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HomeMy WebLinkAboutDNR H-1 Lease Agenda Staff Report KITTITAS COUNTY BOARD OF COUNTY COMMISSIONERS AGENDA STAFF REPORT AGENDA DATE: September 1, 2026 ACTION REQUESTED: Hold a Public Hearing to consider a Lease with Department of Natural Resources for property located at Kittitas County Airport, Bowers Field BACKGROUND: Department of Natural Resources (DNR) has requested a new land lease at Bowers Field. DNR originally entered into a lease with the County for Lot H-1A May 11, 1977. During the time period of the original lease DNR constructed improvements on the site and continuously occupied the lot. Department of Natural Resources desires to enter a new Lease for Lot H-1A of Bowers Field. A new lease has been drafted for consideration. INTERACTION: Public Works; Prosecuting Attorney’s Office; Department of Natural Resources RECOMMENDATION: Hold a Public Hearing to consider a Lease with Department of Natural Resources for County property located at Bowers Field. HANDLING: Return One original to Public Works ATTACHMENTS: Resolution, Lease LEAD STAFF: Josh Fredrickson, Public Works Director BOARD OF COUNTY COMMISSIONERS COUNTY OF KITTITAS STATE OF WASHINGTON RESOLUTION NO. 2026 -_____ AUTHORIZATION TO EXECUTE A LEASE FOR PROPERTY AT BOWERS FIELD WHEREAS: Kittitas County owns and leases property at Bowers Field Airport within the Aeronautical Area for aviation purpose; and WHEREAS: Department of Natural Resources wants to conduct business related to all aspects of the Department of Natural Resources located within the Aeronautical Area on Lot H-1A being 13.14 acres of Bowers Field Binding Site Plan; and WHEREAS: The lease term is twenty (20) years ending September 1, 2046; and WHEREAS: The lease rate will be $0.20 multiplied by the rent square footage for an annual rent of $72,745.20 to be paid annually; and WHEREAS: The Kittitas County Board of County Commissioners did hold the required public hearing considering the lease on September 1, 2026. NOW, THEREFORE BE IT RESOLVED that the Board of County Commissioners, in the best interest of the public, does hereby authorize the execution of the attached lease for property at Bowers Field Airport, Lot H-1A. DATED this 1st day of September 2026, at Ellensburg, Washington. BOARD OF COUNTY COMMISSIONERS KITTITAS COUNTY, WASHINGTON ________________________________ Brett Wachsmith, Chairman Attest: ☐ Clerk of the Board- Julie Kjorsvik ________________________________ Laura Osiadacz, Vice-Chairman ☐ Deputy Clerk of the Board- Mandy Buchholz _______________________________ ________________________________ Commissioner KITTITAS COUNTY REGIONAL AIRPORT-BOWERS FIELD GROUND LEASE This Airport Ground Lease (hereinafter “LEASE”) is made and entered into as of the ____ day of ______, 2026, by and between KITTITAS COUNTY, a Washington Municipal Corporation (hereinafter “LESSOR”) and Department of Natural Resources, a Washington Municipal Corporation. (hereinafter “LESSEE” or “Tenant”). WITNESSETH: A. WHEREAS, LESSOR owns the Kittitas County Regional Airport-Bowers Field (ELN) (hereinafter “AIRPORT”) which is operated by the Kittitas County, B. WHEREAS, LESSOR has approved property available for lease as provided by this LEASE and LESSEE desires to lease, occupy and use such property in accordance with this LEASE, C. WHEREAS, LESSEE desires to lease the property described herein for the purpose of conducting business related to all aspects of the Department of Natural Resources as that term is defined herein; and NOW THEREFORE, in consideration of the mutual promises herein and the benefit to be derived by each party, the parties hereby agree as follows: A. Prior Lease: LESSOR previously entered into that certain lease dated May 11, 1977 for that portion of the airport described in Exhibit A attached hereto and incorporated herein by this reference. The 1977 Lease was subsequently amended by “Addendum to Lease” dated March 3, 2020. Upon full execution of this, the new Lease, the 1977 Lease, as amended, is terminated as of the date hereof. B. Lease: 1. PREMISES: LESSOR hereby leases to LESSEE and LESSEE hereby leases from LESSOR that portion of the AIRPORT depicted on Exhibit A attached hereto and incorporated herein by this reference, which property is legally described as follows: Lot H-1A being 13.14 acres of Bowers Field Binding Site Plan. (hereinafter “PREMISES”) for the purposes set forth in this LEASE. LESSEE agrees to accept the PREMISES “As Is,” and LESSOR makes no warranty as to the condition of the PREMISES or their suitability for any particular purpose. 1.1 Access. LESSOR agrees that, if LESSEE is not in breach of this Lease, LESSEE and LESSEE’s Associates are authorized for non-exclusive ingress and egress across the common areas of the Airport in the areas designated from time to time by LESSOR and for the purposes for which they were designed, all as permitted by applicable Laws and Regulations as defined herein, to the extent reasonably necessary for LESSEE’s use, occupancy, and Aircraft operations at the Premises. 1.2 Right of Flight and Other Reserved Rights. This Lease conveys only a leasehold interest in the Premises on the terms and for the purposes provided herein, and it conveys no other rights, title, or interests of any kind. Among the rights reserved to LESSOR, LESSOR reserves in the Premises a right of flight for the passage of aircraft in the air, on common area taxiways, a right to cause such noise as may at any time be inherent in the operation of aircraft, and all other rights reasonably associated with the operation of a municipal airport. 2. DEFINITIONS: As used throughout this Lease, the following definitions shall apply: 2.1 The term “Airport Activity” shall mean any activity that involves, makes possible, or is required for the operation of aircraft, or that contributes to or is required for the safety of such operations. Aeronautical activities include, but are not limited to: aircraft charter operations, pilot training, aircraft rental, aircraft hangar leasing, sightseeing, aerial photography, crop dusting, aerial advertising and surveying, air carrier operations, aircraft sales and services, sale of aviation petroleum products, repair and maintenance of aircraft, sale of aircraft parts, and any other activities that directly relate to the operation of aircraft. 2.4 The term, “Lease Term” or “Term,” shall mean the period of time set forth hereinbelow in Paragraph 3.3. 2.5 The word, “LESSOR,” shall mean KITTITAS COUNTY, a Washington Municipal Corporation. 2.6 The word, “LESSEE”, shall mean The Washington State Department of Natural Resources, a Washington Municipal Corporation. 2.7 The term, “LESSEE’s Associates,” shall mean the subtenants of LESSEE, business invitees and customers of LESSEE and LESSEE’s subtenants, LESSEE’s and LESSEE’s subtenants’ employees, officers, directors, managers, and members, and LESSEE’s and LESSEE’s subtenants’ contractors. 2.8 The word, “Premises,” shall mean the real property described hereinabove in Paragraph 1. 3. TERM and POSSESSION. 3.1. Effective Date. The lease shall commence on _________________________________(date). 3.2. Lease Term. The Lease Term shall be twenty (20) years. 3.2.1. Possession. The LESSEE’s possession of the Premises (the “Possession Date”) shall be on the Effective Date. 3.2.3. Rent Commencement Date. Rent shall commence and be paid pursuant to Section 4 below. 3.2.4. Lease Termination Date. This Lease shall terminate at midnight on ________________ (hereinafter referred to as the “Termination Date”), which is a period that is thirty (20) years from the Effective Date. 4. RENT: 4.1 Rent Generally: During the Term hereof, Rent will be calculated on a per square foot basis of the real property leased. LESSOR and LESSEE agree the property consists of approximately 8.35 Acres or 363,726 Sq. Ft. of property 4.2 Payment of Rent: Rent will be $0.20 multiplied by the rent square footage for an annual rent of $72,745.20 to be paid annually pursuant to this Section. 