the Fence Access Fee shall be subject to automatic adjustment on each of the third (P), sixth (6th), ninth (9th), twelfth (12th), fifteenth (15th), and eighteenth (18th) anniversary of the Commencement Date, respectively (any of which shall hereinafter be referred to as "Adjustment Date") as follows: As used in this Section 4, "Index" means the Consumer Price Index for All Urban Consumers for Seattle-Tacoma-Bremerton All. Items (1982-84=100) (CPI-U) published by the United States Department of Labor, Bureau of Labor Statistics; "Beginning Index" means the Index which is published nearest, but preceding, the Commencement Date; and "Adjustme.nt Index" means the Index which is published nearest, but preceding, each Adjustment Date. On each Adjustment Date, if the Adjustment Index has increased over the Beginning Index, the Through the Fence Access Fee payable for the following three (3) year period (until the next Adjustment Date) shall be set by multiplying the Through the Fence Access Fee provided for in Section 4 by a fraction, the numerator of which is the Adjustment Index and the denominator of which is the Beginning Index. The product shall be the Through the Fence Access Fee for the three (3) year period (or two (2) year period in the case of the final Adjustment FINAL TTF as of 4-30-10(2).doc Page 2 of 10 Date) following such Adjustment Date. In no event shall the Through the Fence Access Fee determined pursuant to this paragraph be less than ($271,092.52). B Through The Fence Fee After the Expiration of the Initial Term (1) If Boeing has exercised the First Extension Option under Section 3b of the Lease to extend the Term of the Lease,the amount of the Through the Fence Access Fee shall be adjusted as of the first day of the First Extended Term as follows. Promptly following the City's receipt of Boeing's notice that Boeing will exercise the First Extension Option, the City and Boeing shall commence negotiations to establish the Through the Fence Access Fee that will be effective on June 1, 2030 (the "First Adjusted TTF Fee"). If Boeing and the City have agreed on the First Adjusted TTF Fee on or before December 1, 2029, the parties shall enter into a written agreement establishing the amount of the First Adjusted TTF Fee and such amount shall be payable by Boeing on June 1, 2030. (2) If Boeing has exercised the Second Extension Option under Section 3b of the Lease to extend the Term of the Lease, the amount of the Through the Fence Access Fee shall be adjusted as of the first day of the Second Extended Term as follows. Promptly following the City's receipt of Boeing's: notice that Boeing will exercise,the Second.Extension Option, the City and Boeing shall commence negotiations to establish the Through the Fence Access Fee that will be effective on June 1, 2040 (the "Second Adjusted TTF Fee"). If Boeing and the City have agreed on the Second Adjusted TTF Fee on or before December 1, 2039, the parties shall enter into a written agreement establishing the amount of the Second Adjusted TTF Fee and such amount shall be payable by Boeing on June 1, 2040. The First Adjusted TTF Fee and the Second Adjusted TTF Fee are sometimes referred to in this Section 4A individually or collectively as the "Adjusted TTF Fee". (3) If the City and Boeing have not agreed on the Adjusted TTF Fee on or before December 1, 2029 or December 1, 2039, respectively, the Adjusted TTF Fee will be determined as follows. The City and Boeing will each appoint an independent arbitrator, each of whom shall have at least ten years' experience in airport operations and finance. The City and Boeing shall each provide to the two arbitrators such information as the City or Boeing, respectively, believes is relevant to the determination of the incremental capital and operational impact to the Airport resulting from or relating to Boeing's operations at or on the Airport. Within sixty (60) days of receiving such information, each arbitrator will independently develop his or her opinion of the appropriate amount of the Adjusted TTF Fee that such arbitrator believes should be in effect on June 1, 2030 (for the First Extended Term), or June 1, 2040 (for the Second Extended Term), based on the relevant facts and circumstances relating to the incremental capital and operational impact to the Airport resulting from or relating to Boeing's operations at or on the Airport as presented by the City and Boeing. If the two amounts so determined are within five percent or less of each other (that is, if the FINAL TTF as of 4-30-10(2).doc Page 3 of 10 higher of the two amounts is not more than 105%of the lower of the two amounts), the two amounts will be averaged and the Adjusted TTF Fee as of June 1, 2030 (for the First Extended Term ), or June 1, 2040 (for the Second Extended Term) will be such average. However, if one party fails to appoint an arbitrator, the opinion of the one arbitrator so selected shall be the Adjusted TTF Fee as of June 1, 2030 (for the First Extended Term), or June 1, 2040 (for the Second Extended Term) If the two amounts so determined are not within five percent or less of each other, the two arbitrators shall retain a third arbitrator (and if they cannot agree upon an arbitrator, or if either the City or Boeing believes that they will be unable to agree upon an arbitrator, one will be appointed by the Seattle regional director of the American Arbitration Association upon the application of either the City or Boeing), and such third arbitrator (who shall be subject to the same requirements as to independence and experience as the other two arbitrators) shall review all of the information provided by the City and Boeing to the first two arbitrators and shall select an Adjusted TTF Fee that such arbitrator deems reasonable in light of all the facts and circumstances related to the incremental capital and operational