4.2.1 Annual rent payments shall be payable in advance and due on or before _______________, each year during the TERM of this LEASE. LESSOR will prepare and send an invoice to LESSEE annually, payment due upon receipt of the invoice. LESSEE remains responsible for annual rent payment in the event an invoice is not sent. 4.2.2 All rent payments as hereinafter set forth shall be paid by LESSEE to LESSOR without notice or demand, in advance, except as otherwise specifically provided herein, on or before the 1st day of each and every successive calendar year during the Term hereof commencing on the Rent Commencement Date, and shall be considered delinquent if not so paid on or before the first day of each renewal year. All Rent shall be paid to LESSOR, without deduction or offset, in lawful money of the United States of America, at 411 North Ruby Suite #1, Ellensburg, WA 98926, or at such other place as LESSOR may from time to time designate in writing. If the Lease Term commences or expires on a day other than the last day of a calendar day of the year, the Rent for such year shall be prorated based upon a 365-day year. 4.2.3 LESSOR shall first apply any sum paid to past due rent (beginning the most recent amount due), including late fees and interest as provided herein. No statement on any check or elsewhere shall be deemed to create an accord and satisfaction. LESSOR may accept any payment (including but not limited to, past due amounts and related charges) without prejudice to LESSOR’s rights to any default under this Lease. If any check paid on behalf of LESSEE is dishonored by a bank, LESSEE shall pay all charges that the bank may assess to LESSOR plus a service charge of Fifty Dollars ($50.00) per occurrence. LESSEE shall make payments to LESSOR at the address set forth in Section 13.7 (or such other address as LESSOR may designate in writing from time to time. 4.3 Past Due Amounts: If LESSEE fails to pay the annual rent when due under this Lease, such unpaid amount shall bear interest at the rate of twelve percent (12%) per annum from the due date of such amount to the date of payment in full, with interest. 4.4 Rent Adjustments: Rent shall be adjusted throughout the Term and Option Terms of this Lease as follows: 4.4.1 1. Annual Rent Adjustment (Inflation Indexing): Beginning on the first anniversary of the Lease Commencement Date, Annual Ground Rent shall be increased 3.5% (three and one-half percent) each year from the previous year rent amount. 5. USE: LESSEE agrees that it shall use the Premises for the purposes of operating all associated tasks relating to the business of the Washington State Department of Natural Resources. 5.1 No Unauthorized Use: LESSEE and LESSEE’s Associates, shall use the PREMISES and the Airport only for purposes that are expressly authorized by this LEASE and not prohibited by state, federal and local laws and regulations. LESSEE AND LESSEE’S associates shall not engage in any unauthorized uses, including, but not limited to: engaging in or knowingly allowing any unsafe or hazardous activity, practice or condition to exist on or about the PREMISES. All uses must be consistent with airport policy and county code as currently existing or hereafter amended. 5.2 Comply with All Laws: LESSEE and LESSEE’s Associates shall comply at all times, at LESSEE’s sole cost, with any and all laws and regulations (as amended or otherwise modified from time to time) that are applicable to LESSEE's use, occupancy, or operations at the PREMISIS or the airport (the “Laws and Regulations”), which include, but are not limited to, all laws, statutes, ordinances, regulations, codes, and other pronouncements of any kind having the effect of law including, but not limited to, the Airport Rules and Regulations and Airport Minimum Standards as adopted from time to time, airport master plans and zoning codes, and all Laws and Regulations pertaining to the environment (the “Environmental Laws”); any and all plans and programs developed in compliance with such requirements (including, but not limited to, any Airport Security Plan); and all lawful, reasonable, and nondiscriminatory airport policies and other requirements. LESSEE shall assist LESSOR and LESSOR’s agents in obtaining fuel flowage fees associated with operations supported by the LESSEE. 5.3 Permits and Licenses: LESSEE shall obtain and maintain in current status all permits and licenses that are required under any Laws and Regulations in connection with LESSEE's use, occupancy, or operations at the PREMISES or the airport. LESSOR’s specific authorization is required for LESSEE to apply for a building permit. 5.4 Taxes and Liens: LESSEE shall pay, or cause to be paid, before delinquency, any and all taxes levied, assessed and/or which become payable during the LEASE term hereof upon all or any part of the improvements, aircraft, equipment, furniture, fixtures and other personal property located in or on the PREMISES or that relate to LESSEE's use, occupancy, or operations at the PREMISES or the airport, together with all other obligations for which a lien may be created relating thereto, including, but not limited to, utility charges and work for or on any Improvements. 5.5 Signage and Advertising: All signs must be approved by the airport director and conform to airport policy and county code. 5.6 Security: LESSEE and LESSEE’s associates shall at all times when accessing the airfield comply with all security measures that LESSOR, Federal Aviation Administration, state, county or any other governmental entity having jurisdiction may require in connection with users of the airport, including, but not limited to, any access credential requirements. LESSEE agrees that airfield access credentials are the property of LESSOR and may be suspended or revoked by LESSOR in its sole discretion at any time. LESSEE shall pay all fees associated with such credentials, and LESSEE shall immediately report to the Airport Management any lost credentials or credentials that LESSEE removes from any employee or any of LESSEE’s associates. 5.7 Maintenance, Repair, Utilities, and Storage: LESSEE’s use, occupancy, and operations at the PREMISES shall be without cost or expense to LESSOR. LESSEE shall be solely responsible to design and construct all Improvements and to maintain, repair, reconstruct, and operate the PREMISES and all improvements at LESSEE’s sole cost and expense, including, but not limited to, all charges for utility services and their extension, installation and maintenance, janitorial services, waste disposal, weed control, and on-premises ramp repair and snow removal. LESSEE shall at all times maintain the PREMISES and all improvements in a condition that is clean, free of debris, safe, sanitary, and in good repair. LESSEE shall perform all work in accordance with federal, state and local laws and regulations and in a good and workmanlike manner. LESSEE shall promptly remedy any condition that fails to meet this standard. Without limiting the foregoing, LESSEE shall not store on the PREMISES any inoperable vehicles or equipment, discarded or unsightly materials, or materials likely to create a hazard. Any substance or material that is regulated by any Environmental Law shall be governed by Section 7. If LESSEE fails to comply with this requirement after a written request by LESSOR to comply, LESSOR may, but is not required to, cause the removal of any such material or to eliminate any such defect, at LESSEE's sole expense by any means that LESSOR reasonably determines. Any such costs incurred by LESSOR shall become due and owing immediately from LESSOR, and subject to late fees, penalties and interest as set forth for late monthly payments. 5.9 Access: LESSOR agrees that, if LESSEE is not in breach of this LEASE, LESSEE and LESSEE’s Associates are authorized for non- exclusive ingress and egress across the common areas of the airfield in the areas designated by LESSOR and for the purposes for which they were designed, all as permitted by applicable Laws and Regulations as defined in Section 4.2, to the extent reasonably necessary for LESSEE’s use, occupancy, and aircraft operations at the PREMISES. LESSEE is at all times responsible for the actions of any and all Associates, both financially and otherwise. 6. LESSOR’S AUTHORITY: 6.1 Access to Premises: LESSOR for itself and its commissioners, employees, agents, contractors, subcontractors, and other representatives (“LESSOR’s Associates”) reserves the right to enter the Premises upon the giving of not less than twenty-four hours actual prior notice to LESSEE’S authorized representative(s) to conduct inspections to determine compliance with this Lease; provided, that only reasonable prior notice, as circumstances reasonably dictate, shall be required in the event of an emergency or security or safety concern. For non-emergent issues related to health and safety issues, and to undertake work required by LESSEE, but not completed after written notification, LESSOR shall provide 24-hours prior notice of intent to complete such work. For emergency work required to be performed by LESSOR because LESSEE has not completed such work or cannot be located, notice shall be reasonable under the circumstances. 6.2 Applicable Law: This LEASE is made pursuant to Ch. 2.81 KCC, Ch. 59.12 RCW, and applicable Washington law, each as now or hereafter amended, provided, however, that no such amendment shall modify any of the substantive terms hereof. 7. IMPROVEMENTS: 7.1 Authorized Improvements: All proposed construction of new buildings, building expansions, antennas and hardscapes shall be presented for Airport Department review and approval prior to installation or construction. 7.2 LESSOR’S Representations: LESSOR makes no representation or guarantee as to the suitability of the leased area for construction of buildings, roads, ramps, etc., and is not responsible for the costs of excavation and/or removal of any object found either above or below ground level except for hazardous materials and archaeological artifacts existing prior to tenancy. 7.3 Title to Improvements: During the term of this Lease, provided LESSEE is not in default, all portions of the Improvements shall be and remain the property of the LESSEE regardless of its status for tax purposes as being real or personal property. 8. Expiration or Termination of Lease. 8.1 Disposition of Improvements. Disposition of Improvements upon Termination: Upon termination of this lease, except as stated in sections 6.4.1, 6.4.2, all improvements remaining upon the leased premises become the property of LESSOR, free and clear, without any liability of LESSOR to LESSEE. The following disposition is at the option of Kittitas County. 8.1.1 Removal of Improvements: LESSOR shall give LESSEE written notice to remove all improvements and return the premises to its state as before the 1977 ground lease between the County and DNR at least one hundred eighty (180) days prior to the termination date for the LEASE. Upon removal, the premises shall be left in a neat and orderly condition, without debris and shall be graded level. 8.1.2 Failure to Remove Improvements as requested: Should the premises not be left in such condition, after LESSEE received such notice, LESSOR may remove improvements and repair the premises and seek reimbursement from LESSEE in any manner allowed by law. 8.1.3 Surrender of Premises Upon the expiration of this Lease and in the event of the acquisition of the Improvements by LESSOR, LESSEE, at LESSEE's sole cost, shall (i) promptly and peaceably surrender to LESSOR the Premises and Improvements clean and free of debris and in good order and condition; (ii) repair in a good and workmanlike manner any damage to the Premises, reasonable wear and tear excepted, or the Airport by the removal of LESSEE’s personal property; (iii) deliver to LESSOR all keys and other items integral for access and operation of the Improvements; (iv) perform LESSEE’s environmental obligations as provided in Section 7; and (v) remove all movable personal property and trade fixtures and signage that are not owned by LESSOR; provided that LESSEE must obtain LESSOR’s prior written consent to remove any such property if such removal may impair the structure of any building. Upon any expiration or termination of this Lease, including, but not limited to, termination for abandonment of the Premises, all property that LESSEE leaves on the Premises shall conclusively be deemed to have been abandoned and may be appropriated, sold, stored, destroyed, or otherwise disposed of by LESSOR without notice. and without any obligation to account, to LESSEE or any other person, provided that the disposition of Improvements shall be as provided in Section 6.4. LESSEE shall pay to LESSOR all expenses incurred in connection with the disposition of such property in excess of any amount received by LESSOR from such disposition. 8.2 Lease Termination. In addition to Section 8 of this Lease, It is mutually understood and agreed by and between LESSOR and LESSEE that this Lease may be cancelled and terminated by either party on or after the 24th month of its term provided that written notice of such cancellation and termination shall have been given at least one hundred eighty (180) days prior to the effective termination date thereof by the LESSOR to the LESSEE; LESSEE shall give LESSOR written notice of such cancellation and termination at least one hundred eighty (180) days prior to the effective termination date thereof. In either event, rent shall be prorated to the date of termination. 9. HAZARDOUS SUBSTANCES: 9.1 Presence and Use of Hazardous Substances. LESSEE may keep on or around the Premises or Property, for use, handling, transport, disposal, treatment, generation, storage or sale, any substances designated as, or containing components designated as hazardous, dangerous, toxic, harmful, medical or infectious (collectively referred to as “Hazardous Substance”), and/or is subject to regulation by any federal, state or local law, regulation, statute, ordinance or management plan. With respect to any such Hazardous Substance, LESSEE shall comply promptly, timely, and completely with all governmental requirements for reporting, keeping, using, storing, selling, or disposing of said hazardous substances. 9.2 Cleanup Costs, Default and Indemnification. LESSEE shall be fully and completely liable to LESSOR for any and all cleanup costs, and any and all other charges, fees, penalties (civil and criminal) imposed by any governmental authority with respect to LESSEE’s use, handling, disposal, transportation, generation and/or sale of Hazardous Substances, in or about the Premises, Common Areas, or Property. LESSEE shall indemnify, defend and save LESSOR harmless from any and all of the costs, fees, penalties and charges assessed against, incurred by or imposed upon LESSOR (as well as LESSOR’s attorneys’ and consultants’ fees and costs) as a result of LESSEE’s use, handling, disposal, transportation, generation and/or sale of Hazardous Substances. Upon LESSEE’s default under this Section, in addition to the rights and remedies set forth elsewhere in this Lease, LESSOR shall be entitled to the following rights and remedies: i) at LESSOR’s option, to terminate this Lease immediately; and ii) to recover any and all damages associated with the default, including, but not limited to cleanup costs and charges, civil and criminal penalties and fees, loss of business and sales by LESSOR and other LESSEEs of the Premises, any and all damages and claims asserted by third parties and LESSOR’s attorneys’ and consultants’ fees and costs. 9.3 Firefighting Agent Per- and Polyfluoroalkyl (PFAS) substances used in Aqueous Film Forming Foams (AFFF) are not commonly used in wildland firefighting. In the event LESSEE uses or authorizes to be used, PFAS, LESSEE shall be responsible for cleanup of any PFAS used by firefighting support contracted with the LESSEE. 9.4 Survival. The provisions of this Section shall survive the expiration or earlier termination of this Lease. 10. INDEMNITY AND INSURANCE: 10.1 Indemnity by LESSEE: Subject to the provisions of Section 10.4 below, LESSEE will save and hold LESSOR harmless from and against all loss, damage, liability or expense, including reasonable attorneys’ fees, resulting from, claimed by or against or incurred by LESSOR or arising from any injury to any person or loss of or damage to any property caused by or resulting from any negligent act or omission or willful misconduct of LESSEE or LESSEE’s Associates in, on or about the PREMISES or AIRPORT or arising from or incurred by reason of any breach or default in the performance of any obligation on LESSEE’s part to be performed under the terms of this LEASE and from and against all costs, reasonable attorneys’ fees, expenses and liabilities incurred in or about such claim or any action or proceeding brought thereon. Neither LESSOR nor LESSOR’s Associates shall be liable for any loss or damage to persons or property sustained by LESSEE, or other persons, which may be caused by the PREMISES, or any appurtenances thereto, being out of repair, or by theft or by any act of neglect or omission of LESSEE or LESSEE’s Associates, or of any other person, or by any other cause of whatsoever nature, unless caused by the negligence of LESSOR or LESSOR’s Associates. 