impact to the Airport resulting from and relating to Boeing's operations at or on the Airport as presented by the City and Boeing, PROVIDED that such third arbitrator shall be directed that the Adjusted TTF Fee selected by such third arbitrator shall be no greater than and no less than the Adjusted TTF Fee as determined by.the other two arbitrators, respectively. In these circumstances, the amount so selected shall be the Adjusted TTF Fee effective June.1, 2030 (for the First Extended Term ), or June 1, 2040 (for the Second Extended Term). Each party will be responsible for the fees and expenses of the arbitrator retained by such party and if a third arbitrator is used the parties will share the fees and expenses of said arbitrator equally. (4) The Adjusted TTF Fee shall be adjusted on June 1, 2033, and every three years thereafter during the First Extended Term using the method established in Section 4 of this Agreement. The Adjusted TTF Fee shall be adjusted on June 1, 2043, and every three years thereafter during the Second Extended Term using the method established in Section 4 of this Agreement. 5. Boeing Provides Security When Accessing the Airport From Private Property East of the Cedar River: At the access points onto the Airport from the Boeing Renton Plant, Boeing, at Boeing's sole cost and expense,shall maintain the security of the perimeter fence and the sixty (60)foot aircraft gates. When opening either aircraft access gate to allow personnel, equipment and aircraft access to or from the Airport, Boeing shall post a security guard at the gate to prevent unauthorized access to the Airport. During periods when the south bridge over the Cedar River is raised for maintenance or floods, Boeing's support vehicles may be authorized to use the north bridge and east access road solely for Boeing owned vehicles traveling from the Boeing's private property on the east side of the Cedar River to Boeing's leased areas on the airport. Boeing shall post a security guard at both access points to the airside of the airport's perimeter fence when the east access road is in use by Boeing's employees. FINAL TTF as of 4-30-J 0(2).doc Page 4 of 10 6. Expiration Date: The expiration date of this Through the Fence Access Agreement shall coincide with the Term of the Lease, including any extensions thereto. 7. Insurance and Indemnity Provisions: The Insurance and Indemnity provisions of Section 19 of the Lease shall govern this Through the Fence Access Agreement. 8. Default, Remedies and Termination Provisions: 8.a. Default: The occurrence of any of the following shall constitute a default by Boeing under the Lease and this Agreement: 8.a.(1) Failure to Pay Through the Fence Access Fee. Failure to pay the Through the Fence Access Fee when due, if the failure continues for a period of five (5) business days after notice of such default has been given by City to Boeing. A "business day" is any day other than: (A) a Saturday or Sunday; (B) a federal or State of Washington legal holiday; (C) a day when banks are not generally open for business in the City of Renton; and (D) December 23 through December 31, inclusive. 8.a.(2) Other defaults: Defaults identified in Section 15 of the Lease shall constitute a default of this Through the Fence Access Agreement. 8.b. Remedies: If Boeing commits a default, then following the expiration of the notice and cure periods set forth in Section 15 of the Lease, City shall have the following alternative remedies, which are in-addition to any remedies now or later allowed by law, and City shall use reasonable efforts to mitigate its damages: 8.b.(1) Maintain Through the Fence Access Agreement in Force. To maintain this Through the Fence Access Agreement in full force and effect and recover the Through the Fence Access.fee and other monetary charges as they become due, without terminating Boeing's right to access, irrespective of whether. Boeing shall have abandoned the Premises and no longer needs access to the Airport from the Boeing Renton Plant. 8.b.(2) Terminate Lease and Through the Fence Access Agreement. To terminate Boeing's right to access by any lawful means, in which case the Lease and this Through the Fence Access Agreement shall terminate and Boeing shall immediately surrender possession of the leased Premises to City and terminate any and all access to the Airport from the Boeing Renton Plant. In such event City shall be entitled to recover from Boeing all damages incurred by City by reason of Boeing's default including without limitation thereto, the following: (i) any and all unpaid fees which had been earned at the time of such termination, plus (ii) any and all fees which would have been earned after termination until the time of occupancy of the Premises by a new tenant following ' the reletting of the Premises, plus (iii) any other amount necessary to compensate City for all the detriment proximately caused by Boeing's failure to perform its obligations FINAL TTF as of 4-30-10(2).doc Page 5 of 10 under this Lease. The amounts referenced in this Section include interest at 12% per annum. 8.c. Additional Security: If Boeing is in. default under this Lease, and such default remains uncured for more than three'(3) business days after City gives Boeing notice of such default, then at any time when Boeing's annual revenues are less than One Billion Dollars ($1,000,000,000) City, at City's option, may require Boeing to provide adequate assurance of future performance of all of Boeing's obligations under this Lease in the form of a deposit in escrow, a guarantee by a third party acceptable to City, a surety bond; a letter of credit or other security acceptable to, and approved by, City. If Boeing fails to provide such adequate assurance within twenty (20) days of receipt of a request by City for such adequate assurance, such failure shall constitute a material breach of this Lease and City may, at its option, terminate this Lease. 