10.2 Indemnity by LESSOR: Subject to the provisions of Section 10.4 below, LESSOR will save and hold LESSEE, and LESSEE’s Associates harmless from and against all loss, damage, liability or expense, including reasonable attorneys’ fees, resulting from, claimed by or against or incurred by LESSEE or arising from any injury to any person or loss of or damage to any property caused by or resulting from any negligent act or omission or willful misconduct of LESSOR or of LESSOR’s Associates in or about the PREMISES or AIRPORT or arising from or incurred by reason of any breach or default in the performance of any obligation on LESSOR’s part to be performed under the terms of this LEASE and from and against all costs, reasonable attorneys’ fees, expenses and liabilities incurred in or about such claim or any action or proceeding brought thereon. Neither LESSEE nor LESSEE’s Associates shall be liable for any loss or damage to persons or property sustained by LESSOR, or other persons, which may be caused by the AIRPORT, or any appurtenances thereto, being out of repair, or by theft or by any act of neglect or omission of LESSOR or LESSOR’s Associates, or of any other person, or by any other cause of whatsoever nature, unless caused by the negligence of LESSEE or LESSEE’s Associates. 10.3 LESSEE’S Use: LESSEE shall indemnify and hold harmless LESSOR and LESSOR’s Associates against and from any and all claims, liability, obligation, cost or expense, including attorneys’ fees, incurred or arising from or by reason of the use of the PREMISES by LESSEE or LESSEE’s Associates from any activity, work, or thing done, permitted or suffered by the LESSEE or LESSEE’s Associates in or about the PREMISES, and shall further indemnify and hold harmless LESSOR and LESSOR’s Associates against and from any and all claims, liabilities, costs, obligations and expenses, including attorneys’ fees, arising from or incurred by reason of any breach or default in the performance of any obligation on LESSEE’s part to be performed under the terms of this LEASE and from and against all costs, attorneys’ fees, expenses and liabilities incurred in or about such claim or any action or proceeding brought thereon. 10.4 Concurrent Negligence: Notwithstanding the provisions of Sections 10.1 or 10.2 above, in the event of the concurrent negligence of the LESSEE and LESSEE’s Associates on the one hand and that of LESSOR and LESSOR’s Associates on the other hand, which concurrent negligence results in injury or damage to persons or property and relates to the use, occupation, construction, alteration, repair, addition to, subtraction from, improvement to or maintenance of the PREMISES, then: A. LESSEE’s obligation to indemnify LESSOR as set forth in this Section shall be limited to the extent of LESSEE’s negligence, and that of LESSEE’s Associates, including LESSEE’s proportional share of costs, attorneys’ fees, and expenses incurred in connection with any claim, action or proceeding brought with respect to such injury or damage; and B. LESSOR’s obligation to indemnify LESSEE as set forth in this Section shall be limited to the extent of LESSOR’s negligence, and that of LESSOR’s Associates, including LESSOR’s proportional share of costs, attorneys’ fees, and expenses incurred in connection with any claim, action or proceeding brought with respect to such injury or damage. THE LESSOR AND LESSEE SPECIFICALLY AGREE THAT THE PROVISIONS OF THIS SECTION 10 ALSO APPLY TO ANY CLAIM OF INJURY OR DAMAGE TO THE PERSONS OR PROPERTY OF THE LESSOR AND LESSEE’S RESPECTIVE EMPLOYEES, AND LESSOR AND LESSEE, AND EACH OF THEM, SEPARATELY ACKNOWLEDGES AND AGREES THAT, AS TO SUCH CLAIMS, EACH AS TO THE OTHER DOES HEREBY WAIVE ANY RIGHT OF IMMUNITY WHICH THEY MAY HAVE UNDER INDUSTRIAL INSURANCE (TITLE 51 RCW AS AMENDED AND UNDER ANY SUBSTITUTE OR REPLACEMENT STATUTE). THIS WAIVER AND AGREEMENT WAS SPECIFICALLY NEGOTIATED BY LESSOR AND LESSEE AND IS SOLELY FOR THE BENEFIT OF LESSOR AND LESSEE AND THEIR SUCCESSORS AND ASSIGNS AND IS NOT INTENDED AS A WAIVER OF EITHER’S RIGHTS OF IMMUNITY UNDER SAID INDUSTRIAL INSURANCE FOR ANY OTHER PURPOSE. 10.5 Insurance: Pending identification of insurance requirements for a State Agency. 10.6 General Insurance Requirements. At all times when this Lease is in effect LESSEE shall maintain in force all required insurance coverage and shall have on file with LESSOR Certificates of Insurance evidencing the same. All certificates shall be signed by a person authorized by the insurer and licensed by the State of Washington. All policies, except any policies required for workers’ compensation or errors and omissions, and the certificates evidencing coverage shall name LESSOR and LESSOR’s Associates as additional insureds. LESSEE shall provide for a renewal of all insurance coverage on a timely basis to prevent any lapse in coverage. LESSOR retains the right to approve any deductibles, and LESSEE shall notify LESSOR of any material erosion of the aggregate limits of any policy. LESSEE's policies shall be primary. 10.7 Minimum Requirements. LESSOR’s insurance requirements are minimum requirements as stated in the Bowers Field Minimum Standards, and LESSEE is responsible to obtain adequate insurance coverage as LESSEE may determine. Except as otherwise expressly set forth in this Lease, LESSEE assumes all risk under this Lease (including, but not limited to, business interruption claims) whether or not insured. 10.8 Waiver of Subrogation. Notwithstanding any other provision contained in this Lease, each of the parties hereby waives any rights of subrogation it may have against the other party for loss or damage from any risk that is covered by insur ance (including, but not limited to, claims for business interruption). Each of the parties shall obtain a clause or endorsement providing for such waiver of subrogation in any policies of insurance required under this Lease. 10.9 Terms Subject to Change. LESSOR, in its sole and absolute discretion, reserves the right to review and adjust at any time LESSEE's required insurance limits, types of coverage, and any other terms applicable to insurance to insure against any risk associated with this Lease or LESSEE’s use, occupancy, or operations at the Airport. Among other things, LESSOR may review any or all insurance coverage on a periodic basis and in connection with any specific activity or event associated with the Airport or proposed by LESSEE. 10.10 Reimbursement for Increased Costs to LESSOR. If any insurance carrier providing coverage to LESSOR increases its charge of any policy of insurance carried by LESSOR as a result of this Lease or LESSEE’s use, occupancy, or operations at the Airport, LESSEE shall pay the amount of such increase within ten (10) days after LESSOR delivers to LESSEE a certified statement from LESSOR’s insurance carrier stating the amount of the increase attributable to LESSEE. 10.11 Survival: The obligations of the parties under this Section arising by reason of any occurrence taking place during the term of this Lease shall survive the expiration or earlier termination of this Lease. 11. NON-DISCRIMINATION: To the extent required by law, LESSEE, for itself, its personal representative, successors in interest and assigns, as a part of the consideration hereof, does hereby covenant and agree as follows: No person, on the grounds of race, color, religion, sex, age, marital status, handicap or national origin, shall be unreasonably excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in LESSEE’s personnel policies and practices or in the use or operation of LESSEE’s services or facilities. LESSEE agrees that in the construction of any improvements on, over or under AIRPORT land and the furnishing of services thereon, no person, on the grounds of race, color, religion, sex, marital status, handicap, age or national origin, shall be unreasonably excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination. LESSEE shall use the PREMISES in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Non-discrimination in Federally Assisted Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended. It is the policy of the Department of Transportation that minority business enterprise as defined in 49 CFR Part 46, i.e., firms owned and controlled by minorities; firms owned and controlled by women and firms owned and controlled by financially disadvantaged persons; shall have the maximum opportunity to participate in the performance of Agreements as defined in 49 CFR Section 23.5. Consequently, this Lease is subject to 49 CFR Part 23 as applicable. LESSEE hereby assures that 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 and agreements, covered by 49 CFR Part 23 on the grounds of race, color, national origin or sex. LESSEE hereby assures that it will include the above clauses in all sub-leases and cause LESSEE’s sub-tenants to similarly include clauses in further sub-leases or partial assignments. 12. ASSIGNMENT, SUBLEASING AND RENTING. Except as provided in this Section, LESSEE shall not sell, assign, sublet, transfer, mortgage, pledge, hypothecate or encumber this Lease or any interest therein, nor rent or sublet the whole or any part of the Premises, nor shall this Lease or any interest hereunder be assignable or transferable by operation of law or by any process or proceeding of any court, or otherwise, without the prior written consent of LESSOR, which consent shall not be unreasonably withheld or delayed. 12.1 Assignment by LESSOR. LESSOR shall have the right, in LESSOR’s sole discretion, to assign any of its rights under this Lease (and in connection therewith, shall be deemed to have delegated its duties), and upon any such assignment, LESSEE agrees that LESSEE shall perform its obligations under this Lease in favor of such assignee. 12.2 Assignment; Subleases; Cure. 12.2.1 Assignee. An “Assignee” is any of the following: (i) any one or more parties involved in financing or refinancing of any Commercial Aeronautical Facilities, including, without limitation, any lender to or investor in LESSEE or in any Commercial Aeronautical Facilities; (ii) any purchaser or lessee of any of the Commercial Aeronautical Facilities, or any purchaser of all of substantially all of the membership interests in LESSEE or of all or any portion of LESSEE’s interest in this Lease; (iii) a corporation, limited liability company, partnership or other entity now existing or hereafter organized in which LESSEE, or any affiliate, owns (directly or indirectly) at least fifty-one percent (51%) of all outstanding shares of voting stock or ownership interests; (iv) a partnership now existing or hereafter organized, a general partner of which is such a corporation or limited liability company; or (v) a corporation, limited liability company, partnership or other entity that acquires all or substantially all of LESSEE’s or LESSEE’s business, assets or capital stock, directly or indirectly, by purchase, merger, consolidation or other means. 12.2.2 Assignment and Sublease. Any assignment or sublease of LESSEE’s interest in the premises, or any portion thereof, shall require prior approval by the LESSOR as required by the Federal Aviation Administration. 12.2.3 Assignee/Tenant Obligations. No Assignee or Tenant that does not directly hold an interest in this Lease, and no Assignee or Tenant that holds an interest in or lien on or security interest in this Lease for security purposes, shall have any obligation or liability under this Lease prior to the time that such Assignee or Tenant directly holds an interest in this Lease or, in the case of an interest, lien or security interest for security purposes, the holder thereof succeeds to absolute title to such interest, in this Lease. Any such Assignee or Tenant shall be liable to perform obligations under this Lease only for and during the period such Assignee or Tenant directly holds such interest or absolute title. Any assignment permitted hereunder shall release the assignor from obligations accruing after the date that liability is assumed by the Assignee or Tenant. However, such assignment shall not release assignor from obligations that accrue prior to the date that liability is assumed, including but not limited to its obligations related to Hazardous Substances under Section 13. 12.2.4 Preapproved Subleases. As of the Effective Date of this Lease, LESSOR acknowledges that LESSEE intends to enter into the subleases set forth on Exhibit C attached hereto and set forth herein. By its signature below, LESSOR consents to and approves of the form of those subleases. 12.2.5 Right to Cure Defaults/Notice of Defaults/Right to New Lease. To prevent termination of this Lease or any partial interest therein, LESSEE, or any Assignee or Tenant, shall have the right, but not the obligation, at any time prior to the termination, to pay any or all amounts due hereunder, and to do any other act or thing required of any Assignee, Tenant or LESSEE hereunder or necessary to cure any default and to prevent the termination of this Lease. As a precondition to exercising any rights or remedies as a result of any alleged default by LESSEE, an Assignee or a Tenant, LESSOR, so long as LESSEE has provided notice of the assignment or lease together with a notice address, shall give written notice of the default to each Assignee and each Tenant, concurrently with delivery of such notice to LESSEE, specifying in detail the alleged event of default and the required remedy. Each such Assignee and each such Tenant shall have the same amount of time to cure said default as is given to LESSEE pursuant to this Lease, which cure period for each Assignee and each Tenant shall commence to run with the end of the cure period given to LESSEE in this Lease. If LESSEE or an Assignee or Tenant holds an interest in less than all the rights and interests under this Lease, the Premises or the Commercial Aeronautical Facilities constructed on the Premises, any default under this Lease shall be deemed remedied, as LESSEE’s or such Assignee’s or Tenant’s partial interest, and LESSOR shall not disturb such partial interest, if LESSEE or the Assignee or Tenant, as the case may be, shall have cured its pro rata portion of the default by paying the fees attributable to the Commercial Aeronautical Facilities in which LESSEE or the Assignee or Tenant, as the case may be, holds an interest. In the event of an uncured default by LESSEE, or by an Assignee or tenant of LESSEE’s entire interest in this Lease, or in the event of a termination of this Lease by agreement, by operation of law or otherwise, each Assignee of a partial interest in this Lease, and each Assignee or Tenant who is a sublessee of LESSEE or of an Assignee of LESSEE, shall have the right to demand, and LESSEE shall grant and enter into, a new lease, substantially identical to this Lease, by which such Assignee of a partial interest in the rights and interests under this Lease, or such Assignee or Tenant by a sublease, shall be entitled to, and LESSOR shall not disturb, the continued use and enjoyment by such Tenant or Assignee of the Premises, or portion of the Premises, for the full term of this Lease, as set forth in Section 4 of this Lease, or such shorter term as said Assignee or Tenant may otherwise be entitled pursuant to its assignment or sublease. Further, in the event of an uncured default by LESSEE or by an Assignee of LESSEE’s entire interest in this Lease, or in the event of a termination of this Lease by agreement, by operation of law or otherwise, LESSOR hereby agrees that, if and for so long as (i) a Tenant who is a sublessee of LESSEE or of an Assignee is not in default under the sublease (beyond any period given LESSEE, an Assignee or a Tenant under this Lease to cure such default), (ii) such Assignee or Tenant attorns to LESSOR, and (iii) the terms and conditions of the Assignee or Tenant’s sublease do not contravene the terms and conditions of this Lease, LESSOR shall (a) recognize such assignment or sublease, (b) not diminish nor interfere with such Assignee or Tenant’s possession of the portion of the Premises covered by the sublease or with any term extension or renewal rights in the sublease, and (c) not disturb such Assignee or Tenant’s occupancy of such portion of the Premises for the full term of this Lease or such shorter term to which such Assignee or Tenant may be entitled under the sublease. An Assignee or a Tenant that is, or in the future becomes, a sublessee of LESSEE, or a sublessee of an Assignee or a Tenant, is an intended third-party beneficiary of the provisions of this Section and entitled to enforce this provision. 12.2.6 Lender Protection. LESSEE and any Assignee or Tenant of LESSEE may, at any time and without the consent of LESSOR, grant to any person or entity (herein, together with that person’s or entity’s successors and assigns, a “Lender”) one or more mortgages, trust deeds or similar security interests in all or any part of its interests under this Lease (a “Mortgage”). In the event any such Mortgage is granted, the Lender thereunder shall, for so long as its Mortgage remains in effect, be entitled to the protections described in the following provisions of this Section, upon delivery to LESSOR of notice of the Lender’s name and address. 