9. Right to Amend or Terminate: If the City receives written notice from the FAA stating that this Agreement contravenes one or more federal property conveyance obligations and federal grant assurances that are binding on the City or the Airport as of the date of this Agreement, the City shall promptly notify Boeing of the same. Boeing and the City shall then consult with the FAA and with each other and shall negotiate in good faith to make such amendments and alterations to this Agreement as may be necessary to cause this Agreement to be in compliance with such federal property conveyance obligations and/or federal grant assurances. 10. Miscellaneous 10.a. Successors and Assigns: Subject to the provisions of this Paragraph 10, all of the provisions of this License shall bind and inure to the benefit of the parties and their respective heirs, legal representatives, successors and assigns. If Boeing assigns the Lease or subleases all or any part of the Premises acting in accordance with the terms of the Lease, Boeing may assign this License or sublicense its rights hereunder. The rights of Boeing under this Agreement shall not be affected by any sale, lease, or other disposition of.the Airport (other than the exercise by FAA of its paramount rights) or the City's interest in the Lease or this License by the City, or any transfer of operational control of the Airport by the City to any third party. 10.b. Notices: All notices or requests required or permitted under this Lease shall be in writing; shall be personally delivered, delivered by a reputable express delivery service such as Federal Express or DHL,.or sent by certified mail, return receipt requested, postage prepaid, and shall be deemed delivered on receipt or refusal. All notices or requests to City shall be sent to City at City's Address set forth below and all notices or requests to Boeing shall be sent to Boeing at Boeing's Address set forth below. FINAL TTF as of 4-30-10(2).doc Page 6 of 10 City's Address: Airport Manager Renton Municipal Airport 616 West Perimeter Road, Unit A Renton, Washington 98057 Boeing's Address For Notice: The Boeing Company Attn: Lease Administration 4501 E. Conant Street Mail Code: D851-0097 Long Beach, CA 90808 With a copy to: The Boeing Company Attn: Site Director Mail Code 67-12 PO Box 3707 Seattle WA 98124-2207 Either party may change the address to which notices shall be sent by written notice to the other party. All notices shall be -deemed delivered when received, provided that noticed delivered to Boeing beginning on December 23 of any calendar year through January 1 of the following calendar year shall not be deemed.to have been received until the close of the first day when Boeing is open for business in such following calendar year. 10.c. Severability: If a court of competent jurisdiction shall determine, to any extent, that any provision, term or condition of this License shall be invalid or unenforceable, that determination shall not affect the remainder of this License, and each provision, term or condition in the remainder of this License shall be valid and enforceable to the extent permitted by law. 10.d. Attorneys' Fees and Disbursements: Except as otherwise provided in this Agreement, if a dispute between City and Boeing arises under this License, each party shall bear its own costs, including but not limited to attorneys' fees. 10.e. Captions: The marginal headings or titles to the sections of this License are not a part of the License but are inserted only for convenience. They shall have no effect on the construction or interpretation of any part of this License. 10.f. Time is of the Essence: Time is of the essence in the performance of all covenants and conditions of this License in which time is a factor. FINAL TTF as of 4-30-10(2).doc Page 7 of 10 10.g. Counterparts: This License may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original License, but all of which together shall constitute one and the same License. 10.h. Choice of Law: This License shall be governed by the Laws of the State of Washington, without reference to its choice of law rules. 10.i. Agents and Brokers: Each party represents that it has hired or retained no agent or broker in connection with this License and shall hold the other party harmless from any claim by any agent or broker claiming payment of any commission, finders' fee or the like in connection with this License. 10.j. No Recording: Neither party shall record this License, nor any memorandum of this License. 10.k. Complete Agreement: This License, including Exhibit 1, contains the entire and complete agreement between the parties hereto, with all previous negotiations, warranties, covenants, conditions and promises being merged herein. City and Boeing further agree that no alteration, amendment or modification to this License shall be binding upon City or Boeing unless same is first reduced to writing and signed by both City and Boeing. Signatures appear on the next sheet FINAL TTF as of 4-30-10(2).doc Page 8 of 10 • • Executed in duplicate as of the date first written above. The City of Renton The Boeing Company By: &AAISO By: Name: -Dt-�N l S "tj Name: ����� ��Y)I/ Title: Title: 541, Date Signed: Date Signed: S l a [Signatures to be acknowledged before a notary] 4 - 8anoie L Walton,City auk =i9-a oio . i.4j FINAL TTF as of 4-30-10(2).doc Page 9 of 10 ACKNOWLEDGMENT State of Washington ) ss. County of King ) I certify that I know or have satisfactory evidence that Steve Sahlinger is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the Authorized Signatory of The Boeing Company, a Delaware corporation to be the free and voluntary act and deed of such party for the uses and purposes mentioned in the instrument. 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