12.2.6.1 Consent to Modification, Termination or Surrender. So long as any Mortgage remains in effect, this Lease shall not be modified, and LESSOR shall not accept a surrender of any of the Premises or a termination or release of this Lease prior to expiration of all periods described in Section 4, without the prior written consent of all Lenders. 12.2.6.2 Notice of Default; Opportunity to Cure. As a precondition to exercising any rights or remedies for any alleged default under this Lease, LESSOR shall give written notice of the default to each Lender concurrently with delivery of such notice to LESSEE, an Assignee or a Tenant, as applicable, specifying in detail the alleged default and the required remedy. In the event LESSEE gives any such notice, the following provisions shall apply: (a) The Lender shall have the same period after receipt of the default notice as is given to LESSEE, the Assignee or Tenant to remedy or cause to be remedied the default plus, in each instance, (i) an additional thirty (30) days after receipt of the default notice in the event of any monetary default (meaning any failure to pay when due any rent, real property taxes, insurance premiums or other monetary obligation under this Lease); and (ii) an additional thirty (30) days after receipt of the default notice in the event of any other type of default, provided that such 30-day period shall be extended for the time reasonably required to complete such cure, including the time required for the Lender to perfect its right to cure such default by obtaining possession of the Premises (including possession by a receiver) or by instituting foreclosure proceedings, provided the Lender acts with reasonable and continuous diligence. Lenders shall have the absolute right to do any act or thing required to be performed by LESSEE, an Assignee or any Tenant under this Lease, and any such act or thing performed by a Lender shall be as effective to prevent a default under this Lease and/or a forfeiture of any rights under this Lease as if done by LESSEE, the Assignee or Tenant itself. (b) During any period of possession of the Premises by a Lender (or a receiver requested by such Lender) and/or during the pendency of any foreclosure proceedings instituted by a Lender, the Lender shall pay or cause to be paid the rent and all other monetary charges payable by LESSEE, an Assignee or any Tenant which have accrued and are unpaid at the commencement of such period and those which accrue thereafter during such period. Following acquisition of LESSEE’s, an Assignee or any Tenant’s leasehold estate by the Lender or its assignee or designee as a result of foreclosure or assignment in lieu of foreclosure, or by a purchaser at a foreclosure sale, this Lease shall continue in full force and effect and the Lender or other party acquiring title to the leasehold estate shall, as promptly as reasonably possible, commence the cure of all other defaults hereunder and thereafter diligently process such cure to completion, whereupon LESSEE’s right to terminate this Lease based upon such defaults shall be deemed waived; provided, however, the Lender or other party acquiring title to the leasehold estate shall not be required to cure those defaults which are not reasonably susceptible of being cured or performed by such party (“Non-Curable Defaults”). Non-Curable Defaults shall be deemed waived by LESSEE upon completion of foreclosure proceedings or acquisition of LESSEE’s, Assignee’s or Tenant’s interest in this Lease by such party. Notwithstanding the foregoing, in no event shall a monetary default or a default in LESSEE’s obligations under Section 8.7 ever be deemed a Non-Curable Default. (c) Upon the sale or other transfer of the leasehold interests and obligations acquired pursuant to foreclosure or assignment in lieu of foreclosure, the Lender or other acquiring party shall have no further duties or obligations hereunder. (d) Neither the bankruptcy nor the insolvency of LESSEE, an Assignee or any Tenant shall be grounds for terminating this Lease as long as the rent and all other monetary charges payable by such LESSEE, Assignee or Tenant hereunder are paid by the Lender in accordance with the terms of this Lease. (e) Nothing herein shall be construed to extend this Lease beyond periods contemplated in Section 4 or to require a Lender to continue foreclosure proceedings after the default has been cured. If the default is cured and the Lender discontinues foreclosure proceedings, this Lease shall continue in full force and effect. 12.2.7 New Lease to Lender. If this Lease terminates as a result of any default, foreclosure or assignment in lieu of foreclosure, or bankruptcy, insolvency or appointment of a receiver in bankruptcy, LESSEE shall give prompt written notice to the Lenders. LESSEE shall, upon written request of the first priority Lender that is made within ninety (90) days after notice to such Lender, enter into a new lease of the Premises with such Lender, or its designee, within thirty (30) days after the receipt of such request. Such new lease shall be effective as of the date of the termination of this Lease, shall be upon the same terms, covenants, conditions and agreements as contained in this Lease, and shall be subject to all existing subleases entered into pursuant to this Lease, provided that the subtenants are not then in default. Upon the execution of any such new lease, the Lender shall (i) pay LESSEE any amounts which are due LESSEE from LESSEE, the Assignee or Tenant, (ii) pay LESSEE any and all amounts which would have been due under this Lease (had this Lease not been terminated) from the date of termination to the date of the new lease, (iii) perform all other obligations of LESSEE and/or the Assignee or Tenant under the terms of this Lease, to the extent performance is then due and susceptible of being cured and performed by the Lender; and (iv) agree in writing to perform, or cause to be performed, all non-monetary obligations which have not been performed by LESSEE, the Assignee or Tenant that would have accrued under this Lease up to the date of commencement of the new lease, except those obligations which constitute Non- Curable Defaults. Any new lease granted to the Lender shall enjoy the same priority as this Lease over any lien, encumbrance or other interest created by LESSEE. The provisions of this Section shall survive termination of this Lease and shall continue in effect thereafter and, from the effective date of termination to the date of execution and delivery of such new lease, such Lender may use and enjoy said Property without hindrance by LESSEE or any person claiming by, through or under LESSEE, provided that all of the conditions for a new lease as set forth in this Section are complied with. 12.2.8 No Waiver. No payment made to LESSEE by any Lender shall constitute an agreement that such payment was, in fact, due under the terms of this Lease or a waiver of the Lender’s rights with respect to any wrongful, improper or mistaken notice or demand with respect to such payment. 12.2.9 No Merger. There shall be no merger of this Lease, or of the leasehold estate or other interests created by this Lease, with the fee estate in the Premises by reason of the fact that this Lease or any such interests may be held, directly or indirectly, by or for the account of any person or persons who shall own the fee estate or any interest therein, and no such merger shall occur unless and until all persons at the time having an interest in the fee estate in the Premises, and all persons (including Lenders) having an interest in or under this Lease and any portion of the fee estate shall join in a written instrument effecting such merger and shall duly record the same. 12.2.10 Further Amendments. Upon request, LESSOR shall (1) amend this Lease to include any provision reasonably requested by a proposed Lender, provided such amendment does not impair LESSOR’s rights or increase the burdens or obligations of LESSEE under this Lease, and (2) execute such estoppel certificates (certifying as to such matters as Lender may reasonably request, including, without limitation, that no default then exists under this Lease, if such be the case) and other additional instruments reasonably requested by any Lender to evidence the status of this Lease and Lender’s rights under this Lease. 13. DAMAGE, DESTRUCTION, AND CONDEMNATION. 13.1 Damage or Destruction of Premises. If any portion of the Premises or the Improvements is damaged in any manner, LESSEE shall promptly remove from the Airport all damages and debris and timely cause repairs to be made to restore the Premises and Improvements to an orderly and safe condition; provided LESSEE shall not be required to restore the Improvements. In the event new Improvements are undertaken by LESSEE, all work shall be performed in accordance with the terms of this Lease, and LESSEE shall not receive any abatement of LESSEE’s rent obligations. 13.2 Condemnation. In the event of any condemnation proceeding in which all or any part of the Premises or Improvements is taken, LESSEE may pursue a claim against the condemner for the value of the Improvements and LESSEE's leasehold interest condemned, and any sub-LESSEEs may pursue a claim against the condemner for the value of their sub tenancy interests. In the event of a partial taking, LESSOR shall reduce the ground rent payable by LESSEE on a pro rata basis for portions of the Premises so taken. If LESSOR determines in its sole discretion that all or a material portion of the Premises will be, or has been rendered, not reasonably subject to lease as a result of such taking, LESSOR may terminate this Lease by giving LESSEE a written notice of termination, and this Lease shall terminate under the provisions of Section 8 at the time specified in the notice, which shall not be less than thirty (30) days after the date of such notice. 14. DEFAULT. 14.1 LESSEE's Default. The occurrence of any of the following events shall constitute a default by LESSEE under this Lease unless cured within thirty (30) days following written notice of such violation from LESSOR: (i) LESSEE fails to timely pay any installment of rent or any additional rent; (ii) LESSEE violates any requirement under this Lease, including, but not limited to, abandonment of the Premises; (iii) LESSEE assigns or encumbers any right in this Lease, delegates any performance hereunder, or subleases or rents any part of the Premises, except as expressly permitted in this Lease; (iv) LESSEE files a petition in bankruptcy or has a petition filed against LESSEE in bankruptcy, insolvency, or for reorganization or appointment of a receiver or trustee which is not dismissed within sixty (60) days; (v) or LESSEE petitions for or enters into an arrangement for the benefit of creditors, or suffers this Lease to become subject to a writ of execution and such writ is not released within thirty (30) days. If the nature of LESSEE's obligation is such that more than thirty (30) days are reasonably required for performance or cure or a different time for performance is specified, LESSEE shall not be in default if LESSEE commences performance within such thirty (30) day or specified period and thereafter diligently prosecutes the same to completion. 14.2 Remedies. Upon any default by LESSEE under this Lease and subject to Section 14, LESSOR may at any time pursue any or all remedies available to LESSOR, including, but not limited to, the following: (i) perform in LESSEE's stead any obligation that LESSEE has failed to perform, and LESSEE shall promptly pay to LESSOR all costs incurred by LESSOR for such performance, together with interest and service fees for any past due amounts (as provided in Section 3.2) and an administrative charge equal to twelve percent (12%) of the cost incurred by LESSOR which the parties agree is a reasonable estimate of and liquidated damages for LESSOR’s overhead expenses associated with such performance; (ii) terminate LESSEE's rights under this Lease upon delivering a written notice of termination; and (iii) re-enter and take possession of the Premises by any lawful means with or without terminating this Lease. LESSEE shall pay all costs and damages arising out of LESSEE’s default, including, but not limited to, the cost of recovering possession of the Premises, the cost of improving and reletting the Premises, including, but not limited to, any real estate broker fees or marketing costs, and attorneys’ fees and costs regardless of whether formal action is commenced or concluded. No action by LESSOR or LESSOR’s Associates shall be construed as an election by LESSOR to terminate this Lease or accept any surrender of the Premises unless LESSOR provides LESSEE with a written notice expressly stating that LESSOR has terminated this Lease or accepted a surrender of the Premises. Following a default by LESSEE under this Lease, LESSOR shall exercise commercially reasonable, good faith efforts to mitigate its damages as required by applicable law. 14.3 Default by LESSOR. LESSOR shall not be in default under this Lease unless LESSOR fails to perform an obligation required of LESSOR under this Lease within thirty (30) days after written notice by LESSEE to LESSOR. If the nature of LESSOR's obligation is such that more than thirty (30) days are reasonably required for performance or cure, LESSOR shall not be in default if LESSOR commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. 14.4 Survival. The provisions of this Section and the remedies and rights provided in Section 14.2 shall survive any expiration or termination of this Lease. 15. GENERAL PROVISIONS. 15.1 No Exclusive Rights. Nothing in this Lease shall be construed to grant to LESSEE any exclusive right or privilege for the conduct of any activity on the Airport, except to lease the Premises for LESSEE's exclusive use as provided herein. 15.2 Lease Preserves Authority’s Compliance. This Lease shall be interpreted to preserve LESSOR's rights and powers to comply with LESSOR's Federal and other governmental obligations. 15.3 Subordination to Authority’s Government Commitments. This Lease is subordinate to the provisions of any Lease between LESSOR and the United States or other governmental authority (regardless of when made) that affects the Airport, including, but not limited to, leases governing the expenditure of Federal funds for Airport improvements. In the event that the Federal Aviation Administration or other governmental authority requires any modification to this Lease as a condition of LESSOR entering any lease or participating in any program applicable to the Airport, including, but not limited to, those providing funding, LESSEE agrees to consent to any such modification. If a governmental authority determines that any act or omission of LESSEE or LESSEE’s Associates has caused or will cause LESSOR to be noncompliant with any of LESSOR's government commitments, including, but not limited to, any assurances or covenants required of LESSOR or obligations imposed by law, LESSEE shall immediately take all actions that may be necessary to preserve LESSOR's compliance with the same. LESSOR shall have the right to terminate this Lease and reenter and repossess any portion of the Premises if the U.S. Department of Transportation or other governmental authority having jurisdiction expressly requires any such action, subject to any review that may be afforded to LESSEE by such authority. LESSEE’s remedy shall be against the U.S. Department of Transportation or other governmental authority having jurisdiction that required such action in the same means as an event of condemnation as provided above in section 11.2. 15.4 Subordination to Financing and Matters of Record. This Lease is subordinate to the provisions of any leases or indentures entered by LESSOR (regardless of when entered) in connection with any debt financing applicable to the Airport and is subordinate to any matter of record affecting the real property of the Airport. 15.5 Notices. Any notice, demand, written consent, or other communication required to be in writing under this Lease shall be given in writing by personal delivery, express mail (postage prepaid), nationally recognized overnight courier with all fees prepaid (such as Federal Express or UPS), or certified mail (return receipt requested and postage prepaid) when addressed to the respective parties as follows: LESSOR: Kittitas County Public Works 411 North Ruby, Suite 1 Ellensburg WA 98926 LESSEE: DNR – Department of Natural Resources 713 W Bowers Rd, Ellensburg, WA 98926 Either LESSOR or LESSEE may change its notice address by giving written notice (as provided herein) of such change to the other party. Any notice, demand, or written consent or communication shall be deemed to have been given, and shall be effective, upon compliance with this Section and delivery to the notice address then in effect for the party to which the notice is directed; provided, however, that such delivery shall not be defeated or delayed by any refusal to accept delivery or an inability to effect delivery because of an address change that was not properly communicated. 15.6 Force Majeure. No act or event, whether foreseen or unforeseen, shall operate to excuse LESSEE from the prompt payment of rent or any other amounts required to be paid under this Lease. If LESSOR, or LESSEE in connection with obligations other than payment obligations, is delayed or hindered in any performance under this Lease by a force majeure event, such performance shall be excused to the extent so delayed or hindered during the time when such force majeure event is in effect, and such performance shall promptly occur or resume thereafter at the expense of the party so delayed or hindered. A "force majeure event" is an act or event, whether foreseen or unforeseen, that prevents a party in whole or in part from performing as provided in this Lease, that is beyond the reasonable control of and not the fault of such party, and that such party has been unable to avoid or overcome by exercising due diligence, and may include, but is not limited to, acts of nature, war, riots, pandemics, strikes, accidents, fire, and changes in law. 15.7 Rights and Remedies. Except as expressly set forth in this Lease, the rights and remedies set forth in this Lease are not intended to be exhaustive and the exercise by either party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently exist. 15.8 Dispute Resolution. The Parties intend that certain disputes, controversies, or claims arising under, out of or relating to this lease may be resolved outside the process set forth in Ch. 59.12 RCW.. 15.8.1 Phase I Dispute Resolution. In the event of a Dispute not involving non-payment of rent, the Parties will meet and discuss the resolution of the Dispute(s) amongst themselves in good faith. In the event the Parties are unable to resolve the Dispute(s) through good faith meetings and discussion, then either Party may request, in writing, that Phase II of the dispute resolution process be used (Mediation Notice). 15.8.2 Phase II Dispute Resolution-Mediation. In the event the Parties resort to Phase II of the dispute resolution process, then the Parties shall select a mediator who shall be an independent party within twenty-one (21) days of the date of the Mediation Notice. The Parties agree to, in good faith, engage in mediation with the third-party mediator to resolve the Dispute. In the event the Parties are unable to agree upon a mediator, then each Party shall each select a mediator and the two selected mediators shall select a third mediator who shall mediate the Dispute(s) between the Parties. The Parties agree to split the costs of the mediation with each Party paying one half of the mediation fees and costs charged by the mediator(s). All mediation shall be conducted pursuant to the Uniform Mediation Act which is codified at Chapter 7.07 of the Revised Code of Washington. In the event the Parties, after twenty-one (21) days of he commencement of mediation, are unable to resolve the Dispute(s) through mediation, then either Party may resort to any means provided for at law. 15.9 Attorneys Fees. If either party is required to bring or maintain any action (including assertion of any counterclaim or cross-claim, or claim in a proceedings in arbitration, bankruptcy, receivership or any other proceeding instituted by a party hereto or by others), or otherwise refers this Lease to an attorney for the enforcement of any of the covenants, terms or conditions of this Lease, the prevailing party in such action shall, in addition to all other payments required herein, receive from the other, all the costs incurred by the prevailing party including reasonable attorneys’ fees and such costs and reasonable attorneys’ fees which the prevailing party incurred in, and in preparation for, such action, arbitration, trial, appeal, review and/or proceeding in bankruptcy court. The provisions of this Section shall survive any expiration or termination of this Lease. 15.10 Governing Law, Venue, and Waiver of Jury Trial. This Lease and the respective rights and obligations of the parties shall be governed by, interpreted, and enforced in accordance with the laws of the State of Washington. Venue for any action arising out of or related to this Lease or actions contemplated hereby shall be laid in Kittitas County, Washington, and each of the parties hereby irrevocably consents to the jurisdiction of the same. The provisions of this Section shall survive any expiration or termination of this Lease. LESSOR AND LESSEE EACH KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE OTHER FOR ALL MATTERS ARISING OUT OF OR RELATING TO THIS LEASE OR ANY USE, OCCUPANCY, OR OPERATIONS AT THE PREMISES OR THE AIRPORT. 15.11 Amendments and Waivers. No amendment to this Lease shall be binding on LESSOR or LESSEE unless reduced to writing and signed by both parties. No provision of this Lease may be waived, except pursuant to a writing executed by the party against whom the waiver is sought to be enforced. 15.12 Severability. If any provision of this Lease is determined to be invalid, illegal, or unenforceable, the remaining provisions of this Lease shall remain in full force and effect if both the economic and legal substance of the transactions that this Lease contemplates are not affected in any manner materially adverse to any party. If any provision of this Lease is held invalid, illegal, or unenforceable, the parties shall negotiate in good faith to modify this Lease to fulfill as closely as possible the original intents and purposes of this Lease. 15.16 Merger. This Lease constitutes the final, complete, and exclusive Lease between the parties on the matters contained in this Lease. All prior and contemporaneous negotiations and Leases between the parties on the matters contained in this Lease are expressly merged into and superseded by this Lease. In entering into this Lease, neither party has relied on any statement, representation, warranty, nor Lease of the other party except for those expressly contained in this Lease. 15.17 Confidentiality. LESSEE acknowledges that LESSOR is subject to legal requirements regarding the public disclosure of records. LESSEE shall comply with such laws in connection with making any request that LESSOR maintain a record confidentially, and if LESSEE complies with the same LESSEE shall have the right to defend any such request for confidentiality at LESSEE's expense. 15.18 Relationship of Parties. This Lease does not create any partnership, joint venture, employment, or agency relationship between the parties. Nothing in this Lease shall confer upon any other person or entity any right, benefit, or remedy of any nature. 15.19 Further Assurances. Each party shall execute any document or take any action that may be necessary or desirable to consummate and make effective a performance that is required under this Lease. 15.20 Miscellaneous. The headings in this Lease are provided for convenience only and do not affect this Lease's construction or interpretation. All references to Sections are to Sections in this Lease. Each provision to be performed by LESSEE shall be construed as both a covenant and a condition. This Lease shall be construed without regard to any presumption or rule requiring construction or interpretation against the drafting party. If LESSEE consists of more than one individual or entity, the obligations of all such individuals and entities shall be joint and several. References in this Lease to any period of days shall mean calendar days unless specifically stated otherwise. 15.21 Binding Obligation. LESSEE warrants and represents that it has the right, power, and legal capacity to enter into and perform its obligations under this Lease as a legal, valid, and binding obligation of LESSEE. 15.22 Time of Essence. Time is of the essence of this Lease. IN WITNESS WHEREOF, the LESSOR and LESSEE have signed their names and affixed their seals the day and year first above written. LESSOR: ____________________________________ By: Its: BOARD OF COUNTY COMMISSIONERS KITTITAS COUNTY, WASHINGTON ATTEST: _____________________________________ __________________________________ Clerk of the Board Chairperson __________________________________ Vice-Chairperson __________________________________ Commissioner Approved as to Form: ______________________________________ Prosecuting Attorney Exhibit A Description of Premises.